tv Closing Bell CNBC June 26, 2014 3:00pm-5:01pm EDT
of customers. >> they've locked up some six months or 12 months. zuckerberg said they wouldn't have sell shares. this is really an outlier. it looks good for them. he built it. sacrificed it. from an investor inspective, this is different. >> thank you. >> that's it for ""street signs."" "closing bell" is next. they've handed out cookies with crickets in them for the servicemaster. >> cookies with crickets in them. apparently they taste salty.
>> i am sorry i missed the $7,000 wisky a few weeks ago. >> you should be. >> i'll be on nightly business report on pbs. it's long story, but please join us if you can. stocks have been under pressure ul day. james bow lard said interest rate increases could come sooner than later, but what would you expect him to say. we're well off the lows of the day. i don't know if there's a correlation there, kelly. we started to come back when it became clear that the u.s. would advance to the group of 16. >> spurious correlation. what should yu make from the interesting comments? well, the outspoken paul mccully is here to way in. >> the other big story of the day, of course, gopro's red-hot ipo shares soared on the nasdaq after its offering on the high end of the range.
how will it close, you ask. stick around. we're going look at that. >> right now we're still seeing declines looking more like monday than tuesday. >> let's talk about it. peter anderson from congress wealth management. heather hues. dan greenhouse from btig and, of course, our own rick santelli as well. folks, i throw this out there. do we make too much of market moves from day to day? i know that's what we do for a living but can there always be a correlation to market movements based on the day's news? i mean we are heading toward the end of the quarter, heather. i wonder if that has anything to do with some of the profits we're taking. we've had a pretty good quarter. >> yeah, you're right. a little bit of window dressing, perhaps. again, what could shake these markets? the markets are completely
ignoring that right now. you look at the intraday moves. we've gone almost 50 days without a one-person up or down move in the s&p or dow jones. almost 50 days. that's a real lack of volatility showing they're perhaps complaisant right now. >> what do you make of the comments from james bullard here today? >> that means organic growth will have taken the establish and replaced stimulus. so i would be all for it. if you look at bill's point, if you look at the way the market reacted to the gdps from the first quarter and look at the gap between those reads, i mean the largest difference between the second read and the read we got yesterday in the history going back to 1976, that is one way for investors to take a little bit of pause and be moved by even gdp numbers on the day
they get released. >> but at the same time, peter anderson, some analysts on wall street are lowering their numbers. now we've got bullard saying maybe we have rates that will need go up sooner than later. you can't have it both ways, can you? >> you can't. even in our markets, i'd love to see it that way. i'm sure the fed in their twisted way would like to see it that way. to your first question in terms of are we looking at this thing too closely, perhaps we are, but, you know, we love to do that. that's what we love to do. that's our business. we look at this every day. we're paid do that. what i find interesting is the window dressing comment you made earlier, too, if we all know it's coming to the end of the first hand of the year. isn't it amazing you get these commend tairs right near the end of the year when you expect probably more volatility anyway.
i think it's particularly interesting that they don't wait until, say, mid-july to come out and say something like that. they're saying it when we're running around window dressing our portfolios as some people do. >> can i interrupt for a quick second? >> go ahead. dan? >> do you think members are coming out and making statements to affect the end of the first half of the year of the performance of the stock market? >> i would love to know what exactly the fed regional presidents have in mind when they do make these comments just in general. >> if anything. >> if anything. for instance, they seem to be kind of off the agenda given what chair yellen has said. >> that's always the case. >> right. but it's only been recently. i've done research on this. it was when chairman bernanke
was in charge. before we didn't see much of this where they would make comments. it was a big deal when they'd come out and say something but now it's very common. they're not all singing out of the same hymnal, if you know what i'm saying. >> to what he was saying, the expectations for the first fed rate hike, they were moving out, not in. >> let me add -- this is funny, this whole conversation to me. jim bullard has been here for several months. for those of us who pay a lot of atoning the fed, i find it hard to believe. the truth of the matter is people don't follow this as closely as they say they do and jim bullard didn't add anything to them. >> dan, people look to him as more in the middle. they say if he's talking more
hawkishly here, perhaps there's a shifting view how much more policy can achieve. >> let's also remember from an investment standpoint, there's two different things going on with respect to federal reserve. that's the asset purchase and the interest rate program, but to repeat. there might be a shift in the course of the federal reserve in that it's been so many years and it's time to start winding this down. but i repeat. interest rates are not going up in the first half of the year. >> rick, is the market telling you anything as we approach the end of the first half? >> yes. stagflation. one of our guests said how can you reconcile what's going with rates and inflation and economy and growth, stagflation. i tell you what. we could see this issue again. maybe a little bit different form. nothing's ever the same. it just rhymes. in terms of the feds being on the same package.
