Skip to main content

tv   Closing Bell  CNBC  August 8, 2013 3:00pm-4:01pm EDT

3:00 pm
>> you. >> >> thanks you so much. >> thank you so much. >> always a pleasure to help you spend money. >> thank you so much for that. and thank you everybody for watching street signs, brian, this is your last "street signs" for a little while, right? you're up -- >> to the upper peninsula, you bet. >> the "closing bell" is next. >> hi, everybody. welcome to the "closing bell." the dow and s&p 500 on track to snap a three-day losing streak. >> i'm bill griffith. are you in a bad mood? >> i'm in a good mood. >> you just gave me the raspberries. what is that about? >> raspberries are better for you than blueberries. that is my snack. these are good earnings. jobs claims report, higher but not as high as expected.
3:01 pm
showing claims fell. >> it is pretty good. getting better. but the employment situation remains pretty insistent. pemco continuing to see huge outflows. founder bill gross says a bond war is at hand and his firm will be the winner. he lays out the battle strategy exclusively. >> lays it out as war strategy. plus richard fisher is with us. he says it is time to taper. but he has been saying this for a while. he is not a voting member but he will tell you what he expects his colleagues to do beginning next month. he is a september taperer. >> it is amazing. and it shows you the debate going on within the federal reserve right now. >> absolutely. >> let's approach this final hour. near the highs of the day here, not so far from it. up about 40 points. 15,511. nasdaq also positive here with the gains double-digit, up 18.5 points. 1.5 of 1%. s&p 500 showing a begin here of
3:02 pm
bet are than will points, bill. >> down s&p about an hour and a half away from snapping a three-day losing streak. what was the turn around about earlier today? >> what was the decline about, is the question. i will try to explain what i think happened. let me show you markets today of what is going on. main story is china. very good exported, inport date why from china and yes it moves the whole world. . it moved commodities and market stocks and kmosity countries. everything is moving on that. there is still money moving. we are seeing inflows and that is also helping. i think this is why we have this weird pattern is the yen rally we saw. take a look at s&p 500. maria just showed you the charts. have you this weird u-shape here today where the data on the u.s. was good but we went straight down. a lot of this has to do with the yen. i know it is a little bit difficult. take a look here on the top that's s&p 500.
3:03 pm
white line, that's the dollar line and as that green line went up, that means the yen is weakening. as green light goes down, that mean the yen is strengthening. market goes down. and it has been going on for a long time. very obvious today. i don't want to pin it all on that but a i think a lot is going on with this yen trade and japan. look at the strength here today. when is the last time copper was up? commodities have been terrible. good news stories in china. commodities go up. commodity producing countries go up too. countries like australia. new zealand. some other big names in that area. south africa and peru. put up etfs in the commodity group. all of them moved to the upside as well. can you buy these different countries. all up because of china. finally, note european banks are strong. money flowing into europe, even though the data is still choppy. guys, back to you. >> when you get a chance stop bit anchor desk because maria
3:04 pm
has a special going on on raspberries. >> oh boy. >> they are almost kbgone, thou. she is munching away. this is me, about an hour from the close. markets rebounded from lows into positive territory right now. >> yeah, let's break it all down on "closing bell" exchange. jim mccamp with us. james loul. steven reece from j.p. morgan. also joining the conversation, let's kick this off with you. what do you tell client with a look at double-digit gains today and we are approaching the tapering. >> we are very positive in the u.s. u.s. has been overweight with portfolios. with the earning season, it was good but not great. but good enough. where we are changing our view is europe. more constructed on europe. adding more there. we are encouraged by what we see on the economic front in europe. earnings are coming in bet are than expected in europe right now. >> i love this, bill. we have been talk a lot about europe. you are seeing people put money to work there.
3:05 pm
what is it that you are feeling has changed in europe. >> fundamentals are bet are. perhaps less bad. sentiment is terrible. fund managers are very underweight in europe. if you listen to what the u.s. company said during earnings season, everyone where exposure in europe, most people said things are better. an valuations look pretty good versus the u.s. >> jim lowell, you think we are overthinking this tapering thing, don't you? >> i absolutely do. i think what we will find is that you will be able to have to manage the bonds side your portfolio, not abandon it. right about now, i think everybody assumes that tapering somehow means some significant shift in the gradualist fed. and i just don't see that in the card. in fact we think the fed could wait until the transition occurs in january from one fed head to another before we really see the execution after plan to begin to win over what has been a very successful recovery strategy. >> but the fear isn't so much about the tapering process itself, it is about the
3:06 pm
marketing response. and we got a taste of that perhaps in may when we saw the skyrocketinging of long yields on even just the talk of a timetable for tapering. so isn't it possible everyone will rush to the exit at the same time, once we know for sure they have begun. >> it certainly is possible. that will be a buying opportunity, especially for our bonds manager who can go in and bond buying, fix nice yields. the reality on the ground is we did get a test. we saw overall aggregate market sell-off by 3%. in terms of total return. i will take 3% down side panic sell to find opportunities any day of the week. >> so jim la camp, what about you? would you put new money to work here? >> we are putting some money to work here. but i have to be more cautious in the short term. as we approach the back to school season, i think september could bring market schooling for investors. september has been historically our worst month.
