In russia, though, the benchmark micex index fell by more than 3 at the open. Right now, its down by just over 2. 3 . The u. S. Futures at this point are hanging in there. Theyre showing a slight rebound after yesterdays selloff in wall street. You saw that decline when the dow was down by 230 points. Also saw the s p and the nasdaq down significantly. We will have a deeper market discussion with our panel in just a few minutes, plus a live report from kiev. Secretary of state john kerry gets ready to meet with his russian counterpart in london. Coming up at the bottom of the hour, Michelle Caruso sa brar ra caught up with ukraines Prime Minister who was here. There was a question that he wouldnt answer. In fact, he walked away from the camera. Thats coming up at 6 30. About bitcoin . No, not just bitcoin. It wasnt whether he was the that was the guy that we pegged as the person that looked like no, that was not the question. Because andrew said the guy didnt look like the actual guy. The newsweek fingered. And then we said what would he look like . And we said nerdy looking sort of that was not the question that had him walking away from the cameras. Because if he wouldnt answer it, then you would think he might actually be the you know, these foreign things that are coming in and impinging on our markets, we decided in january that it didnt matter . Yes. No, we decided recently that external things. But remember when i said is he going to be hungry with tanks . It kind of is this hungry 2. 0. Its like the way you do it now. You kind of do it and, you know, we just sit around and go, yeah, theyre doing it, but there are some but no shots were fired when they took over some of the navy facilities. There were two protesters killed yesterday. But its different and it seems like sort of a kinder, gentler russian annexation of a country. Which theyve done before. I mean, the people on the ground are very concerned at this point. For the referendum, theres only two votes. You get to vote to be part of russia or you get to vote to go back to 1992 when you were basically separate from the rest of ukraine, anyway. There is no vote on the referendum. I think china was worse. I think china was worse. I think people are more worried about the but even that, i dont think, should be really more than a one on or twoday well see what happens. Were ready. Were probably well, we had everyone coming in here saying were ripe for about 5 or 10 or 15 . So were ripe. Were set up for that. Youve got what seth carmen talked about. Youve got some serious froth and a couple of names, warren technology, youve got the nasdaq back well above 4,000. But in terms of whether it has the the potential to derail the 3 right. To derail the 3 . Well find out the biggest shot depending on what happens. Right. Because of the rip off effect. But yesterday we had welch say it. Things are good and that the orders are coming in. And no change yet, but optimi optimism. Optimisms based on orders actually coming in. But nothing has changed. As of right now, nothing they have seen orders coming in and that gives them hope. But i had the feeling that they werent concrete. Yesterday he said nothing has changed except its optimistic that it will change. It seems optimistic. But it has in the last couple of years. The gm recall crisis is we hear new things about it every day. Anything that goes back to 2001, you know its sort of keep coming out, dribbling out. A report from an Industry Safety watchdog says as many as 303 deaths there were 12 or 13 were recorded when air bags failed to deploy in the 1. 6 million cars that were recalled last month. Thats a little different. The center says it used fatality data from the national highway Traffic Safety administration. This doesnt sound like you can just point to the ignition thing. This is like going back and figuring out what would have i dont know. What caused the air bags to deploy. You cant say for sure if it deployed that someone wouldnt have died or not. A little bit more statistical Type Analysis here than this, knowing that the wheel locked and you ran into a tree and died, right . Gm issued a response to the report saying that, oh, the 303 deaths is based on raw data and without vigorous analysis i could have written the pr for this it is pure speculation to attempt to draw any meaningful conclusions. Goes on to say gms investigation into the ignition switch defect is ongoing. Shares have had a rough week, but the markets have had a rough week. But at this point, down below 34 now. Yesterday we were talking about below 5. So 3361. But still, if you look at 12 months, its right in the middle of its range. Another story weve been covering for some time, activist investor nelson peltz blasting p pepsico. He is demanding answers on operational issues and its corporate strategy. He wants the company to hand over details about expenses and provide volume growth and market share data for all beverage categories in north america. Plus, he wants a meeting of shareholders and Board Members without the presence of pepsicos management. Here is pepsicos response. They say, in fact, our independent providing director and one other independent board member have met with trian without management present. The board has they are rowly reviewed trians proposals and has concluded that they would not maximum shareholder value. Taking a look, its been a bit of an up and down for the last couple of months, but it is higher, 81. 