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tv   Closing Bell  CNBC  March 17, 2014 3:00pm-5:01pm EDT

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weekend, there's a lot of froth in this weekend. jim is nervous, other people are nervous. "the closing bell" will have a lot of people on to see if they're nervous. we'll find out. >> thank you so much for watching "street signs," everybody. "the closing bell" is coming up right now. yes, welcome to "the closing bell." i'm kelly evans here at the new york stock exchange where the dow is up, bill, almost 200 points at this hour. i'm bill griffeth. now, this is the way to break a losing streak. the dow riding five down days in a row last week, but with an hour to go industrial average is up 182 points. now, do we say it's in spite of the crimean referendum or because of the crimean referendum? it's hard to say. it's hard to say what the bounce back is all about today. >> sure. there's some disturbing
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nationalistic rhetoric in russia. at the same time, of course, we have a top commentator talking about nuking america and yet there are some who say the russian market is too cheap to pass up. we'll look at that. >> we'll look at the investigators, the russian etf trading under the symbol rsx. it's down 23% just this year, but as you're saying, we've seen the russian market bounce back today about a 5% gain on the rtf. we'll look at that. also deja vu all over again for housing. adjustable rate mortgages are apparently back in vogue even in this low interest rate environment. very counterintuitive. some experts warn it is a new ticking time bomb that's sure to go off in a few years when rates are inevitably likely to go higher than they are right now. we'll have a full report on these new mortgages coming out right now. >> and so the dow jones industrial average adding 180 points today. the nasdaq adding about 40, almost 1% there. same for the s&p 500 which is up
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18 points. pretty much across the board the reaction in equities is consistent. and we're also seeing the ten-year benchmark treasury rate move a little higher. all of this as coming up this week we have the federal reserve meeting. we'll hear from janet yellen on wednesday. the line according to some of the guys i speak with is that it can't come soon enough. >> yes. we already have a time clock getting us ready for that news conference on wednesday. joining us in "the closing bell" exchange, everybody getting ready to hear kim forest, anthony chan, john spalen za ni, rich bernstein, and our own rick santelli. john, you're the trader type here. why is the market up big today? >> i think i was a little bit of a relief rally after the crimea vote. everybody knew they were going to pass the referendum. we saw a little short covering. also the fact that the sanctions really aren't that onerous to
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begin with also led to to the russian market rally as well as the china news. the yuan trading ban being expanded has helped that market. i think some of those fears were taken off the table. vietnam cut rates another 50 basis points. another central bank in the easing mode. we expect india to follow and probably china in another few months will also cut rates. >> rich bernstein, at the same time over the weekend china widened the trading band for its currency. how important is what's happening in china to developments in the u.s. today? >> i think the emerging markets in general are kind of a wash in capacity and they're all starting to fight for market share. one of the ways you fight for market share is to make your goods cheaper. china has had a very strong currency. they have lost some market share. they're starting to react to that now and they're weakening the currency to try to gain market share. i think it's going to be the
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story in many emerging markets. the downside though to that strategy is that china is able to do that because inflation has been under control. now the watch is what happens to inflation as the currency starts to devalue? >> great point. >> yeah. anthony chan, this will be our chance to parse every word from janet yellen on wednesday. are you expecting anything to come out of that fed meeting this week? >> i think that the federal reserve will continue with their $10 billion worth of tapering as time goes by. i think that right now the economic fundamentals in the u.s. are still healthy even though there is a lot of g geopolitical unrest. i think the equity market is rebounding because some of the uncertainty is taken off. there's still a lot more uncertainty that's likely to come moving forward, and it may work out okay, but i don't think it's safe to say all the uncertainty is removed because we see a rally like we see today. >> what worries you the most? >> what worries me the most is when you go to russia, it's not
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clear if they're going to stand down indefinitely or take the vote from crimea as an encouragement to do more. >> kim, circle back to you in one second. sticking with the fed theme, rick santelli, there are more people saying the fed is actually buying $30 billion, maybe soon to be $40 billion less in treasuries than it has in the recent past. this is going to hit markets right around the same time we're going to work through maybe some of the overhang from weather and realize the u.s. economy maybe is reasonably strong. are we staring into a potentially -- a place where the treasury market could really need some buyers to step in, where rates start to move higher. >> i think you bring up a good point. if anybody who has been watching the monthly treasury international capital flows, tic data, see that is china's holding of u.s. treasuries is down rather substantially. we've seen a transfer, big $104 billion transfer last thursday that probably wasn't a sale and most don't think it was china. so i do think at a time where
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the federal reserve is one of the best buyers, that it will create a bit of a vacuum. but it doesn't matter. the market is what the market is, and the fact that forward guidance is under review, well, that's nice parlance for those that are into the whole economic scene. you know what it means to me? everything we've said up to now isn't really true. we're reassessing actual facts of what a drop in the unemployment means even though for 2 1/2 years we've said it drop something a good thing and it would mean less quantitative easing. and the last point is when it comes to russia, we can all talk, and there's many people out there militarily and foreign policywise that know much more than i do, but in the end it really is about money. to see the euro, to see the dax, see the markets where they are, it certainly doesn't seem to me that they're looking at putin as a well revenued aggressive activity guy that's ready to go to stage two. >> yeah. not a lot of concern. that's for sure. kim forest, you get to be the
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voice for the individual investor today. should they be more worried about last week's five-day losing streak or take more comfort from today's bounce back. what do you think? >> i like the even steven storm of money management which is on both highs and lows, don't think too hard about it and have a very long-term focus. you know, five years ago we were hitting market lows, and the best thing you could have done was the opposite of what your gut told you, which is instead of selling go to cash to buy quality companies. now at the top of the market here, what i'd do is not sell everything and go to cash, but i'd take a look at that portfolio and maybe sell some overvalued -- overweighted position significances. >> what's so interesting though, just to jump in for a second, you could almost argue about overvaluation on the equity side and fixed income side right now. >> right. >> even someone who wants to be
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conservative, who looks around and said, i don't know if i'm comfortable with this kind of exposure, what do they do? >> it's a great point. but we only have really four asset classes, right? we have stocks, bonds, cash, and we have real estate. we live in our real estate. the other ones, it's going to be a mix, and that's something that you and your adviser have to understand what the right mix is for you. all i'm saying is people that are running their own money, you know, whatever the market is full and you're feeling great, it's time to reassess if you have too much single company risk and pare it back. look at it as a single company risk sort of problem. >> rich bernstein, you have been the super bowl for a while. the volatility of 2014, does that change your mind at all? is it time to take profits off the table? >> not a bit, bill. i think the early cycle environment is always the best time to invest. nobody ever wants to. they're always under their desk in the fetal position. we're now in a midcycle environment and with the
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midcycle environment, still a great time to invest but you do get rising volatility despite the fact the market goes up and the reason you get that increased volatility is you're now in a situation with a tug of war between rising interest rates and the unanticipated improvement in fundamentals. as that seesaw and that tog f tug of war goes back and forth and back and forth, you're likely to get more volatility. but, you know, that's normal in a midcycle environment. i don't think we're seeing anything abnormal for a midcycle environment. >> quick question, on this alibaba listing in particular, they're coming to new york. hong kong said we protect one share, one vote. new york says we have other kinds of structures here we have allowed to go forward and we will let do that, too. is this an okay development from your point of view? >> as an investor, i always want as much protection as possible. i always want, you know, terms of any trade skewed in my advantage. you know, i don't want to comment on that one ipo but
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maybe people should be thinking a little bit. >> can the share structure proliferate? any reason to be concerned from your point of view. >> i'm sorry? >> the share structure, with regard to alibaba being able to protect its ownership as opposed to other parts of the world like hong kong which say we're not going to let do you that. is that any reason to flag a concern for the individual investor? >> that's only one concern. it will be a super hot ipo most likely. we've seen over the last couple days that china has shut down some forms of payment to alibaba, and that should ring some bems. there's a lot of caution individual investors need to look at. >> do we need to close at the highs of the day? does it matter? >> i think we have obviously the fed meeting this week. we also have janet yellen's first press conference. we'd like to see them close on the high. we have the c-core on thursday. the banks are performing very
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well today. as we go in the close, things are looking obviously well. as long as we stay up here -- we don't want to see it sell off going into the close but we have reason to be positive going into the next of the week. >> thanks, guys. have a good weekend. heading to the close, we are about ten points off the high of the day. the dow was up 200, 205, a gain of 193 with 50 minutes left. >> coming up, we'll hear from one market bear who says investors should cash in on today's gains before it's too late and we could see a diaper sell-off. twitter shares, meantime, they were red hot after the ipo. but the stock is down 18% this year so far. is twitter in trouble or is this now a bargain stock? good old stock brawl on twitter. and russia's stock market down 15% over the last month when the crisis in ukraine began to heat up. find out if that sell-off has made russia too cheap to pass
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up. that's later on "the closing bell." keep it right here. you're watching cnbc, first in business worldwide. business wor. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. no two people have the same financial goals. pnc investments works with you to understand yours
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dow is up 192 points, trying
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to snap last week's five-day losing streak. we gained back almost half of what we lost last week. >> seema mody, what is driving the comeback? >> tech is providing the biggest move to the upside. let's start with yahoo!. shares higher today following news that alibaba has chose ton list its ipo in the u.s. yahoo! has a 24% stake in a aliba alibaba. other large cap stocks outperforming as investors take a more risk-on approach, google and apple higher on the day. it's not just tech. pharma, health care, insurance players also posting gains. look at hertz also on the move on reports it is preparing to spin off its construction equipment rental business. twitter shares not participating in the rally following news that the ceo is planning a trip to china to meet with government officials. twitter has been blocked by chinese censors since 2009. stock down frictional ll ll lly
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fractionally in today's trade. >> earlier on, stephen wiseiss said he sold out of twitter at a loss. >> and we have someone who says stephen just made a mistake by selling. what made you sell. what was the big red flag for you on twitter? >> well, first of all, i have made mistakes before, so it's not unusual as a trader to make mistakes. so here is what it was. i bought twitter and i bought facebook at the same time, but i bought twitter because it was after the quarter. i thought it may have been oversold, and i'm very positive on the market, thought momentum would continue in the stock. now, the company missed the very objectives he set as their first quarter out of the gate. so that's always a big negative. the trade didn't work. it worgked for a little bit.
