Territory, 1754 and change with a gain of 10 points. Former ceo jack welch my special guest. Great to have you. Thanks for spending the time. Thanks so much, maria. Great to be here. We have a lot to get into. Bob pisani, another record day for the s p. What gives . Not only for the s p but for many major indices. Take a look. S p 500, historic high. The dow transports as well, historic high. There you go. Russell 2000, historic high. S p 400 midcap, historic high. Reed hastings, on the Conference Call said, every time i read a story about netflix as the highest appreciating stock on the s p 500 it worries me because that was the exact headline that we used to see in 2003. As that came out, stock dropped. Up 30, moved down rather quickly. As a matter of fact, alld all the other big momentum stock. Thats why ceos dont like to talk about their stock price. Apple dropped before the ipad announcement as we saw what happened with netflix. Facebook, went from 52, linkedin, momentum names, also dropped on that. Chinese internet stocks, also momentum names like baidu, for example, dropped on that as well. All these charts look exactly the same on momentum stocks. Best and worst out there, whirlpool, great earnings report. Best gainer in the s p 500. Coach, second worst. Rather disappointing. Appears to be losing market share out there. Thank you so much. Heng us to break down todays market arms, amy wu, brian bebel bellski, and former chairman and ceo of ge, jack welch. Good to see everybody. Thanks for joining us. Amy, let me kick this up with you. Feeling is tapering is off the table in 2013, perhaps off the table for much of the 2014. Do you think this market is going to stay on track to keep going higher given the feds stimulus . Maria, it sure seems like it. And even todays payrolls was an afterthought for the options market. Volatility came in quite hard. Back to normal term structure. Weve been talking about momentum stocks this whole time but, frankly, the laggards, utilities, home builders, reits, those impacted when we first started talking about tapering, were seeing all this call buying in options action in these names now so it speaks to your point that maybe we have more to go and people are trying to find even worse off names to buy further upside in. Jack, its interesting, when you look at the broad economy today, you could say, okay, the fed is in place. Thats going to continue stimulating things. But earnings, revenue revenue so, how do you see it . Theres no place oels to put your money. I mean, what are you going to do . Put it under the mattress . Right. Have you to buy u. S. Stocks. Youre kind of forced into the game. Or european stocks. Even though the back drop is not great shakes in terms of earnings . And revenues are slow, but the thing is, companies are more producti productive. Theyre squeezing out the earnings. Maria, what do do you with your cash . Yeah. Of course, weve seen flows out of the bond market. David, is that money finding a home in stocks . Some of it is. Some of its in the sidelines sitting in cash which i think is helping propel this market. New cash coming into the market. People are concerned about higher rates. Looks like tapering it on hold. We think march could be the earliest we see tapering. Larry fink told me it could be june. Could be. Brian, is this the right allocation . What do you tell clients right now . Is this warranted, stocks into bonds given the environment we find ourselves . N . Could be. As year goes on, Asset Allocation kicks in, as they tell asset allocators to increase their position in equities, youll see more and more flows into equities. We caution people, since mr. Welch is here, this is not the 90s. Hey day of ge is not the 90s. Youre coming back to america because of the consistency and fundamentals. In the 90s you came because of the growth. We dont have any infloes like the 1990s. This whole secular bull market remains in the very early stages. Jack, you speak to so Many Companies out there, whether its your management institute, or meeting with various companies, small and midcap and large, what do they say . It depends on the industries youre in. If youre in old, traditional america, its thumping along, you know, 1. 5 , 2 economy. If youre in health care, have you niches that are doing very well. If youre in oil, youre doing very well. So, if youre in some of these its industryspecific. But it is really not a very exciting time in Middle America other than grinding out productivity, 2 revenue growth, 8 revenues growth, grinding along, good cash flow. Its steady. Do you agree with their keys, this is not the 90s, a completely structurally different economy. Depends on what industry youre . Again, industryspecific . Industryspecific. If youre in montana and you have yourself in the bakken, youre feeling very good about life. If youre in midland, texas, its just heaven. Because of energy . Energy. It depends on where you are. If youre in the right niche in health care, through the roof. Amy, what turns this around . What are the sort of red flags youre looking at that might get you a built more cautious on equities . In terms of what were seeing, its structures like calling spreads and selling risk reversal. Again, the volatility landscape were looking at has told us basically theres bullish sentiment and weve climbed the wall of worry of what was the biggest concern, the Government Shutdown debt ceiling. Now that thats all pushed further, these rlt structuare t structures were seeing people are using to get the next leg of upside. Increased upside plays that dont cost you that much money. Hey, amy, can you give us a good trade there . Yeah. Sorry, sorry. Yeah. One of the trades we like are in the laggard space. The three biggest laggards were seeing year to date are home builders, utilities, reit sectors first hit during the first the fmoc meeting where you saw tapering become a concern. With options prices cheap, we like out of the money call spreads there or buying risk averse. Selling put to get upside. If you look at the