you know, one word that was used often today by kevin walsh was humility with respect to nobody, nobody on the planet knows exactly how any of this works. how the money moves. i think those are suck secinct s to talk about. all of a sudden it's ban in the 2%. the carrot goes on and everybody plays along because as a friend of mine e-mailed me today he had his broker talk him into selling his stock position. now his e-mail was what do i do with the money which really describes the entire plan. so we're going to go on and on and on until the migration of it goes on. they do have collateral all over
the board like one of those old movies, the producers have sold 600% of the placement something's going to add up to the market i'm still not advocating stocks. it won't bhmatter because everybody won't get out. >> don't forget "the producers" was a big hit. >> same like soccer. you lose and you advance. >> if i can add rail quieal qui want to give him some credit since we argue all the time. rick said there would be no growth in the second quarter. he deserves credit if that. >> when trying to have a debate, rick, you've been right on bonds. others have been rate. equity has headed farther. so i don't think it's a debate
of bonds versus stocks. it may be a debate of allocations to such. i don't think it should be time these markets. it's rather the old adage, time in the markets. >> let me write that down. >> if i could just address the issue of timing. >> go ahead, peter. >> i totally agree with the issue of timing. it seems like i'm in the minority. let me add to that. you have to distinguish between the signals and the noise, right? right now there's a lot of noise with the kind of topics we've been talking about. how do you make money in this market because that's what we've all been trying to do. i think we can still find stocks. am i saying i'm ready to release
balloons to the ceiling? no. i hate to use the phrase stock picker's market. >> do you have any before we move on? >> yeah, sure. diamond resources international. it's a time share company that's come back and also ee quo knicks. >> jim lowell, i wasn't to ask you. they're doing a massive buyback. they had one morgan stanley analyst say if the price is going lower, it's all right. they're buying back 18% of the flow. >> we love to see big companies borrowing at low rates and applying that capitol to their own growth. it has been our core overweight and will likely remain so. >> very quickly, i disagree. i disagree with everybody about
everything. >> corporate promo, they eleven from the fed. >> it's not necessarily encouraging if this is the dynamic. >> it's why we love you, dan greenhouse and have you along. see you later. heading toward the close and we're heading back toward unchallenge was down. it started to crawl back. the average down 20 points. the nasdaq is down and s&p down too. >> coming up. pimco chief economist paul mcculley. and gopro, up like a rocket. how long? >> seema mody looks at it live from the nasdaq. >> plus gold, a loss.
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the marks today. it was positive until some hawkish comments. the dow is down 75, 80 points at the low and now it's come back. as we have 45 minutes left in the trading session, it's down 20 points. >> also buffeted a bit, it's gold. dipping for the first time in seven sessions. jackie deangelis with us today. >> closing at 1317 even. the first one was that imports of gold to china from hong kong were down 17% in may. obviously china is a boog consumer of gold. also, new reports of $15 billion in illegal gold-backed loans
coming from china as well. traders looking a little cautious here. meantime that we're holding back, that's very significant. it does set the stage for gold to potentially move higher. some of the catalysts that would take us higher would show inflation is really coming back into the economy and also if the situation in iraq worsens, we could see some save haven buying. you could see people move back into the gold trade too. back to you. >> thank you, jackie. is now the time to buy gold? that tees questi that's the question we want to ask. welcome to you both. >> thanks for having me. patrick. do you think gold here with whatever catalyst ultimately it may be is poised to break out? >> i wouldn't say break out.
>> i wouldn't say that. we've had a good run already. we're looking at gold price maximum for the year a little up. on the down side the physical demand is physically strong. i know you talked about imports into hong kong being down since last year. of course, last year, beginning of last year was a very high rate of imports there, and so the comps actually are not very good, you know, in terms of that number. but also what i should say is there's imports coming in not through hong kong but shanghai and beijing. that's something not recorded in your data. that may be where some of the missing gold may have gone. >> you're bearish on gold.
why? >> it doesn't look compelling to me. i'll tell you why. from the rally, i've seen nothing but increasing gopro rates. i guess i'm not seeing the same data as my co-guests. i don't see a compelling move for the gold market out who demand from china participating. >> you know -- sorry, kelly. anybody who is willing to listen to me, i don't get gold anymore. is it a hedge or -- you're asking it's money. who's going accept a bar of gold to pay for what i've got right now. i mean what moves gold higher and lower besides geeld old supply and demand? >> certainly central banks.
there are many increasing their gold reserves. meantime the sales of gold from central banks has stocked. that's why it's a reflection of money. what you're seeing in the market are two factors driving gold up a little bit here. we're not saying it's going to go wild here. one reason is your political risks, the iraq situation, syria situation and russia and the relationship with the states also impacting on gold but also you've seen impacted from the fed, the economy, and interest rate. are we going to see interest rates move into the positive? i don't see that happening any time soon. >> you know i learned from the
world gold council last night is the easier way to play it is buy it during evening trade hours. my question is do you think people will be interested in adding it to their portfolios? by the way, one of the few assets not buying at trading highs. >> i'm not buying it. essentially gold will become a more efficient gold. look at it this way. syria, cyprus, government shutdowns. what more can it be that's truly constructive to the price of good. of course, we all see that potential but that could be very bearish for gold.
