Military strength. And some signs of a not so roaring economy. Retail prices are dropping. U. S. Futures now pointing to more or less a mixed open. Shares of eli lilly are tumbling more than 5 in the free market, failing to receive fda approval for a new Rheumatoid Arthritis drug. Stocks are looking to bounce back after the dow and the s p ended the holiday shortened week with the worst day in three weeks. And retail sales slowed down for a second straight month. We have geopolitical concerns and the Vice President is sending north korea a message during his visit to south korea. While issues like that remain the president and i have great confidence that china will properly deal with north korea. But as President Trump made clear just a few short days ago, if china is unable to deal with north korea the United States and our allies will. Got the dollar today at a five month low versus the yen. People going for safety. We mentioned gold getting near within about 2 bucks almost of 1300. And empire, other things sort of adding to the fire of things regarding worry. Yeah. The nervous trade is on. You see it in the bond market that treasuries are coming off the best week is since back in january. Pushing yields lower. And that really has dragged groups like the banks down. Even though some of the banks had good earnings, right . David, and we are expecting bank of america and Goldman Sachs tomorrow. You said exactly what i was thinking. As you often do, sara. I talked to a number of bankers who were at some of the institutions that reported numbers last week and they were disappointed to see the stock prices not go up. Net interest margin is part of the key and this morning were close on the two year and the ten as you said to recent lows. And that pressures the banks more than good earnings apparently helped those shares which despite the very positive reaction to the election of donald trump in november have not performed well during the course of 2017. I think it brings up another risk which is the French Election, you know, the first round of voting starts on sunday. And the polls are pretty close. The centrist who is seen as the most market and euro friendly is leading. Le pen is there at 23 . And then you have the far left communist candidate who wants to nationalize the french banks. The market is closed for easter monday, but fell twothirds of a percent on thursday. And the banks are getting hit. Some of the french bonds are getting hit on this. Yeah. Crazy. The polarity of political views here in the states and increasingly in europe and in france. Not to mention the erdogan referendum which is bringing turmoil to that region. For more on the markets and what could be another volatile week ahead, were joined by gabriela santos. And a portfolio manager. Ed, ill start with you, i remember you were on a few weeks ago, early april saying you were starting to reduce your risk that stocks were looking expensive and that the trump policy agenda might not come to fruition just as optimistically as investors were pricing it in. Is that what were seeing right now . Thats right. We have continued to reduce our positions at equities and add to bonds. So we have got to the point in the multiasset portfolios that were slightly under weight relative to benchmarks and stocks and roughly equal weight in bonds. I think its a combination of the Economic Data has been a little weak. Not just the First Quarter but look ahead. The rebound on the consensus expects for the rest of the year is not that dramatic. On the policy front it looks like whatever reforms we do get to things like corporate taxes hay not be as dramatic as we had hoped a few months ago. Is that where the geopolitical risk comes in . Is it the idea that the president is focused on that and not the health care and tax reform that the domestic investors would like to see . I think its both. There are four main uncertainties, geopolitics in and of itself is one. The second is politics fading enthusiasm for washington, the French Election as you mentioned. The third has to do with just economic growth. Is this weakness we saw in the First Quarter temporary, do we see a rebound the rest of the year . And the fourth i would say is fading optimism around expecting a big bounce in growth beyond this 2 pace that we have been seeing this expansion honestly. So where we shake out well stick around with the 2 expansion of the growth and the mature has matured and we can expect 5 a return a year. What are you saying that the q1 has been a head fake on the soft side and this year is no different . Thats probably true. Over the last three years we have seen the First Quarter be significantly weaker and were talking about growth of only 1 by our estimates. Atlanta is out today with 0. 5. Thats atlanta. So much much weaker in the First Quarter. So a rebound the rest of the year, but what to what . Back to the expansion pace of 2 . Were not escaping that range. I guess another question is, ed, with earnings season in focus is there a rebound in growth sharp enough to carry the markets that are trading at historically high valuations . Well, we had three years where earnings were basically flat. I think we are seeing kind of rebound in this quarter. We think growth is quite good, 12 . A a lot of that driven by turn around in growth in the Energy Sector and to a lesser extent the financials. We think well have a good year for earnings overall this year, about 6 to 8 growth on the s p 500 earnings. But thats enough to get us to the 8 to 10 return for the year. We have gotten halfway there at the peak. And so i guess that the return you get from here is positive. But not all that exciting. And given the volatility theyre just inherent in stocks we think more prudence is called for. Thats why were trimming the equity positions. Geopolitics