strikes to january expiration, 9 0 , 10 strike options youre getting that at zero cost. Youre saying, i can get geared upside right now at little cost and carrying it at net credit right now. People definitely dont want to spend money, so this is a good way of getting that exposure. Thanks, everybody. Appreciate your time on this as we continue to watch this market trade higher. And money moves into stocks. Breaking news on the irs. Eamon javers with the details. A big delay coming now in tax season for 2014. The irs announcing just within the past few minutes that theres going to be a one to twoweek delay to tax season as a result of the federal Government Shutdown over the past 16 days or so. The irs announcing that the original start date of the 2014 Filing Season was january 21st. With a one or twoweek delay they say the irs would start accepting and processing 2013 individual tax returns no earlier than january 28th and no later than february 4th. They say theyre still working on the final details here and theyll make an announcement soon as to when exactly that will happen. A big delay coming up for individuals in tax season, maria. A big delay. Is this because of the Government Shutdown, eamon . It is. They are saying they lost 16 days during the Government Shutdown and they say theyre going to need to make up that time somehow. So, thats the thats what they can have to do at the front end of the tax filing for the rest of us in 2014. Thank you. Much more ahead on the s ps roll into record territory with my special cohost for the hour, jack welch. Well take a look at Jpmorgan Chase costly legal settlement. That settlement has not ended the banks pain and now the government wants that deal to be the template for further settlements with other banks. Well get jacks take on the twitter ipo and whether the company is going too fast too soon. If he thinks its time for amazon. Com to turn better profits justifying the stock price. Peace of mind is important when youre running a business. Century link provides reliable it Services Like multilayered Security Solution to keep your Information Safe secure. Century link. Your link with whats next. Back goen with my cohost for the hour, jack welch. One of the most recognizable faces in business globally today. We have a lot to talk about with this market. First, want to get his reaction to jpmorgans costly legal battles with the u. S. Government. You know, jack, it feels like there are two americas. I know susie has talked about this a little bit. Every time i come out and say every ceo, business guy comes on and says, jamie dimon is one of the best executives out there. They beat me up on twitter. How do you feel about all of this . I think hes a great ceo. And i think hes in the crosshairs. And hell get through it. And i hope this settlement he gets clears the decks. But, jack, 13 billion is 13 billion. Its outrageous. And for what . You cant just say for what when its 13 billion. When you write a check for 13 billion this must be something you did wrong. And theyre giving it to fannie and freddie, come on. Those government boys . Come on. You think this is a witch hunt . Absolutely. Why is it all jpmorgan . Isnt this the company that was the Strongest Company within the financial collapse back in 2008 . Yeah. And the other guys will be behind them. Theyll be after them. You think so . This is just the beginning. If they can pay that much, theyll probably leverage them all down based on their earnings capability. Look, fines are everywhere. You have regulators looking for everything. Look at new york city, how many food violations are out there. How many theyre looking for money everywhere. And the piggy bank is in the private sector and the Public Sector is coming to the piggy bank. How come theres no accountability in government . We were talking to barney frank yesterday and he said, listen, i should have said, what kind of accountability should you have . He said very little. You and barney, i missed yesterday but we go at it. I like him a lot. I think hes one of the smartest guys. Hes a smart guy put bth but its outrageous, his positions. The way he flips on you is unbelievable. He was the leader of the pack in housing. Come on. What do you do then, jack . If we have this heavy hand of government looking for money everywhere you dont get jobs. You dont get jobs. All youre doing you know, ive said this before. If the regulators come to work with the attitude of get them and not how do we grow the economy, theyll get them and they wont grow the economy. You cant take this money out of the economy constantly. Look, i use the example of the Affordable Care act. 26yearolds having their parents coverage. Weve got 16 to 18 companies. We had them all in a room. How much is it going to cost you . 2 million to 7 million. What does the ceo have to do . He has to go home and find 2 million to 7 million. He cant say, i missed my numbers because of the Affordable Care act. He cuts costs, cuts people. Everything has consequence. Bureaucrats sitting in washington are doing nothing other than throwing out the charges, collecting the dough and saying, why arent we growing jobs . I want to ask you about the Affordable Care act. Bob nardelli will be my guest. It seems like everything you say that disagrees with the talking points of the administration, you get swarms of people around you trying to knock it down. Im going to ask you about this parttime economy we find ourselves in. But let me first stay on health care for a minute, kathleen sebelius. Theres a whole rush to blame everything on her, all these computer glitches. Thats my republican friends again. Screwing up the marketing. Look, they forget the last election. Republicans were demonized for hating women. For being mean to women. Now theyre falling back into the trap again. They did a lousy job in the shutdown of selling their points of view. I saw last night on tv, republicans yelling out, get sebelius, sebelius. Im saying, there you go again. You dont blame sebelius . Of course shes to blame but