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i overstayed my welcome. i think it's egregiously overvalued. as people want to get exposure, why not go into china internet stocks, social media stocks like a baidu. there's no reason to own a company that's underperformed. >> do you like twitter whether or not the ceo has success convincing the chinese to turn it back on over there? >> we do like twitter and i like the chinese internet stocks as well. i like twitter because of what we think the future holds and the ceo is talking to china about opportunities there, but the stock did sell off quite a
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bit after the quarterly earnings announcement and has been in this trading change, $50 to $55. as we look forward, the opportunity for twitter right now there is about -- a significant monetization of their users in the u.s. $2.89 per user, only 34 cents overseas. we think there's incredible opportunity to increase that revenue for users overseas while continuing to increase revenue even though -- >> by monetizing it or adding more users overseas? which is the argument? they will make more money off the existing base or increase the base dramatically? >> the existing base is increasing more slowly but we think the opportunity is the expansion and monetizing that user base. >> very quickly, david. i assume you own the stock. you own it at a profit or a loss? >> we own it at a profit.
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>> okay. now, it sounds to me, guys, like you are talking different time frames. david, you're talking the long term, stephen, you're a shorter-term trader. >> actually i'm not. >> wouldn't you want to buy this stock down the road? it's a game changer, isn't it? >> no, no. i am a long-term investor. i'm not really a trader. that's a very small part of what i do. i look at declining fundamentals. they've been decelerating even into the ipo and i see better value out there. so why gamble and hope they finally do something to reverse the downward trend when i have others that are still on the ascent. plus 47 million shares come off lock up. why would you get in front of that -- >> because it never matters. stephen, name me one example of any company that went public where the lockup made a difference to the -- >> facebook. >> and it's already discounted in the stock price. we've known about that. >> how can you say it's discounted in the stock price when they'll earn 12 cents this
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year, the revenue growth has declined. i don't know why it's discounted. if anything, i think you're everyestima overestimating that's what's been overcompensated for. i don't need to pay for that. >> earnings growth quarter over quarter in the u.s. near -- revenue growth, i'm sorry, quarter over quarter in the u.s. near 40%. >> what's your number for this year, your estimate? or better yet, what's your estimate -- >> guide sense $1.15 billion to $1.25 billion, twice the revenue of last year. the story -- >> what do you pay for that? what do you pay for that? >> the story here is when we look down the road. what they're doing in gauging the user, what they're doing is change the user interface to make it more visually engaging. the deal with national cine media --
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>> dreams don't come with parachutes. you better -- the first quarter out of the gate they missed, that they now overachieve. i can give you other stocks, priceline. priceline is extremely cheap. that's growing at 25 pr%, 30%. >> because you make such a compelling argument, why did you get involved with twitter in the first place? >> that would be my question. >> there are basically two stocks that trade in this. linkedin was to me overvalued and that had not started to recover. so i thought this would rise up in the -- sort of in the draft of facebook. so that's why i did it. >> but if you're a long-term investor, how can you have all the reasons to buy the stock a month ago and now hate it. >> i said i have a small part of my portfolio that's a trading segment. that's where this went. the trick to being able to staying around for almost three decades is you have to know when to cut your losses on your trades. >> okay.
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>> we have to go at this point. got to go. thank you. steve, if you're on vacation, buddy, unwind. >> caller: no, i'm working. i'm working hard. >> very good. >> thanks, david. >> all right. 40 minutes to go into the close where the dow jones industrial average adding 187 points. the s&p, bill, 1860 as it adds 19. you have probably heard about this russian tv host ratcheting up the rhetoric over ukraine saying his country could turn the u.s. into radioactive ash. then you won't believe what he said after that. meanwhile, russia's stock market has been blasted by the ukrainian crisis, down more than 15% in the past month. when we come back, we'll find out whether the risks outweigh the rewards when it comes to investing in this beaten down market. now, the u.s. scoring an ipo coup. alibaba saying it will list in new york, not hong kong as many people were thinking. why that matters more than you
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>> it's a referendum the united states says it will never recognize. eamon javers is in snowy washington with more this morning. >> that's right. the snow didn't stop president obama today who expanded sanctions on russia now targeting 11 russian and ukrainian officials targeting senior administration officials say their personal finances and assets, not necessarily corporate assets here. the president said that he is still holding out hope there might be a diplomatic solution. take a listen. >> i believe there's still a path to resolve this situation diplomatically in a way that addresses the interests of both russia and ukraine. that includes russia pulling its forces in crimea back to their bases, supporting the deployment of additional international monitors in ukraine, and engaging in dialogue with the ukrainian government which has indicated its openness to pursuing constitutional reform as they move forward towards elections this spring. >> meanwhile, the assets of
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those 11 officials, whatever they have in the united states will be frozen. it will not be permissible for u.s. people to do business with those 11 officials, and interestingly, the senior administration officials, bill, were asked why it was that vladimir putin himself was not named as one of the officials, and they said that that's a step too far at this point. it's very unlikely or unusual, rather, that the united states would sanction a head of state but they also portray all of this as part of a sliding scale of responses that they can up -- ramp up or ramp down as needed. they say they're trying to provide sort of an off-ramp diplomatically for the russians to des-escalate the situation. >> thank you very much. and then there's this, the rhetoric. all of this took a distinct and worrisome tone over the weekend. the russian state television host saying russia could turn the u.s. into radioactive ash.
