tv Closing Bell CNBC April 2, 2013 3:00pm-4:00pm EDT
animatronics, in recreated dinosaurs. palmer, may be familiar to you, he's the guy that's building the replica "titanic" that will actually sale. those wacky aussies, what's next? thanks for watching "street signs," everybody. "closing bell," is next. hi, everybody. good afternoon. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. rally mode once again, bill. >> now we're starting the new quarter here. i'm bill griffeth. it is a stock market that just will not quit. a broad-based rally so far today, although we're well off the highs right now. take it for the naysayers to cry uncle. is it time now? don't look now, but we are not too far from dow 15,000. there, i said it. >> all of this as the north korea situation is escalating, escalating the threats, anyway. restarting a reactor to make
nuclear weapons. yet traders don't care. we'll find out why. >> also, are u.s. businesses kowtowing to communist china right now? apple ceo tim cook with that over-the-top apology to china and now movie studios are we working scripts to not offend the chinese government. we have a special report on this rather alarming trend, coming up. >> what gives with this story? check out where we are on the markets, as we approach this final hour on trading. the dow jones industrial average just shy of the highs of the day. up 73 points on the dow jones industrial average at 14,645. about half a percent higher, uncharted territory, obviously. and nasdaq at composite up 14 points, half a percent there. it has certainly come off the best levels of the afternoon, at 3253. check the s&p 500 with gain of nearly seven points. it too off of the best levels. we're still seeing a gain of a half a percent. >> so equities continue higher. we are keeping an eye on yet another market smimilestone.
the s&p needs to be up 7.02 to close at an all-time high. we're not up into that intraday high that we're all obsessing over suddenly. we were there earlier, we're not there now. but let's talk about all of this in today's "closing bell" exchange. michael santoli from yahoo! finance, carol roth, rob lutz from cap and money management, and our own rick santelli. welcome to everybody. michael, you and i just had a very long conversation where we solved the problems of the world before we came on the air. you're starting to rethink the pullback scenario for this market? >> i wouldn't say rethink, but i think the reasons we haven't had it remain in tact. the defense gets and the market as a whole doesn't go down. you see today a lot of the recent meters, airlines, no good. you're seeing the refiners actually get dumped. small cap's not working, but some of the defensive sectors managed to hold up. clearly, people do not feel the need to run for the exits. they just look for another place
to sit while things blow over. >> and particularly with the fed keeping the free money in place. rob lutz, as you look at opportunities to either buy in or navigate this rally, how do you want to be positioned here? what would you be doing in terms of allocating capital? >> well, i think, first of all, you have to recognize, this is a bull market, and there are tremendous forces driving it. first, you've got more innovation in our economy than anybody thinks. everybody's worried about banks in cyprus, but the innovation, right in the u.s. today, is driving our economy forward. secondly, you have valuation. valuation is very reasonable today, and we think it could move up the 15% alone, without the economy improving at all. but third, we think we do have the economy improving. and lastly, sentiment. sentiment is very positive today. main street's left wall street and institutions are far undervalued in their allocation to equity. so we think stock prices are going to just continue to march
upward. we think 10 to 15% move from here is very possible. >> and carol roth, i'm guessing, you're thinking rob has forgotten one very important piece of this whole puzzle? >> yeah, i'm kind of interested in this whole innovation theory, because when i look at the gdp and the projected gdp growth from this year, i'm not seeing this being anywhere higher than 2, maybe 2.5% if we've got lots of innovation in the back half of the year. and i don't see how that is this incredible growth coming out of a recession, coming out of a recovery, that is justifying where we are. i think where we are is because of the printing press and the printing press continues. that being said, that if you might not like the fact that the bunch bowl is being spiked, but you have to realize that everybody else in the room is drunk. so i am acknowledging that fact, that everybody else in the room is drunk and i think that you work, accordingly, but let's call it like it is. there's a reason, it is not innovation and it's not this amazing growth. it's a printing press. >> rob, what do you think of
that? >> well, i interject that there is really integration out there. in the energy platform today, you've got an amazing development in a natural gas. we've increased production of natural gas seven fold in the last five years. that's amazing. prices are lower compared to anywhere else on the planet. and that's making the u.s. a very viable entity in manufacturing today. so that's just energy. if you go look at technology, there's tremendous innovation going on, in health care as well. so i disagree. i think everybody's worried about the headline news and financial malfeasance, which there's plenty of, but while we're worrying about that, innovation is really taking over and i think we're going to have a 4% gdp quarter later this year. >> well, you can say innovation is taking over, but i don't know that innovation necessarily will drive the stock market. at the end of the day, isn't it all about fundamentals and the federal reserve? mike santoli, we talked about earnings yesterday. rich peterson talking about first quarter earnings growth coming in at about 0.4%.
