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tv   Closing Bell  CNBC  November 20, 2013 3:00pm-4:01pm EST

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2.79%. it was 2.74 going into the minutes. brian, did we learn anything new today in the minutes? >> the fed will taper at some point, 2014, 2015, 2016, who cares. the bond market may eventually do it. 100 points off the basis of our lows. gold down more than 30 bucks an ounce a again. the gold bulls continue getting burned. thanks for watching "street signs" on that note. >> "closing bell" is next. hi, everybody. good afternoon. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. hey, bill. >> we were on dow 16,000 watch. but i don't know, it doesn't look so good right now after the fed minutes came out at 2:00 eastern time. the market pulled back. we're down at the lows of the session right now. interest rates are moving higher. we have a lot more on the fed minutes and what the taper talk has done to the stock market so far today. >> and, of course, the minutes
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in the last hour certainly having pretty good impact. we're looking for solutions to the obama care met. tenet health care ceo trevor fetter is with us on how the bumpy rollout has impacted his company. >> also muni bonds, everybody loves them, they're safe and boring, right? well, not so fast. millions of investors are in these because many times the income is tax-free and it's believed these bonds that are linked to cities and municipalities are a lot less volatile than stocks. but are there new danger signs of anyone who owns them or thinking about owning them, need to know about? we'll take a closer look at munis coming up. the dow jones industrial average near the lows of the day with a decline of 58 points. pretty steady until the minutes came out. as can you see what happened, as soon as those minutes came out at 2 p.m. eastern time today. nasdaq composite under selling pressure today.
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take a look at down about seven points on the nasdaq. fractional move there. again, very similar chart pattern, falling out of bed once those minutes were released. s&p 500 looks like this. decline there as well. same chart there, down 5.33. >> let's talk about today's market action. quency crosby is part of our "closing bell exchange," jason pride, steve liesman and rick santelli. and plus bars and ton. is rick santelli there or is that him there? >> i'm here. >> steve liesman, let's start with you. what did the minutes say that spooked the market? >> that a taper is coming in the coming months if the economy performs according to the fed's forecast. that forecast is for a gradual improvement or acceleration in growth to 2014. not necessarily expected at the end -- in the fourth quarter because you'll probably get weak growth. that's why i would rule out a december taper. that it's coming in the coming months and the fed is looking for a we to do that in a way
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that doesn't cause the market to bring forward when it would raise interest rates. >> what does that mean about investing? what did you hear as an investor trying to allocate capital across? jason pride, jump in there in terms of allocating capital. what does this mean to you today, the minutes? >> one of the most important things people keep missing is the fed needs to taper in order to remain as stimulative as they have been before. one of the things that is coming about in the next -- the next couple years and next year automatically is the treasury's issuing less debt. they are buying more of the percentagishanc percentagishance. therefore, a tapering is natural just to keep their amount of buying of issuance the same and keep demand/supply balances in check if they weren't going to do anything at all. >> i keep hearing people say, you know, when the time comes and they start tapering, that will be okay because it means
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the economy can withstand it and the market should take comfort from that. but every time the "t" word is brought up, look what happens here. so, how do you invest right now? do you invest expecting a tapering or do you avoid investing because you're expecting a tapering? quency? >> yeah. look, we're going to get a taper. it's not if, it's when. and the fed knows it needs to start the process. the way we're investing is we want quality. even though when the low quality names leave the market, it's a momentum market. it tells you it's risk on. but if we're in quality across the board with dividends, we might get more buying opportunities with dividends. we like the industrials, we like financials, we like insurance in financials that thrive on higher interest rates. >> peter, what about you? here we go into the year end. we had the taper talk today. that spooked the market from the fed minutes. going into year end, are you expecting a melt-up in stocks?