82. John malone, Liberty Media are looking at splitting holdings into two tracking stocks. The other will cover libertys 53 in sirius xm holdings. And the Atlanta Braves baseball team. Probably just something to do, knowing him, with taxes. Liberty is pulling its offer for sirius xm off the table in a deal with more than 10 billion. Liberty plans to create the tracking stock by the Third Quarter and, you know, malone has given a clinic on how to do this stuff, among other things, over the past 25, 30 years. Hes still in, isnt he . Hell make the top 25, wont he . I dont have the list right in front of me, but he has to be on that list of 100. Im surprised. Exactly. Well, were wrapping up the trading week on wall street. Stocks had their biggest loss in more than a month yesterday thanks to china fears and ukraine joining us now to talk about the economy is nariman birivekh. And phil is joining us, as well. Ill start with you, phil, first. Were trying to decide anywhere in this bull market, its been going on for a while, but ive seen historically its not that long in the tooth necessarily. Are valuations stretched right now . Is china or ukraine able to derail this . China and ukraine are speed bumps, certainly. And the heightened volatility this summer has been increased. But we city think were we have a 2100 market on the s p by tend of the year. Not on the dow . Not on the dow. We look at the s p. That would be a significant call. Our people are saying that, by the way, guys like faber and others. 2100 on the s p. Okay. 21100 on the s p. So from a valuation perspective, which was your question, were probably trading at about 15 1 2 times estimated earnings of 120 this year, given benign levels of Interest Rates and inflation. Thats a reasonable multiple. We think multiples continue to buy that. So china wont turn into a route in the emerging markets as it affects us . We dont like em. We have this dont we need them for our Multi Nationals . Its important for us, isnt it . We certainly need them. But right now, u. S. Is working, developed markets are working, emerging markets are not. Our models dont particularly like them. From an allocation standpoint, were essentially zero em versus 6 benchmark. So were 6 underweight. When did you go underweight . We were short for the best part of the last three months or so. Wow. Just close that short for the last couple of days. Before the january mess . Exactly. We started getting nervous. Our model picked up that decemberish or so. The em has been an area that we havent liked, it hasnt worked. The markets have come down. So youre not shorted any more . Were close to short this week because the markets have come down. From a valuation perspective, we thought it was prudent to cover the short, but were still under weight. Thats a sideble bet. Nariman, i havent spoken to you about this conversation weve had all week long. That is are you at 3 . And it was the negative numbers have been mostly weather related and we should do 3 this year . Is there a where you are or are you in the low 2s . No, were not in the low 2s. Were in the mid 2s. Mostly because the First Quarter will be very weak. First quarter is only going to be between 1 and 1. 5 . We expect by the second half were at 3 or above 3 . If you look at the calendar year average, that comes out around 2. 6 , Something Like that. So yeah, were going to start off weak, no question about it. Markets may not be happy about that, but well start off walk but then strengthen. Well, thats a pretty big statement, mid 3s by the end of the year. Its not a given. Well, i think the fundamentals are very strong in the u. S. Which ones . Which one what . Im sorry. Which fundamentals . Housing still strong, Consumer Finances are strong, Corporate Finances are strong. Weve got an energy boom going on. Theres a lot of factors that underlying strength in the economy that i think will finally show themselves. Weve got all these temporary factors playing in. Because weve had a chance for a couple of years to do that. And it just hasnt happened. And i wonder, is it a leap of faith to think that finally it works out for us . No. Just remember, the last half of last year, if you average those two quarters, were about 3 . We had a over 4 and then we had a weaker Fourth Quarter. You average those, were over 3 in the second half of last year. We can do this just domestically, too. I mean, if china slows or if the emerging market is good, or even europe, europe doesnt you know, is not going gang busters at all. I dont know whats going on with the euro. Its like a 1 economy, isnt it . Absolutely. Thats what we were saying for this year. Yeah, i think we can pretty much do it on our own and thats what its going to be this year for the u. S. If the yuan goes down, its even cheater for us over here, isnt it, with the stuff we do buy from them . Yeah, actually, it is. Ironically, youre absolutely right. Obviously theres all these worries about a weak chinese currency, it doesnt hurt us because of all the outsourcing going on, all the supply chain issues you were alluding to, absolute absolutely. You were talking about leading indicate thaers suggest the u. S. May be ready to turn coming out of this weather compact. Just over the last week, joe, claims data the last couple of weeks getting better. The retail sales report says versus january was encouraging. Some of the data were looking at in manufacturing, the orders have been the shipments have been terrible, but the orders have started to perk. Were starting to see the inflexion point right now. We absolutely agree with him in terms of the weakness in the Fourth Quarter and the First Quarter from a weather standpoint. We absolutely believe that were looking at three handles in the Second Quarter and beyond as we sort of shake off this weather impact. You know, europe, were sort of in the 1 camp, too. And right now, em is a wild card. Okay, gentlemen. Thank you. Distracting to read these tweets. Anyway, thanks, nariman. Thank you, phil. But its nice that people are wishing you well. Good morning wishes, becky, from louisville. Yes, we appreciate that. Rutgers versus louisville last night was not exactly i told becky. A shining moment from there. We lost by 61 points, i know. 9230, its a rebuilding program. Is that what it is . Its just our Basketball Team helping our Football Team feel better for when we enter the big ten next year. There you go. There you go. I watched some of that. You know what . They did a great job the night before. Boone was in earlier. They did a great