3:07 pm
now we have this ham let moment to taper or not taper. and nobody knows for sure what they are going to do. where i think the risk lie says that the data could come in worse economically. consumers are hampered here. we have seen consumer savings rates go way down. we have seen consumer incomes, real incomes, go way down. part-time jobs are replacing full-time jobs. this will show up in economic data at some point, probably in the third and fourth quarter and if the fed starts to taper with weak data coming in, i think the market's going to have more volatility in september. long-term, we are so bullish. but in short term, i think investors have to be cautious. >> i think if you feel the economy continues to grow, you go with the cyclicals. if you are worried about what tapering is going to do to the economy, maybe you go with the defensive. you actually have both on your list here. >> we have more cyclical bias. you look at valuations for the cyclicals. look very cheap versus fences and we want to buy sectors and
3:08 pm
stocks with the premium data we expect in the back half of the year. it is not like we don't like the defenses. we still like the dividend themes but we are more effective in the stocks we are buying so looking for companies with growth opportunities where pay-out rash yes, stios are low higher. >> do you think we tapener september? >> i think we will see gradual tapering in september. but it is important to remember pt reasoning is not that the economy is getting better. >> which is positive. >> exactly. >> jim lowell, best idea, what is it. >> consumer stationenerry, consumer staples. biggest move lately is to dip back into europe. fidelity active growth. >> you know, i wonder if given the fact we are up as much as we are, and we know that we will have events come september, possible tapering, which i actually think is unlikely, actually, but at some point we know it'll happen in the second half. plus you've got the political
3:09 pm
issues. debt ceiling debate. is it time to take money off the table as general practice because we know we are headed into a more volatile area? >> jim, i will let you answer that as we go out. >> i think it does. if you look at it historically, the market doesn't go straight up like it has the last three years. it has done that because the federal reserve had our back at every sell-off and everybody knows that. but if you look at when the fed took money off the table after qe1 and qe2, there was a violent reaction. bond markets already had a violent reaction. if trade yields get above 3%, could you have a lot of volatile knit this market. >> i guess you echo that, steven? >> definitely. >> thank you, gentlemen. appreciate it. >> we have about 50 minutes before the "closing bell" sounds for the day. the mark set higher here. >> up next, declaring pemco will win, the war in the bond markets. if you weren't aware one was happening, then we do now and
3:10 pm
listen up. we will share his battle plan up next. >> and federal reserve richard fisher in the house. he has a message for policy makers. baton the hatches. he says it is time to taper. and he will show us how it is done. >> we have more earnings after the bell tonight. if you are listen awning satellite, it is lions gate and price line.com. more with "closing bell" after this. on their 401(k)s?! go to e-trade and roll over your old 401(k)s to a new e-trade retirement account. none of them charge annual fees and all of them offer low cost investments. e-trade. less for us. more for you. time to have new experiences with a familiar keyboard. to update our status without opening an app. to have all our messages in one place. to browse... and share... faster than ever. ♪ it's time to do everything better than before.
3:11 pm
the new blackberry q10. it's time. [ male announcer ] come to the golden opportunity sales event to experience the precision handling of the lexus performance vehicles, including the gs and all-new is. ♪ this is the pursuit of perfection.