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this type of thing we haven't had to worry about since the soviet union fell back in late 1991. >> russia's behavior has had an impact on russian investments. the market investigators, russian etf, a good example, it's down 22% this year. the question now is despite the crisis, whether this presents a kind of buying opportunity. with us, tom lieden and willis sparks from the you'eurasia drg. should we call it propaganda? whats that a state-owned operation? >> i'm not sure that propaganda captures the pure thee at tri kalt of what we saw complete with graphics. sure, the rugs hassians have a tradition of propaganda. the host is famous for being -- >> outspoken. 1y507
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1y5 1y507. >> a loud mouth. let's call him that. the important point about watching this guy make this statement, a lot of what is driving russian behavior is this desire to show they are strong, they're not afraid of standing up to the west. that's playing very well at home and it's driving a lot of russian behavior. >> tom, i realize you have etfs to sell in this regard, but in this case, is it time to think about buying the russian market? it is down 30% since november, and it's down hard in the last week or so as well. is this the kind of environment to buy in, do you think? >> well, it doesn't feel good in your stomach, bill, but if you look at the valuations, it's incredible. since this etf came out seven years ago, it's never been cheaper. five times earnings, half the price of emerging markets that are also cheap at this time. and when you mention ego, hey, we noknow putin definitely has
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ego. he wants his capital markets to be respected. what's going on is he's going to these banks, oil companies, and saying all the cash you have on hand, you have to start giving out to your shareholders. dividend wield 3.4%, could be up to 6% by the end of the year. if we can get through this tumultuous time, i think we can see higher highs. >> to the extent the russian bourse is discounting future earnings, how strong do you think the growth and earnings power will be when it seems like lately all we're doing is taking down our estimates and likely to see further estimates. >> everything that's happened in the last few days on both sides has been very carefully scripted. european and american leaders said this is what we're going 20 do if you have the referendum. security council voted. crimea voted. interimmediate yad sanctimediatn
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imposed. now we're ad libbing. on thursday the europeans and ukraine will sign the very agreement that started this whole crisis on november 2 1st of last year. how will putin react? we don't know and maybe even putin doesn't know. >> the market seems to suggest this stops in crimea. do you? >> well, it depends what you mean by stop. >> there's an annexation and then it's over. >> putin is not going to stop. he's not going to stop because ukraine is too important. that does not necessarily mean that russian troops are not going to stop, that russian troops are or are not going to invade eastern ukraine. of course, that's what everybody is watching. again, uncertainty. the wildcard here is, when you look at the eastern cities where we see all these pictures of competing mobs waving the competing flags, violence, no one is in real control of that situation. putin may not want to invade. he could have his hand forced if violence in those places get out of control. the larger message is volatility
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is following unpredictability. >> tom real quick, we know markets anticipated this move in terms of what was happening on the geopolitical side, sold off in advance of this and even a little during. so if there's more to come as willis is suggested, why shouldn't we expect the russian market to suffer first? >> it may get worse before it gets better, but like five years ago here in the u.s., you look at valuations, you look at dividend yield. it's pretty attractive. but you have to have a pretty hard stomach to be able to buy in at this point. but don't let it get away from you as far as being a global investor. >> just don't put the rent money in this one. >> or anybody else's rent money either. >> gentlemen, thank you. very important topic these days. appreciate it very much. 30 minutes left in the trading session. the dow just off the highs of the day. we're up 180 points. we've gained back almost half what we lost over that five-day period last week. >> but our next guest says forget today's rally. he says investors should be
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really the weight of the evidence. that's what's important. and it's not a gut feel. gut feel is only good for telling you if you have indigestion. but the weight of the evidence is negative. we look at money flows. that's the only thing that can change the price of an investment. earnings are history. money flows tell you what is happening now. >> where is the money flowing right now? >> it's flowing out of the emerging markets. china is having a big problem. china is going to be the contagion factor for the emerging markets. first asia, then the rest of the emerging markets. >> isn't all that money going to come to u.s. equities, not to mention the trillions of potential cash on the sidelines and the money that could come out of fixed income. >> kelly, that's what the bulls say, that the money will come into the u.s. markets, but in today's world, all the financial markets are interconnected. there's huge money in the japanese carry trade which is
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selling the yen short or borrowing the yen and then investing it in u.s. treasuries. >> yaur sou're saying everybody going into cash and that's why everybody should get out of the market? >> yes. the game is now will i be the first person out of the exit when they pull the plug? everybody is playing the same game. when the pressure is on, you're not going to be able to get out at a good price. bernard -- >> that's always the case. why are you confident people should get out now and not at some future point. >> next week or the week after. or in five years. are you saying we're within week of a major sell off? >> we're not years away from a major sell-off. if you look at the economic factors that count, mortgage originations, serve so bullish on the housing sector. you look at mortgage originatio originations, they're at an 18-year low. that tells you what's really happening in a residential real estate market. this is very important. disposable income now is lower
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than it was in 2008 and 2012. disposable income rules the consumer market. >> to the very patient mr. stovall. bert is not alone. there are a lot of people that are concerned about a lot of things that could affect your economy and the emerging markets and for that reason they don't want to be in the u.s. stock market right now, but you have a different point of view. >> i'm not a raging bull. i look at valuations, i look at inflation rates, look at earnings expectations, et cetera, and right now i would say this market is in a sense priced to perfection and that we need to see an improvement in corporate earnings. our belief is inflation will remain rel testifily low but we need the earnings growth. >> explain the rule of 20. >> i'm glad you asked that. the rule of 20 is an old rule basically says that if the pe on the market plus the rate of inflation equals 20, then we have a fairly valued market. anything below that is an
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undervalued market. as of the end of 2013, we had a 1.6% cpi. we had $100 in trailing gap earnings. that pointed to 1845 as fair value. we closed at 1848 and change, so very, very close. >> so, bert, what do you say to that? >> earnings are history. it's like driving a car looking in the rear-view mirror. you're going to end up in a pileup. i want to look ahead. i want to see where the money flows are. and the money flows right now are not positive. >> let's look to the earnings of the future. capital iq consensus numbers point to an 8% increase to $118 this year. also looking at that into the rule of 20 based on where your cpi level is would imply we could see an end of year value at 1980 up to 2025. so depending on what future earnings expectations and cpi levels are, i still think
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there's opportunity. >> last quick word, bert? >> those are expectations. i expect to lose 20 pounds over the next year but that doesn't mean i will. >> well, i don't. >> guys, thank you. at least you have illuminated the contours of the argument. >> watch out for the aftershocks, bert. >> all right, bill. always. >> 20 minutes to go to the close. 1973 poin 173 points on the dow. >> they were one of the factors in the housing crisis. now, adjustable rate mortgages are making a come back right now. we'll discuss whether this is something that's doomed to end badly or is it different this time as lenders are claiming? up next, the latest on the mystery of malaysia air flight 370. find out if searchers are any closer to located this missing plane when we come back. k.
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no two people have the same financial goals. pnc investments works with you to understand yours and helps plan for your retirement. talk to a pnc investments financial advisor today.
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welcome back. the search for the missing malaysia airport 270 is now well over a week old. >> phil lebeau joins us with the latest on this mystery that's captured the entire world's imagination. >> the latest news is that the u.s. military is scaling back some of its efforts in terms ever its assistance with the other countries searching for the missing plane.
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the "uss kidd" which had been basically searching in the strait of malacca, it will no longer be assisting with the efforts. it's looking in two tracks of where the fright might have gone. the u.s. military is reducing its efforts. it will leave behind a p-09 and a p-3. 25 countries are looking for the missing plane. a lot of questions about the time line of last communication. the final transition came at 1:07. at 1:19 the pilot said already, good night. 1:21 was the transponder was turned off. 1:37 was the next transmission from the acars system. there's some question about two turned off acars, when was it turned off. 2:15 was the last detection by military radar. the investigators are focusing on the flight crew. the malaysian prime minister says this plane was deliberately
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diverted. the question is who did it and where did they take that plan? unfortunately, bill, there are less answers than questions today eight days after this plane went missing. >> acars, that's in simple terms one of the tracking systems they could use to keep an eye on the plane. >> correct. >> and we still are no closer. unbelievable. >> phil, is there any sense of pulling back on the rescue efforts more broadly? >> not from the other countries involved. i think for the u.s. military, they're looking at this saying, okay, we had the "uss kidd" in the strait of malacca. it's no longer needed there. let's resume our usual navy activity was this aircraft carrier and in the meantime you have the p-9, the poseidon, which is probably the best tool you have for searching for anything missing in a vast open area of the ocean and you also have the p-3 anti-submarine hunter. you have two great tools they're leaving behind they're still using in the search. >> thanks very much. >> thanks, phil. >> really appreciate it.