job the night before. They did. And youre wearing red. Louisville i think is sort of cardinal, too. Florida state took kansas into overtime. But you know who we are on today, too . Dan gilbert and Warren Buffett. Buffett. Do you remember who we were talking about with do you know he was at that crayton game . Did you watch knit of the creighton game . He has tattoos on his face over the weekend. Apparently those dont come right off. Yesterday, 27 points in the first half. Hes the coachs son. Hes like a brown noser. Right . The other guys on the team are like, oh, the coachs son. Except hes the best player in the country so its great watching him. Anyway, were going to talk about were going to talk about some march madness. Are you into this . I am. Its so much fun, isnt it . What does the nba have to do to get the same xiemtd . College games are so much more exciting right now. Is it the clock. I think its the desire to play or something. College kids are going out all the time. Its like run and gun, right . You watch things happen. I dont know what to do with the players are the best College Players are in the nba. Why isnt it good . I dont get it. Anyway, thanks, phil. Youre welcome. Thanks for having me. But i digress. Sorry. Nariman. I was trying to smooth over the wound. Yeah. Pour a little salt this morning. In the meantime, secretary of state john kerry is in london today where hell be meeting with his russian counterpart just two days before crimea holds a referendum. Steve, is this seen as a foregone conclusion there like it is here . Yeah, well, michelle spoke to the ukrainian Prime Minister after his u. N. Meeting yesterday. And he suggested foregone conclusion, the result is in the bag, obviously, for the pro russian element. Because this is not a legitimate election done any decent monitoring. I will give the point of view, though, of the crimean pm who is seen very much as the russian man in crimea. He says, look, this will be a guaranteed aspect of european law will be followed. We will include the security of voters. Now, the u. S. Ambassador, the oace, which is approved for the Security Cooperation is a which hasnt been able to get into crimea. He says no legitimacy, no legal effects, no moral effects, its political theater perpetrated at the barrel of a gun. If we look at the question itself, its not offering voters in the crimea to stay part of the ukraine. The question is do you want to join the Russian Federation or do you support the 1992 crimean constitution . Thats very interesting because the original 1992 crimean constitution pretty much had crimea as an independent state, not part of the broader ukraine as it stands now. So huge question marks about what people are being asked. People are very nervous throughout the rest of the one of what this means next. A russian population in the east of this country. With that as a back drop, weve seen huge Russian Military maneuvers in areas bordering the ukraine. Big artillery displays, powerful maneuvers, as well. There are concerns, of course, that there would be potentially some form of escalation. Escalation, as well, on the sanctions front. And it was very interesting to hear frau merkel despite the enormous link with russia in terms of trade talking hard yesterday. If there is this annexation, if it does go on, what happens next on both the sanctions front on the u. S. And europe could be very interesting, indeed. Backlash from the russians, as well. Back to you guys. Steve, thank you very much. Right now, though, we are turning to missing Airlines Flight 370. Todays News Conference just wrapped up in kuala lumpur. Sri, the details that we tend to hear outside of malaysia tend to conflict a lot of times with what weve been hearing. What did you hear today . Well, the minister was tracked by journalists who question whether the back drop flowed on for several hours after it stopped transmitting signals. Remember that theres also the question as to whether it deviated off course. Not a great deal to go on, im afraid. And the other question mark that is being raised increasingly is whether the plane had been commandered. There have been records that the pilot had a Flight Simulator in his home. His home is yet to be searched. So that leaves that question unanswered. What we do know is that they continue to maintain this is not a normal investigation. This is unprecedented and the transport minister said it forces us to look further and further afield. We can see some probing of the Western Areas off the coast of malaysia into the sea, even into the indian ocean has been confirmed. The South China Sea is a main focus area. Malaysian transport area getting back to this issue of whether the aircraft has been comandered. One other point i want to make, we raise this question as to whether its been silence from the stakeholders in this investigation. Thats boeing and rollsroyce, the aircraft manufacturer and the maker of the engines that go into the aircraft. They havent said anything for the past one week. And i asked the minister pointedly, why was that . Do they have things to hide . In the interest of full disclosu disclosure, we need to hear all the facts. His answer was we dont need to put any pressure on them because they are working with us. So the bottom line here is the search areas is being expanded even further. Back to you now. So, sri, it sounds like they are being evasive, but not knocking down the reports that that plane could have been in the air for five or five hours after its last transmission back, correct . That is correct, yes. Everything is on the table. Theyre sxloe exploring all possiblies the that is a refrain that we have been hearing for the past several days now. And they havent really narrowed it down. We really dont know, but they are not ruling that possibility out. Particularly cruel for because if it were me and i had a loved one, i would be holding out hope that it landed somewhere and that there was some weird thing look, even if it was a hijacki