expecting it to pick up later on in the year, but that's not so great. is this market setting us up for disappointment once we start seeing the flow of earnings over the next couple of weeks. >> potentially. but i don't think optimism about earnings growth has been the factor in this bold market over the last few months anyway. what you're seeing, you can have this market about whether the economy's innovating, was in the market, what's going on, the stocks that look most like bonds are benefiting from the fact they're a little bit cheaper than bonds. the valuations are going up not because earnings growth is great, but people say, i suppose i have to own dividend-yield stocks are as opposed to the bonds. so i think earnings risk is a problem, because of how high the valuations have gotten in the very short-term, but i don't know that's going to be the ultimate waterloo of this rally. >> carol, can you really say everybody's drunk, when, in fact, it's a fundamental story. a lot of people expecting earnings to pop later on in the year.
>> they're ramping up, maria, because of very low, low expectations. so we've gotten ourselves into a situation where there really isn't anywhere else to put your money, and everybody's pulled back those expectations. so i really do attribute it to being a little bit drunk. but the other thing that really concerns me here, when you look at the broader financial landscape is the amount of debt that is at the city level, that's at the state level. i'm in illinois. we have $100 million unfunded pension liability. stockton just went into bankruptcy. and that means retirement benefits ultimately are going to end up getting cut back, the consumer is going to end up getting killed. it could be as early as later on in this year. and that means if we don't have consumers out there spending, more consumer worry, people not spending the money, that's going to have an impact on the market. >> a good point. >> rick, we haven't forgotten about you. and i wanted to ask you, sharon epperson will have more on this in a few minutes, but sock gen out today with a report saying the era of gold is over. and in fact, gold is down sharply on that today.
your thoughts? >> you know, once again, i think gold has been securitized by etfs. it's going to act funky, in my opinion. and when it comes to sok gen, that french bank and others used to enjoy dividends more than cream puffs. i would be a little wary of their opinion about what they put on the menu or or take off menu. in terms of being drunk, carol has it right. and here's the breathalyzer report, it's called interest rates. look at a year-to-date chart of tens. all the work really above settlement. it's all based on the fed keeping everybody rather inebriated on the liquidity. but the third chart here is a chart of the chinese stock market. that's the sober stock chart to pay most attention to. but i think both of our guests are right. i think energy is a great innovation. but i think the irony there is, federal lands aren't participating, the government
shuns the industry. it seems pretty crazy to me. government has all these programs, and the one bit of true american ingenuity is the child that's up in the bedroom with no babysitter. and whoever said a 4% gdp, if there's one 4% handle on any last friday of the month, gdp for the rest of the year, i'll bet that guy a sack of sliders. >> i'll take you on that. i'll take you on that one, rick. i think we're going to have it. i think we're going to have a 4% gdp. >> that's cool. and i hope i lose bet. >> wait a second, 4% in the fourth quarter is what you're lacking for? >> any quarter this year? >> that seems so crazy, given the slow growth that we have. >> i agree. >> give me one reasons why that happens. >> it won't. >> what's the catalyst? >> i think the catalyst is lower energy cost, higher profits, and i really think you get an economy that's ready to be unleashed on this spending that's been held back for four years. so i think it could happen.
>> we'll put white castle on speed dial. there are going to be a lot of sliders moving around here at some point. thank you all for joining us today. we'll see you later. >> let's get a check now on exactly where we have to close to set new highs the for the s&p 500. we're in uncharted territory for the dow industrials, as you know. josh lipton, breaking it all down for us. josh, the dow is almost for sure. what about the s&p? >> hey, there, maria. in the green, as we head toward the close here. let's review some of the highlights. we'll start with the blue chips. the dow hit a new intraday record high. this is the 12th time we have hit a new intraday record in just the past 20 sessions. as for the s&p 500, the broad gauge came with only three points of crossing its previous intra-day record high of 1576. remember, that was set in october 2007. there were also a lot of stocks making new all-time highs today. some big names there, including johnson & johnson, amgen, clorox, and news corp. guys, back to you.