3:12 pm
3:13 pm
it's war in the bond market. p pimco's bill gross made that statement. >> in a note to client, he outlines his plan of action. this is after investors already pulled more than $18 billion out of pimco's total run fund the last three months. what will it take to get that money back into the fund? bill, good to have you back on the program. >> welcome back, william. >> i love to hear you say, this is a war and we're going to win. talk about the new war you see in the bond world out there. >> all right, let's speak it that maria. you know, it isn't like the cuban missile crisis or nuclear
3:14 pm
war, it is more like grenada in terms of what we have gone through. the average bond fund is down about 2% this year. pimco a little less. we are doing better than the market. what does that mean in per spekt sniff put it in terms of the dow. if the dow were down to 15,000 then that's the excuse to take out tens and tens and 30 billions of dollars on the basis of a minor correction? no. stock investors would say, use that as a buying opportunity. pimco is saying the same thing. hey, the bond market sold off in terms of price. but listen, this is a minor skirmish as opposed to a major war. >> bill, you said in your note to clients to get ready for this era of lower fixed income returns. you make it sound like this is a new event. with all due respect, and you know i respect the heck out of you, we've been in a lower return environment for quite a while. i mean, shouldn't people have been prepared for this a long
3:15 pm
time ago? >> well, they should have. and with due respect to you, as well, bill, we have been preparing them for the last 6, 12, 18 months and talking about a lower return world. where pimco made a mistake is that we suggested that equities as well as bonds based on 3, 4, 5% future returning world. certainly that hasn't been the case for stocks. but for the bond market, pimco has been on record for the past several years of talking about 2 to 3 to 4% returns. i think that's where we are. >> so what's the strategy to win those investors back? you're talking about the third consecutive month of outflows in july. over the last three months in terms of investors pulling out more than $18 billion from the fund. what's your strategy to get those folks once again invested? the fund? >> well, let's look at it this way, maria. the war is between money market funds and bond funds and bond fund and equity funds,
3:16 pm
basically. those three in the case of the triangle. what is the potential for bond fund to be defensive like money market fund but still provide adequate return relative to inflation. close to what stocks can do. you know, what we have suggested in this particular outlook and in terms of strategy going forward is that bonds are composed of a number of component that produce a yield and we call them carry. now most investors associate yield or carry with maturity extension. for instance, three-month treasury yields 1% and three year treasury bond yields 1.5%. so in order to get the yield you have to take maturity risk or duration risk. we are suggesting, no, that's not the only way to produce high carry or high yield. can you do that with credit or by volatility or agency mortgages and produce 3 to 3.5% yields with much more defensive price qualities going forward. >> i mean, the war metaphor you
3:17 pm
use comes from your belief, that as all military school will teach you, you've got to adapt in order to sur rifsurvive. that's what you are trying to did do here is adapt to conditions. like you are describing here with keri. when we talk about investment here is they merely shorten their duration. they go with the shorter term interest bearing income producers because that's where less volatility is. less risk is. but you're not talking about that, are you? >> no, we are to some extent, bill. the investment speaks to lower durations over a longer period of time. it's true. if interest rates go up as opposed to down then prices go down as opposed to up like they have for past 30 years and so pimco is cognizant of that. we are simply suggesting that in the process of lowering durations, it is not necessarily
3:18 pm
the case where you have to lower your return. so you can supplement those shorter durations, you know, with what we call credit risk, with what we call volatility risk. with what we call currency based risk. so you can still produce 3 to 4% yields in a defensive type of war as opposed to offensive type of war we fought for the past 30 years. >> do you expect rates to spike again as they did in may? is that what's going to happen when we finally know when the fed is going to begin the tapering process? what do you expect the mark tet do with that? >> you know, h is where i see the tapering going, bill. and you know, qe3, to my way of thinking and to the fed's way of thinking in terms of our interpretation just isn't working like its predecessors. and instead of a 3% inflation, it is continuing to have asset prices and in some cases dangerously slow like the two asset bubbles of the past 15
3:19 pm
years. in our opinion the fed will taper. and it has access of reinvigorated access of foreign guidance and policy rate, much like the bank of he england. that is positive for short to intermediate bonds and negative longer term assets like 10 and 30 db year treasuries and it is a negative as well. let me put this out on the table. i think it is negative as well for stocks. why did you think stocks have gone up by so much? because of quantitative easing of 1, 2 and 3 and the ability to write checks going forward. even an optimist can't say that stocks are on their own and looking good. >> what kind of returns would you expect? i mean, what make the total return fund the place it be right here, returns in july came in under 1%. meanwhile, you know, between april and june, you saw losses and when you look at stocks, you are looking at double-digit gains for equity. have you missed much of that
3:20 pm
move in equity. >> >> you are citing history, true, maria. but going forward, we are talking about a substantial universe of investors that need fixed income. it is fair to say that boomers require fixed income. fair to say that pension funds, insurance companies, all with liabilities going forward for 10 or 20 or 30 years. they require a fixed income. this isn't a universe that is going to disappear. if anything is t is growing dem graphically. so what can fixed income investors expect? yes, probably 3 to 4% going forward. is that great? no. but it certainly is something positive relative to inflation and if you can go with pimco and go with our historic alpha generation of maybe a hundred to 150 basis points per year, then you can enhance those returns. so it is not injury father's or mother's old mobile going forward. but the same case for stocks, because stocks rely on the, in terms of discounting mechanism, same interest rate producing
3:21 pm
problems for the bond market. >> who would you like to see be the next fed chairman? >> oh, i don't think we have our drudgers. let me just say this, bill. i think there are differences. i think janet yellen, is perceived as more dovish than larry summers. three to six months back larry summers was asked to talk about quantitative easing and he said he doesn't think it was a good thing. >> will you have to change your investment style based on who is chosen depending on one or the other? >> we are simply going to observe it. i think larry summers would be more positive for lower inflation and the longer curve, i think janet yellen would be more positive for the front end of the curve. this is, she would be a chairman that would keep policy rates lower for longer. and so, you know, we'll observe. right now, there's a london vetting market, bill, that has 60/40.
