And im melissa lee coming to you live from the emerge conference here in miami it is the tech event of the americas with us on the today ai social media navigating the tech world right now cofounder weighs in move over Silicon Valley and alley for that matter. Why miami may be becoming the next hightech zone. Welcome im becky quick. Lets take a look at how markets are trading now. Green arrows with the dow hitting an alltime interday high the dow up 82 points s p up by ten points the nasdaq up by about 40 points by the way, nasdaq is up for the first time in just three sessions after some rough days apple, netflix, amazon and facebook are all trading higher and materials are the second best performers today led by cf industries, Martin Marietta and sherwin willia williams ron barron striking an optimistic tone this morning about markets and the economy. With lower are Interest Rates than we think and Lower Oil Prices than we think, we think the economy will grow much faster than it would have otherwise. And so stock prices as a result are cheaper than they should be and, finally, gdp is significantly understated. Bill gross of Janus Henderson is not quite as optimistic in his latest outlook he says all markets are increasingly at risk Economic Growth is and should continue to be below par and bill gross is joining us now bill, its a pleasure to speak with you thank you for joining us brian, thank you for having me we think of you as the bond guy but you are literally unconstrained and you have invested in stocks to a point, to a small point in your fund. What do you make of ron barons optimism on the economy and the markets . Well, i think its a little too optimistic and when he talks about gdp numbers being distorted thats a typical argument when things dont go your way the way i see it the u. S. Economy is a 2 economy plus or minus not a 3 economy and i see the Global Economy as slowing, too. Brian, the global economies are faced with what are secular head winds. I call it the normal some called it secular stagnation and were talking about aging demographics, people getting older, talking with about debt, too high debt levels were talking about global de delevering and those that lead to slower Economic Growth. Theres not much monetary orificecal policy can do about it bill, sit tight were not going away but we do have some important breaking news on uber deirdre bosa, what do you have reporter brian, according to the New York Times ceo of uber is going to be taking a leave of absence, Travis Kalanick the reason he will be grieving his mother after a tragic boat accident where she passed away a few weeks ago. It is not clear at this moment who will be stepping in but, remember, this is a Leadership Team that has been decimated by this holder investigation. Were still awaiting the results. I have them right here, guys im going to be going through them and we will look for more casualties from this report and bring you more we can see now there is an email that travis has sent out company wide, the last eight years of his life has always been about uber but again, guys, he will be stepping away for a leave of absence. Well get back to you shortly with more details. Cnbc can confirm this as well. Were going to see more of you in a couple of minutes as you have time to go through that back to bill gross of Janus Henderson. Thank you about that, bill uber is a big story certainly. Sure. We dont want to invest with whats going on today. Generally if youre smart you want to invest whats going to happen nine months, 12 months, three years from now we had an interview with a fo former fed official, moodys coming out, both suggesting the fed could go as high as 3 over the next couple of years a, do you agree and, b, what happens and where do we invest if they do well, not in this economy until nominal gdp, real growth plus invasion basically at 3. 5 to 4 now. A 3 fed fund rate is restrictive. It would remind me of what bernanke did in 2005 and 2006 when he raised the fed funds rate to 5. 25 . It was too restrictive i dont think the fed can do that i dont think other global central can move higher. Ultimately they should savers and investors need higher Interest Rates in order to pay off liability to insurance companies, Pension Funds and the like i dont think they will. I think theyre going to hike once and perhaps once next year. Thats what the market anticipates. We simply have a levered economy that does not stand or could not stand 3 fed funds rates bill, its becky quick. Its great to see you today. Hi, becky good to see you the question i have in terms of why markets at these levels now, why would you say that is its been kind of defying gravity for so long particular ly since the election. Well, all due to Central Banks. Thats the only place where we need to it look, becky Central Banks have injected 8 trillion worth of money, credit into the system over the past four or five years were talking about the ecb, the boj, the fed, of course, and they havent done that for a year and a half or would 8 trillion is a lot of money. Its about 8 to 9 of total credit on a global basis when you put that into the system the money finds a haven, it finds higher yielding assets like stocks and leads to bubbling in many asset categories i think almost all assets are artificially priced and that once Central Banks stop doing what theyre doing, and they will at some point, then investors should be leary. It could take a while to get to that position if the fed starts rachl ratcheting down its Balance Sheets, they are all planning to inject more liquidity into the system at least over the course of the next year and a half or so does that mean markets might