>> josh, thank you very much. so, we mentioned stocks may be rallying, but gold getting hammered today. sharon epperson with more from the nymex on details of this soc gen report. >> well, you know, investors love stocks, they're not really into safe havens right now and we're seeing gold prices really tumbling result, down 25 bucks today. and keep in mind, it looks like the bears are firmly in control. several headwinds out there for gold. the fact that we're looking at low rates from the fed, the stocks rallying, dollar rallying, and then inflation was low as well. so a lot of funds just aren't interested in commodities overall and definitely not interested in gold right now. also, the etf action is significant. the fact that we're seeing outflows from the gold etfs is also contributing somewhat to the decline we're seeing in gold prices. and in fact, we've seen prices down about 40 bucks, in less than two weeks' time. back to you. >> all right, sharon, thanks so much. >> all of them reasons that michael haigh mentioned in his report on gold where he asked whether the era of gold was over. and he'll be on "fast money"
tonight. he's the head of commodities researches there and he'll back up his controversial new call on gold. >> all right. we'll take a short break. we are about 50 minutes before the closing bell sounds on wlal street and we are once again in record-setting territory. >> the dow needs to be up five points and the s&p needs to be up seven to hit new all-time highs today. forget about the long-awaited pullback, he said. coming up, we'll hear from someone who says this market has nowhere to go but up, i'm just reading that. >> and how about the demand that's outstripping supply when it comes to visas for skilled workers? we've heard this from executives. we've got a guest who wants to put his ship in international waters. the ceo behind this concept will join us. >> i love this story. what do you need to make a film these days? lights, cameras, and china. we'll explain why hollywood, the champion of free speech, is
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welcome back. demand hr high-skilled foreign workers is surging in this country, so much so that applications for visa are far outpacing visa supplies and it's worse than ever. jane wells has that story for us. jane? >> hey, bill, it's either a sign of growth or the need to cut costs. for the first time in years, u.s. firms will max out the number of immigration visas allowed for highly skilled foreign workers. all visas could be spoken for by friday. that hasn't happened since 2008, before the economy went south and demand dried up, but demand is back. intel tells "the wall street journal," it needs to hire foreign workers when, quote, there is an identified skill shortage. but a gao report says that many of these foreign workers are paid less than americans and a lot of these visas go outside contractors, which provide labor. >> the estimates right now that are being thrown around are somewhere between 60 to 65%, are controlled by ten major
outsourcing companies. >> but it's not just big techs saying it can't find enough merps to do these skilled jobs. caterpillar says it needs more skilled laborers too. the ceo said in a speech yesterday about this competition and quest for the best, quote, i really don't care if that person was born in chicago or india or england. i want that talent working for caterpillar, not one of those competitors around the world. maria? >> all right, jane, thank you so much. and our next guest has decided to sail right past these visa restrictions. he's getting around the issue by building a ship for technology entrepreneurs called blue sea. this will be located about 30 minutes off the coast of the san francisco. workers from around the globe can rent office and living space on this floating city. the ship will provide a gym, doctors, cafes, as well as helicopters and ferries that will shuttle people back and forth from silicon valley. and with the ship in international waters, employees will not need a u.s. visa. >> this is a great story. >> what a great story. >> max marty is the man behind
this idea. he's the ceo of blue sea. we should point out, you're going to get a cruise ship, but you need to get that cruise ship out in the water and you need $27 million to build it. so they don't need the worker visa, but they do need a visa to come to this country, and that's a lot easier to get, right? >> right. there's something i want to be clear about, which is, so we're creating this community sp specifically for start-ups. a lot of people want to come here to work with caterpillar and such existing companies through the hb-1 system. but if you want to create your own company, and we were talking a lot about innovation and economic growth and all that earlier, if you want to really push that envelope, if you want to help the u.s. economy, you want the to create new companies, whole new sectors, whole new industries, for example, like google and facebook and all of those have done. so that's what we're doing. we're creating a platform where high-tech start-ups, early stage companies can come, those
entrepreneurs can come and live and work aboard while they grow their companies and then move, eventually, into silicon valley itself. >> but how realistic is it, they're going to just work on the ship? >> they're going to live and work on the ship. and there's really, there's a huge demand for entrepreneurs who want to come to silicon valley. a lot of them are chasing their dreams. and i think it does take some of that entrepreneurial spirit to want to live and work on a cruise ship off the coast. but, like we were saying earlier, there's ferries and helicopters that can bring you in and out of the bay area on what's known as a business and tourist travel visa, which allows you to be inside the country for up to 180 days. >> how much are you going to charge and here you already have orders. there are entrepreneurs who want to be involved here. how many could you accommodate, when all is said and done? >> we're looking at accommodating about 1,000 entrepreneurs and the average company size on board is very