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>> just unbelievable. still crazy. losing some altitude here. maybe that's the wrong term to use. but 15 minutes left. the dow now up about 160 points. at its peak we are up 205 points. up next, much more on this big market rally and whether last week's losing streak is in the rear-view mirror or not. i get another transition, domino's pizza cooking up impressive gains for investors with a 15% gain this year. when we come back, we got ceo patrick doyle talking about what this week's march madness tip-off means for pizza sales and if it's a reason to own the stock. stay tuned. stay tuned. [ man #1 ] we're now in the approach phase, everything looking good. ♪ velocity 1,200 feet per second. [ man #2 ] you're looking great to us, eagle. ♪ 2,000 feet. ♪ still looking very good. 1,400 feet. [ male announcer ] a funny thing happens when you shoot for the moon.
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ten minutes left in the trading session. the dow up 165 points. this has been a risk on day. you know, a lot of the hedges of last week are down today. you know, bonds, the yields have gone up. gold is down today. >> if anything, it's interesting the u.s. dollar is sitting this one out, and that's the very question we should ask to matt chess lock from virtue financial. not that you're in and out of the fx markets all the time but what do you make from the
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signals. >> gold was fairly strong and sold off this afternoon. the market didn't sell off or rally from that point. there are some conflicting opinions out there. obviously that makes great trading environment. if you can have a sell-off like we had last week or nervousness going into last week and see the rally today, if you position yourself right, could you make a lot of money in this market. >> i guess to understand today's bounce, you have to understand last week's sell-off. what was that about? >> is it more than just the weekend? and everyone uses this as an excuse. you start waiting for the weekend saying i can't be long over the weekend, what if, what if? it has to be something more than that. it's too easy of a trade. i think we've been range bound. 16,000 on the dow, 16,400 on the dow. even though there's been geopolitical news and other news that's caused us to move around. it's really not that much, 1% gyration. >> if you had to position, would you position for a resumption of last week's trading pattern or
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for a resumption of the earlier trend until we kind of hit the start of this year? >> i would be more nervous of the downside, and i think the downside will be quicker when it does happen. what's it going to take? we've seen a lot of stuff that's come out that's going to shake the market. unexpected stuff. it's not going to be the fed anymore. it's not going to be the backstop we've had. that's another worry you have if you're long. the momentum is still develop to the upside but i'm more worried about the downside as we go. people are calling for a much bigger pullback than a rally. >> you are not what art cashin would call buy the dipper. >> maybe i'm just a dope as they say. >> but think about it, all the different worries that there are out there with the emerging markets, you know, the situation with russia, you could add syria, anything out there, and we're still only 1% to 2% away from all-time highs for the major averages in the u.s. market. >> based on the u.s. data, we're finding reasons to buy it. we know the u.s. is so far ahead of everyone else as far as the
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recovery time. now we're starting to fear china. that's a big worry. they're a huge supplier and consumer in the world stage. if they show signs of slowing down, can the u.s. withstand that? >> any other individual names or sectors you'd choose to play? >> i think the momentum names are still -- it's too easy not to play them really. you start to see these moves. those are the ones you have to buy the dips. you see the rotation back into them quickly and when they do they have monster moves to the upside. you think it's going to have the big flush, it doesn't happen, and they buy the dips. >> springboard. >> indeed. >> matt, good to see you. >> good to see you. >> thanks for your thoughts. we're going to come back with a closing countdown, and this big market day doesn't end after the bell, of course. we'll have full team coverage of today's rally and whether it's full steam ahead from here. stay tuned. tuned.
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♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. welcome back. four minutes left in the trading session. let's put things in perspective with today's rally. this is last week's sell-off, and, again, we were down about 300 and some odd points on the dow jones industrial average. at the peak we were up 200 points. now we're off that high, but for the last week the dow is still down about 1%. but we have had a pretty good snap back today. let's look at the russian stock market. this is a market that's been very hard hit.
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it's down 30% since november, and just this year, this is from january 1, it's been a steady decline, and then we had today's 5% rally, but even with that the russian stock market is still down 22%, and you wonder, peter costa, you wonder what kind of pain vladimir putin feels from that or if he even cares. >> i don't think he cares. i think the west is underestimating his threshold for pain. even if he cares, he's not going to show it. >> should we care? last week we're down five days. ahead of that crimean referendum. >> today is a relief rally as far as i can tell. i've been listening to cnbc and i've not gotten any direction from anybody why we rally sod strongly. i will just say it's a relief rally. we're also on very, very light volume. maybe everybody is watching the parade and spending time with
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st. paddy's day, but it's, you know, let's not underestimate the russians. >> all right. but isn't it interesting this last week as we were moving lower, especially on thursday when the market was really down hard that day, we couldn't come up with a single reason for the markets to climb at the time and today we're really hard pressed to see this is all about the crimean referendum. >> this is a rare time in trading history where this could be two weeks of this where we don't have a specific thing to say the market is up or down because of one item. i think we'll see some positive comments come out of the fed on wednesday. i think that's what i'm looking for. >> you anticipated my next question. this will be janet yellen's first meeting she's chair of and it will be her first news conference. >> yes. >> to speak to the press. we'll all listen very carefully to what she has to say. is there anything she could help the market higher that we don't
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already know? >> no, i don't think there's anything she can say, but if she says something we don't like, that could help the market go lower. so i think that she can just toe the party line and continue with the same, you know, definitely from bernanke to yellen and keep it going in the same direction and that would be fine. if she says something that might be upsetting or a change in direction, that could be very detrimental. >> we just spoke with matt cheslock who is not one of art cashin's buy the dippers. you have been though. >> yes, i have been. >> did you buy this last dip here? >> no, as a matter of fact, i'll be honest with you i did not because i believe that last week watching the action and watching what's going on in the ukraine and crimea, i was thinking that there's possibly another opportunity at a lower level and maybe that's, you know, foolish of me, but i do think -- i'm not a big market timer but i definitely would buy a dip, a big dip going forward in the next couple weeks. >> good to see you, peter. happy st. paddy's day. >> to you as well. >> per tradition, the folks from
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guinness stout ringing the bell. going out with a gain of 176 points. off the high of the day. what does it mean? the second hour of "the closing bell" right now with kelly evans and company. i'll see you tomorrow, kelly. and welcome to "the closing bell" this hour. i'm kelly evans. stocks surging as the dow snaps a five-day losing streak last week. here is how we're finishing up this monday on wall street. with the dow adding 177 points and green arrows for st. patrick's day. nasdaq getting 35. the s&p 500 about 17. rallies of about 1% across the board. what to make of it all, let's get to today's panel. joining me kayla tausche, cardiff garcia and dominic chu and "fast money" trader brian kelly.