have a bit of a run still before you see any pullback yeah, i think thats possible as long as the ecb is 60 billion a month and keeping Interest Rates basically at zero or less. Then Global Markets will be arbitraged and u. S. Treasuries and u. S. Stocks will benefit from that. Ultimately its a central bank gain and to the extent you have to keep playing Musical Chairs or you have to keep dancing like chuck prince said, you do have to keep dancing, to invest in markets. But you have to be careful that at some point once Central Banks stop injecting money the game will end rather quickly. Were going to see you tomorrow, bill, but we have our own central bank, the Federal Reserve decision im sure youre likely in the camp youre going to get a rate hike everybody seems to agree on that what kind of language do you want to harper the fed say about the deleveraging of its own Balance Sheet . Well, i think theyll hint, brian, at the 10 billion a month delevering does that do much on a 4 trillion Balance Sheet not really and so that will assuage investors in terms of the ten ye year it will keep the ten year posted and pinned, i guess, at around 20 or so, plus or my fuss. The fed will be very cautious in its language janet yellen is dovish and i continue to see that in the expression theyll keep money cheap for a long time. Bill gross of the newly renamed Janus Henderson. Well see you tomorrow get some rest. So you just got bill gross take now the view from one of the biggest bulls on the street, chief u. S. Equity strategist at rbc is out with a new note raising his yearend target for the s p 500 to 2,600. Good to see you. That is a gain of more than 6 from where we are now. What do you see that maybe somebody like bill gross isnt seeing at this point i think i disagree with the premise bill has this is simply Central Banks are almost like central plan ers choosing where to push markets. What pushes markets higher are earnings and if recessionary risk is low and the fed is telling you its low, multiples tend to go up until basically you start to get a threat that the cycle is over. So earnings look like theyll come in Something Like 7 to 9 in the next 1 2 months and if you get a half to a full pe point 12 returns for the next year and it has nothing to do with free money. Its a simple math does it not, though i dont want to speak for bill but its you have to agree a little bit ksh and i agree with you, jonathan, 100 that earnings should be the most important thing for stocks but do you agree at all that it artificially low Interest Rates do help goose earnings im going to take the opposite side. When you have artificially low are Interest Rates, the first thing you do is you fry the Banking Sector and make it very difficult for them to lend profitably so that hurts Bank Profitability by having artificially low rates. The second thing is savers or retirees have to live off of a measly Interest Rate and dont have the same level of capital to spend the market if it sets the Interest Rates themselves you should get more output at the market set Interest Rate and why Central Banks believe that by a artificially lowering the rate they get more. You staked your place in the sand its great to see you, jonathan. Lets get back to deirdre bosa with details on the uber meeting, breaking news coming out. What can you tell us now reporter hey, guys we can give you a little bit more detail about travis kal kalanick the ceo of uber, his decision to step down. We have an email he sent to ubers 14,000 employees. In it he says that if we are going to work on uber 2. 0, i also need to work on travis 2. 0 to become the leader this Company Needs and that you deserve. He also says that during this interim period they will be running the team there have been a whole bunch of departures while the investigation has been ongoing his number of reports have been depleted he says it is hard to put a time line on this it may be shorter or longer than we might expect. We also have the report are from the holder investigation that has about 14 pages long. I have it right here but it has recommendations such as reallocating the responsibilities of travis k kalanick and identify candidates who can help address these recommendations. They already brought on several new people theyve lost lots as well. This is a culmination of months and months of investigation. Well continue to go through it and bring you more six or eight eyeballs are better than two, deirdre i will add to it you said its a 14page report i see other recommendations have to do with reducing alcohol use at work events and i will not ask you to comment on that directly but as a comment statement if these are the recommendations you need to have as a corporation, youre starting from scratch. A the lot of these reports have come out in the last few months but its been going on for years. This company has grown very quickly. There have been reports of parties in vegas, company wide parties, when it was much smaller than it is now theyve operated hard and fast and there are reports such as guidelines that Travis Kalanick sent out about how to conduct themselves at these socalled parties. Where there was alcohol involved, thats part of the reason, maybe a big part of the reason weve seen that he is taking a leave of absence. I want to make clear, though, brian, in his email it is to grieve his mother who he says he put to rest just last week you know, deirdre, when the news crossed i thought immediately if this were publicly traded what would happen to the stock price. And it seems unclear at this point given the power vacuum that exists at the top you get the sense now might be the perfect time for uber to bring in the