small. they're just starting out. they want to be the big googles and facebooks, but they're just the beginning. so we're looking at about 300 companies, given about 1,000 sbrep nuentrepreneur entrepreneurs. >> and $1,600 per person, per month, is what you're going to charge? >> that's the average and that includes living and office space, that's right. >> so what kind of companies have you already had agreements with? i mean, and how does it work? in other words, if caterpillar needs these skilled workers, what are they going to be doing on the ship? how are they going to organize what's done on the ship versus what they may need in-house or at another location. >> well, so all the companies that have come to us so far are what we call at the seed stage or series "a," which means they're a tech company, but they're just raising their first rounds of funding, et cetera. so a company like caterpillar really wouldn't work for us. it's just way too big. we're looking at companies that are between three, five, seven,
or maybe nine employees, just really getting started, getting the ability to raise funds and move their product forward, bring their first products to market before they can move ashore. >> what are some of those companies? >> so we have a lot of typical tech companies, so the sort of things that you'd -- the sort of mobile companies, apps, a lot of web companies. so the sort of things that you see coming out right now, the ubers, those kinds of companies. we have about 380 of them from 68 different countries around the world that have told us they want to be on board. >> you need $27 million to get this thing off the ground or out in the water, however you want to put that. you've got, what, $9 million. where are you going to get the other $18 million? let's be frank, is this really going to happen? >> well, we're putting a lot of sweat equity, as they call it, into this project. we're going and knocking on a lot of doors. we're going, actually, all around the world, looking for
the remaining $18 million that we're looking to raise. so as long as i have plenty of sleepless nights, i think we'll make it happen, hopefully by q2 of next year. >> we'll be watching. come back soon and tell us about it. great story. >> thanks, maria. thanks, bill. >> 40 minutes left in the trading session. the dow is still in record territory, easily. the s&p needs to be up seven points. so we're not in record territory for the s&p right now. >> just the dow. >> and united health care, one of those dow components really pushing the dow to that record level. that after the government said it will unexpectedly increase the payment rate for medicare advantage programs. which insurer could deliver the healthiest products for your portfolio. >> also, why free-market forces may be bringing the sky-high cost of college down, just as my kids have graduated. of course, you'll want to hear this story later on the "closing bell." stay tuned. an still help you see your big picture.
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welcome back. we have breaking news right now from the securities and exchange committee. right to eamon javers. >> the s.e.c. has issued an interesting ruling on social media. the s.e.c. saying in a press release just a few minutes ago that it is okay for companies to use social media sites like facebook and twitter to announce company information, but they have to let investors know which sites they're going to be using to disseminate that information. now, this ruling has an
interesting back story here. it comes in the wake of a facebook posting by the ceo netflix, who posted some information to his personal facebook page about the company. that information was not included in a press release or an 8k for investors. it affected the company's stock price and the question then became, when it is okay for company officials to use social media like twitter and facebook to release this information? the s.e.c. now saying, it is okay to use those venues. but they've got to let some investors know when they're going to be posting that stuff before they post it. and that way everybody knows where to look for the new details, maria. >> very interesting. >> yes, it's interesting, but als also, eamon, it's difficult to figure out, what is the media? >> you don't know how big the audiences are. >> we all agree about that, but how are they deciding what is
the best medium? do we know the audience numbers? >> which of these are you going to use. it is going to be linkedin, facebook, twitter? how about some more obscure sites? what about social media sites that only exist overseas and not domestically for global corporations. a lot to consider here, and the question is what did reg-fd say about this, and they're saying as long as you give people a heads up, so they know where to look -- >> but here's the question i've got, did the s.e.c. tweet their press release today? >> i just tweeted this news, so you should follow me on facebook and twitter. but, yeah, that's the question. they have a press release that came out. i got it over e-mail. i haven't checked their twitter feed yet to see if this is on the s.e.c.'s twitter feed. >> good stuff. thanks, eamon. meanwhile, health insurance stocks rallied today after a major victory on medicare advantage payments. scott cohn, this was welcome surprise to the sector. tell us about. >> yeah, maria, welcome news, and a surprising reversal have the obama administration, which