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cardiff, what did we learn today? >> a lot of people were paying attention to what would happen with the referendum but there was no suspension about that. it's not surprising to me that geopolitical events didn't affect the markets. i think it's difficult to price in the fast range of possibilities that are going to come out of what's happening between russia and the ukraine. right now the more likely scenario is still that that's part of a wider repricing of the emerging market asset classes, but not something that immediately is going to drive activity in the u.s. or even in europe just yet, at least not until we can rule out the possibility of a diplomatic solution. >> wasn't it joseph on alphaville who was writing a lot of the russian stock market is foreign owned. to jump out of those assets entirely is shooting yourself in the foot. >> that's right. i think right now, and joseph made this point beautifully, the likelihood is russia will bear the brunt of the problem of what's happening with ukraine. this isn't something -- we've been worried about what's happening in emerging markets all year, so there was turmoil
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there, slowing growth. again, it's something where it's worth following broadly, but it's not necessarily going to be an acute problem for anywhere else. this is not yet a global economic story. i think this is a huge geopolitical story, but it's not a big deal elsewhere just yet. >> dom, a lot of people paying attention in the final hour to see whether stocks would ramp or pull back. the net net appears to be they were largely unchanged from where we started the hour. i bring it up as a tell about strength and weakness and which trading pattern resumes tomorrow. >> the bulls will take this as a win. when you have five straight days for the dow to the downside, you're looking for some kind of stabilization. whether or not this is a turning point for the market, what you have are buyers and sellers trying to meet up and match up, and the price action was largely positive. you also had a broadly decent rally across all sectors, across all stocks, so the question then becomes we were about entering today about 2%, 3% off record highs for both the dow and the s&p. even if you fell another 5%, which we didn't, 5% from where
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we close friday, you would still be within the historical realm of reason for pullbacks during the bull market. this is largely a bull market that's still intact until traders say to goes recognizoth. >> we have a ton of earnings that start tomorrow. we'll hear from the likes of oracle, then fed ex on wednesday. we'll here from lennar and nike on thursday. kayla, we'll also start talking about the banks and how much capital they might be allowed to return to shareholders. a lot of people, whether it's the hedge funds or more broadly, near the financials to do well for this market to do well. how important is this week and what we hear from the fed? >> there are two important dates. this thursday you will get the results of the stress test, which is how much capital the banks have but it won't be until next week that we actually know how much of that capital the fed has approved for banks to return to shareholders. expectations across the board are pretty low because they think that the populist sentiment against wall street is still so strong that taking that money and taking it away from
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the buffer and giving it back to shareholders will not be a popular opinion. but you bring up the broad rally we've had. financials have been a huge part of that. that's been such a bullish trade that i think people are expecting that could pull back a little bit. you can't forget this morning we had incredibly good u.s. manufacturing output, the best in six months. i think the market was looking for decidedly good data to actually get behind this rally we've had -- >> that's true. >> and that's why you have seen some of the big moves. you have the bare minimum of the sanctions but it's really that u.s. data that is fueling the market run here. >> before we get to the strength of the u.s., brian kelly, i think we also have to clear the brush on the china case as well and what is happening over there as they were liberalized a little more the trading ban for their currency. to your point this morning, you were writing about how they're effectively -- this is an economic stimulus plan in disguise here. this $160 billion urbanization program. >> i think this rally today is a lot more about that than russia and crimea. that was last week's story.
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we knew that. we knew they were going to vote to go into russia. as long as there was no escalation, everything was fine. look at what china did. we had another apparent default over the weekend in china. they went and said $165 billion will be put into shanty townhousing. that's not an insignificant sum. that's a lot of money. for the time being you have to say, you know what? maybe china isn't falling apart today and what does the world look like otherwise? that's why we're seeing this rally. >> that's the point kayla brought up, natalie. you wake up this morning, you want to talk about things that are setting the agenda. a lot of it has to do with the alibaba ipo as well. what is the broader tell from that? >> it seems like china is willing to take this punch on the chin without a lot of drama for lack of a better word. they're sending 80% of chinese
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e-commerce is tied up in alib a alibaba. so to allow that to trade in the u.s. market seems like it would be egg on their face, but we don't see a lot of drama. that's alittle surprising. >> i want to bring in jeff from raymond james who has been watching markets but also as we turn to the federal reserve, we hear from janet yellen on wednesday. what's your expectation? >> i don't think you're going to hear much out of janet yellen. i do think it's significant that the second time she spoke she was much more poised than the first time she spoke. so i think you will see a more poised janet yellen. i do not expect any prices. >> anyone here disagree with that? >> look -- go ahead. >> this keeps it intact. you wanted a seamless transition in fed policy from chairman bernanke to chairman yellen and she's taken painstaking efforts to make sure that everything is continuous, the message and everything else, and that's important, right? >> cardiff? >> i make the point it's going
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to be tricky. it's likely they will change the forward guidance. it's going to be interesting to see what they do about the unemployment rate threshold. they will have to add language. it's true they want to keep the overall level of accommodation roughly the same. the taper will stay the same. the forward guidance will change. we don't know how. they will want to keep the expectationsed a that mid-2015 or late-2015 date. >> so many people will be watching those dates in particular. and what's also interesting, again, going back to the point about the u.s. economy, is if you take a forecast like citi's which is after maybe growing 1% ft. first quarter, the u.s. economy could rebound to 3.5% as we move through some of the weather stuff and we might get a 300,000 print on payrolls, that's a citi forecast, does that strike you as an outlier or is that consist went this strength we're starting to get in indicators like jobless claims? >> i think you're going to see -- i think you're going to
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see a pent up demand once the weather ends. washington has got over 30 inches of snow this year as opposed to 3 inches last year. a lot of the drilling activity north -- in the north part of the country has stopped because of the weather. i think you will see gdp numbers pick up. i don't know if it will be that strong but i think you will nudge towards 3%. >> all right. and by the way, if we start doing that, the backdrop for markets is going to get very interesting, natalie, because all this talk about valuation, whether things are too expensive, whether there are parts of the market there are too frothy, that's going to pick up. >> exactly. even the companies that are well established, we're wondering what these big buyouts or what these big ipos will mean. for instance, we see yahoo! jumping around because of the alibaba move. >> and, kayla, over the weekend, i think it was matt who was making this point, you always look for kind of the smart fun, if you will, to exit at the top. goldman went public in '99 he was saying. there were obviously a slew of -- >> 2007. >> now you look at a listing.
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you talk about what might be the future of barclay's investment banking unit. is this a similar moment is the question he's posing. >> not necessarily form molis. you're seeing companies like greenhill, lazard, evercorp. twit ser going to be the one to watch in my estimation because you have a couple catalyst there is. some 80% of the shares held by employees will be unlocked on may 6th. that could be a key point. investors are saying this could go in the opposite direction. >> brian kelly, stephen weiss was on the show last hour. he sold out of twitter. he cited this upcoming expiration of the lockup as one reason to be concerned. how concerned should investors be either about this specific one or generally speaking as a slew of ipos start to mature and
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these lock ups expire? >> in general that's not a good thing, right? more supply meeting the same amount of demand is going to be a problem. i'm long twitter. i understand that we have the lock up coming. i'm not as concerned about that, but i have to say, the stock has been trading pretty badly, and just doesn't seem to have much lift. so i might not be long twitter for too much longer. >> and quick finally, jeff, just have to ask you about this valuation question more generally here. it's going to be the central argument. is the market here fairly valued, over valued, under valued? what's your take? >> if you believe the s&p bottom up operating numbers of about $121 this year and $137.50 for next year, stocks are not overpriced here. they're not even fairly priced. they're still undervalued, not as much as they were a year ago, but they're still undervalued. >> all right. that's going to make the continuing stream of earnings so important. my thanks to everyone. you can catch brian kelly coming up on "fast money" at 5:00 p.m.
