Airbags. Autonations ceo mike jackson will be with us again today, joining us exclusively to discuss the impact on auto sale, talk about jamie dimons warnings on auto loans. We have a lot to talk with mike jackson about this hour. California, one of the highprofile primaries today. Were going to take you there live to speak with Trump Supporters in the bay area and look at the spending between Hillary Clinton and Bernie Sanders. In the meantime, lets get to our panel today. Rick santelli joins us from chicago. So john, what do you think . Is this rally sort of an all clear rally . A relief rally if you will after Janet Yellens speech yesterday. I dont think were there just yet. This is just another example of our market drifting higher on light vacuum, very light participation. There hasnt been a major catalyst for investors to buy in this market. And speaking to cog leagues, i need to get to this market now. I think im going to miss this run up higher. Theyre still in this wait and see mode. Clearly what comes out of washington, whats going to happen with the scene next week, next month, is going to dictate how the Third Quarter plays out. Either way, there ee no catalyst to get into this market or get out. Were going to see this market drift higher. And as you said, your job is still to find places to put peoples money to work, so where are you finding those spots . Well, we still like some of the financial stocks, which we think are still undervalues, but were also looking for secular winners in the market. Ryder systems is a company were attracted to for that reason. The transportation company. Why ryder . Why ryder . Theres a little bit of change in the market. Some of the directives really havent worked a lot in the last few months but ryder specifically on the transport sector because of the secular change going on, 30 of their lease growth in the last year, in 2015, came from companies outsourcing their transportation to ryder. This year its already 40 of their growth is coming from that, so theres a secular trend toward companies leasing or actually outsourcing their transportation to ryder. Thats their specialty. Thats what they do. 85 of Companies Still do it internally. So theres a long runway for growth for them. Interesting. Hey, rick. At the risk of sounding really, really nerdy, we all notice the yield on the tenyear hit an alltime the tenyear bund hit an all sometime 44 and all these markets are trying to deal with the various vagaries of the Monetary Policy of the central banks. Whats going on there, and do you think thats helping our markets as well . Well, i think it had curve implications as to whether its help our markets. Todays threeyear note auction was nothing to write home about, but at the end of the day, our yields versus the five basis point settlement on that tenyear bunld you reference even though the intraday yield was lower is an alltime yield. Everybody is talking about the toyota yield of 1. 1 , so the answer is yes. Theyre not having a big impact on the questionable outcome of what fed normalization may look like. Even though investors melee off of three or two, for for the most apartment when you get to five or sevenyear and beyond, my guess is youre going to see the relative dynamic in action and it also does underscore how difficult and how much pressure janet yellen and company are under. Above and beyond how hard it is to normalize. But the pressure of how it will affect Global Markets is huge. Its the same deal as brexit. Its not about whether the uk leaves or not. Its what condition the uk will be in. For how long will they be in. I also, rick, was wondering what happens when the European Central banks starts to buy the former bonds tomorrow . Is that already priced in and does that mean its sell the facts events. We have to watch, kelly. All great points. A lot of what happened with the u. S. Regarding qe was counterintuitive, how markets priced before the events happened and how they priced after the events were over. Its anybodys guess, but the distortions loom large above and beyond what make may be the biggest talked about distortion, thats who gets to pick which Company Security the ecb buys and how that answer is making many very nervous with regard to the relationship between governments and corporations. Ann, speaking of Monetary Policy, the last time you were with us, you liked some of the financials out there. Would you call them secular winners as well, like a pnc for example. But with this continued delay in normalization as rick puts it, the rising of rates which would help the financials, are you sticking with these guys even though theyre suffering with these extremely low rates . Yes, bill, we are. I mean when i was on last, the stocks were at a low point for the year. Since then the banks have rallied about 14 to 15 , and that was since the begin of april, but pnc and pack west, two names i talked about earlier, still have 10 to the upside in 12 months. I think the key in this market for us is not ignoring the macrobut still searching out for stocks that can outperform. Ryder as i talked about earlier is trading at 10 times the earnings. Thats stock that can grow revenues in the middigits and mid teens. So there are still those opportunities out there. Investo investo investors need to not just focus on the macro. Theres really nowhere else to get a return. Right. You know, jonathan, briefly before we let you go, the fact that wti settled over 50, do people feel like thats more of a ceiling or a floor . Weve seen how oil has gapd. That 50 psychological level has been to the top end of the rairj. All right. Leave it there. Thanks, folks. Thanks for joining us. Now, valiant and biojen are among the biggest losers. Lets get out to meg tirrell who joins us from chicago with more on these moves. Meg . Hey, kelly. A tough day for health care. Lets start with biojen. This was a pretty exciting looking drug because what it aimed do was actually to try to repair some of the damage