has as recently as february wanting to cut medicare reimbursements by more than 2%. this is aimed at fulfilling a key cost-cutting goal of the health care act. apparently the outcry was too much. after what the administration calls careful consideration of public comments, a 2% cut has become a reimbursement. take a look at how the managed care stocks have performed as a group. they fell after the election, and again in february after those cuts were proposed, today the stocks are back big-time. that index up 3%. reimbursements are going up, but deductibles are going down. premium increases for medicare advantage are limited. and there are also new cost controls in effect as well. plus, of course, health care costs in general are going up. the president of humana said today that the changes, all told, still create what he called meaningful challenges that they are still evaluating. bill, maria, back to you. >> scott, thanks very much. it wasn't lost on the stock market, after this announcement came out last night, health insurance stocks jumping on the news.
today, which of these stocks can provide well-being for your portfolio longer term? humana, which is the best performer among the s&p 500 today, or united health care, which has been the dow's best performer today. let's talk numbers on humana and united health care. on the technical side, it's enis taner with riskreversal.com, and zachary carabell, welcome to both of you. enis, of the two charts, you like united health over humana? >> yeah, united, we'll look at a shorter term three-year weekly chart. and it's reached a very strong level. very strong uptrend. this market's been all health care, all the time. and recently, you've seen it break, finally, above $60 resistance. which, in fact, is long-term resistance. so if we look at a ten-year monthly chart, you can see that that $60 level, not only held short-term significance, but long-term significance. on this ten-year monthly, you can see $60 was resistance back in 2008 as well.
the only level left to breach is 6461. that's the all-time high in the united health care. but i think $60 going forward is going to be strong support for the stock. >> zach, do you like either? obviously, the markets loved what they heard. both went higher today. >> i loved both of them yesterday at 4:00. and with this kind of pop today, i think the reality is that in a down market, these kind of stocks are going to be less volatile and probably continue to perform pretty well, was in a market that's trending up, and i think we're still in what amounts to a bull market, i don't anticipate you're going to have this kind of move anytime soon. and in fact, these names will probably lag a lot of other names. so it's less about the intrinsics for me of these particular names than it is about a market where in an up market, there's a lot more room for a lot more names in my view. >> my objection to that is, zachary, normally i would agree
with you but this year in 2013 the market has gone up 10%. and is health care is, by far, the best-performing sector on its own. i don't think this is a normal, cyclical bull market, is the pushback i would give. >> and i would say we've probably seen that outperformance. and today we're seeing a really good iteration of it. i just don't think we'll keep seeing that going forward, particularly given that a lot of the cyclical kind of names, the industrials and some of the techs have lagged a lot. and yet there's fundamentals that are coming into play that show that these names are likely to be going quite well at a fundamental level, unless you believe we're in a cyprus-infused collapse of global system. >> very good. good discussion, guys. good to see you both. >> we have a market in uncharted territory once again, just about 30 minutes before the closing bell sounds on wall street. the dow jones industrial up 70 points at 14,643. nasdaq and s&p also strong. >> as you know, maria, facebook's chief operating officer, sheryl sandberg, is doing media tours to promote her
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welcome back. big market day again. interesting trading day for apple and the nasdaq, in general. let's talk to seema mody. >> let's start with the nasdaq. the nasdaq omx buying a fixed income trading platform from bbc partners. bmo capital says the purchase price seems lofty, even though trading activity is currently at a cyclical low. however, morning star says the transaction represents a bet on the treasury market, where
nasdaq expects volumes to increase. the analyst says it's reasonable to expect trading activity in the bond market to grow over time, as the economy gains strength. goldman sachs writing that apple's most recent product cycle has not driven the market share and new user growth that they had initially anticipated. other stocks weighing on the nasdaq, actually, in the social media space, groupon, zynga, and facebook lower. maria, bill? >> thank you, seema. facebook stock certainly not on the fire as of late. ceo mark zuckerberg making headlines now away from his social media business. he's helping to create a new issue advocacy group that will focus on education and immigration reform. so with facebook down about 33% since last may and a pending announcement on thursday about a new mobile plan, maybe zuckerberg should be more focused on turning around the stock, according to some investors. >> we have both sides of that right now. max wolf of green crest capital says zuckerberg cannot have it