3:22 pm
60 for summers and 40 for yellen. it is a toss-up at the moment. we will have to wait and see what happens? >> let me ask you about richmond, california. your firm, with blackrock, among other bond investors seeking a court order to block richmond and corners llc from seizing mortgagees from imminent domain. you say the initiative would hurt savers and retirees. what can you tell us? >> is a concept of imminent domain, maria, attached to mortgages as opposed to the homes themselves. typically imminent domain with a city or county, basically occurs when you need a freeway and the home's basically have to be torn down and moved out of the way. in this particular case, this is where a city begins attaching or confiscating securities as opposed buildings. and it seems to us that all investors should be concerned about this when a city starts attaching and applying imminent domain to securities as opposed
3:23 pm
it a physical building. we will ask what's next. shares of apple or ibm. if so, i think equity investors should be worried as well. >> all right, bill, good to see you. thanks for joining us. >> thanks, you guys. >> we appreciate it. see you soon. >> by the way, i don't know if you just saw this on the wire, cleveland fed president just announced retirement. >> she made comments yesterday. >> in january. so she is head of the cleveland bank for ten years. she is leaving at the end of the year. >> we will talk to the president of the bank at the end of the show. a mark set higher though often best levels of 26 now on the dow. >> check out this, t-mobile shares up 90% so far this year. stock is rallying today after wildest provider added more than a million customers in the second quarter. when we come back, hear from somebody who says you should add this stock to your portfolio. >> and to taper or not to taper. richard fisher would like to cut back on the stimulus. does he think the fed will do it
3:24 pm
in september? he will join us to answer that question later on in "closing bell." ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ]
3:25 pm
before their gift helped preserve the point... before a credit solution was used to expand their business... before trusts were created for their grandkids' educations... they chose a partner to help manage their wealth... one whose insights, solutions, and approach have been relied on for over 200 years. that's the value of trusted connections. that's u.s. trust. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
3:26 pm
if we close right here, dow and s s&p would close lower the first day of the year. >> quick review of red and green in today's trade. let's start with jc penney. moving sharply higher today. that after bill ackman wrote in a letter to the retailer's board that the company startedity
3:27 pm
search for a new ceo replacing interim ceo mike you willman. and in sticking with retailers, l brand rallying, the parent company of victoria secret, posting same-store sales raising 3 percent in july. and liftingity second quarter earnings guidance. next, aeropostale, second quarter dropped 15%. outlook for the second quarter disappointing the street. among earnings, groupon a clear winner. website reporting a record quarter for north american business and named co-founder as ceo. tesla marching higher. electric car maker posting earnings and revenue that blew past wall street expectations. at least five brokerages raising price targ pets. we will end on t-mobile. ceo john ledger on cnbc this morning. here is what he had to say.
3:28 pm
take a listen. >> we did a couple of things. phase one was simplified pricing which people really were annoyed by. one of the biggest pain points. no contracts. no up front device cost. then came in with any-time upgrade. just to point out, we did launch the iphone. >> wireless carrier added 1.1 million customers in second quarter. big boost in revenue also kept post paid churn toi its lowest level ever. >> let's talk more about t-mobile. company up about 3% today. will the stock continue it trade at these levels? and is now the time to get in? richard ross and tanner. gentlemen, good to see you. gentlemen, how is that chart looking on t-mobile? >> i'm not just a t-mobile customer, i'm a buyer. i would tell you why i would still be a buyer here.