it needed to be sold to raise cash and liquidity and pay on notes. it will increase the current account deficit in india and they're the number one if not two in the gold markets. i sold all my longs yesterday and today. i'll wait for it to go negative before i think about buying it again. >> all right. >> thanki ins for having me. >> i still don't get. >> it we'll ask youing bitcoin next. >> still it continues. the dow back 22 points. >> barclays becoming the latest european bank. banking pros weighing in against the war on so-called european
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minutes to go. now, the european union may be an ally of the u.s. when it comes to banking but it seems like there's a bit of a war under way. filing a lawsuit against barclays. far from being alone in taking fire from u.s. regulators. in fact, in the last couple of years, dozens of multi-million-dollar fines have been imposed on the likes of deutsche bank, ups, and others from market manipulation to bond buying and doing business with iran. >> dennis gartman and securities attorney andrew stultman. good to see both of you back. why is this happening? why do we have to keep doing that? >> i kind of feel like i'm in
the movie "groundhog day." it's the same old thing ore and over again. the banks have defrauded customers over and over and over again. they get away with it year after year after year and they're a very easy target for regulators to go alf. >> dennis, the question is one of eight belles. >> quite honestly, i'm going to take complete exception. this is nothing more than a prosecutor's attempt to run for governor at a very early rate. let's beblunt. that's what's going on here. i have my doubt that this is egregious fraud. i don't think they're out to defraud anybody. i fail to see where the disconcerting --
>> let me ask. did you say across the board you don't think there's anything nefarious going on? >> now money laundering, libel manipulation? >> i'm sure -- >> that doesn't pass the red-faced test. that's a joke. to argue that they paid tens of bi millions for money laundering. >> and libor. >> they won't do it because they know they would be out of business. >> they won't do it because this will go on forever. they won't do it because the legal costs -- >> cry me a river. these are the most -- >> hang on a second. dennis gorks ahead. >> it will simply be a long and protracted war that will simply track everybody's name through the dirt. did people make mistakes? yes? is this a fraud upon the public which is what you're attempting
to prove? i suspect probably not. >> this is quite a serious allegation as to what bar lace was up to. >> it's an allegation. >> andrew? >> these banks almost meanted down the entire global economy except for a bailout. to say they didn't do anything wrong, that's a joke. >> 2008 were bad loans made to people who probably shouldn't have been buying real estate at prices that were egregiously overpriced? >> it fell heavily on the american banks and what we're asking here is if it's the european banks. >> that's what it looks like. you had bnp pair boll, you're taking -- >> money laundering like hbc and
-- >> i don't doubt for a moment where there were circumstances have been laundered. not a question. when they're as big as they are, dealing with the people they do, there's no question. the question is this a fraud on the public -- >> how much of this is a glaring example for the need for global banking regulation out there? those that's something they were talking about in washington is how do you deal with these multinational bank concerns who are beholden in the u.s. but they're not when they're doing business overseas at the same time. >> that's a great question and that's very difficult to do, but we need a coordinated effort by regulators, and if somebody gets out of line, you've got to whack
them. and to complain they're getting whacked, i think that's ridiculous. >> any time i hear we should have a greater and larger amounts of regulation in not only just a federal circumstance or state circumstance but a state circumstance. i have my doubts whether i want to have my bank being subjected to qatari regulations and others. >> it's why we're in the problem in the first place. >> by the way, this is not the last. there's going go a major -- the fs probe and others are going to hit. that falls on other foreign banks. that's goad to lead to more fines. i'm just curious. again, if the net outcome is sort of a volcan opportunity worldwide, do you think that's what they're trying to encourage
here by some stretch? >> i suspect they're trying to see the number of banks decline, not increase. i suspect we'll see that, fewer banks. much larger banks. that's the only way it's going to end up. find this whole thing very disconcerting. >> what do you think the net outcome of this will be? >> i just think there's going to be more libor. i think it's going get far, far worse before it gets better. it's going to be deja vu all over beginning like oweyogi bea once said. >> the dow's off about 25 points. bill. >> kelly. gopro's ceo talking up the wearable camera maker first on
cnbc this morning. listen. >> if gopro can make it easier than any other company in the world, make it easy for our kman customers to share professional content, that's an opportunity that's never going go away. >> see ha mma mody is up next aw long the wearable camera making can stay hot. >> up next, seema mody and janet yellen, whether the fed rates will be raised sooner than later. we'll be right back. ♪ ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪
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the fastest speed dial. the fastest office plant. so why wouldn't i choose the fastest wifi? i would. switch to comcast business internet and get the fastest wifi included. comcast business. built for business. oh, it's awesome. my grandson uses it when he skateboards. he puts it on his head. it's awesome. >> i don't really care. >> i think it's a good kpaechl i would indeveloping. >> that's some of the reactions on gopro. >> seema mody telling us how the wearable camera making is finishing up the day. seema. >> that's right. in addition to being a wearable device maker, gopro capitalizing
on user-generated content. that being the big opportunity for gopro going forward. its video has trached more than one billion views in the first quarter. a big following for gopro. wall street, of course, seems to like its story. raising ruoughly $27 million. it plans to use its proceeds to grow its content business and pay debt. gopro is one of the first u.s. consumer electronic companies to go public since head maker skull candy in 2011. woodman is the current ceo and after going public, woodman still own as third of the company. a self-made billionaire. bill and kelly? >> thank you. not a bad debut, bill, today. what else is moving markets?
bertha coombs is moving markets. >> two tax stories lead our stories. iron mountain soaring after the irs moved for the plans to become a real estate investment trust. as a result, iron mountain is upping its full year guidance. meanwhile shares of biotech, qlt, they announced they will buy the company. finally phillip morris taking a hit after its lowered earnings guidance for the year citing foreign exchange impact. those taxes make thinks more difficult. >> don't they, though. keeps the accountants in business. thanks, bertha. >> the dow has plateaued. it was a lot worse earlier when we were down 75 to 80 points. >> that's right. trying to digest it. we're talking economic recovery.