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straight ahead here, big market moves on this st. patrick's day. we'll get the day's reads from our reporters. plus, forget the corned beef and kakage this st. patrick's day. domino's making you a pizza offer you can't refuse and patrick doyle, you can't be more irish than patrick doyle, he will join us with those details. keep it right here. you're watching cnbc, first in business worldwide. wide. in a world that's changing faster than ever, wide. we believe outshining the competition tomorrow offer you can't refuse and fuse
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welcome back. some markets kicking off the week with sop significant gains. the dow making up half it's losses already from last week. nary thompson is here from the floor of the new york stock exchange. shei sheila dharmarajan and rick santelli. >> we had good economic data. the industrial production numbers were good and there was some relief there wasn't any kind of more aggressive action taken in crimea and ukraine following that referendum. the sanctions from the u.s. as expected. good data. a lot of good news about spinoffs and ipos which is always a positive for this market, and then also the markets pushed through a key resistant level of 1850 at the s&p 500, and so that helped to drive the markets higher. some traders say some short
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covering was involved there. so all of this on a light volume day, you get 188-point gain on the dow. >> sheila, the strength we saw across all the bourses, so what about some of these parts of the nasdaq, for example, where we've seen the biotechs ramping of late and anything there that might be a tell for the rest of the week? >> we saw a couple good signs here at the nasdaq today. the first had to do with the chip makers. we saw nice strength there. qualcomm leading the way after bullishness from stern ag. biotech sector did get a lift. also a good sign. then there were enough other stories sprirngcleed in like the yahoo!/alibaba case that overall gave a nice lift to the nasdaq today. but here is the thing, traders definitely characterize today as a reluctant rally. they said, yes, there was some good news, but there's also enough uncertainty out there that people didn't feel great about the market. you can see that by the fact we didn't break out to any new highs. you know, all of the momentum
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names didn't necessarily gain so much steam. so there is still that reluctance out there that people are starting to point to a little bit more. >> rick, most reluctant of all might be the ten-year. what are the bond pits telling us? >> we couldn't even break into the 2.70s. treasuries are going to be in a range and that range will probably surprise many to have a bigg eger probability to test 2 than to test 3%. the notion that the u.s. economy on a relative value argument is the best economy in the world is true. but if we're 1% or 1.5% spread meaning if the global economy's gdp is going to move somewhere to 1.25%, 1.5%, we're always going to be a little better than that. i don't see the global pie growing, and i think when i look at china, when i look at europe,
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there's a lot of question marks. look for treasuries to be in somewhat of a range and most likely not much upside to interest rates. >> and you know what, mary? a lot of the argument going around the street about the stock market seems to come down to whether you think it's going to be a function of supply and demand, in other words people pouring into the u.s. market maybe even because of weakness elsewhere, or fundamentals. you know, so is it internal strength or money flowing in? >> a lot of that will depend on what happens with russia. there was a bit of relief rally today, but keep in mind putin is addressing the russian parliament tomorrow. this is an issue that isn't going away. whether or not, you know, the sanctions ratchet up and how that affects the european economies as well, if it impacts russia, all of this remains to be seen. so as far as the u.s. economy being, i guess, the best deal in the house. it looks like it, it could continue to look like it, and that could continue to drive flows. >> last hour matt cheslock told us as well, he said i'm not really a buy the dipper when it
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comes to equitying more broadly but i am in some of the momentum names. that was very interesting because he said that's where you tend to see a lot of activity after a couple down days. they turn around and spike back up. did that happen today? >> it did happen but it happened in a mixed fashion. so you saw names like priceline, names like tesla did rebound, but other momentum names like a netflix didn't do a whole lot today. you know, it's interesting, you were just talking about money flows versus fundamentals. traders definitely say, look, there's a feeling that you have to buy a little bit. you don't want to be the person who is getting caught back. you don't want to be the person being left behind. there were so many money managers who didn't beat the market last year, there's a sentiment of wanting to catch up, wanting not to be behind, and that could be what's fueling today's action a little bit more. >> yeah. everyone wants to outperform. they can't. thanks, guys. great to see you this hour. now, it's bigger than ebay or amazon. it's a chinese company but it's going pub lilic here in new yor. alibaba is bringing its ipo to
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the u.s. up next, we'll look at what it means for long-term investor yahoo! and how it will fare as a new public company. we'll explain what alibaba does. stay with us. we'll be right back. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. sunny or bubbly? cozy or cool? "meow" or "woof"? wheels or wheeeels? everything exactly the way you want it ...until boom, it's bedtime. your mattress isn't bliss: it's a battleground of thwarted desire. enter the all-new sleep number classic series.
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pcentury link provides reliable yit services like multi-layered security solution to keep your information safe & secure. century link. your link with what's next. welcome back. so after months of speculation, it's no longer if but now a question of when for the publc h offering of china's alibaba.
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what exactly does alibaba do? jon? >> what doesn't alibaba do might be more like it. it'salibaba.com. it's like a chinese ebay, consumers to each other. then business selling to consumers. and then group buying flash sales site. ali pay is a payments platform. and that's not even the full list. last year alibaba group organized into 25 business units which observers described as a prelude to an ipo. from what we hear they all add up to a big business that's making a lot of money. yahoo! said alibaba cleared nearly $1.8 billion in quarterback several. $786 million in operating
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income. what's hard to fathom is how far alibaba will grow from here. it's facing increasing competition from local rifleval like ten cent. as alibaba gets bigger, it's likely to continue bumping into the opaque interest of the chinese government. >> jon fortt, thank you, sir. what is the significance of alibaba's choice to file its ipo in new york? joining me for more is jim le camp, senior vice president of investments from ubs. the panel is we me as well, jim. there are two issues here it seems. one the case about whether alibaba is the right investment general lie speaking. the second about whether the share structure in new york is something that will offer investors enough protection. what do you think? >> well, i think so. it shows that the u.s. --
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they're probably the lead horse in the global financial community. the fact they chose new york is a change from what we've seen. we've seen a lot of big ipos go to london, hong kong. this is a chinese company coming over here. i think this is a real positive and a positive sign that the u.s. market is again seen as more resilient, more innovative, more nimble than the rest of the global community. could you make an argument we're the lead horse because all the other horses are running to the glue knafactory but that's not true. we're seen as a safer, better, and more innovative place. >> i want to bring in the panel here. a lot of people are saying what this comes down is hong kong saying we're one share, one vote. alibaba wanted to retain control by having a dual listing and new york will let them do that. is that global arbitrage of what is the exchanges will let you do? >> if you think of the overall
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structure, the reason why you would access any of the capital markets, first of all, we're global. it doesn't matter if it's hong kong or frankfurt or london, you will get access to. the question is whether the structure will allow them to have the oversight they want. the benefit to investors here is that they still have to operate by a certain set of rules that these exchanges require all companies listing with them to list by. and that's the real issue here because as people start to look at these as investments where they want to apartment their capital, fund managers, the institutional veferts ainvestor ones who will say i didn't care if it was listed in london or hong kong. >> kayla, what do you think? >> it's also about volatility here because, yes, you have the partnership structure which was the straw that broke the camel's back when the underwriters were trying to figure out which exchange they should list on. also, executives were pacified a little bit by the fact that the u.s. market for ipos has been so
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much less volatile than the hong kong and chinese market. when you take a look at some of the numbers over at renaissance capital, year-to-date u.s. ipos up 10%. in hong counsel dokong down 13%. in the u.s. for the last year, 60%. so whale that is so much better than theasian markets. the vix is so much more favorable for that company to trade here. >> and also when you think about the users then that are traded in the u.s. and investors can now invest in users in alibaba -- i'm sorry. i had a total brain fart what i was about to say. i'll toss it back to you. >> there's something i'm kind of wondering about especially with respect to u.s. investors and
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whether or not -- really how interested they're going to be in this company. right now john alluded to the regulatory environment in china. look at all that's happened in the last week or so. there's a new consumer protection law that's highly controversial. people wonder if it will protect consumers. ten cent was forced to shut down a bunch of accounts on we chat. the central bank is starting to stifle the move to mobile payments. if i were an investor, i would have no idea how to think about issues like this. >> jim, that's an interesting point. >> that's a good point. you look at the chinese government and the way they treat their market, it's really like a bad spouse. they're controlling. they're needy. and they're lying about their own economic statistics. look at what that means for the u.s. we're getting ipos like alibaba again. you can argue about the structure all you want to, but the markets are liquid. investors can make choices. we have a lot of liquidity here in the u.s. and it's coming from around the world. so this was a smart decision by
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them. >> jim, last quick question, have ipos performed too well? i thought i read about how 75% of the listings over the last sick months were companies that were actually unprofitable and that was the highest share we've seen since the dotcom days. >> i think they have performed too well and i think there's some concern out there, but, kelly, look at what else is happening. you're talking about new supply coming onto the market. how about demand? share buybacks are still going on very quickly and we're continuing to see a lot of supply removed from the market at the same time. you look at multiples and other valuations, it doesn't suggest we're in the same kind of ipo -- hyperipo market we were in 1999 at all. yes, maybe they're a little frothy, but nothing at all like we saw at the top in '99. >> you have to think about the sheer number of users as well and alibaba has so many users. that's the way we evaluated the facebook whatsapp.
