That we saw yesterday, increasing concerns about whether or not the fed is going to raise rates in june. Does the fed threat then rally . I dont think. So im not going to speculate on when theyre going to raise rates. The bottom line is you know theyre going to raise rates. It could be june or september, next year. What the real important question is what are you doing in the fixed income market if the feds raise rates you . Know theyre going to go up. Its just a matter of time. And i get very, very concerned about the 3. 5 trillion that is sitting in fixed income mutual funds as i look forward into a higher rate environment. They could be potentially at risk. Talk to me about stocks. Do you do anything differently with your stock portfolio . No, not at all. If you look at the market, i think the market is in great shape here. Reminds me of 1982 to 2000 market where it was up each and every year. Except for 1990 when down. 5 . One thing that you have to look at this market is theres no euphoria in it. On either side. Fear or greed. In corporate profits are at all time highs. Cash flows at all time highs. The banks are in the best shape theyve ever been n its poised to go higher. Nick, speak to that point that neil just made. I was just looking at some mutual fund data. Money is coming out. Flying out of equity funds. Where is it going . Its going into fixed income funds. Yeah. Are these people getting their ass handed to them or what . Theres been a lot of shift in what we do is ch is focus on market volatility and what is happening in the derivatives markets. Weve seen an enormous shift towards protection buying. So you started the year with the vix products suite which is where people play pure market volatility with about a billion dollar notional long bias. And that shifted toed 4dz billion notional long. So its kind of an unprecedented shift. What does that mean . Notional long bias . So because people are investing in vix futures, they can invest long or short. So you have products that allow you to get short exposure to the market and vix futures, long exposure. If you aggregate whaupt client flow has been and take account of whether its in the long products or whether its into leveraged short products, et cetera, and you say where is the money moving . It is towards long volatility positions, short volatility positions . Which means fear . Which means fear . It z it drives up the cost of those positions. So what weve been talking to clients about is counterintuitive to what you think with the vix at low levels. Were looking at a 15 on the vix. The cost of those long positions is at near record highs. Its very, very expensive if you believe that trade. If you want to put on that trade. It would cost you a lot of money. Correct. Correct. And so what were really talking to clients about is perhaps its when everyone else is buying, maybe its a good time to be selling so, neil, as a straight up fund manager, you take the client money and make them money. You are noticing a higher level of stock fear among your clients . Absolutely not. I think thats why i say there is no euphoria in the market. When i look at the overall market today, you can get 2. 75 yield in the 30 dow jones stocks verse a 1. 70 in a ten year fixed u. S. Government bond. So its really a nobrainer. The other thing i see in the marketplace is that historically companies that paid out approximately 50 of their earnings in dividends. Today its about 30 to 35 is being paid out. So there is a lot of room for Dividend Growth before the Companies Start to actual lly spend money. When you start rotating out of the dividend payers, rates are going to go higher. The thinking is you get out of the utilities of the world, Consumer Staples. You move into the likes of financials, lets say. Which are, by the way, a market leader. You take a look at the financial s p 500 sector and also the kbe, the Regional Bank etf. Those are the gainers in todays session on the day where theres a thought that the fed rate hike son the table. You have to look at the total market around 30 or 35 which is paid out. Theres a lot of room. If rates go up, that doesnt necessarily mean dividend paying stocks are going to go down. Its because of what are they doing with the dividend . Have they raised it every year for the last ten years . Are they going to continue to do it . So you at least have the opportunity to get more income in dividend paying stocks than you do in a fixed income product. I think thats where you should be Going Forward let alone profits and cash flow. Youre ahead of etfs for janus. Any way to play the fed at this point or dividends . Yeah. I think what we see similar to the point being made is that equity Market Investors have priced this n weve seen certainly at janus a year that weve seen increased market volatility. This year its been fairly calm. Obviously, we had some of the declines and come back. If you look at the daily realized volatility, its averaging about 16 on an Annualized Base this year. Youre right. I mean, its calm now. Can you average it out. We have massive hits, 20 swings. What changed