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how do you position the portfolio going into the new year? >> well, what i'm seeing already, maria, is a lot of window dressing. a lot of portfolio managers, especially equity managers, i think, are taking risk off the table. they're looking at their holdings and just trimming the higher valued pe stocks. they don't want to take any high profile risks right now. and i think they'll open the books again in january. and on top of it, i know i joined a little late, but i wanted to put my two cents in about the fed minutes. i think what's happening now is the older communication and the confusion between the minutes and what the fed actually said just last -- yesterday is really conflicting. we really need to make sure that when they do come out officially and make statements, that they're all singing from the same hymnal, so to speak. sometimes this overcommunication can have, you know, the unintended consequences of almost being like a daily weather report. and people -- the policy tool
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they're using for communication can be distorted. so, i hope in the future there will be very, very careful about what they say and the timing of what they say and don't say it too frequently. leave us some time to digest the minutes of those meetings before another fed official comes out. >> with all due respect to my friends in the weather forecasting business, there are oftentimes after a weather cast i don't know how hot it's going to be tomorrow. rick santelli, based on what you saw in the markets here, what do you make of their response to what we got out of those minutes today? >> i think it makes perfect sense. i don't care how many trumpets and trombones and violins you put on top of the building with nero, none of that will matter. i don't think talking about taper will matter. this is human nature, okay? if you give broccoli out instead of candy bars on halloween, you're not going to be popular. if you raise taxes, it's not easy. this is a subsidy. can you say it's not, but it is. removing subsidies is like removing a tooth. it's not fun.
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and i think the fed is having a real problem trying to get out of some of these programs that have outlived their usefulness. here we are, almost ready, getting close to testing that 2.99 high-yield which is hasn't even begun. the 30-year will be the highest yield since august, september for tens. the home run is short rate is the fed controlled, the rest is the market. these trades are steepening, bill. fives to tens, five to 30s. these are at multi-year highs. it will get worse before it gets better. the fed ought to just swallow the medicine and start lowering these programs. >> quency, it's not just the fed, right? you have easy money all aren't the world, japan, the ecb. we had rates moving lower this week elsewhere. tell me about playing into that. would you invest internationally
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elsewhere? >> yes. the market is itching for the bank of japan to come in with another round. quantitative easing is -- it works it's way around the world and money goes -- back into japan, it will go into exporters, it will go into small and midcap. keep something in mind, the bank of england had said in june it was going to keep rates low for a long time. forward guidance they have never done. guess what? the market is dictating that the bank of england may have to start raising rates because the economic data are picking up. the worst thing that can happen to the markets is that the fed is behind the curve. >> and i'll just point out, especially for those on satellite radio listening in, that the dow is starting to fall precipitously down. almost 100 points right now. the other averages are going as well. steve liesman, i'll finish with you. in your view, does the fed have a credibility problem right now? >> perhaps, but it certainly has a communications problem right now. it seems incapable of telling
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the market that if it reduces the amount of qe that's out there, that it doesn't mean they're going to be raising rates any time sooner. i'm not sure, though, that all the investors on the panel, bill, are listening to what the fed is saying. because you made the point, bill, that if the fed does, indeed taper because its economic forecast for improving or accelerated growth comes to pass -- >> or so they tell us. >> again, if i could trade ten bucks of qe for $1 of groeshgts i would take that bet any time. i would probably take it in the stock market but i'm not sure the average investor is there yet. >> that's without knowing how you're going to exit those extra nine bucks. that's the problem right there. >> all right, guys. thank you. >> thanks, everybody. >> another fun taper talk today on "closing bell." heading toward the close with about 50 minutes left, 16,000 off the table right now. that's clear with the dow down 9 7 points, maria. >> just this week, we were flirting with new highs.
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yet this market down about 100 points right now. short sellers are out. they see a once in a lifetime opportunity. to bet against this market. the story has been tearing up is that prediction accurate? that's coming up. also, -- yes, we're sounding the alarm on muni bonds today. we'll find out if allegations of rampant fraud in one of the nation's largest cities is just the tip of the iceberg, meaning you may not be getting what you bargained for if you buy munis, which many people see as a safe investment. that's still to come on the "closing bell." it's as simple as this. at bny mellon, our business is investments.