you see in m. S. And it didnt meet the main goal in the study and youre seeing the stock getting hit there. The company saying its tough. It may have a path forward but the market not giving it a lot of credit right now. As for valeant, they recorded their First Quarter earnings and missed expectations. What analysts are saying is really troubling to this them is the underlying business doesnt look like its recovering. Theyre saying there are drugs in the business and they worry about valeant debt. Meg, we noticed, too, endo is down today and there is pressure on. There are things people are excited about, but is there a line you draw between what happened at valeant and some you mentioned and the fact that the whole sector is weaker . Valeant has bled over into the specialty pharma space. You see endo reacting on the very back of it. People really worry about the health of that business and the viability of that business model. More broadly i would say valeant is a separate kind of company from biojen. Youre seeing biojep and there, people start to get worried when you have poor clinical readouts. We were just signaling here. Bill miller likes it. Right . Yes. Can he step in there . I believe so. Hes one who came out after it had fallen 90 from its peak. Wonder if hes willing to accept that. Well tripe to find out. Meg, lets move on here. Theres a question whether these liquid biopsiebiopsies, blood tr cancer, tell us more about it. Thats right, bill. It was talked about a lot mostly because there was a feature presentation over the weekend at the conference. I know you had the ceo before. We sass down with him at asco yesterday. Take a listen. You can get all that information from a simple blood draw, you could totally change the paradigm how we monitor and treat cancer. So its pretty exciting medically. Theres a lot of Companies Working this spachls we talked with Foundation Medicine about what their tested should be used. Listen to what their ceo told us. About 10 to 20 who have developed cancer, its very difficult to get tissue for testing. Instead of saying, we have to let you go, we dont understand your tumor, we have the blood base to test it. Were not at the place where the blood canneser er e places it, but folks are really working on that. Illumina in particular is working on a company to try to do that, and theres a lot of companies. This is a big area in this area. Im intrigued because weve all been touched by cancer. Is it. That was the study presented at the conference. It was the biggest study that had ever been done of a liquid biopsy and it compared it with the accuracy of a tumor biopsy. What it found it these are for multiple kinds of cancers. That has been pretty encouraging to people here. That is great. Great to know. All right, meg. Thank you. Thank you very much, meg. Our meg tirrell. We have about 45 minutes to go. T the gains are a little more muted here. I think the highest since last summer. A couple points off that right now. The dow is up 54 point whiels the nasdaq is actually lower. Biotech probably not helping there. What do you think . 18,000 today . I dont know. Wheel ask art cashin. Well see. Tesla is higher after a billionaire longterm investor makes bullish comments on the automaker right here on this network. Well have details coming up. Also ahead the ceo of autonation is speaking up. Youre watching cnbc, first in business worldwide. Man 1 youre new. Man 2 i am. Woman exmilitary . Man 2 four tours. Woman you worked with computers . Man 2 thats classified, maam. Man 1 but youre job was Network Security . Man 2 thats classified, sir. Woman lets cut to the chase, here. Man 1 whats youre assessment of our security . Man 2 [ gasps ] porous. Woman porous . Man 2 the Old Solutions arent working. Man 2 the world has changed. Man 1 meaning . Man 2 its not just security. Its defense. Its not just security. Its defense. Bae systems. Slightly higher day if youre just joining us. The dow did touch 18,000. The s p up 6. Nasdaq being dragged. Lets check some of the other movers. Shares of zillow group are rising. It raised its price target to 32 from 20. You see it trading now at 31. Its pretty close. They call the downline database legal settlement with move. Only then was it offering a negative judgment of at least 500 million. Meanwhile teslas gaining ground as well. Billionaire longterm investor ron barron made bullish comments aboutautomaker on squawk box this morning. Take a listen. I think this could be one of the Largest Companies in the United States in the whole world. Tesla hired today. A gain of about 5 , kelly. Not too shabby. From what could be to what is. Autonation is the biggest auto motive retailer. It doesnt sell vehicles with open safety recalls. But theyve had to modify that to some degree. 14 of the used vehicles are not for sale. 60 are, guess what, involved in recalls of takata airbags. Were pleased to welcome back autonation mike jackson. Mr. Jackson, good to see you. Welcome back. Bill, good afternoon. What a nightmare this is for the industry. I know were talking about tens of millions of airbags that have to be recalled. You cant do this with just a snap of a finger, but why is it taking so long. Why has this dragged on for as long as it has . Well, bill, i think your word this is a nightmare for the industry is to the point. The first airbag failed in 2004. There was a long period of denial that this was going to be an issue and then it clearly pushed by safety regulators. Somethings wrong when we have serious injuries and over ten fatalities when the ulironic reality is the only thing thats there to save you can cause serious harm if not death and the number is staggering. In the u. S. Were now up to 70 million devices that need to be replaced, and i expect theres going to be a lot more because weve only gotten to the root cause of the issue, mainly the decision by takata to use knew moan yum nitrate in the device which has proven to be unstable in humid climates and hot