is a tough thing to get a feel for. Sometimes you think things will have a Significant Impact and vice versa. We can expect a continued drum beat on north korea, are we going to tune it our investors concerned by it . And sara mentioned the French Elections but give me the sense as to the impact on the worlds equity markets. When we look at the geopolitical events and we think of their impacts to the economy or to the u. S. Economy specifically as well as to corporate fundamentals. Oftentimes it may seem like a very large geopolitical event, but the fundamentals is not that large. And hence we can tune it out a bit. So we think the most important thing to watch in order for the market really to continue rebounding is Economic Data. Do we see a rebound, do we continue seeing a positive earnings story . Ultimately we think we will. But its not that exciting of an outlook in the u. S. So were starting to look overseas more and more for that upside over the next few years. Looking at europe, looking at emerging markets. Ed, here in the states the benchmark yield, we have more people saying 2 is in our future. If that happens then its the likelihood of 157 gets a lot greater. Are you going that far . I havent gone that far but we had a very low inflation print. We do see things like tightening credit conditions. We saw car sales dropping a little bit. Looks like consumption growth is pretty weak in First Quarter. So yes well probably get a rebound for that 1 pace. But i tend to think were still on that same kind of roughly 2 that we have been on for quite some time absent some major policy changes. So i think maybe the markets a little ahead of itself. Expecting more robust growth likely for the rest of the year. Yeah. That was growth. The question i think was treasury. I was asking about the ten year, but all these percentages are sort of in the same ballpark. Well, i would the reason that the ten year yield has come down is because i think of that economic weakness. So its relative to expectations is how the market trades so i think the expectations going into the year is wed have a nice strong rebound this year and next year. Get to 2. 3 or 2. 5 growth over the next couple of years. As those expectations are starting to drop, i think mostly because of a little disappointment on the policy agenda thats driving both yields down. I think also stock prices down. Well, well leave it there. Great preview of the week and month ahead. Good to see you both. As we said earlier the Vice President visiting the Demilitarized Zone between north and south korea, comes after the failed missile launch. Sherry kang joins us live. Good morning. Good morning, carl. Washingtons message was dont provoke, we wont be patient anymore. Vice president mike pence visiting seoul saying that all options are on the table and a strategic patience with the north korea which has been the key north korea policy for many years out of washington is over. Also highlighting this alliance with south korea. Here is Vice President mike pence. Let me assure you under President Trumps leadership, our resolve has never been stronger. Our commitment to this Historic Alliance with the courageous people of south korea has never been stronger and with your help, and with gods help, freedom will ever prevail on this peninsula. And overall it was a tense weekend here on the Korean Peninsula and not totally unexpected i would say. The regime was widely expected to Mark Kim Jong uns birthday, kim i. There was a whole military parade that went on for two years, showing off its military missile collection i would say. And of course there was that missile test, yet another one, just 11 days since the last one. Yes, it failed. But its certainly the idea of going ahead with it, especially with the Trump Administration very much on high alert was provocative enough in the eyes of washington and also it managed to get some reaction out of u. S. President donald trump, tweeting over the weekend, quote, our military is building and rapidly becoming stronger than ever. Frankly, we have no choice. Now, i wonder what the second sentence means. Its very interesting. Certainly not ruling out the military measure in all of this. Although, a lot of north korea watchers that i have been speaking to recently seemed to agree, that for now economic and diplomatic measures will proceed for now before it has to come to that. Carl . Thank you very much for that. The Vice President has a busy few days as he makes his way around that part of the world. When we come back the fda handing eli lilly a set back thats taken a toll on the stock. And ahead, billionaire investor jeff greene on everything from where hes putting his money and the white house. Look at the premarket. The major indices are down. Were back in a minute. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. So how old do you want uhh, i was thinking around 70. Alright, and before that . You mean after that . No, im talking before that. Do you have things you want to do before you retire . Oh yeah sure. Ok, like what . But i thought we were supposed to be talking about investing for retirement . Were absolutely doing that. But theres no law you cant make the most of today. What do you want to do . Id really like to run with the bulls. Wow. Yea. Hope youre fast. I am. Get a portfolio that works for you now and as your needs change. Investment Management Services from td ameritrade. Shares of ealy lilly. Lets go up town to meg tur rel for the latest. This is surprise negative decision on friday. This is a arthritis pill that was being developed by eli lilly and the fda declined to approve the drug and they told eli lilly and incyte they need more information on the dosing of the drug. They disagree with the agencys conclusions but this shirting both companies stocks