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muni bonds tax-free status and perceived safety. part three of our series "cre t "critical condition," scott cohn. >> reporter: we're in miami on day three of our "critical condition: saving american
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cities qu cities." you are probably invested in municipal bonds because of the tax safety. miami is at the heart of a three-year crackdown, namely the disclose urs they make. just this year the s.e.c. sued miami and former budget director saying they were cooking the books, essentially on city finances back in the depths of the recession and not telling investors about it, the city and budget director deny it. from here we're headed up the coast to boot mother. there's an issue of infrastructure and a city that has three major water main breaks a day and not a whole lot of money to cover it. got a lot more on our special report, online and tweet us #savingourcities. miami the latest city with fiscal woes. add detroit and 50 billion outflow from muni bonds since
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march, some say it's time to reconsider how safe munis are for the average investor. >> gives you pause. jeff cox says munis are a mine field right now but alexander labrenthal. jeff, why the caution? obviously, we have high-profile cases but why do you blanket the rest of the businesses? >> i think the word mine field is important to keep in mind. it's not that everywhere you go, munis are bad, but do you have these areas where you step on things and they explode. here about, you know, three things. and i think scott covered it very well. three things that concern me. one, just as we noted, $50 billion of outflow from munis, investors clearly concerned out there. that leads us to some of the ramifications from that. we had the financial crisis. during the crisis we had a lot of really bad deals that went down, some unsavory characters
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moved into the market and created problems. number three thing that bothers me, more than anything, is we see many reports lately about hedge funds moving into the market and to me, whenever you see huj funds commit to something, bad things seem to follow. >> what about that alexandria, do a few bad apples like miami, detroit, signal we're seeing cracks here? >> let me kind of parse what was just said. first of all, i want to address the outflows. the outflows in municipal bonds are really not a factor in terms of concerns over credit. yes, detroit did play a small part in that, but it was really what happened in may and june with the bond market route. people got scared with interest rates going up, saw net asset values going down, they liquidated their funds. that's really what happened there. let's talk about detroit. detroit, definitely a one-off situation. that was in the cards for years
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and years. i want to talk about puerto rico as an area of concern because it is a holding that's so many individual investors have had across the country. and it was a situation that did build up over time. that's one i'm going to give to the naysayers as a problem. i'm not quite sure about the unsavory characters coming into the market, but i just want to comment on the hedge fund investors. those are guys who see opportunities in the marketplace. guys who see an opportunity to make money. you know, those guys will make money. >> are there warning signs that -- an individual investor can watch for that will tell them that maybe that's not a muni bond they want to buy? something that's going on? is the rate too high or whatever it may be. >> actually, puerto rico is a great example right now. you can get yields anywhere from 8% on up. big warning sign. sounds great. don't buy it. if the yield's that high, sounds too good to be true, it is. we have always said, and this
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goes back to 1925, that individual investors in municipal bonds are supposed to buy conservatively. don't go into junk bonds. that's not where you're looking to get tax-free income from. those are the bonds that are going to be in trouble. stay high grade. and i do think having a professional manager, where you're paying somebody to look at the credit and to decide when it may be time to get out, that's where you're going to get more value for your buck. >> what about the unfunded pensions? i mean, jeff, how much should unfunded pensions, health care liabilities, how does that play into this? >> well, i think that kind of goes back to investing 101, maria. have you your known unknowns and unknown unknowns. we have come to the point in the country, we've developed a nasty habit over the years to take unfunded things and shunt them off to the side, make them off-balance and deal with the present. that's got us in trouble so many times. the two things you mentioned are two really great examples. things that aren't being accounted for. i think that -- i think they
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make a lot of good points about bonds. have you to be careful. there's a lot of debt out there and a lot of bad debt out there. investors need to walk carefully through this mine field. >> on the pension side, i think that one of the things the media has done, which is really important, is to keep this subject out there. because it does mean that governments are going to have to deal with it. yes, it is absolutely a very important part of the budget process. ultimately, it will make a municipality stronger or weaker. >> good information from both of you. thank you -- >> maria, an honor to be with you over the years. best of luck. >> thank you so much. >> thank you, jeff. >> really appreciate that, guys. >> alexandria doesn't remember 1925, but her grandmother does. just to be clear about that as well. why, are you going somewhere, maria? 40 minutes left in the trading session here with the dow down 84 points. just off the lows of the session. down about 100 ten minutes ago
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♪ [ engine revs ] ♪ ♪ [ male announcer ] the mercedes-benz winter event is back, with the perfect vehicle that's just right for you, no matter which list you're on. [ santa ] ho, ho, ho, ho! [ male announcer ] get the all-new 2014 cla250 starting at just $29,900.
