There. The price going up a little bit and the yield coming down ever so slowly. Road map this morning starts with the historic day for the eu. U. S. Markets as you just say are mixed at the premarket. The uk formally begins brexit negotiations to which britains Prime Minister said theres no turning back. Plus, betting on robots. The largest money manager blackrock changes the ways it picks stocks. And President Trump expected to sign a bill that clears the way for providers, your isp providers, to sell your browsing history. Well, one day after the dow snapped the eight session losing streak and the s p posted the best daily pormdz erformance in weeks, history is being made in uk. Theresa may has triggered the twoyear process or what could be the proyear process of britains depart chur from the eu. And this is how theyll approach trade. We will no longer be members of the single market. We are going to make sure we are going to make sure that we can strike trade agreements with countries from outside the European Union too. Because important to our trade with eu is and will remain, it is clear that the uk needs to increase significantly its trade with the Fastest Growing export markets in the world. All right. Were here. We finally got here. Where are we . Well, i tend to i attended a Panel Last Week in london on this issue and my take was this. First, if youre interested in british stocks they have been the hottest among the hottest around the world. Dont chase those. Thats a mistake. Second, i think theres a lot of business as usual. We can speculate on what banks may move some people to europe. This has been so far that you have heard the rhetoric is punishment of the uk out of the continent so that nobody else does it. I question whether there is a cinny on the continent that will be the right place to do the business with. Im not saying business as usual necessarily, but the uk has had a big run. Maybe take profits there. And of course people will be focused on the pound. Yes. The uk economy has perform performed well since june. And the surprising vote they have inflation there. Here we are finally nine months later and they are they finally exercised article 50. Many thought it would be sooner than that. Right. Its a new story that you must cover. Its not a new story thats news relevant unless you have the real surcise come on. This was a separate country in having its own unit. Again, i think that the motion important thing to think about is which banks will it be jpmorgan or credit suisse, will they move more out of london . A story details the decisions jpmorgan is trying to make about where. Because theyre going to move. You have to a significant amount of jobs out of london. I think it will hurt your franchise if you dont move a lot of jobs. I know there are two banks i warmed up to, both are very troubled. Deutsche bank and they are winners. Keep in mind that the spanish situation was supposed to be horrible, its gotten strong. Some of the swiss banks obviously and Deutsche Bank are winners out of this. I dont think that lloyds, rbs particular, barclays are necessarily winners out of this. I think they could be loser. S spain, for such a long spain is doing quite well. The overall unemployment rate, things have gotten better. Ten year yields in spain will get you 3. 6 . Better here in the good old usa. You bet it is. Were 2. 4. I think a lot of 350epeople rea didnt understand how it was, so easy. Just journal it by u. S. Paper. Especially after the excellent interview with Stanley Fischer where you feel quite confident that the two rate hikes are on, which then cause the banks to do quite well yesterday. We had a nice rally across every single segment. This is an interesting story this morning, jim. Actually, kind of hit late yesterday. Blackrock announcing the significant revamp of its equities business. Its going to slash fees, cut some jobs. Its going to increase the use of computers to pick stocks. Theyre trying to boost the active management business. This is a small portion of the overall 5 trillion at the world that the Worlds Largest money manager runs. Legacy businesses from the old Merrill Lynch investment management, were talking what about somewhere 300 billion in terms of overall assets. They have underperformed their peer group for quite some time, but interesting to see quantitatively driven strategies that are largely based on gra algorithms, taking over an asset base to a certain extent that has been focused on picking stocks and trying to outperform the market rates and the larger question is is that day just over . Are we going to be indexed . No, i dont think so. I think i want to do a contrary approach on this. Individuals are the winners if you think about it. The winners, well go back to what Warren Buffett was saying. Winners beget too much money. They just get a huge amount of money. So whatever they were doing right is then almost made into the index fund because they get so much money. You cant outperform the market the larger you get. Yes. Thats my experience following the hedge funds that have success. They get large and then they move out of the area where they have true expertise and start to invest in other areas. They drift. Thats when they start losing again. Warren buffett did not into that style drift. Style drift. Its like a salary cap. If you want to win in a diversified mutual fund, people are looking at it whos got the lowest fee . Right. And larry fink is not someone he did not do this idly. A brilliant guy who made a determination. Lets have the lowest fee, well do fine. If you look at how were doing versus everyone else our fees are lower. You should be in our funds. Again, as a percentage of the overall assets under management its very small. Its