all. he should not be distracted by things like forming a nonprofit, but av mendez says everything zuckerberg does ultimately does help the social media giant. good to see you both. make your case for mark zuckerberg. and by the way, we can throw in cheryl sandberg and her book, "lean in." you've got two high-profile members of the c suite at facebook who have all these very interesting outside interests right now. >> sure, absolutely. thanks for having me. i will point out, i want to take a look at leanin.org this morning and notice that the only social network you can use to sign in, with third party credentials, is facebook. so suck think of that as a third party vertical focus social network that leverages facebook's infrastructure. so there is a tie-in there. with respect to zuckerberg's advocacy for immigration reform and education, i think it makes all the sense in the world. facebook's r&d expense, from 2010 to 2011 went from 7% to 10%
of total revenue. similar trends over the last five to six years at google and amazon. these companies have to hire the brightest programmers in the world, and it's getting increasingly more expensive, partly because there's a lack of sufficient supply of that kind of talent in the u.s. so supporting education, improvement in math and technology, as well as immigration reform, makes a lot of sense. >> have you seen any other companies where the ceo and the coo, though, are focused so much on outside issues as opposed to actually running the business? >> i've seen a lot of other examples where companies have outside sort of philanthropic or political interests that are further afield than in this case. i mean, maybe the coo role is one where i'm a bit more surprised to see somebody devoting so much time to auoutse activities. look, i don't know how much time cheryl and mark respectively are devoting to these outside activities. i will say, when they go to hire
the best and brightest in the world, it's not just about pay. these kids coming out of stanford and m.i.t. want to work somewhere where they feel they can make a difference in the world. so for the leaders to put forth the vision they are actually changing the world makes sense in some way. >> and max, i know you're not enamored with all of this, but one issue that faces facebook that they have to solve is mobile and they've got this mobile announcement coming on thursday. it's not like they're completely ignoring their company with their outside interests right now. >> no, no, i would agree with ab and most people, i think these are worthy causes. i'm glad someone's doing it. it's good to be a renaissance man or a renaissance woman. the question is, if you can be a renaissance man or woman and turn the company around and prove you can monetize and do it without alienating the public and do a mobile strategy, and do social graph. and if you can give the same bandwidth to everything. i commend them for having interests and working to make the world a better place. at the same time i'm glad of the causes they've taken on, the cause they don't seem to have taken on as well over the last six months is a cause of making
people think of facebook as a social movement. and when you leave facebook to do your social movement, you underline facebook's recent weakness, which is now it's just sort of a utility, it isn't a social movement, it's a place to see and consume ads. they have to do that to keep wall street happy, i share a lot of their commitments, and i'm happy to see them working on those and bringing attention to the worthy causes. the question isn't, should they do that, too, but, should they do that, or, and there's a big question there, because the big mission that zuckerberg usually talks to is facebook as a mission to cure the world's ails. >> what's the downside? is there something you think should be done right now at facebook? i mean, the company is growing, right? now, the stock is down, but what's the downside and what do you think they should be concentrating on, if not facebook, as well as these outside interests? >> well, i think they're doing pretty well. it's not a knock on them. but i mean, they have to thread a very sharp, a very difficult
needle that many companies have tried to pass through and few have succeeded. and that is, they have to still be cool and relevant and the new thing, even though they're not the new thing. and even though they're aggressively monetizing the private, personal communications of a million or in this case, a billion people, who aren't really comfortable with monetizing their private lives, but have to monetize those private lives for facebook to stay free and stay viable and stay growing. they're threading a very difficult, very sharp needle with an increase in competition. >> i agree. >> i wish we had more time for the conversation, but believe it or not, we are out of time. one of the limitations of television. >> thanks, enis. >> good discussion, though. thanks. heading towards the close. 20 minutes left in the trading session here. the dow is up 62 points, well off the high. we were up 111 at the high, but still good enough for an all-time high right now. >> meanwhile, north korea still lashing out with nuclear threats. yesterday on this program, leton panetta told me it has to be taken seriously. >> the kind of provocation and
bellicosity that they're showing now with their rhetoric raises a lot of concern. it just means that the united states and our allies, japan and south korea, have to be very firm in sending the them a message that we're going to do everything necessary to defend our security and defend our interests. >> so, how come wall street doesn't seem to care? we'll check it out, next. >> also, we're revving up the debate about you're better off investing long-term in new auto companies like tesla, with cutting edge electronic technology, or the old guard, the fords and the general motors. that's coming up, after this. my mother made the best toffee in the world.