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mercedes benz has been leading with 5,000 more units than the next competitor sold, that would be bmw. new cla model has been on fire so far in 2013. >> our phil lebeau has been at the l.a. auto show today checking out the hottest new cars. he joins us with mercedes benz ceo steve cannon. >> thank you. we're in front of the cla because this has been red hot. tell us the type of buyer you're bringing in with the cla. >> all new buyers, conquest buyers. 80% of the those buying the cla are brand new to mercedes. trading in bmws, honda,
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toyotas -- >> mass market. >> that's what we were hoping for. those that sold in the 30,000 to $50,000 price point is significant. what's going on in the marketplace is you have luxury folks moving toward that point. and you have the mass manufacturers moving up. that's a battleground that's very significant. >> which brings up what happened in december, which is always huge for the luxury automakers. i was talking with one of your dealers yesterday and he said, boy, december is going to be a great month for the deals when it comes to luxury. how much more will we see this year compared to past years? >> for us it's going to be business as usual. fortunately, we have hot new products like the cla. we don't need to incentivize people to buy that. they're coming in all by themselves. we have the s-class, that's brand new -- >> but the market will be hot. >> in general the market will be hot. it's going to be the biggest month in the history of our company. december is always big. we'll take advantage of that. >> i think this price point is doing so well, steve. what's going on with the consumer, you think, going into the new year and why is this price point where it is hot
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regardless? >> well, think about it, if i can get a toyota camry and i option that up for $27,000, $28,000, and then i have a mercedes i can get for $31,000, a few thousand more and you get the quality, the design, the brand promise of mercedes benz, that's a pretty appealing value proposition. that's one thing we think is a success factor for the cla. >> at what point do you worry about what it does to your brand? yes, bringing in aspirational buyers, or conquest buyers, as you put it, but lowering the price, coming in with smaller models to bring those folks in, does that affect your upper end of the market? >> sure. there is a point below which we will not go. but we think we're in perfect space with the cla. we don't think it waters down or dilutes our brand because at the end of the day it has to stand up to mercedes benz.
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you can't come up with a cheap mercedes and we haven't do that. it's got to be a true mercedes benz. >> you start $29,000. when you add on it goes into $30,000 range. where's the base? >> we're comfortable, that's why we came in at $29,900. we wanted to recalibrate people's brand perception. that's about it. don't expect to see a $20,000 mercedes. we're not going there. at the end of the day, we have to produce a real mercedes benz. >> the market for the holidays going into the new year, what are you expecting? what do the books look like in terms of your expectations? >> buyers are excited. so, there's a lot of commotion going on in the marketplace but the stock market's at an all-time high, housing is recovering. those are two factors that really contribute to purchase behavior in the luxury segment. we think we have all the parameters for just a phenomenal month. >> yes, but interest rates are at an all time low.
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that's going to help. eventually the fed will raise those rates. are you susceptible and exposed to those potentially higher rates at some point? what will that do to your business? >> everybody's going to be exposed to it, so as interest rates climb up, it's the rising tide that will affect all of us. it will have an impact on monthly payments, and for very payment-sensitive buyers, it could become a problem. that's a problem that every single manufacturer is going to have to deal with. >> and most -- especially i would think it would have an affect on the type of car buyer we're talking about today, who would be looking at that cla. >> certainly. i mean, they are price-sensitive buyers, but we're tapping into a price band where there's an awful lot of people out there. we're not going to do 100,000 units of volume with this car, so we're confident there's enough cla buyers out there, even in a higher interest rate environment. >> steve, final question. you're about 5,000 ahead of bmw in u.s. right now. do you finish the year as number one in the u.s.? >> we are going to finish with
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the best year in our history. that's what i will tell you, phil, thank you. >> steve cannon, ceo of mercedes benz usa. >> we're in the final stretch of trading. the sell orders have begin to pare off. we did have $350 million but things are paring off a bit so it's not as dramatic. a decline in the dow of about 78 points. >> 30 points off the low right now. stocks may be near record highs, but some short-sellers are now ready to pounce. if you're long this market, should you be concerned about that? when we come back, we'll hear from one short seller who says this market is heading for a huge selloff. also, this is how bad it's gotten for obama care. private insurance companies are now even making fun of the website debacle. >> all right. let's have a listen. >> things don't always work like they're supposed to. good thing the government exchange website isn't the only
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place to buy health insurance. just visit >> but it's actually no laughing matter for president obama, whose approval rating are plunging. today the website even crashed while health and human services secretary sebelius was using it in front of a crowd. not good.