what does the chief economist have to say about that? paul mcculley is coming up. also ahead, toyota is taking on tesla with its new hydrogen fuel cell car. we're driving head-in to the debate over what's better for consumers and investors. that's coming up. ...and a choice. take 4 advil in a day which is 2 aleve... ...for all day relief. "start your engines"
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and toyota taking on tesla, the company announcing plans to take on a new heavily competitive priced car hitting japan. it is a hydrogen power car, pricing if it's consistent with what's happening in japan, about $68,000, bill. >> and while we may soon be seeing more of these green cars on the road, there is a debate over which technology if any can reach mass market success. is it the electric cars? hydrogen cars? we were talking about it. joining us right now is kelly blue book's alex gutierrez. we had also planned to have michael gorman for end gadget who was going to make the test
for the tesla car. we were having technical difficulties. alex, you're going to have to play both sides here. you believe they can both do well, why? >> one of the limitations of electric cars is a limited range although tesla can go 200, 250, maybe 300 miles depending on the battery pacquiao choose. we're talking about a $200,000 car and yet toyota is going have a similar range for $68,000, $70,000. that's one advantage. you have water vapor as your own emission. a very, very clean vehicle to drive. but in the long run it's not time to do it at this point. >> for a moment to focus on this
refueling issue, alec, they say the same thing. they say their range or their accessibility is superior when you look at how far you can get on a super charger and how ubiquitous it is. it's whether you're able to goat to electric gas stations. how easy will it be to refuel a hydrogen vehicle? >> it will be more affordable than gasoline and you can use renewable resources such as wind power and solar, so inessence the fuel pricesed my be more affordable than gasoline. the nice thing is while a super charging station on an electric vehicle will get you a charge in 20 to 30 minuteses you should be able to fill up a hydrogen car in three to four minutes. that's assuming you can find a
super charging station. there's a lack of infrastructure at this moment. >> look. we're in the place of horse and buggy days. one of the "fast money" guys has a tesla. he was driving fr. he thought there would be charging stations. they weren't there. they had to put him on a flatbed. we're talking alternative fuels for cars that we now are perhaps the dawn of a new era for energy in the united states where we'll become self sufficient because of all the fracking in the upper part of the united states here. ing. >> yeah. it's quite amazing. we're looking to take the next step yet we're at the moment finding ourselves energy independent for the first time. >> could that hurt these efforts for green cars? >> absolutely. i think you look at the price of gas today. on average you're looking at
3.65 dollars a gallon. natural is $2 per gallon and that's an area for the potential for growth. you have honda with their civic natural gas as the only player. >> it's funny. we don't talk about the natgas aspect of this almost at all. just before we let you go, the challenge for chess la tesla is below. >> tesla is looking at their factories to hopefully drive down the price of batteries to get them to a point where they can offer a vehicle in that 30 to $35,000 sweet spot. the average car is aushlgd $35,000. that's where you hope to get hydrogen cars. >> it's all about cost. alec, thank you. playing both sides. 14 minutes left to the trading session as we head to the close.
the dow down 24 points. >> much more ahead on the marketsen in the economy. wait till you hear in mcmully. >> our sharon epperson will tell you what you need to know. there's a big deadline coming up. that's after this. seeing the world in reverse, and i loved every minute of it. but then you grow up and there's no going back. but it's okay, it's just a new kind of adventure. and really, who wants to look backwards when you can look forward? cut! [bell rings] this...is jane. her long day on set starts with shoulder pain... ...and a choice take 6 tylenol in a day which is 2 aleve for... ...all day relief. hmm. [bell ring] "roll sound!"
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about ten minutes left in the trading session here. again, some volatility. we're down just 17 points right now. the nasdaq is down three. there's the industrial average as it heads toward the close. joining me is catherine jones from schwab. cathy, do you believe bullard? do you believe rates could go up sooner than expected? >> the market doesn't agree with bouleyar bu bullard, i'll put it that way. i think i'd be surprised if they moved in the first quarter. certainly that's not what the market expectation is right now.