welcome back. warships in the pacific as north korea still makes nuclear threats. yesterday on this program, former cia director and former defense secretary leon panetta told me, there is reason for concern. but if you look at the stock market, traders are just not concerned. we're here with bob pisani now to talk about this. we know that the fed is driving everything, bob, but no concern whatsoever about what's happening in north korea. >> and when i talk to the trading community, i hear what we've been hearing for a long time. there's been so much bluster from the north koreans for so many years, that it hasn't amounted to much, why should it now? and put up the south korean stock market. you can so the proof in this, this is three months, no movement at all.
but even the south koreans aren't that worried. here's what worries me a little bit. the whole nuclear doctrine we use, mutually assured destruction, is based on the idea that the other side is rational. that if they do missile tests, we send in nuclear capable jets to do exercises with the south koreans. but we don't know anything about this new guy, this kim jong-un fellow. he's 30 years old. we don't know if he's in charge of the country or not. and the concern that some people have is there could be a miscalculation on their side. >> there could be, but let's face it, the history of the relations with north korea is that they are known to bluff. their economy is in a shambles. they can't afford a prolonged conflict of any kind, which is why they would have a nuclear arsenal to begin with, because one strike is all you need, but they are, you know, in the end, the feeling is that all he's trying to do is bring the other side to the bargaining table so they can remove sanctions and get on an even keel. >> you are acting like a rational actor. >> i understand. >> that's the problem.
>> i get it. >> and i agree with you, of course you're right. but if they're not entirely rational or in control or willing to take some risks, it could get difficult. here's the big hope i have. they're supposed to continue these military exercises for the next couple of weeks. i think that tensions will be high. hopefully, when the military exercises are over, this all goes away. the koreans, the north koreans calm down. >> bob, thanks very much. >> by the way, april is autism awareness month. you'll notice, we're wearing our pins again this year. this is the symbol for autism speaks, the foundation formed many years ago by our former boss and dear friend, bob wright, and his beloved wife, who's the reaeeal boss, suzanne. >> they've done such a phenomenal job on autism speaks, so we wanted to the pin to rally up. >> there needs to be something done about autism and the wrights have done a lot with autism speaks. we wanted to help raise
awareness. >> the most. time to take a short break. we've got about ten minutes before the closing bell sounds for the day. we've got a market off of the best levels, but nonetheless, in uncharted territory. up 58 points on the dow industrials. >> he may be our resident bear standing over there, but jeff cox has been doing some digging and found a very bullish sign for this market. that's coming up next. >> also, dividend plays. are they still red hot? actually, they are. but somebody here says that investors need to be cautious about choosing high-paying dividend companies right now. i know what you're thinking...
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welcome back. hi, there. about ten minutes left in the trading session here as we get ready to close out the day. and only, boy, the dow is well into record territory. the s&p is about a point away from record territory, although we are still a few points away from that intraday high that we have yet to hit since the fall of '07. so we're keeping an eye on that. but have the recent positive indicators turned our resident bear, jeff cox, into a bull? is that possible? let's ask him as he joins us now along with ryan diedrich from schaffers investment research. what turned your head here? >> such a boring market.
trying to go back to the data, find out what's powering the market. there's really no good news, no terrible bad news. found out that corporate buybacks since the market bottomed in march of 2009, about $1.2 trillion. so that's really helped power the market higher. it's a testament to how cheap capital has been. at the same time, about a quarter trillion dollars has come out of mutual funds. so you can look at this as saying, okay, corporations are continuing to keep spending their money. they're willing to keep pump market prices up. the danger here is that this market is starting to get a little bit rich, and these buybacks are not going as affordable as they were before. >> brian, do you want to put new money to work in this market that's in uncharted territory once again? >> maria, we all know april's been the strongest month, we've talked about that, and the recent small cap underperformance is a big concern. but one thing at schaffers, we look at cinnamon, and there's been a big surge since february.