3:29 pm
even though the stock is up 90% year to date, we are in a bull market. you want it be a buyer of strong stocks. what i really like is this textbook correction we see within the context of this well defined trend channel. takes us back 8% to key support around the $24 level. then the upside of today's numbers, break away gap. bust out of that trend channel. i think that sets the stage for a move up to $30. i like the name. >> how are fundamentals looking to you? you want to buy as well? >> first and foremost, they are back to focus on the customer. simplifying all of their pricing plans. but second of all, and perhaps more important in the short term they are starting to offer apple iphones. they came to an agreement in april. over the next six months that should be a boost for the company. they are gaining shares for
3:30 pm
sprint. lastly, on a valuation basis, despite the run-up, it management, if they continue to execute earnings plan and continue to satisfy customer growth, they will do well going forward. >> all right. so you would buy at these levels, even though we are talking about this rally we are seeing in the stock, which of course has been quite bullish? >> yeah. >> valuation issue. >> right. i think the telecom space as a whole, all verizon, at&t, t-mobile and sprinting with all look reasonably valueed. so given the strong performance of t-mobile specifically, i like the stock as well. >> gentlemen, thank you so much. see you soon. >> they said thank you. >> yes, they did. i think they did. >> hook their mic, again. 30 minutes to go on the dow and s&p. slight gains. this is the first gains for the week. we've had three down days in a row. we have not had four consecutive down days this year.
3:31 pm
it's been that kind of year. >> banks under pressure. bank of america, j.p. morgan, both in the cross hairs by regulators. up next, find out how that could impact the stocks of these financial giants. >> also, activist investor big ackman wants jc penney to appoint a new ceo in 45 days. he is being impatient. is that enough time to find a new ceo for the struggling retailer? we will find out. back soon. i've been doing a few things for a while that i really love-- tdd#: 1-800-345-2550 playing this and trading. tdd#: 1-800-345-2550 and the better i am at them, the more i enjoy them. tdd#: 1-800-345-2550 so i'm always looking to take them up a notch or two. tdd#: 1-800-345-2550 and schwab really helps me step up my trading. tdd#: 1-800-345-2550 they've now put their most powerful platform, tdd#: 1-800-345-2550 streetsmart edge, in the cloud. tdd#: 1-800-345-2550 so i can use it on the web, where i trade from tdd#: 1-800-345-2550
3:32 pm
most of the time. tdd#: 1-800-345-2550 which means i get schwab's most advanced tools tdd#: 1-800-345-2550 on whatever computer i'm on. tdd#: 1-800-345-2550 it's really taken my trading to the next level. tdd#: 1-800-345-2550 i've also got a dedicated team of schwab trading specialists. tdd#: 1-800-345-2550 they helped me set up my platform the way i wanted, tdd#: 1-800-345-2550 from the comfort of my home. tdd#: 1-800-345-2550 and we talked about ideas and strategies, one on one! tdd#: 1-800-345-2550 really gave my trading a boost. tdd#: 1-800-345-2550 all this with no trade minimums. tdd#: 1-800-345-2550 and only $8.95 a trade. tdd#: 1-800-345-2550 after all, i'm in this to win, right? tdd#: 1-800-345-2550 open a schwab account and learn how you can earn up to 300 tdd#: 1-800-345-2550 commission-free online trades for 6 months tdd#: 1-800-345-2550 with qualifying net deposits. tdd#: 1-800-345-2550 call 1-888-254-2600 today. tdd#: 1-800-345-2550 [ male announcer ] you wait all year for summer. ♪ this summer was definitely worth the wait. ♪ summer's best event from cadillac. let summer try and pass you by. lease this all-new cadillac ats for around $299 per month
3:33 pm
or purchase for 0% apr for 60 months. come in now for the best offers of the model year.