>> especially the gdp numbers do not look good. >> given what we've seen, you need revenue growth to pick up on the back of better economic data. >> are you seeing that? >> well, no, you know, not now, but we're hoping. some of the data we're seeing is suggesting that the economy is gaining traction and some very important barometers are acceleration, you know, back in the second half of the year. but it's not going the make up for the first quart e. that was much lower than people expected and it wasn't just weather-induced. >> kathy, assuming the fed is finished with the quantitative easing in october, that's sort
of the consensus, when are we going to see long yields? >>. >> i'm telling you the bond market is just not buying the k accelerating growth story. it's slower growth, lower inflation. when a ten-year yield is going to bet get baget back to 3%. we need to see income growth peck up in real terms, not in normal terms, and we need to see more, 2%, not just a month here, a month there. >> quincy, are you going to defend for growth? >> i thing if we continue to see these barometers gaining momentum, i think you're going to see money go into the cyclical part of sectors. what you may be seeing is
defensive moves. we're seeing the ipo index gain momentum. i think, again, all we need is a little bit at the margin. more growth. and i think you'll see cyclical sectors start to gain. >> where do you put any money to work in the debt market? >> we're really concerned people are chasing yield and taking credit risks. we're staying with a more important part of the market. that's in investment trade. there's not a lot of yield there. but there's not nearly as much risk as there might be in high yield. >> not losing money is not dull. >> right. >> as we all know in this market environment. ladies, stay with us, we'll come back. add bob pisani to it. after the bell find out why one of the world's biggest investment banks likes these stocks. there they are. if you're listening on satellite radio, you'll find out coming
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[b♪ll rings] time and sales data. split-second stats. ♪ its so close to the options floor, you'll bust your brain-box. all on thinkorswim, from td ameritrade. inside the four-minute look, a quick look at the markets. the dow coming back here as we saw. it's down 29 points right now. the s&p and the nasdaq down small amounts as we had just a few minutes left in the trading day on what has been a rather volatile day. some breaking news on barclays again. mary thompson, what do we have
now? >> we have a memo from jenkins to his employees. in it he says barclays is launching an interning investigation about a conduct within its dark pool. within the memo jenkins says they're serious charges which allege the grave value and culture that we're working to change. again, barclays is launching its own investigation and bringing in outside sources. back to you, bill. >> as you say, mair, it's down 7%. talk about raising rates, you would think it would go higher. it went lower. some of wall street's top analysts including at goldman
sachs and one more look as we head toward. up 30-plus percent. joining me once again, back with kathy jones and quincy and bob pisani joining me. goproing down well. >> $31, not a bad day for gopro. that's where it was when i looked before. even servicemaster. $17 and was trading above that. not a bad day. this is a strange day, bill. i think you made a good point about the banks downward readvising their gdp estimates. so i think that was it. >> these were quite hawkish comments he made. >> what does that say to you? where are we in that cycle right now?
>> well, it just tells you that companies want to take advantage of market that is still grinding higher and they don't want to wait. normally as we get into the summer, the calendar dries up. but it looks as if they're going in as long as possible. i don't think they roy tonight get into this market come fall when it looks like the fed is finished, not knowing what that may entail that and, kathy, i'll pet you on the spot. you know, we've been in this range for a while. 250, 249 has been below the range. do you think we can go below that? >> there's been a lot around 244, 245. we can test that again but i think the economy would have the really unperform to go under. i think we're still stuck. >> it's early. it's early. although the second quarter has two trading days left. thank you all for joining us. i appreciate it very much. we're going down 23 points. gopro the high one of the game
with game of about 30%. stay tuned. we've got the always outspoken pete mcculley. >> welcome to the ""closing bell,"" i'm kelly enks. let's see how we're finishing out the day. the dow jones industrial average gives up about 230i7b89s. were down, i believe, as much as 20 earlier in the session. the nasdaq off by just about a point. the naz damage off 2 to 1957. let's get some perspective. with us from today's market is "fast money" trader tim seymour. tim, wi -- don't call it a comeback. the nasdaq lmg did.
>> clearly momentum getting a lot of love. it's one of the best we've seen since 2004. so the debate goes on to whether it's a big cap value. the gopro ipo is something to me that is extraordinary if you consider where this valuation is coming. so i'm a little incredulous on that front. i'm not surprised the market fought back. tin flags data not strong enough. the people have a lot of anxiety fearing the fed's going to get back on the rhetoric side of the table. >> john ford, what do you think about the action? >> momentum is back. gopro really welcomed in its debut. it's not crazy if you believe it's beyond hardware story. nick woodman i'm sure is a good spokesman for this company. as we'll get into later there's a lot of options around twitter, facebook, google. they have very different
stories. i see some potential headwinds ahead. >> michael farr. >> i think the market's telling you it's a little bit tired. we've had a very strong run and we're building and think we're setting a limit and level where investors, i hope, are going to find a new comfortable level. >> what great time to be a corporate finance investment banker. not dwrounl have all of these ipos but one of the things that hasn't been there, on daily basis, plus the debt market and m & a. it goes on and on and on. >> a lot of people are saying this market is only going higher because companies are buying back so much stock. that's true. look at mon santo today. there are a number of shares being issued. >> they give with one hand, take with the other, right? they're issuing -- there are so many companies issuing it because the market will suck it
up right now. i feel like every time i'm on this show, kelly, i bring up the ten-year yield. bullard if he has his trusters, he would bring up the interest rate. luckily he doesn't so he can't vote. we have junky -- >> junky? >> i'm trying to be kind. >> then you have someone say i might raise rates. then they go lower and the flattening of the curve continues. it's amazing to watch. >> the interesting thing today after bullard's comments people were crediting that with the market coming under pressure this morning but the bond market to michelle's point was not responding the way you'd expect if it was worrying about a faster rate or increase. if anything, the rates got pushed out from october to november. >> michelle's insinuating that it's behind that.
they're going to have to catch up in a hurry and that's going to slow things down. if you look at the world. clearly there's a case where the u.s. economy is growing faster. there's a very strong argument that the fed is behind the curve and i think, watch the u.s. dollar for any sign of vol a built. the dollar will rally if the fed is behind the curve. >> we had a debate about gold. do you like gold here? do you think it's going to break out? >> no. think while we have better inflation or more inflation than the fed is letting onto. i think gold is a dead asset. it's unwinding. we don't have the kind of systemic risk there could have takien it ooh lot higher. it's going to be below 1200 before the end of the year. >> there's talk of risks and dividend stocks.