been the actively managed portfolio that has lagged. People will use this as an example of whats the robots if you want to call it, taking over the management of the money t t that i mean, we have so many quantitatively driven funds at this point. So many hedge funds as well deploying and more and more rocket scientists and physicists and look at renaissance and the success they have had for so many years. Whats thats meant for their founders and their ability to influence the process glad that you mentioned that. Theres so called homeland him i thinks that. Were still going there. Yes, absolutely. They may have pioneers at the renaissance james simons i met him at the charity event. I dont know how he does anything other than Charity Events because hes so charitable. I will say this. When people ask why do you say that the ten year went up this much and then you say oh, the banks sold, when it went down thats just the algorithms speaking. You will see this morning that Restoration Hardware is up. Thats not algorithmic. When you look at bank of america its algorithm. Should we never say another word . Just the opposite. People at home can control when they commit capital so theyll be in the index fund and then capital to be individual stocks. Do we say no the facebook no, i cant pick a facebook . I cant pick an amazon . I think people at home have much better horse sense than we think and theyre trying to convince them at home, theyre on facebook all the time, but dont you dare pull the trigger because youre too stupid. Im saying the opposite. I say, look around, do a little homework. If you like it. If you have the temperament then you should own some individual stocks because you can choose when you want to take when you want to take capital gain. You can watch it. Be much more empowered. Know your money and for executives who watch the show, i think that they are bob iger is not saying all of my efforts are for naught. Because blackrock is going indexed. No of course not. By the way, its a great hes a great american. Double great. Super great american. Do you think for a minute that you i mean, i remember sitting down with some of the people who are 60 saying this could be an unbelievable stock but i never said, but you know what . The algos dont like it. I think we can go a lot of work here. There are so few actively managed funds that beat the benchmark. Hedge funds, eat n park wrapping it up last week. Guys who had good years, but they it was the early years where they had smaller amounts of money under management. Then they give you this idea that they have got well long term track record, but so much of it was the early years where they had 1 billion or less. Look. Thats what happened to me. I compounded 24 . Fees after 8 over a 14 year period but you have to be nominated in the fund. I never took it north of 500 million. Because i knew id have to be starting to do the stuff that everybody does which is oh, i have to have this much health care and this much bank. Management is greatly exaggerated . I think it is. I think theres plenty of people coming up and theyre doing the right thing. Just that were not hearing about it. A whole new generation who know the social mobile cloud, internet of things, making your money. Theyre not on tv. Theyre quietly going about the work. We wont hear t r. Roe or the guys. Therefore youre going to scott walker has a series of Money Managers on. I remember when he had will which my kids have. Fidelity of course. I look at what hes done over his body of work and i say thank heavens that i had the instincts to put my kids the uniform gift to minors in there. My ira which was originally with peter lynch at magellan. Again, im not giving up on stock picking either for individuals or for Money Managers but i understand if youre going to underperform, why not cut the costs out and go algorithmic. Still to come, Westinghouse Electric files for bankruptcy protection. I heard that from a guy on my left yesterday. Well see what it means for Companies Investing in on the Nuclear Power and the stocks that go along with that. Take another look at futures this morning. Setting up for kind of a mixed open. We have a lot more squawk on the street. Were live from post 9 when we come back. Call his agent. Im coming over right now. The newly advanced gle can see in your blind spot. [ dinosaur roar ] onboard cameras and radar detect danger all around you. Driver assist systems pull you back into your lane if drifting. Bye chief. Bye bobby. And will even help you brake, if necessary. It makes driving less of a production. Lease the gle350 for 579 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. What . Pony neighing] hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at td ameritrade. A set back for the Nuclear Power industry. Westinghouse Power Electric which is a toshiba unit has filed for bankruptcy protection. They suffered heavy losses from the Nuclear Construction projects in the southern united states. The Southern Company in factnary ceo w in fact their was on yesterday. You expected news in the near term. This wiped them out. Not a big surprise that westinghouse is filing. As you said yesterday, toshiba certainly in trouble although this actually protects their balance sheet. Yeah. But toshiba has to raise money. Theres a subtle option for the flash business which i think there are a couple of businesses, cypress semiata they said that flash is very tight. I dont know if you can put it together, some said 7 billion. Some said more than that but theyre selling assets. That auction is tonight. I think what the southern overrun has been a true disaster. And it says to just how complex these plants are to build. Lets not forget natural gas passed this year, coal, 33 versus 