3:34 pm
good afternoon, bill. with three banks airing their dirty laundry this week, and an sec filing that the defendant of justice okayed a civil suit. the bachk has received a subpoena from the u.s. attorney regarding its for closure
3:35 pm
practices. j.p. morgan back in the legal cross hairs as well. the official saying in its latest 10 q filing its subject of parallel civil and criminal investigations by the u.s. attorney's office in california's eastern district. the bank got notice in may that is violated federal securities laws and mortgage backed secure fritz 2005 to 2007. the firm saying it tps to respond to other nbc related regulatory issue youies. this is just the latest in the saga of housing overhang that continues to plague financials. 10 q also revealing doj investigations into its foreclosure business and bank of america charged on tuesday with defrauding investors through sales of mortgage backed securities. >> all right. thank you so much. what is the likely legal outcome of these cases and should we be worried as
3:36 pm
investors? >> paul miller covers the banks for fbr capital markets. tom gorman is with us. a partner at dorscy and whitney and ex counsel in the endorsement division. from what i read, neither of you is all that impressed with charges against b of a. you don't think they carry much weight, tom gorman? why? >> i think that's right. what you are seeing is the end of the cycle of market crisis cases. these banks have been investigated for years by the department of justice, by the sec and every other regulator in washington. what you've got to date is handful of cases from the sec, the doj saying there is no criminal liability. and now, we've got this new residential mortgage backed security working group that came out of the president's state of the union address and they are rehashing the same old same old. the same old same old gets you
3:37 pm
the same old results and i think that's what you will see here. >> you don't think anybody -- there is a likelihood that anybody would go to jail if the investigation produces criminal charges or convictions? >> no. i think it would be very surprising it see any kind of criminal charges here. i think what you're going to see is cases like we saw earlier this week. sec bringing a case against bank of america. that's a negligence case is based on the sale of one security or one securitization. one single transaction. and that's it. and you may see more cases like that. but you're not going to see what congress seems to want. what the public seems to want. is executives going to prison. j.p. morgan being indicted. i just don't think that's in the cards here. >> paul, why is this? what has taken so long in the financial crisis was four or five years ago and this thing is still dragging on. >> yeah, this is old news. just to me, department of
3:38 pm
justice old guys trying to make names for themselves and get the last bit of hidden tax from these institutions. everybody knew what went on a couple years ago. these guys paid lot of money to settle with the state ags on a lot of this stuff. none of this is new. investors know about it. they know about this possible liability out there. i don't think it is material. i think it is headline risk. that's all it is. >> headline risk, but we are talking about investigation after investigation on mortgage. pressure on capital. from an investment standpoint, do you want to be in these stocks right now knowing there is uncertainty and attack everywhere you look. >> i think these things add nice run and i think they need to pull back a little bit. i'm not telling people to buy j.p. morgan or these companies at these levels at all. however, investors seem not to care. what they see is an improvement in the economy. rising rates and possibility of earnings going up next year, not
3:39 pm
down. and this is a speed bump. is it another billion of litigation for j.p. morgan? they will be able to move on that and move on. they have over $6 billion reserves. do they up that a little bit? yeah, they probably could. but in long-term, i don't think investors really care. >> tom, what happened? was there no smoking gun? we all -- we all, i'm overstating this. but plenty of people fell likes there should be somebody going to jail for what happened during the financial crisis. whether a mortgage industry bank or whatever it was, that caused this crisis, and did so much damage to the economy. but nobody has. is there no smoking gun somewhere? >> there is no smoking gun. nobody's ever found really a smoking gun. what they found is one off transactions like the case earlier this week, like the case the sec brought against goldman sachs, like citigroup case. one transaction kinds of cases.
3:40 pm
but what you're not finding is cdo after cdo after cdo where there was fraud in it. if you found that kind of systematic fraud, then you can bring an institutional case. but what you are really finding is, a lot of sloppy practices. things that weren't doing good. bad business judgment. a lot of things that maybe are sort of silly. but at the end of the day, silly, bad business, bad practices, bad procedures add up to the problems we've got. but they only add up to people going to jail. that's not intentional kinds of fraud. that's why you're not seeing those kinds of cases being bought. that's just really -- those documents have been picked over and picked over and picked over. and they've taken reams of testimony and they are not finding it. they are just finding the silly stuff i said. >> you can't pranosecute stupidity. >> that's right. >> thank you, gentlemen. 20 minutes before the "closing
3:41 pm
bell" sounds for the day. s&p and nasdaq showing gains. >> other spin at jc penney. retailer trying to quickly replace mike you willman who just replaced ron johnson four months ago who replaced mike ullman before that. what is going on at jc penney? that's up next. >> let's go to the fed when i speak to the richard fisher. who should succeed ben benanky? that's later on "closing bell." she's still the one for you - you know it even after all these years. but your erectile dysfunction - you know,that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently.
3:42 pm
tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help.
3:43 pm
because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company." a quarter million tweeters is beare tweeting. and 900 million dollars are changing hands online. that's why hp built a new kind of server. one that's 80% smaller. uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this&is gonna be big. hp moonshot. it's time to build a better enterprise. together.
3:44 pm
welcome back. jc penney soap opera continues. looking to replace interim chief executive while bringing back a former ceo to be chairman of the board. courtney reagan with the details. >> possible pending shifts in the management. for beleaguered jp penny. bill ackman wrote to the entire board expressing his frustration about the search for a permanent ceo. in april, jc penney announced mike ullman who was ceo from 2004 to 2011 is stepping back as ron johnson, who was brought in to replace ullman, backed out.