they treatering it the same regardless of what the risks might be. do you woe that this chase for yield has gotten ahead of itself, overextended, i don't know what the right way is to describe it here. >> well, yes, a little bit. and i think it's interesting. three weeks ago the concerns were more deflationary. now we seem to have shifted toward deflation and the fed doesn't seem to be all that concerned. bullard wants to raise rates now. i don't think they have the room. i think we move higher. a lot of them. >> are you still recommending those high dif accident payers even though they've gotten really extend ivs. >> it cannot speculate for yield. stocks that have been trading on dividends in a high environmental will not do well. >> isn't there some overlap
there? the ones paying are the ones with the cash flow. >> for now. >> unless they're borrowing to 'zo. right, right. >> that's true. you don't have a lot of flexibility, for instance, in the utility stock that's trading on that yield. some of the stocks are rate sensitive. >> kelly, i think one of the questions around inflation is really sort of -- a big issue. what happens if you still have wages that don't rise but you're having the inflation and things like good and gas. i think that's going on -- >> it's deflationary ironically. if you get the must spend components, it acts as a price on consumer ins. >> if we continue to get this pattern of data, what you'll start to hear, stagflation.
>> exactly. >> santelli said that in the last hour, in fact. >> we're not there. >> what's the pattern of data you don't like. >>? we've had four straight farm rolls. we're going to get 220 on july 4th or that next week swrechlt jobless claims that are better. wage growth year over year. it isn't awful. >> what about the gdp declining nearly 3%? >> that's years ago. are you kidding me? we're talking first quarter gdp. >> it may not be awful but it certainly isn't good. >> in the recovery. >> in the quote/unquote recovery. >> and gains of 200,000 jobs still after all this time it's pathetic. >> you're out of place where you're starting to see labor pick up.
that will lead to pricing ability of companies for sure. >> but if you don't have any wage inflation or wamg gains, we've seen a reversal in it. the consumer's got back to debt. it's been piling up. they can't do that forever. >> and organic increases in wachs. >> if we get it, i agree. that's going to inject a lot of volatility in the markets. we haven't seen necessarily wages falling apart. if more jobs are being addnd and we tick down 6%, that's the real deal. there's less slack and the fed believes that. they're just not saying that. >> i want to break in if i can. i believe we have some breaking
news on dupont. bertha coombs with the details. bertha? >> we do, kelly. we've got them lowering its quarterly and full year outlook. the problem is it's in its agricultures. higher than expected seed inventory write-down. what's interesting is their soybean sales volumes in north america. others are going to be impacted. price on refridge rants for mobil. you can see the stock down as much as 6%. still on the lower side. back to you. >> i'm going the pick up one piece of that. corn price. monsanto. here's why, corn prices are a little bit under pressure. the company today did a massive debt offering, speaking to the
appetite for any yield in these markets. by the way, one of the reasons it didn't perform worst on the back of that is it's 18% of the flow. not that it's the exact same thing but it's a window. >> no question. it's been a very strong company. we receive it, what they've been able to do with the genetically modified seed and how much productive in corn and so i booe soybeans has increased. i worry how it might affect the prices. >> your reaction? >> i would be concerned. that's kind of a shocking number. they have been on major run because of the shale and cheap feed stock that they have. i would look deeper into it. you might see this through to the rest of the sector.
>> thank you, tim, for that sector. they're coming up at 5:00 prime minister and they're going to get the first reaction from nasdaq. nasdaq evp and head of local listings will join bruce auft. don't miss it. up next we'll have the results from the dow component and how world cup fever is impacting earnings and the guidance as the usa team is advancing despite a loss to germany. >> also, assigning each a buy ra rate, but what does our panel think of it? plus, student rates are about to spike. could that move come back to haunt them and the housing market? it's all ahead on the "closing bell." you're watching cnbc, first in business worldwide.
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bertha? >> that's right. let's look at the former dow stocks. big gain today. alcoa moving up today after announcing a nearly $3 million deal to buy aluminum parts manufacturer. also moving higher, elizabeth arden shares. they were moving to the down side after south korea's l. gchlt household said they're no longer interested in buying the beauty products company. elizabeth arden down 50%. and cost-cutting helped the bottom line but sales fell short on schnitzer steel. >> we're waiting for nike's earnings and he's going to give us a little reaction. the estimate i have here is 75% for the net income -- i'm sorry
$7.34 billion for the revenue side. where do you fall? what is your own estimate here? >> i think nike's in position to deliver a modest or mild surprise to the upside. trends have been strong, especially with retailers like foot locker. they've got a nice tailwinden from the world cup buildup and it's going to be where the gross margins come in and have they been able to push through the higher prices without losing any customer sales. >> right. interestingly, it was one of your colleagues on the street who said nike underperforms during the world cup and a little after. do you see anything, too, around the trading patterns? >> what you see is a big ramp-up in sg & a expense. they call it demand expansion.