32 at the end of last year. Nuclear has been constant but nuclear is decommissioned. It aint going to be a new Nuclear Plant coming in. Decided to embark on building new plants. Big mistake. It was a mistake. Big mistake. People make mistakes. Nuclear is still responsible for 20 22 . Its the cleanest. But there are ever since fukushima, that was the death nell. Y death knell. Be aware that westinghouse storied company by the way. I once remember you interviewing michael jordan. Michael jordan, number 23 no, a different michael jordan. We used to make that joke all the time. T never got old. You remember my interview with michael jordan. Remember they owned cbs. I said to myself, this asset is worth a great deal. Well, this asset has been destroyed. Its been destroyed. Destroyed. I mean, lock, stock and barrel. What do you do with Southern Company if youre a holder there look, southern i think is somewhat insulated from this. But lets just understand that you could go into firstenergy which hitherto was the worst. And do fine. You can go into dominion which has got a very big liquefied natural gas operation in maryland thats about to start. It makes a lot of sense. So i just think you do swap out. Theres some the liability is not big, but southern has demonstrated a lack of horse sense. Southern is a long, storied company. We know that they have got a great history but utilities are somewhat interchangeable. And you probably dont want to want to interchange that one. A story well keep a close eye on. Perhaps not that large of a stock market ramifications but one of importance with westinghouse, people know well. Flash is big. Dont forget toshiba as you said. Man, theyre having a rough go of it. This is a huge, huge company. I think they couldnt see their way out of this. But they are not done selling assets. That could be the benefit okay. Getting ready for the mad dash . I have some stuff that will blow your head off. Dont do that. Okay. Thats not pg. Just kidding. Keep it right here. I want to set my stocks to music. Okay. We have a mad dash from jim coming up after this. Stay with us. Stay with us. Uly of 98. Our 18 year old was in an accident. When i call usaa it was that voice asking me, is your daughter ok . Thats where i felt relief. Were the rivera family, and we will be with usaa for life. The power of the nasdaq market. The power of 100 of the worlds top companies. The power of an etf. The power of qqq. The thinking we put in, clients get out. Power your clients portfolio at powershares. Com qqq. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Containing this information. Read it carefully. bell chimes nice work brother dominic. Now we just need 500 more. Translated into 35 languages, personalized oh and shared across the 7 continents. other languages spoken look abbot, i got it. Its a miracle. The markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. Breaking news from chicago. Fed chairman charles edmonds. Yeah. Charles evans who is a voter this year saying that fis kecal policies risk upward pressure on inflation and if there are policies that could more hikes. Now hes saying hes looking for one or two more this year. I want to walk through the fiscal policies because its something that investors should be aware of. It could boost growth for a time. But the odds of 3 to 4 growth write the which the president is talking about seems to be pretty low. He sees a 1. 75 potential and a little upside. Lets talk about what he sees when it comes to tax reform. Well designed tax reform can help potential growth but not by much because the overall effects on productivity which is the key not likely to be large according to charles lee evans. He says there are more notable upside growth scenarios out there including bring the way foreign economic prospects looking better. He still sees a gradual rate hike path and he supports one or two more rate hikes this year as his base case. But david, important to think that the fed is very skeptical about the fiscal policies coming and b very skeptical about the fiscal policies. I think its something that investors need to be aware of and how much the fed thinks about it. They ought to internalize it into their own outlooks. Thank you, steve. We have jims mad dash and we have the opening bell. Thats coming up. Im not sure what youre doing that. Is your tie getting stuck . Im playing the music when you do the mad dash. Beautiful. Looking forward to it. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Our customer is a our 21yearold female. Heavily into basketball. Wait. Data just changed. Now shes into disc sports. Ah, no shes not. Since when . Since now. Shes into tai chi. She found disc sports too stressful. Hold on. Let me ask you this. Whats she gonna like six months from now . Who do we have on aerial karate . Steve. Steve. Steve. And alexis. Uh, no. Just steve. Just steve. Just steve. Live business, powered by sap. When you run live, you run simple. Please repeat the objective. Thrivent mutual funds. Managed by humans, not robots. Before investing, carefully read and consider fund objectives, risks, charges and expenses in the prospectus at thriventfunds. Com. We plan to unveil the second edition this spring featuring 38 new lighting collections across 400 pages. Heres what jim has been referring to. From the Restoration HardwareConference Call and that music. Were a few minutes before the opening bell. Well get to our mad dash which is Restoration Hardware. The whole thing was set to the tune. May i suggest beethoven third concerto. Gary friedman just delivered, okay. He bought a lot of stocks in the 20s. That was the tip. Hes the ceo. And now youre seeing both maybe a short squeeze on all the recognition hes cutting the numbers and hes going for