3:45 pm
he supported him as interim ceo but the process that was supposed to start if april just began. in the letter, ackman says the reoriginal predecessor has agreed to return as chairman under certain conditions. he called questrom said he would need to not come back into a hostile situation. we know allen was approached in april but didn't want to come back at that point. in fact he endorsed mike ullman as strong choice to help stabilize the financial situation. and many believe ullman did stabilize at least the near term liquidity risk and did the right thing with coupons and private label brand. but hasn't been enough to truly bring the needle forward. there is a request for comments about what is going on there and comment and reaction to what
3:46 pm
happened with this ackman letter. >> pretty unbelievable. in such a short pooheriod of ti to have some much uncertainty in the corner office there. no wonder the stock performed so poorly. >> and no new names. is there nobody new that could come in? and all of the people running j th penny for the last what number of years? and allen questrom coming back too. >> and a lot of people think there is such low expectations that anyone could come in and move the needle and everyone would be happy with that and who would want to take this job? so it is hard to say if they want a new ceo in 30 to 45 days. remember you have to think about things like noncompetes and getting out of existing contracts. who wants the job, who could get to texas p there is all sorts of what-ifs here. i'm not sure what names are thrown around to be honest. a lot of han el lifts said we haven't had a second to think about it but no names really popped to the top of your mind. >> i hear ron johnson is
3:47 pm
available. >> that's true. i do believe he is available. i'm not sure how that would work out. >> that's true. >> thanks, court. >> thanks. >> see you later. final stretch, bill. >> 14 minutes left, maria. looks like a positive day. first one this week. can we finish below 1700? two point below that. >> why is heather hughs saying investors have to be cautious right now? we will ask her next. >> and could fed tapering begin next month? who better to ask whether the central bank will start to cut back on stimulus than dallas fed president richard fisher. before a credit solution was used to expand their business... before trusts were created for their grandkids' educations... they chose a partner
3:48 pm
to help manage their wealth... one whose insights, solutions, and approach have been relied on for over 200 years. that's the value of trusted connections. that's u.s. trust. lealong the jersey shore,g. coca-cola is partnering with local businesses and the seaside heights business improvement district to restore the historic boardwalk, welcoming beach lovers back with a refreshed and revitalized place to get out, get moving, and have some fun in the sun. it's part of our goal to inspire more than three million people to rediscover the joy of being active this summer. see the difference all of us can make... together. the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade.
3:49 pm
i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
3:50 pm
okay. about 10 minutes away from the "closing bell." looks like we will break the losing streak. three in a row. we will be up today as time to get out of the markets it says here. >> what's the plan? we want to bring in heather hughes and ben willis. good to see you both. thank you so much for joining us. ben, what are you looking at end of day here? how do you look at this market in terms of flow? >> there is very little flow.
3:51 pm
what we've seen, i would have expected the market to be much higher, quite frankly. most important eeconomy giving us great news out of china. material groups responding. rest of the market state asleep and summer slow down. i'm surprised the line is as high as it is today. going forward, another report out of china tomorrow morning coming in. that maybe help us more. but hopefully what we are seeing is a very slow step down in the correction rather than sharp move. so one day up after three is not unexpected. >> heather, you are cautious. >> have you been a bulldog for a long time. >> yeah, but at these levels -- >> especially in the month of august. it tends to be a lighter month. lower volatility. up 20% year to date. a record month of equity influence. last month, $40.3 billion, seems like you know, little engine that could. i think i can, i think i can. we are chugging up the hill to take a pause here. markets at all-time highs. let's digest some news. four out of ten of the largest
3:52 pm
equity monthly inflows in history occurs right before the tech bubble burst in 2000. >> i don't know if you saw the headline a few minutes go, basically that china is considering now taking shale imports from the united states. okay, shale gas. this is a big story in terms of energy. what's your take as a result of what people are talking about will be a huge revolution in the u.s. >> a big story concerning news coming out of the oil communities in fracking just yesterday and giving up on positions like chesapeake selling their positions in new york for leases that were not valuable to them and now all of a sudden there will be value. so i think again, i think china is the most important story globally to everyone. oddly enough, the oddity of today's trading, most basic material up on oil to the down side today and that a function of currency more than anything else in that particular area. but again, on money flows, huge slow down on money flowing into mutual funds. you know from seeing in your own