they're trying to build up the nike brand to get future sales to occur. as those expenses, those sg & a expenses fall off in subsequent quarters, they usually get a nice bump from that. sales growth continues to stay where it's at while expenses trail off. >> stand by, robert. sara eisen has the numbers for us. >> let me bring you the revenues number. 7.34 billi$7.34 billion. 75 cents was the expectation. as you guys were talking about, the costs, sg & a were higher, more than 20% for the quarter. that's another one people are looking for. how they can cut costs in is supply chain. 45.6 was the number. as you can see, nike's shares
are moving higher in the aftermarket here, but we will dig in. nike does break it down by gee graph cake region. it looks likeov over awl feall, are up. those were some of the question marks going into the quarter. overall it looks solid. we're going through this world cup period right now, perhaps starting early because they started all their promotions several months ago that should continue throughout the year. >> yeah, sharon. thank you. stick around. i want to get some reaction from the panel. rob, first to you. top line, bottom line. >> sounded like good numbers. i'm not looking at a quote stream but it sounded like the stock is responds positively. >> we want to hear what they have to say.
we want to know where sales are headed, what margins look like and i'm really interested to see how the turnaround is progressing in china. >> how many watched the germany/usa world cup. i presume everybody. >> i was on t v at the time, soi would assume you were looking at us. >> split screen, kelly. >> isn't there a long screen, past the world cup and you can look toward the olympics. i think nike has a strong brand in all of the world markets. you've about got the olympics coming down the pike and they're big. >> the analysts are with us. china revenue is $702 million. is that in line. >> it looks like in terms of futures, it was up. the chinese consumer buying
nike. by the way, if people wonder how exposed nike is to soccer relative to adidas, last year $2 billion of nike sales was soccer. adidas is expecting $2.7 billion for 2015. it's definitely usa versus germany with these two. >> i'm wondering if we the have sara if you're hearing anything about the fuel band. they're going to drop the hardware, focus on software? >> we've got them on the record saying they're more on the software program. he said stay tuned on their relationship. apple and nike. people are widely expecting whatever apple comes out with, a watch in terms of nike and their integration. also john donohoe, ceo of ebay
is on board. they need to grow their online sales. not so much for the quarter but the brand awareness. nike always forward thinking fashion brand. it is the number one sports brand. >> john, to your question, there's so little color in this announcement, there's nothing in there except the hard core numbers. we've built on our platform. >> its like a press interview. >> michael farr, what's your view on this name? >> my guess is nike didn't bury the lead. they went with their strength and got it out there. their press people are very good about that. that margin at 45.6% is a center strong market. i think if we're seeing a positive reaction, i agree with carol. that's a trend that has legs and you ought to pay close
attention. >> robert, i'll leave it there. thank you for joining us. we'll see what the higher earnings us the for the dow tomorrow. and an agent see the americans have never heard of but the head of the export/imimportant baenk. larry kudlow says the agency amounts to corporate. and the concern that fed rates may be raised sooner than expected. we'll be right back.
let's head out. bertha, what's happening? >> a big activist investment firm. according to reports, it's taken an 8.5% stake, dividing the company into two according to reports. it's the latest effort to try to bolster those companies. they're arguing that manitowoc who makes food service machines and others are separated. you can see the shares are jumping after hours by 12%. >> that's certainly going to turn up the heat on management, thank you. speaking of turning up the
heat, they have a new target. the export/import bank that finances businesses overseas is under fire. the tea party accusing the agency of doling out favors to wealthy u.s. companies. several officials have lately been suspended or moving amid allegations of gifts and kickbacks. should it be shut down or is it vital? >> let's bring in larry kudlow and the panel. is it lights out? >> gee, i hope so. get rid of it. the tea party is exactly right. you're right. fraud, corruption, kickback, bribery, there's all that. all forms of corporate welfare, whether it's exxon, the bank, fannie, or freddie, or corporate farms, get out of the business. xm loans, dubai, okay, which has mrp money than america.
do you think we should be loaning money to dubai? and finally it's costing us money. xm is financing foreign competition which is costing jobs. that was the message of the delta ceo. you ought to listen to it. it's a terrible operation get rid of it, fi finito. >> is it important to finance u.s. businesses in any part of the globe? >> clearly it's a turning point. they're under great deal of scrutiny and it's also clear they really have to take a close look in-house and do some house cleaning. >> that sounds like a political response. >> thank you. i'm from washington. >> wait a minute. i'm still waiting for his opinion. >> my opinion is you can't get rid of them yet, larry.
in the broader sense you can't get rid of fannie and freddie. you need to level the playing field not just for dubai but they're loaning money to boeing that gives them a competitive framework versus airbus that gets a lot of financial support from the french government. >> here's the problem. this is done on the back of the small business owners of america, taking money out of their pockets and loaning it out so the big businesses can compete. small businesses employ 55% of the population. we have to stop letting the government pick the winners and losers. >> are you saying that providing frontal boundary to boeing is crowding out smat businesses? >>. >> it's taking the money out and loaning it to fannie and freddie. >> we should. do that ee thefrmt none of this should exist. regardless of the fraud. the fraud is bad.
even if the thing were profitable and pristine -- >> michelle has the story right. take a look at what they're doing. they're financing -- >> nothing. >> 60%. >> it's not the world government. >> does that put the world at a disadvantage versus other companies? >> no cl! . it's the opposite. it's the opposite. >> l.e.d. and solar, is there anything the government should do or should they let it operate? >> look. 98% of these international trade credits, 98% is done in the private sector. if it can't meet private sector, then you shouldn't do it. but i want to make a second point. it's about jobs. you know what? they are -- the xm bank is financing foreign competition and you can talk about boeing. that is costing us jobs. valero made a statement in front of jebs s hjeb's financial out.