adult in the room, so to speak, and what sort of pressure could the venture capitalists be putting on the company now to get that adult in the room melissa, thats a great question i think an important point to look at, yes, this company has seen a lot of crises, has been in the media but lets strip that all away, look at its core business and we did see some financials from the first quarter. And the business it self is improving. Theyre narrowing the massive losses so there was an article on cnbc. Com by bradley tusk who was is the adviser to uber while we strip away some of the old management, leadership and put new people in, there is a bit of a risk you could do something to the core business largely a cultural problem and some indication that it is, that lyft may be taking advantage of all of ubers woes this is seen as a cleansinging and whether uber will take them, put them in place and make the changes necessary. Deirdre, well give you time to dig through that 14page report thank you very much. I have a news alert on the bond market. 30year bonds are up for auction as well. Rick santelli tracking that at the cme. I dont know if you heard the bill gross interview but Steve Liesman talked about fed funds going to 3 . Whats your take on everything going on reporter 2. 87, 30year dutch auction yield. I gave the auction a cplus. Charlie plus all the metrics were average price tight, though, with that 2. 87 now done i had former governor robert helle are r on he said the same thing and i dont dispute the notion that theres a good argument to be made the rest of the market isnt under normalization function its not going to normalize. I dont think the long end can handle that. I think bill gross is right. Theyll invert the curve never a good thing rick, thank you very much we will see you again soon, Rick Santelli folks, bitcoin has been hitting record highs can you actually live off of bitcoin . We did and by we i mean seema we will tell you what happened and the uber report crossing and Travis Kalanick is taking a w llt fe te omheomny howi iafctheir valuation . That question next so, how are things careerwise . They youre fired [ screaming ] its time to get back on top. Were going back to villainy. So bad so good that im so bad. [ maniacal laugh ] dont try to fight the feeling of somethin thats so organic. [ pop ] despicable me 3. Rated pg. All right. That eric holder investigative report into uber is just breaking so far the big headline is this. Travis kalanick is taking a leave of absence for the company with no timetable on his are return what does this mean for uber manageme management, its customers, lets bring in the professor of law at Northeastern University and m l molly wood, tech correspondent with marketplace polly, ill begin with you kalanick leaving, no timetable for his return a number of other toplevel posts. What is uber today is it an operating entity . Thats a pretty long list you do have to remember uber has brought on some fairly highprofile people in recent weeks including francis frye of management and strategy. There will be people working on revamping the culture and they will be promoting from within but it is absolutely true one of the biggest problems at uber thats been identified by people like francis frye is that it has a problematic Management Structure in which everything flows through Travis Kalanick. It is certainly going to be an absence felt pretty keenly molly, the one thing i will say is this. Its a private company so we dont know all the internals but we havent seen fidelity and other firms that track the value of private companies write down their thing, that maybe this is hurting their core business. People are still popping out of ubers millions of times a day. Do you believe the company will go through this storm and come out the other side as it was i think consumers will decide and i saw some Brand Research just this morning that said ubers favorability is starting to take a dent it was from morning consult, dropped nine points in just a week and its favorability rating was about 40 . As it reaches the mainstream i think the consumers will make that determination whether this is a company they feel good about. So far ridership has been increasing there hasnt been a huge sign theres a policemen wiproblem wh the business so many companies, investment funds, institutions have money in uber now that its not in anybodys interest to try to tear down that valuation unless we find out something about the financials of the actual business which, i have to say is still possible we really dont know whether this Business Model works. Andrea, what happens in a situation like this . Its hard to even think of a similar situation in the past where you have somebody like an eric holder come in, issue a report like this what do you think the next logical step is . I think the first step to follow through next on ubers part is to take those recommendations very seriously and so this isnt an unprecedented growing pain situation. If you look at the history of google, of microsoft, you see other magic Tech Companies go through restructuring and to shift from entrepreneur and creation mold, builder mode into Public Company mode and we can view this as a unique opportunity for uber to engage in precisely that kind of transformation the key metric that id be curious to see is the ridership churn. How many of the early adopters that started out with the company in 20132014 are still customers and what their opinion of the Current Company is and the way the company does business could be a har binge earp of future downward trends in ridership is it possible were looking at a company that could actually be completely sa