3:53 pm
funds the last week. huge slow down in funds and that goes right to the volume wore seeing. >> what do you think of that. >> $4.48 million in longer data mutual fund. not necessarily all in the equity mutual funds. but they have definitely slowed. you have seen great rotation pr bond into cash and equity. >> they are foaming runways getting ready for tapering, right? >> i think we have more stimulus than a-rod. >> we do not believe, the two of us, that you will see tapering in september. >> i'll take the other side of that too. >> you will take the other side? >> i believe this is a political enterprise more than an economic. this will be ben bernanke putting his thumb print on his swan song saying it is time for me to go. the result after 30-year today will tell you there is a lot of natural tapering. >> no demand because people are expecting tapering soon. >> because the biggest buyer will step away. someone taking down 50% of the
3:54 pm
issue says i'm out. you will walk away. >> he waits and leaves it for the next day. >> have you a bet? >> we have a bet. >> you're on our team. you say no tapering is well then in september. >> no tapering in september. we're all hooked on this monetary morphine. especially head of bernanke, his term expiring. you know, before the new fed president. they won't make too many moves in september to increase volatility. >> it is interesting you're so sure of it, ben. what about the market, 6.5%. unemployment, inflation. we haven't even met those. >> not even close. >> what is important in that whole conversation is when they today correct themselves and explain tapering isn't tightening, the fact is it may be the way tools are separated. markers have been issued were for the zero interest rate policy, not for the tapering. that has to be separated. so they are going to stay away and back away from the purpo purchases. they have an impact that
3:55 pm
diminished. just like the economics of it. they no longer have diminish. >> if they do, we will finally get lift off in the bond markets. >> maybe that's what we will see, lift off, the next buzz word. >> we appreciate it. >> closing countdown. >> then earnings after the bell. priceline and lionsgalionsgate. you're watching cnbc. first in business worldwide. bet. and i'm michelle. and we own the paper cottage. it's a stationery and gifts store. anything we purchase for the paper cottage goes on our ink card. so you can manage your business expenses and access them online instantly with the game changing app from ink. we didn't get into business to spend time managing receipts, that's why we have ink. we like being in business because we like being creative, we like interacting with people. so you have time to focus on the things you love. ink from chase. so you can.
3:56 pm
[ male announcer ] you wait all year for summer. ♪ this summer was definitely worth the wait. ♪ summer's best event from cadillac. let summer try and pass you by. lease this all-new cadillac xts for around $399 per month or purchase for 0% apr for 60 months. come in now for the best offers of the model year. farmers presents: fifteen seconds of smart.
3:57 pm
so you want to drive more safely? stop eating. take deep breaths. avoid bad weather. [ whispers ] get eight hours. ♪ [ shouts over music ] turn it down! and, of course, talk to farmers. hi. hi. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum ♪ ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.
3:58 pm
coming up on the two-minute mark here, our first plus day of the week. here is monday, tuesday, wednesday, down day, down day, down day. but now, a slight up day and about 33-point gain. i'll repeat it again. we have not had four consecutive down days for the s&p this year. buy in the dip has been the mentality. three companies we're keeping an eye on, especially lionsgate and priceline. priceline -- let's see. lionsgate up a traction. expecting 8 cents on $523 million revenue. priceline expecting $9.36 on $1.6 billion revenue. and monster beverage, we will keep an eye on, that's up 1.6%.
3:59 pm
we're in the dull drums obviously but still holding the line. no bull pack. >> lines are weaker. vix is low. but enough to keep a bull market down and that's what we are seeing. it is not unusual to see a little bit of consolidation here on some of the levels we talked. s&p got to 1700. got beyond 1700. little bit of pull back is healthy to keep moving forward. we don't really get concerned about this market until the s&p gets down around the 60/40 level. i just don't see that happening in august. >> maria, i don't think they will start tapering in september. ben banging the table with why he thinks it will happen. what do you think? >> i will think it will happen modestly. you will hear from president fisher -- we will take a listen. the economic data is getting better. not where it is. it is not to the escape launch
4:00 pm
that ben bernanke wants. i think it'll be fine and will tapener september. >> thank you for your thoughts. we are going out positive, first time this week. with the dow up about 25 and s&p just below 1700. stand by, uber hawk on the fed. richard fisher up in the second hour on the "closing bell." i'll see you tomorrow. >> and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." stocks snap three-day losing streak today. take a look at how we are finishing the dion wall street. dow finishing off the session but up 26 point. 15,497, last trade there. volume not so grade. 587 million shares, typical for the afternoon. s&p 500 picks up 6.5. the string is broken after three days of

95 Views

info Stream Only

Uploaded by TV Archive on