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which is the point i wanted to make earlier. >> thank you, jim. appreciate it. >> thank you. coming up, chocolate was not good for the health of augustus gloop in the original willy wonka but it may be good for you. a study sponsored by the maker of m&ms that looks at if a special chocolate pill can make you healthier. that's coming up. we want to know is a chocolate pill that's good for you too good to be true? i'd rather eating the candy. we'll be right back. ight back.
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welcome back. spring officially starting on thursday even if it doesn't feel like it in some parts of the country. that's historically when the housing market heats up, and it appears just in time for spring adjustable rate mortgages are back in style even though it seems probable interest rates will be higher when these mortgages readjust. is this doomed to end badly. fred, you're saying this is going to end badly. >> well, yeah, there's a lot of little quirks. i don't really have a big problem with adjustable rate mortgages as long as you know the devil's in the details, and
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what i've seen primarily is that every lender is changing so that after the initial period of, say, five or seven years, you could have a cap of 5% over what you start with, and that can be a dramatic jump after the five or seven-year period of a stable lower payment. a lot of people are being pushed in these loans because of the dodd/frank cfpb ruling of the 43% back end ratio. used to be you could -- >> in english what does that mean? put that in english for our viewers. >> you take your new mortgage payment and your other recurring month lly debts divided by your income and it's not allowed to exceed 43% of your total income. >> why is that pushing people into adjustable rate mortgage approximates. >> because we used to be able to go higher. people would put 50% down and be able to go to, say, almost a 50% ratio, and it would be a safe
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loan. but accordingly, the cfpb says, no, no matter what your loan to value is, 43% is what's a qualified mortgage. if you have a fixed rate and it's 4.25% and you don't qualify at 43%, maybe you then take a five-year a.r.m. and 3.25% but in year six maybe you don't have the same job and it's a big surprise. >> fred, what do you think accounts for the popularity of adjustable rate mortgages again. >> i think the rates are very low and they have remained low because libor has remained low which is basically what they base it off of, and people just like that lower monthly payment. >> exactly. >> there are a lot of jumbo product out there that the banks are portfolioing because they're able to and they want to attract people into the bank through the
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mortgage and then -- >> fred, do you think for the most part -- i'm sorry, i don't mean to jump in, but for a lot of the banks making these adjustable rate loans, they're holding them on their books because they're betting that those rates are going to go higher and they'll benefit. don't you think for the most part, tim, i'm sorry, people who are taking out these mortgages should know the banks are positioning for rates to go up which is the very thing that will tcut into the bills to mak it more expensive. >> hi, kelly. >> i'm sorry,. >> tim. >> no worries. >> homeowners are very myopic. they're looking at the spread between a 30-year fixed and an a.r.m. when it's more expensive to get a 30-year fixed than an a.r.m., which is what's happening now, it's a 1.2% differential, they're choosing a.r.m.s. they've done it historically.
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a good way to think about a 30-year fixed is it's a hedge. it's an insurance policy against future increases in your rates and payments. over the last 30 years that's been a bad bet. interest rates have gradually come down or little dips up and down but overall a.r.m.s have outperformed them. it makes a lot of sense to continue that trend as affordability starts to drop again when interest rates pop up. >> quick final word. >> it's the same thing that's happened for the last 30 years. >> full sentence, please, we'll just finish the point. >> yeah, i'm sorry. >> guys, we're going to leave it there. we'll come back to this topic. we're getting our wires krocros. please go to "the wall street journal," read the piece and that will give you much more of the information. college basketball brackets are set and domino's is set to lead the fast break for fast food during the ncaa tournament. up next, patrick doyle, the company's ceo, will tell us the madness his company is about to embrace this month and how it could save you money. plus, the domino's pizza
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delivering drone reappeared on "60 minutes" but domino's said it wasn't a serious thing. was it though? we'll ask the ceo right after this. this. opportunities aren't 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.
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♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ it's that time of year again. march madness officially begins tomorrow, and that means pizza madness for domino's. last year the company sold more than 1.7 million pizzas during the sim mi finals and championship games. that's enough to give 21 pizzas to each person walking into the championship game. for more on the increase in
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sales during the season as well as their march madness discount, let's bring in patrick doyle, he's president and ceo of domino's pizza and irish i assume. >> absolutely. >> happy st. patrick's day. >> thank you. >> how much of your sales is done during the season? >> march madness is terrific for us. always very strong. 1.7 million pizzas sold during the semi-finals and the final game. and we're celebrating this year actually to get things going, we have a 50% off deal when customers order online this week to get them in the hackett easterhabit early. but final four and march madness is always terrific. >> is it fair to call this your christmas? >> it is except it goes on for three weeks instead of just one day. so that's part of why it's so good. >> i know cardiff already has his order ready.
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>> this pizza would taste a lot better if it was delivered by a drone. this was a big deal last year. there are a lot of people talking about how the regulatory environment in the u.s. is behind other places and, for instance, drones are being used in other countries like japan and a few other places to deliver things for commercial reasons. when do you think we're going to have something like that here? >> look, at domino's we're driving technology as hard as we can. our digital platform is great. so we're always looking at what the other options are going to be. i think the reality is that drones are going to take a while, you know, before that's practical, but for us, you know, we're the technology leaders in the space. we want to continue to drive it. and we are and so we're going to look at things. so, you know, we played around with drones a little bit, and we'll look at these things as they develop. >> natalie? >> and also, domino's is known or being on the forefront of
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using social networks to communicate with their users. you have to know if you fail to deliver these pizzas within the span of the game, you're going to hear about it online. so are you prepared to beef up your delivery staff and if you're not, are you prepared to then face the rage? >> we're doing both. the answer is we've got to be ready. we've got to give people the great service, the fast service that they're expecting, but social media is a fabulous place for us to be engaging with the customer, listening to them, finding out where there are issues, figuring out how to correct them when there are issues because we're going to make mistakes from time to time, so we absolutely will be staffed there as well to make sure we're responding to things quickly. >> patrick, you know, we make the comparison to christmas but the flip side for retailers is it is so bad for margins when they do these deep discounts. if you have three weeks of 50% off, are you guys ready to take an earnings hit when you finally announce for this quarter? >> we're actually -- it's just this week is the 50% off, but you know what? the more we drive people across
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the technology to our digital platforms, that's actually very good for our profits over time. we've been running this promotion on and off a couple times a year for a couple of years now and it's very effective at getting people to try our digital platforms ordering online, over their smartphones. so we get them in, we get them to try it, and hopefully that becomes a habit. >> do they become repeat customers? >> they absolutely do. they absolutely do. >> dom? >> you can measure that by how many people then don't delete the app or continue to use the app that downloaded it within this special, right? you have those metrics? >> that's exactly right. we've had our app -- our apps have been downloaded over 7 million times. once we get them on the phone, that's starting to set up a habit which is very good for us and our business. >> you know what i'm curious about, patrick? the mix between delivery and takeout. a lot of pizza places now have incentivized people to come into the stores to pick things up with preferred pricing? have you seen a shift away from traditional delivery? are more people opting to take
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lower prices and picking their pizzas up instead? >> they're the delivery experts. we still do a lot more in delivery but carryout has grown a little faster over the course of the last five years than the delivery. people make that choice. they do expect a little bit of a lower price if they're ordering from carryout because they know that there are costs involved in delivery. but the reality is a carryout customer wants control. that's the real reason they come into our stores. >> that explains maybe why i've always been a carryout customer. personality type. patrick, lastly, because people are wondering whether they need to start thinking about domino's as almost more of a fast casual competitor over time, do you see that being a direction? >> fast casual to people means better quality products, better looking stores, better service. >> seating more importantly. >> absolutely. we think we're doing that. we've announced that we're reimaging all of our stores over the course of the next four years globally. so, you know, to the extent to
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which that defines fast casual, that's certainly something we're getting closer to. >> all right. message received. thank you, patrick. thanks very much for being here. really appreciate it. >> thanks. >> patrick doyle, the ceo of domino's pizza. sticking with the food theme, coming up, we'll talk about candy, the maker of m&ms backing research behind developing a chocolate vitamin type pill. is this too good to be true? tweet us @closing bell. back next with "the hot list." keep it right here. it right he. ♪boots and pants and boots and pants♪ ♪and boots and pants and boots and pants♪ ♪and boots and pants... voice-enabled bill pay. just a tap away on the geico app. ♪ huh, 15 minutes could save you 15% or more on car insurance. yup, everybody knows that. well, did you know that some owls aren't that wise. don't forget about i'm having brunch with meagan tomorrow. who? seriously, you met her like three times. who? geico.