the s&p 500 components, it's almost a 10% surge. there's a lot of people betting on the correction that's supposed to come. >> and you think that's a contrary indicator? >> when all these people keep betting on a correction, what's been happening, we continue to slowly step higher. >> that's a good point. >> here's another interesting thing. the best sectors so far has been defenses sector. it shows me that nobody is going out, going crazy here. there was a note from s&p, put it very well, said people want to go to the carnival, but they're not ready to ride the roller-coaster. they want to go on the merry-go-round. >> you know what i want to know about is earnings. here we are a couple weeks away from hearing the flow of earnings report in the first quarter. we know there's not going to be any great shakes. 0.4% growth. is that enough to keep up with these -- this market rally? >> well, when you car it the start of the year is up over 5%. we think this looks like some of the earnings seasons we've seen over two years, with all of
these cuts come into earnings season, and yes, earnings aren't great, but they were bettered than the lowered expects and you have good news out of europe and you have that upward bid. yes, there's a lot of concerns. i'm not naive to those, but the bulls still rook to be in control. >> got to go. >> it's all about the fed. we need this rally back. >> this rally is named ben. >> thanks, guys,. >> for obvious reasons. >> i'm going to call it the d. martin rally. heading towards the countdown for this tuesday. >> after the bell, we will hear from one of the top strategists who says, he doesn't think this rally can last. he's advising clients to take some profits now, buy assets overseas. we're going to get that trade and find out what's behind that. stay with us. york?ew new a new property tax cap... and the lowest middle class income tax rate in 60 years... and a billion dollars in tax breaks and incentives. new opportunities for business. over 250,000 new private sector jobs were created over the last two years. and 17 straight months of job growth. with the most private sector jobs ever.
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and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him,
and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade. okay. about three minutes left. actually, the economic data this morning was pretty good. factory orders, durable goods, the auto sales up. we didn't even get to this. ford and chrysler said they had their best sales month since may to have 2007. six years! >> but the yen has been strengthening. i think this is an important story. we've got to start looking more at the yen, because the yen has been really going the way of the japanese automakers. we'll see what that turns up for the next quarter, for the u.s. automakers, but, yeah, detroit's been hot. >> and here's what we did today. the economic data pushed us higher. we were up more than 100 points for a time on the dow. we were in record territory.
we still are for the dow. drifted the rest of the day. did a button hook. we only have to be five points on the dow for another all-time high. we're well in that area. by the way, united health, the strongest dow stock today, hewlett-packard is the weakest dow stock today. the s&p, this is going to be a squeaker here. we need to be up seven points to hit an all-time high. we're almost there. we'll see if we can finish there, but it's still a squeaker there. nasdaq oms, by the way, weakest nasdaq stock with that announcement that they made. terry dolan, we going to do this? another rally? >> it is another rally with no end in sight. at some point, we'll get a correction, but today i was taking my clue from the bond market as well. we were seeing that the bond was down about half a point. i think you're seeing steady and consistent outflows of the money from the market. and as the economic data continues to strengthen, the underlaying strength here in the u.s. economy, you'll see more of those outflows. no one wants to be the last man
standing in the bond market. >> where do you see conviction in the equities right now? >> i see conviction in the fact that there's a steady flow. i see conviction in the fact that investors out there are wary of the bond positions they particularly have, and i'm looking at that unwind as being the fueling factor here. i think it's going to be harder as more come our way in trying to do this election process and find stocks that are a reasonable value and price earnings multiples, stuff like that. that's where stuff heads into the marketplace. but i think we'll see those outflows continue from this point on. >> getting ready for the opening bell. >> you better go. >> looks like we're going to hit another new high. >> see you tomorrow. >> we're right there, now, for the s&p. we need to be up 7.02 points and it looks like we're going to do it again here. so once again, this market, very resilient. even after a lackluster day yesterday and all it took was a couple of good economic reports today and off we go again. >> again, it demonstrates that there's a lot of naysayers on the sideline, watching the economic recovery as it