climates. A lot of these devices theyre putting in today will have to be replaced in four or five years when the final solution is finally put into the manufacturing process. So this is going to go on for years. Right. Which brings us to what you do with it as a company. So youre still going to sell these vehicles but slap a big sticker saying, hey, this now is your responsibility whoever takes possession to solve it, but as you said, this could be going on for years. Lets be clear. Autonation does not retail to any consumer, any retailer with any open recall. If there are recalls that are going to be tied up for extended periods without part, we will take them to auction and hawks them off in the wholesale market with full disclosure, but autonation does not retail any veegs with any open recall either new or used. And it is disruptive to our business. What does it cost you . Well, its in the millions. It niece the millions, but, you know, i dont want to talk here today about a poultcy thats protecting consumers and hopefully saving lives because the cost of takata is not only in millions, its in lost lives. If you add it up to industry, takata is going to be pushed to its limits. Manufacturers are going to have to step up and take a big chunk of the expense, and theres going to be an impact of retailers like us who have made this policy not to retail any vehicles with takata open recalls. You bet. Mike, it brings up the health of the industry here. Im sure you saw jamie dimons warning that he thought theyre stretched in their opinion. He said somebody is going to get hurt saying jamie dimon has tried for the most part not getting involved, maybe referring to the loans or other practices. Weve seen this pace of sales come off the boil a little. Do you expect much many of a fallout from here . Well, you know, i was the first one alt at the beginning of the year to say 2016 is going to be a plateau year. Thats exactly whats developed. The Industry Sales are flat. If you look beyond the numbers, theres been a big push into fleet, leasing, and a big push into incentives and most likely an overdependence on sub prime. So jamies exact quote was certain players in subprime will be hurt. I dont think in the total auto lending market theres real risk whatsoever. People pay their auto loans. On the margin in different segments than necessarily where autonation is, only 10 of our business is sub prime loans. Therell be some players that are pushing too hard and will be hurt. The other problem you see is you think auto manufacturers are building too many cars. Youve got too many cars to deal with, right . Theres no question their ambitions are bigger than the market and thats a problem. Its been a problem for this industry going all the way back to henry ford and the day of the assembly line, that the capital costs are all sunk and use price to make it all go away. I think thats a mistake. We still could sell high 16, 17 million without taking extreme measures but that last 200,000, 300,000, 400,000 vehicles for the industry could be very expensive and i think the industry should curtain production and we started reducing our orders already at the end of 2015. Mike, we mentioned leading into the segment the performance of tesla and the comment from ron baron that he thinks the company could be worth 7 billion in years to come. That could make it larger than apple at its peak. Do you think tesla could get that large and what would it mean if an increase in shares of u. S. Cars are electric . First, im a tremendous fan of ron barre baron. Hes an extremely shrewd investor and has made money for himself and investors. Tesla is still a coin toss spinning in the air and i theyre lon musk has done many things which he should deserve credit for, mainly establishing the brand tesla and a certain demand for electric vehicles that did not exist before. How however, whether they work is still unknown. Good to have you talk with us. Appreciate it. Mike jackson, ceo of autonation. Let lets take a break. The dow sup 15 points. Were wondering if it can close above 18,000. The bet is probably know. Kamara is ringing the bell. Details are coming up. Also ahead, Silicon Valley may not be a stronghold of Donald Trumps but he has a loyal following there and josh lipton speaks with them coming up next. speaking japanese oh watson, your japanese is very good. Thank you. speaking japanese exactly. I can understand nuance, context and idiom in seven languages to help companies all over the world with everything from retail solutions, to banking, to cyber security. speaking japanese dont put off checking out your Medicare Options until 65. Now is a good time to get the ball rolling. Medicare only covers about eighty percent of part b medical costs. The rest is up to you. Thats where aarp Medicare Supplement insurance plans insured by Unitedhealthcare Insurance Company come in. Like all standardized Medicare Supplement insurance plans, they could help save you in outofpocket medical costs. Taking informed steps really makes a difference later. Thats what it means to go long™. Call now and request this free decision guide and explore the range of aarp Medicare Supplement plans. All plans like these let you choose any doctor or hospital that accepts medicare patients. These are the only Medicare Supplement insurance plans endorsed by aarp. Call now and request your free decision guide. And start gathering the information you need to help you go long™. Its californias big primary day. Josh lipton searches out donald Trump Supporters. Yes, there are a number of them. And jane well looks at Hillary Clinton and Bernie Sanders. Josh, lets start with you and the Trump Supporters you found in the bay area. Well, bill, polls here opened at 7 00 a. M. Local, but Trump Supporters are hard to find in these parts. Even rightleaning people like meg whitman and weisman have come out and spoke against trump especially when it comes to trade and immigration, which puts him at odds with many in