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welcome back. my favorite indicator, time to see what's clicking or what you're clicking anyway on cnbc.com. allen wastler, good too see you. what's on top? >> market outlook pieces have been doing real well for us lately. summer of discontent brewing ahead. this is based off citigroup came out with a net this morning pointing out a lot of economic turmoil could boil into geopolitical turmoil and back and forth, back and forth leading to a bad summer. jeff cox did additional research. he wrapped it all up into a nice analysis. it has over 10,000 people
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reading it already. more diving in at this moment. number two on the hot list today, alibaba. we had that news break over the weekend it's going to come out with its ipo. katy thompson used it as a jumping off point to say is going to be the end of the honeymoon period for marissa may mayer. that's bleeding off into the yahoo! stock price. maybe that will all be over. that's interesting. and then, third, another soap opera, okay. over at pimco, mohamed el-erian has left pimco now but he's joined twitter. and so we have a little write-up about that. he's already got 10,000 followers. he just joined. he's already got 10,000 followers. >> not too shabby. he makes it look so easy. >> he gets a big following on the website. i guess it just goes. we have a little look at that, too. kind of a humorous take on that. >> maybe a tell for twitter as well. alan, thanks very much.
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would you take a super chocolate pill? >> yeah, sure, why not. >> okay. why not, exactly. i'll take a chocolate flavored one. just real quick, i want to go back to yahoo! for a second. isn't the honeymoon already over for over for marissa mayer? >> no. part of the deal was ali baba would have to go public by the end of 2015. the market has been expecting this. and no one thought the honeymoon could be over until that happened because there would be so much value created under her watch. >> and they have a stake in this ipo. >> and everyone has known the value in that stock was ali baba and not what marissa mayer was for doing, correct? >> right. but she's at the helm when this happens. and given the demand for the shares. that will likely drive up the price. drive up how much yahoo! can cash out on it. >> but she was at the help when they did the last sell-off, of 10%, which they admitted they regret. >> she's going to have a lot of
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money. billions of dollars to play with. is it the right acquisitions? is it whatever it is? she's going to have a big task ahead of her. >> going back to the summer of discontent, as well. when you hear and read things like that are the main focus of readers, you know, it's like, doesn't that then get discounted into information today? should we be that worried? maybe we should. >> it depends on what's going on. i keep coming back to the point that earlier in the year, there was all this worry about whether or not investors would be able to differentiate between those markets that had bad fundamentals or had started the process of readjustment. and they were able to differentiate between those two things. if you look at the longer-term trends, yes, growth is slowing across the developing work. and in the developing market, things are concerning. so, it does make for a highly uncertain environment. but it's not something that u n
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panic over. it's never going to be a perfect world. >> we have to see what mohammed el eranian. >> i think he's going to be prolific. he's been a ubiquitous media important. he writes an op-ed and it turns up in three places at one time. >> am i sensing some frustration? >> absolutely not. we appreciate it. all right? but i think he's going to be active on twitter. >> he should be able to get that many followers. >> i want to see the first tweet. what gets him out of his shell? >> his first tweet said, basically, have patience with me because i don't really know how to work twitter. maybe that is why he's just retweeting. >> we all had that learning curve. up next, have your tweets and the magic chocolate pill
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ready. and share them. kevin o'leary will join us tomorrow on "closing bell." o "c. time to take care of business with century link's global broadband network and cloud infrastructure. we constantly evolve to meet your needs every day of the week.
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a new study wants to find
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out if nutrients in dark chocolate have health benefits. they're putting it into a pill. is the healthy chocolate pill too good to be true? >> a chocolate pill solving health issues? who needs a pill? when i eat chocolate, i feel good. james tweets, i prefer my chocolate pills to have m&m printed on them. >> we're eliminating the sugar and the fat. but isn't this the argument for being able to enjoy dark chocolate? >> they took the red wine with the pill. why not take the -- as someone who is allergic to chocolate, this is probably a good thing. i can actually have it. >> really? >> that's a good thing. >> it's about isolating the flavonoids or other things in it from the coca? >> yes. >> people find out that a glass
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or two of red win is good for them, and they have a whole bottle. >> and the gummi bear vitamins and have to put warnings. >> the gummi vitamins are great. >> gum has no children. >> read the label. ingredient number one, sugar. should i really give this to my children? >> here's the thing. gummi bear vitamins is one thing. but we're all going to be consuming food via pills anyway. isn't that the future? we have rations. toothpaste things. >> a slow food movement to have that not happen. >> but i believe it's up for debate whether concentrating all of this into a pill is actually the best way for your body to absorb the nutrients. and it's one reason why a lot of people have gone back to eating food things themselves to get all of the nutrients out so the body can process it. chewing is how you get a lot of nutrients out of a lot of things. i'm not sure taking a pill would necessarily solve it.
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>> i go and read the label and tries to buy the chocolate bar with the least amount of sugar. so, when i'm giving my kid this treat -- >> that sounds like a reasonable way to go. you can go on one end of the spectrum. >> it's hard to find chocolate that has -- a chocolate bar that has the more than 85% chocolate. i would be in favor of it. >> yeah. but it's a little bitter. >> yeah. hard to find. >> i would rather have gummi bears than chocolate. probably the reason why i look the way i do. >> you're not a member of the slow food movement. >> if this is being funded by the chocolate industry, is this because they have a stake in creating pills that have a massive concentration of cocoa. and a month ago, we were talking about a chocolate shortage in the world. >> this is kind of like the tobacco companies getting behind electronic cigarettes, right? i don't know why mars would fund something like this, unless they think it can be profitable. >> maybe it will be stamped with
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an m. >> it will have a disclaimer, not verified by the fda. you'll take it anyway because it will be the next big thing. >> maybe they have some kind of manufacturing by-product, they can resell. they don't know what to do with it. >> this has turned off my appetite of chocolate successfully. real quick, what are we watch pg tomorrow, dom? >> i'm looking to see if there's a carry through on this market rally. if we have an update tomorrow, i'd like to see a lot more participants in there. and that will be big. >> i like the microsoft news. microsoft just brought one note to the mac. i want to see if that makes a difference. we'll see if microsoft has an announcement of the first in the public appearance. >> i'm skipping tomorrow. and on wednesday, i'm going to be watching janet yellen's first press conference. she is a wild card. she's somebody who was more dumbish in her speeches. we'll see if she has surprises up her sleeves. >> i'm watching industry guidance from the fed.
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but the stress test results that come out on thursday. the fed is stressing for interest rate risk. you could get some smoke signals about how exactly those are going to be moving. >> got it. guys, thank you for being here. it's time for "fast money." melissa lee is back in the saddle. >> thanks, kel. "fast money" starts right now. live from the nasdaq market site in new york city's times square on this st. patrick's day. i'm melissa lee. our traders are steve grasso, brian kelly, dan nathan and guy adami. and the mother load coming for apple. our top story, stocks kicking off the week in rally mode. there isn't a lot of conviction behind this move. the total trade and volume today, the second-lowest of the year. is all the drama over russia, china behind us or not? and the v.i.x. was down a lot. >> there's fear going into the weekend. people knew it was going to happen here. but in a way, i think equity investors kind of repositioned a little

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