the end of february to now . This goes to the point that were making. Ultimately, what do you do with equity market volatility . Nice to say the fed may feed into that. What do do you about it . And our position ultimately is you have to you know, investors dont care about volatility unless its to the down side. Up side volatility is a wonderful thing. What were talking about is what is the risk of a decline . Were seeing than vestors in equity markets are not expressing that fear. Theyre not going out in markets. It is manifesting itself in option and derivatives. Have we ever met bill gross . Does he exist . I have met him a number of time. Did he ever show up in denver . He has an office in denver next to the ceo and he spends a lot of time in newport as well. Good to see you. Thank you. Just checking. Thank you nick and neil. Retail target shares trading at the lowest level since november of 2014. This is after they reported lower net profit last quarter compared to the same time last year. Theyre joining the slew of other retailers hitting multiyear lows. Foot locker, lowest level since march 2015. Nordstrom, lowest since 2010. Macys and gap, lowest level since 2011. Lets bring on a analyst over at morning star for more on this trade. Great to have you with us, bridget. Thank you for having me. In terms of the Department Store, there was a story that gap ceo was saying he would entertain the idea of selling his merchandise on amazon. Is that the new Online Department store . I mean is it going to disinterimmediate yad the nordstroms of the world . I dont think that will be the only player standing. But, yes, certainly the Department Stores are losing share to the online channel and amazon is the king of that. The trick is how these brands switch over to that platform. Their concern is to maintain their brand image and pricing whereas amazon historically was known for the cheaper prices, discounts, and its not really good at displaying the clothes in a lifestyle manner. So i think youre going to see a slower shift over to that channel than just in the heed everyone gets onboard with amazon. Is that a good thing for the gap though . They do this in china an tmall. Its not like theyve never done this before, sell their merchandise through another channel. Right. But there is a shift in the model. You know, youre suddenly not owning and operating your own retail channel. If amazon ever were to become a significant retailer of the clothes that, would mean that you are heavily overstored and that you really do have to tweak your Distribution Channel to represent the new model. So you think that gap should not do this . Is that the bottom line . No. I mean, all of retailers need to follow the customer to where the customer is. So absolutely they need to do it. I do think that its going to involve a few bumps and bruises along the way though. Its interesting. I was reading through the notes here. It seems like you think the winners, among the winners are the off pricers. Weve seen success during this earnings season. And also the manufacturers. These are the guys of the fcorps of the world. They can decide what the channel is. Does it play to their advantage . They could decide were going to go through a Department Store like a macys or go straight on amazon and sell our stuff. Exactly. The apparel manufacturers are completely channel. And, you know, theyre manufacturing and supply chain is set up to distribute to whatever retailers are necessary globally. So i think for them, their positioned to have the easiest shift over towards somebody like amazon. And id also highlight that basic apparel manufacturers like a hanes brand, they do underwear. And the underwear category is wonderful. Its replenishment, right . The underwear is going to run out. You have to replace it. Hopefully. Lets hope we dont get so poor we cant afford that. So i do think right now those are some of the best positions. All right. Bridget, great to speak with you, thank you. Tyler . So what is the fate of the major dement stores . Former chairman and ceo of Saks Incorporated joins me. What do you think of what bridget said . Pick apart her argument. I think retail is going through a major transformation. I call it a disruption. Youll is winners and losers. Everybody is going to look at their own self interest in terms wlaf is right for them. And whether you have the vertical intergrated manufacturers like gap thinking that maybe we ought to be selling on amazon or the vfs of the world saying that Department Stores are not growing the way we need them to grow and get another distribution out. So maybe theyll open up amazon. So that says the Department Stores have to find theyll sell on their own website. Absolutely. Just the way the Shoe Companies do or whoever does. Spin forward this movie ten years. With specific reference to Department Stores, whos going to be left . What are they going to excel at . How busy are they going to be . How are they going to be different . Remember, the Department Stores, a number of them, macys, for example, nordstrom, theyre major players. They have internet