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the months of november and december have traditionally been a time when markets post gains, especially the s&p 500. seema mody has been pouriring o the data. she'll tell us which sector will repeat. >> typically the marketunder performs during the summer months, hence the saying, sell in may, go away. this year as you know, that's not what happened. the s&p 500 gained better than 9% from may to october. some market technicians say that's one reason november to december may not be as seasonally strong period.
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we did some digging, though and found that since 1980 there have been seven other instances when the market gained 9% or more from may to october. and on average, the s&p 500 closed higher during the last two months of the year. so, if history does repeat itself, and we do see the market move higher from november to december, which sectors will outperform? well, that's a hot debate on the street right now. ubs strategist julian ee manumas betting on laggards, while giving health care, leading sector, overweight rating, citing defensive characteristics. oppenheimer putting out bullish note on health care saying health care equipment stocks are well positioned for further outperformance. bill and maria? >> seema, thank you so much. stay right there, seema, because your data shows sectors that may take the market higher but a piece on today says short sellers are selling and
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seeing the best opportunity right now. >> let's bring in brad from adviser shares, joining us along the cnbc news line and bob pisani in as well. brad, you say there have been three major shorting opportunities in this market in your -- in the last, what, 10, 15 years. 2000 at the top of the -- before the dotcom bubble burst, 2007 before the financial crisis hit, and now. what's going on now that makes you want to go short big time? >> well, when we look through the different things that we tend to look at to try to prognosticate what we're looking at, i look through my lamensdorf news that sentiment is through the roof, it's at 72%. whenever we've gotten over 72%, we've had a minimum of 16% annualized decline, that is statistically driven.
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that's not some subjective comment i'm making. margin debt is at an all-time high. we've had $150 billion in ipos this year, which only rivals 2000, which was $63 billion. and we've also had $155 billion of secondary offerings this year, which is the most in 19 years. >> how many times of those times in the past was the fed pumping $85 billion mu the market. >> that's a great point. >> listen, no question. the fed has been on a reckless crusade the last two or three years trying to repair things with this qe-type response. but the fact is that they've been buying all summer, all fail, and rates are still moving against them. i'll also caution everyone we are no longer the biggest debt market in the world. china has gone from $5 trillion in debt to $25 trillion in debt.
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and we can't sit around and buy the entire world, you know, debt market. >> what about -- >> at some point -- go ahead. >> i was going to say, what about that, seema? jump in here, seema, because the issue on debt, the issue on ipos, how does that play into the bullishness? >> well, it's interesting. i think what john fich thorn said earlier on cnbc the art is managing the risk and capturing that move to the downside. . if you think it's a bubble and know when it's going to burst, maybe there's an opportunity to make money on the short time. at the same time, the bulls are making the case we're in this low-rate environment. to address your question, maria, there are many so-called bubbles out there, specifically in the ipo market. you could even say the equity market as well as the private market, snapchat rejecting a bid from google, dropbox being valued at $8 billion. there's a lot of bubbles out there. >> bob, you and art cashin and i have talked about this a lot,
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traditional metrics overbought, oversold, have been thrown out the window. i don't want to sound like i'm whistling past the graveyard, but this is reality right now. >> these overbought indicators have been around for a long time and overbought for a long time. the best hope for the shorts this year is the fact that all the short funds are closing. remember when julian robertson threw in the towel in 2000, closed tiger down. he wasn't a short but he said, i don't understand it anymore. that was essentially the top of the market. very pressing comments he had there. i think that's a good sign. number two, the thing i would agree on the shorts is that as the fed ends the quantitative easing programs, that there will be alpha opportunities around that and i think a lot of money can be made in picking the right names. massive shorts, i don't think so overall. i don't just mean chinese internet names. those are easy picks. i think there are alpha opportunities out there. >> brad, what are your top stocks you're shorting right
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now? >> first off, i couldn't agree more with bob. i think that's exactly right. that's exactly what we're trying to do within our short ips. we short ibm, caution money on centurylink. it's been a total train wreck. li lulu lemon, we've been shorting that. we think that's about to unravel. we've added a new position in triple d. we think the plays over 3-d printing is for real. but we think triple d has fundamental problems people aren't address pentagon we've been averaging in. as you know, it's down 13 points as of today. >> shorting individual stocks is one thing. when it comes to the overall market, brad, you realize it's one of the classic battles that goes on. you're fighting the fed right now. >> yeah. and it's been tough. there's no question about it.