today. Lilly is down 5 and people were expecting this to get approved. This is a giant indication, arthritis affects many people. A lot of drugs are on the market with a 16 billion drug. And that stock really getting a bit of a boost today as perhaps this competition getting pushed out. Also Companies Like pfizer have oral drugs on the market. The other drugs are injectable. So other drugs here from Johnson Johnson and amgen. You are seeing impacts to regeneron and sanify which have win awaiting fda approval as well. This is a big market. People expected this drug to get approved on friday. Now analysts are downgrading lilly and incyte. It could be a year or two to get the existing day to resubmit. It is already approved in europe which is a big surprise. A lot has written about the changing face of the fda in the midst of this transition to the new white house. Does this particular chapter inform that narrative at all . Its a really great question, carl. I have been trying to think of myself. Scott gottlieb is the nominated commissioner and hes expected to be approved. One of the things requiring companies to public complete response letters. These rejections from the fda. We dont know if thats a something hell push through. But companies arent required to publish that information and share why drugs get rejected. So that could be very interesting. Of course he is charged by the president with trying to expedite drug approvals so depends on why this drug really got rejected here. Whether this particular thing could be changed. All right. Well, the stock reaction is there nonetheless, insooitd is down 10 . Thank you. David has breaking news. Yeah, i want to share that with everybody. Klaus kleinfeld is stepping down as the ceo of ar connick. They have been involved in the proxy fight with large shareholder Elliott Management. I think its expected to take place may 16th. Elliott had been waging a significant war against mr. Kleinfeld. Im looking through the press release here. What i can tell you is mr. Kleinfeld they say stepped down as chair and ceo by mutual agreement after the board learned that without consultation with or authorization by the board, he had sent a letter directly to a senior officer at Elliott Management that the board determined showed poor judgment. They say this decision was not made. That is effectively to ask for his resignation it would appear. In response to the proxy fight the criticisms of the strategy, leadership and performance and not in many any way related to the financials or records of the company. Clearly, requiring a bit more reporting it would seem to look into this. Given that the board had remained steadfastly it would appear behind the leadership of mr. Kleinfeld, which of course was under strong criticism from elliott which claimed that arconic was significantly underperforming and would benefit from new management and frankly, a refresh to a certain extent of the board, despite the fact they put a few Board Members on there previously. It is interesting on thursday not friday, thursday elliott had come out with a somewhat complicated but criticism of what appeared to have been a decision by mr. Kleinfeld to trigger a potential change of control provision in an agreement with the trustee. Actually an employee trust. But by doing that. It created a 500 million liability for the shareholders that did not need to take place. I did reporting on this on thursday, back of the back and forth typically that goes on in these kind of proxy fights but that was interesting. In light of this resignation now, i want to take a look and try to understand a bit more here. Big surprise coming as it does just a few weeks prior to the annual meeting and arconic had been feeling good about their ability to perhaps continue to have not just mr. Kleinfeld, but all the Board Members in their seats remain in their seats and elliott telling me quite a few times that is not going to the case. They thought quite strongly about their own approach. And the proxy advisers coming to their side. Well see. Now you have got the big change they wanted. Stocks moving up on the news here in the premarket. I bet jim cramer wishes he here. He knows Klaus Kleinfeld pretty well and i think its worth mentioning the background. Arconic was built out of the split with alcoa and the more finished goods product. And the stock had been doing not too poorly. Right . Since the spinoff is one reason that i think kleinfeld who came on this show to defend himself against elliot and february 1st. He was pointing to that fact and he was feeling good about it. It raises questions about what this letter might have said to elliott that he sent directly. Trying to go around the process, have a real conversation on the side of unclear. We can speculate. Im going to try and you know, make a few phone calls and give people a more concrete idea of what exactly was in the letter. But again, thats the key here. The board learning without consultation or authorization he had sent a letter directly to elliott, not clear what that was in or why it showed poor judgment other than of course not having received the authorization of the board itself. But this is a big surprise. It might have been the case perhaps if they looked like they were going to lose and there was going to be some sort of a settlement you would have seen some changes. But he was steadfast in his rebuttals against the arguments being made by elliott which essentially came down to the management of the company and what they claimed were simply costs that are far in xess of what they need in excess of what they needed to be to put a sim million information on a more complex process. Well watch them at the open. We have retail and m a buzz that involves walmart. Take another look at the premarket. The opening bell is seven minut