im not going to politically yell about it because im going to get whacked for hating women. Its crazy the way this thing goes. They ought to shut up, let the thing goes. If its not going to let it work, let it fall on its own and let the president and ms. Sebelius deal with it themselves and not be out there calling for her head. Let the president call for her head. Hes the one thats supposed to get rid of her. Not them yelling and screaming. All theyre doing is playing into a narrative that says republicans dont like women. Which is the dumbest narrative in the world. Its impossible to back up with any facts. Well, its also the narrative of republicans who want to blow up the world. I mean, you know, were holding a gun to everybodys heads right before the debt ceiling deadline. Was that smart . They handled it wrong. Republicans went out and asked to defund something. They overreached. And they had so many chances to turn it around during negotiations. I used a line the other day. The republicans couldnt sell an ipad on opening day. I mean, theyre the worst marketers known to man. And the administration is damn good at it. Yeah, very good at it. What youre saying is the republicans need a shakeup here. Well, they need a leader who has a message. Now, that because they dont have a president , the same thing happened to democrats when they lost 12 years in a row. They didnt have a leader with a clear message. We need a coherent message. And not each guy yelling up from each congressional seat. Their own views of life. Its a great point. Let me turn to netflix because netflix hitting an alltime high after the earnings that were expected. I know youve been following this story. I want to get your take on what Ceo Reed Hastings said about the stock in their Conference Call. Every time i read a story about netflix is the highest appreciating stock in the s p 500. It worries me because that was the exact headline that we used to see in 20 03. And, you know, can you definitely we have a sense of momentum investors driving the stock price more than we might normally. Theres not a lot we can do about it. Should a ceo be talking down his stock price . He ought to be candid and hes got some history because he got whacked once when it went up and hes trying to be cautious. Hes done a great job, you have to admit. He put the money in. He put the money in, bought the rights, got the stuff and, you got to give him credit. God bless him for saying that. And hes taking market share from cable, from everybody. From everybody. So, hes done a job. Hes smart to reflect on what happened before. Why wouldnt he . Hes got no downside so that comment. Lots of comment from jack welch, my special cohost. We to want get his take on the rise of the activist investor. After the break, a bit of ge reunion. Well speak with bob nardelli who went on to head up home depot and chrysler, get his unique take on how ge is using from top former executives. And another potential black eye for obama care story. The Associated Press is reporting website programmers saw red flags in Health Exchanges months ahead of the deadline. The reporter who broke the story will be with us. Keep it right here on closing bell. Here we are, me and you on the road and we know that it goes on and on [ female announcer ] youre the boss of your life. In charge of making memories and keeping promises. Ask your financial professional how lincoln financial can help you take charge of your future. Oh, oh, all the way oh, oh oh, oh, all the way customer erin swenson ordebut they didnt fit. Line customers not happy, im not happy. Sales go down, im not happy. Merch comes back, im not happy. Use ups. They make returns easy. Unhappy customer becomes happy customer. Then, repeat customer. Easy returns, im happy. Repeat customers, im happy. Sales go up, im happy. I ordered another pair. Im happy. both im happy. Im happy. Happy. Happy. Happy. Happy. Happy happy. I love logistics. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Welcome back. Market up 75 points on the dow. New record for the s p 500. Dominic chu, quick market flash after hours. Lets kick it off with aftermarket earnings with amgen, biggest Biotech Company in the world, came in better than estimates and said full year earnings would come in above expectations. Panera bread lower after market earnings. Met estimates but sales fell short. Forecast also falling short. And cree reporting in line with estimates but lighting equipment maker, guidance disappoints so shares lower in the aftermarket. Back to you. Thank you very much. A next guest was a colleague of our cohost today, jack welch. Theyve seen business go up and down, and in a cnbc exclusive xlre founder bob nardelli joins us to talk current state of economy, politics and a lot more, and of course jack welch back with us for the hour. Tell us about xlre. First of all, congratulations on your anniversary. Thank you. Its great to be sharing our mutual mentor here. Thats right, my mentor, jack welch. Thank you for having me on. You have to get pretty lucky to have a boss like jack welch. I was beaming ear to ear and i saw him walk in. Its great to be with you, jack. Great to be with you, bob. What are you doing at xlre . Were focused on the midcap businesses. Weve done about seven deals so far this year in a lot of different sectors, as jack said. Some are very strong so its very sectorspecific as to where were looking. Were in energy, were in retail, were in dealerships. Were having a great time doing it. As jack said, when you look at Different Industries can you see a different picture like energy. Is that a gamechanger for the economy, energy . It sure is. If the administration with let it rip on public lands, wed really see something. I mean, i think the whole thing is just going to change america. Yeah, jack, i couldnt every time im on, i get boring. Im an absolute, you know, proponent for energy independence. I just you know, as much progress as the industry is making, maria, i think we should move faster. We shouldnt be exporting gas. We ou