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but that doesn't mean -- that doesn't mean the risk isn't high. >> for short sellers. >> what about fighting the fed, though. we know where rates are. sure, people are expecting taper at some point but it may not happen well into 2014. >> yeah. >> so what's the catalyst to actually send the market lower? >> personally, i think the catalyst is the interest rates start way from the fed and they no longer stay in control. >> at the same time, maria, we have more stocks hitting new highs. that means multiples are rising. when will we reach the point when investors from main street and wall street say, i'm not willing to pay this price or pay this much -- a premium for these stocks? >> interest rates are already moving away from the fed. this is a very crowded trade, a very crowded bias on the upside. look today, read the fed minutes. i read most of it. it's a lot of -- >> good for you. >> a lot of on the one hand, on the other hand. got very lick out of it, frankly, and yet the market
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seems some pressient statement is coming from the fed. i didn't get that from the fed minutes. >> brad, appreciate your thoughts. thanks, guys. see you later, bob and seema. we're in the final stretch of trading. a market down 78 points here with 20 minutes before the closing bell sounds. we'll be back with more "closing bell" in just a moment. honestly, i'm a little old fashioned.
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mac/apple getting final approval to build new headquarters, which looks like a spaceship. >> wait until you see this. josh lipton got an exclusive look at the new complex. josh, you're cleared for takeoff, buddy. >> listen, we were the only tv network that did get this video. the centerpiece will be the spaceship. now, this is a circular office building, accommodating some 12,000 employees. the building will be four stories high and total 2.8 million square feet. now, to put that in perspective, you could actually fit the "uss nimitz," super carrier for the navy and one of the largest warships in the world, you could actually put that inside the center of that ring. as a part of the deal reached last night, apple will pay
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cupertino more in taxes. apple is the single largest taxpayer in the city already. it could mean a boost for the local labor unit. berkeley has done research for every high-tech job, five others are created. so lawyers, nurses, carpenters, there to support the high-tech labor force. residents do have concerns about construction noise and congestion. apple says it plans to widen streets and expects one-third of its employees to take public transportation. apple isn't giving guidance on the price tag for the new campus but estimates range from $3 to $5 billion. back to you. >> there's something they're doing with their cash. carl icahn should be happy about that, right? >> that's true. >> thanks, josh. see you later. heading toward the close. we're down 67 points with about 15 minutes left in the trading session. off the lows of the session right now. >> now more on obama care. how is the rollout debacle impacting the hospital industry? coming up, the kree of tenet
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health care is with us why it could force hospitals to cut back on purchases of new equipment and hurt patient care. by the way, tomorrow, don't miss scott wapner's exclusive with hedge fund david einhorn, we'll find out if he's bullish and where he's finding opportunities. that's tomorrow. [ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account. maestro of project management. baron of the build-out. you need a permit... to be this awesome. and from national. because only national lets you choose any car in the aisle...