businesses today. Thats going to become even bigger. Theyll probably have fewer stores. But they have to fundamentally transform themselves. Theyve got to provide much better experiences than they do. Everyone use thats word, experience. But it is real. Theyve got to change its not just about selling the physical product. Because if all youre doing is selling a pair of jeans, they can get it on amazon or somewhere else. They have to first have much more differentiated product, more private owned brand, brands that nobody else can get. Then theyve got to provide an experience that is very different. I think thats the real key. I just bought a pair of branded jeans on amazon, first time id ever done it. I like to try the stuff on. But i knew this brand. And i ordered it that way. I probably do it again. Like the shopping experience. I think you nailed it there. I think the experience is critical. When i go into a store that is jammed with stuff, that wasnt the word that came to mind, i get annoyed by it. I cant get i cant find what i want. Thats number one. Number two, i think for the younger shoppers and others, it has to be a social experience. It cant merely be im going to go in there and go through racks of stuff. I think you have to have a party. Throw a party at saks and make women come and serve them a nice rose. Its about the relationship and experience and providing something they kblt get anywhere else. And macys, nordstrom, all of them have to go into how are they going to do it . Brian . Its a little side ways of a question, i guess. You know, you ran saks. All this real estate, macys and sears, all the real estate. What it is going to look like if your prediction is true . Is america going to be littered with a bunch of empty ugly buildings and half filled malls . I think youll find winners and losers. The winners will be fine. There will be good malls for the long term. The cnd malls, i call them the a malls, the short hills. The cnd malls, theyre going to become health clubs and reused for other purposes. You dont need amany malls as you have. Will they be used or empty . An empty building is blight. It is ugly. Its dangerous. It brings down Neighborhood Housing values. Will they find other uses . I think it will be both. Some will and some wont. Some will go away and theyll become housing. What about the big buildings in the interior of the cities, im thinking of the big macys landmark on seventh avenue. Big macys in chicago. Lord taylor. I think the big stores like the macys, the saks on fifth avenue, theyll be fine. Theyll be fundamental tolt idea providing the experience. But they have to change. They have to bring in the restaurants. They have to bring in gosh, ways in a mall in thailand where they have movie theaters where they have movie theaters where they serve why pay for insuranc yo pay even more for using it . If you have Liberty Mutual deductible fund™, you could pay no deductible at all. Sign up to immediately lower your deductible by 100. And keep lowering it 100 annually, until its gone. Then continue to earn that 100 every year. 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Hell release once a federal tax awed it is done, perhaps even before the lection. Meantime, both likely president ial nominees have released the legalry required personal Financial Disclosure statements which show both of them, no surprise, squarely in the top 1 of all taxpayers. As did he last year, trump reported net worth of over 10 billion as well as income of 557 million. Not clear whether that is revenue to his businesses or personal income but heres some building blocks. 131 million from the trump golf course, 49 million from the Miss Universe pageant. 44 million from trump park avenue condo sales and a screen actors guilt pension of 168,000. Clintons income was smaller but still extremely large. 5 million from book royalties, 1. 4 million from paid speeches, and another 5 million from bill clintons speeches. Whatever affects their policies would have on average american families, neither one of these candidates will be feeling them, guys. He gets it from the apprentice, i assume is where the pension comes from, the Screen Actors Guild . Makes sense to me. John, i believe i read in an article last night on these Financial Disclosure thats bill clinton had received a fair amount of money, maybe totaling 20 million over the years from an Online EducationCompany Based in the middle east. Was that part of this disclowe slur . Do you know . I dont know about that Online Education company. Is that a from speech making revenue . No. No. He was a consultant to this company as i recollect what i was reading last night. Well have to check into it. All right. Thank you, john. John, thank you. You bet. All right. There is no other way to put it, its air travel hell. Long lines, angry passengers, people sleeping inside airports. Fingers are being pointed squarely at the tsa. Senator richard bloomenit wi eel talk to us coming up. The call just came in. Shes about to arrive. And with her, a flood of potential patients. 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