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about 13 minutes left in the trading session. dow down 74 point. we had been slightly positive earlier in the session until the fed minutes came out around 2:00 eastern time. market fell like a stone. interest rates went higher. maee yeah, it just points to the skiddishness of this market. all it took was a comment the other day by carl icahn and the market went down. it's happened again. >> today the comments really centered around the potential of tapering from the fed minutes. that's what really impacted the market. james bull ard comments as well. joining me is ed from jhs capital advisers. you think it's the taper talk that sent this market down? >> yes. which i love. >> in other words, when it goes down, you just buy it? >> yeah. i'm buying all the dips right now. to me, tapering doesn't mean anything. when they start buying back their own bonds, nothing
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changes. if fed keeps interest rate at zero until unemployment hits 6.5%, and they're talking about lowering that -- >> which will be longer. >> which means rates are zero for even longer. that's good for business, good for economy. the oil and gas boom in the united states, talk about the numbers that came out today. you saw gas go down 20 cents a gallon this past month. retail sales numbers rocket up. what does it mean? people have more money in their pocket and they're spending it. there's no inflation. why? businesses have cheaper cost on energy so they can produce their goods at a cheaper price. they pass that savings along to consumers. >> bill, what do you think about that? >> here's what i think. i always get nervous when we -- it seems like we've all figured it out at this point. the fed, as long as they keep pumping money into the markets, everything will be fine for the stock market because they won't stop -- they won't start tapering until the economy's fine. and then it will be okay to invest in the market because the economy's fine. but it just seems -- it seems too easy, don't you think, ed?
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>> that's true. you said to me off camera a couple months ago the fed won't do anything until janet yellen takes over as fed chairman. you're probably right. bernanke will probably keep his hand pat until he's out of here and leave this decision to yellen. when the crowd does think the same way, you know you don't want to be in that trade. the one thing i think people are missing over and over again is what has changed in the oil and gas world. we are now the world's biggest producer of oil. that's a gigantic story. that's a story for the centuries. >> it is. >> not a story for the week or the month. >> are we going to tap into it? we're fighting over the potential fracing, debating the keystone pipeline. you're right, it's a great story and a job creator but will we tap into it? >> i think we already are and i think it's going to continue. at the end of the day, the oil in canada, alberta tar sands we're trying to use keystone pipeline to bring down to oil to refine, that oil will come to market. why not have it come to market in the united states, ship is it
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to china and work with china governments to create new emission standards and create a better global emission environment. that's what we should be trying to do. it's a job creator and a win-win for the environment and the economy. >> what wouldn't you buy right now? what would you avoid? >> i would stay away from momentum plays. biotech, it's way too expensive for me. with drugs that are very, very far away from drugs coming to market. i'd stay away from 3-d printing. all of a sudden the stocks quadrupled no time flat. i'd go with high-quality stocks that play a dividend and also look for small and midcap dividend payers. they can growing their business but can pay you 3%, 5% dividend. so you can collect the dividend while waiting for the company to grow. >> that's a good point. small and midcap are taking the lead. are they getting expensive? >> it's okay. whenever i think it's getting too expensive, i buy dividend. if they come back down, you get
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your dividend, reinvest and buy more shares -- >> you really are a buy on the dip guy. >> i am. i'm a bull, i'm sorry. >> thanks for being on the program. >> appreciate it, ed. thanks. we'll take a break, come back with the "closing countdown". >> qualcomm announcing plans to return to investors. paul jacobs joins me to talk about the capital return commitment later on "closing bell." >> you know amazon for the kindle and for books and video. are you ready for amazon ketchup or ham? online retailer may be increasing the offerings from its private label line into food. will it be a boost to amazon's already lofty stock price? we'll look at that coming up. you're watching cnbc, first in business worldwide. pportunity, with ideas, with ambition. i'm thinking about china, brazil, india. the world's a big place. i want to be a part of it. ishares international etfs. access to developed markets, emerging markets and single countries. find out why nine out of ten large professional investors
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what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. five minutes left in the trading. congressional budget -- lest you thinking, congressional budget office says we could hit debt limit in march. oh, boy, here we go again. >> i'm here with aaron valdez, which i know you'll talk to in a moment, but he just commented and remarked about the same thing. he said, the fed's not going to do anything. first off, recount the fact that the jobs numbers are still weak. then, what about the debt ceiling, we haven't even gotten into that fight yet, right? >> exactly. >> what cow think happens going
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into that debt ceiling? >> i think you'll see a lot of volatility like last time. i'm worried the republicans may take a stance now. they see maybe obama's a little weak. let's take a real stance going into mid term elections in 2014. i think all bets are off the table, what really happens. >> obama care and the mess it's been, maybe that gives the gop some leverage. >> or at least it takes the debt ceiling off the table, you know, who needs to worry about that when we have obama care we can pick on at this point. >> correct. >> allen, what happened today? i mean, i don't know if we can still technically show the charts i had planned here, but at 2:00 when a gain for the markets turned south. i mean, we saw some selling as soon as the fed minutes came out at 2:00 eastern time. >> look at the chart. >> the dow was down by 100 points at the low. we've come off that. the yield and ten-year were up. we almost got to 2.80. we're at 2.70 right now. the dollar index,fy saw it correctly, yes, went higher today. what was about the fed minutes that spooked the market today?
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>> it's again, back to that tapering. they were concerned they would taper in december. like maria and i said, they won't tape in december. yellen won't be confirmed until next year. the earliest they taper is probably march, and that would be the earliest. then they cut back to $60 billion or $65 billion. >> is there a risk? you hear skeptics about qe. so no taper until march. should i be happy about that? >> not really. the market, they put $4 trillion into this market. >> they expanded the balance sheet. >> right. and the market's still too weak to take this. unemployment, i think -- unemployment $4 trillion, and interest rates would chew up as soon as they pull out. so the fed is in a bad predi predicament here. >> we were talking about how skiddish this market is. today is a good example. monday is a good example when carl icahn at the reuters summit said he could see a selloff. carl icahn. so, the market, i think, senses that it's in territory that
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maybe it doesn't belong in right now without some meaningful correction. what do you think? >> well, i agree. i think overall most corporations, 70% of all s&p companies are overvalued right now. again, you have the fed backstopping everything so you have this fake market. the minute they pull away, we'll see what the real market looks like. >> basically, the buy on the dip scenario once again. you're a buy on the dip guy. at the lower with were down 90 points. we're down 57. at the lows, the buy on the dip guys came in. >> it will keep continuing. you get a little break, s&p, you bounce off a number, takes it back up to that point. it's going to keep continuing because we can make money trading this stock. at the end of the day, we're just traders. we're just trading the volatility. >> paul jacobs just walked in, the ceo of qualcomm. >> tell him hello for me. >> can't wait to talk to him. he'll talk about how he's allocating that capital. i'm getting back to the set for the 4:00 hour and the interview.
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>> paul coming up in the next hour, chairman and ceo of qualcomm. while we sit here, gold is hitting a four-month low. around the 1200 range. oil has been coming back as well. what's the market telling us right now? what does that do for stocks here, do you think? >> well, i think in the long run, again, bill, i think you see the money's just coming into this market. if you look at the bond market, that's down 13% for the year. gold's down for the year. i think basically they're saying, hey, s&p, up 25%, that's where the money's going to flow. that's where it will continue to flow until we see what happens with the fed. >> where i was i thinking i was leading you, is there a deflation play out there, even though long yields -- long rates seem destined to go higher here. every time they talk about tapering. >> yeah, they do. that's it. they go up for a short time and then come back down. i think you'll have to see a real, real effort for the fed to say, we're going to start
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tapering. we're not fooling around. we'll cut back to $60 million. but yellen doesn't want that. she wants to keep it low. >> she's made that clear. thank you very much. stick around. as you heard, chairman and ceo of qualcomm coming up with maria bartiromo. i i'll see you tomorrow. by the way, i'll see you tonight on "nightly business report" on pbs. it is 4:00 on wall street. do you know where your money is? hi, everybody, welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. stocks declining today after the federal reserve hinteded it will begin taping its economic stimulus measures in, quote, the coming months. that sent the market plunging. take a look at how we finished the day which bounced off the lows of the close. down 60 points on the dow, 15,901. volume on the light side at the big board. nasdaq gave up ten points, 3921. s&p 500 segmentses down 6.5 points at


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