now how stupid is that. >> larry, at the same time you can also put it this way. the world is a big place and to some extent if you want more people, for example, refining petroleum products in other countries forecast you want dubai to have international airlines, isn't that a good thing for u.s. businesses by growing the client, not by crowding somebody out? >> kelly, let free market capitalism work. i'm all for growth and expanding the pie but i don't have to finance dubai. >> there's an assumption based in your question that they couldn't get the financing. >> well, dubai and some of the other countries, or emerging markets where the money is going rng if they don't have a truly well functioning system at home, is it a bad thing if the u.s. helps to finance the companies? >> if this is a good business, the private sector will find a
way to do it and if they can't figure it out locally, it's our job. >> hang on, hang on. there's one other thing that's essentially a problem. that is trade finance in particular right now, banks are derisking. they're under so much pressure to derisk that they're stopping a lot of legitimate business that they should be engaged in. >> they should be financing the small businesses of the united states. we should have the ability to create jobs here in the u state. >> let me get this right, kelly. you would rather have the u.s. government and taxpayers finance these banks. is that what you said? >> in other words if we put it aside, they were left unfortunately as a result of this if you would like heavy-handed regulation is that the very u.s. institutions that could be doing some of this
risky lending are moving the other way. they're pulling back and retrenching. >> so you're trying to fix it the wrong way. >> dodd/frank is stopping lending across the board. second of all, abolish the u.s. corporate interest rate or at a minimum take it down to 20%. if you want to help american businesses get the tax burn off their backs. >> you have to do it for others as well. >> michael farr? >> i am a devout free market capitalist. i am a believer -- >> except right now. >> no, no, no. >> only when it's convenient. >> it's always convenient. that's my philosophy. but you can't flip a switch on a freddie mac or fannie mae or xm bank. >> move slowly. >> let's put it this way.
right now the timing of this -- >> i'm for shock therapy. >> me too. >> michael farr honored the fact we almost got an pittsburgh out of you. i'll take two years. we can abolish the xm fwhank two years and fan anyand fred di in three years. but you know what they're going do with fannie and freddie? >> they're growing to expand it. that is exactly what the problem is. that's why i don't want these to continue. >> the interest rates are so low, why don't they want to do it now. >> quick last word, michael farr, and then we've got to go. >> if we did it two or three years ago, we'd go into recession or depression. philosophically i'm with larry kudlow, which scares the hell out of me to say that on television. >> i wonder what's going to happen on commercial. >> i'm going to be all for it.
>> good to see you this afternoon. so is this surprise a red flag for the economy? pimco's paul mcculley. that's later on the "closing bell." t to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes where you can. so you can invest in the life that you want today. tap into the full power of your fidelity greenline. call or come in today for a free one-on-one review. kudlow, which scares the hell that's later on the "closing
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welcome back. james bullard saying he could see interest rates rising by the first quarter of next year and we're closing to the economy than most think and how the fed thirchings we're closer to our goals. pimco's chief economist paul mccully. welcome. >> good to see you. >> what you do think of jim bullard's comments? >> he gave a really nice speech a couple of weeks ago pointing out that relative to their mandates of unemployment south of 6% and inflation up to 2% we're getting closer and closer and then he added we're getting
closer to the first rate hike so i didn't see anything new from what jim had to say but clearly at the margin he had a reaction in the market because the market is getting ready for its first tightening dance and we haven't had one for eight years so everyone's very nervous. >> i wonder going back to those gauging the outlook and just how long interest rates can stay at these low levels what you make of the first quarter where not only did gdp plummet but productivity was horrendous. what does it all mean? >> it's very interesting. gdp plummeted. productivity plummeted and the reason was actually the inputs to the economy basically jobs didn't. you had good income growth but lousy out growth. you certainly wouldn't want that for the longer. term chltz the fact that
consumer income and job creation held up, i think, is the silver lining in what happened in the negative productivity in the first quarter. >> it's either the silver lining or it's a worrisome point for those who think there's a lot of slack in this economy because if this persists what it means is perhaps the supply side of the economy is the problem and this can't be fixed or remedies by monetary policy. >> i certainly think you'll have those making that argument that we're getting labor koufts and therefore we have an insipient labor problem. but i don't think it's going be repeated. it's not repeated in this quarter. tlink was a whole number, fistful of it. i understand the argument and we should hear it because the marketplace recognizes as bullard said today, we're
getting closer to where the fed needs to be relative to its mandate and as that happens the fed will want to get off of the zero lower balance. so i think that's ak oh axiomat. we have an ax to grind here. >> right. and so does the when or the how fast change in light of what we were just discussing with that first quarter? >> actually i don't think so. tightening is not going to happen. lift-off is not going to happen in the first quarter. it's as uncertain as chairman yellen said. sometime around the middle of next year, i think, is a reasonable proposition, but the
big issue is jhow long. i have a very strong disagreement with bullard. he thinks they should tighten until they get to 4%. i think and pimco thinks the new neutral will be 2%. so we have no disagreement on the notion that zero is not normal around the fed will lift off zero in 2015. our issue is the destination, not the lift off. we say 2%. they say 4%. >> that's a significant difference. good to see you. hope to see you this afternoon. >> good to see you, thank you. summer is officially here. it's burning up. we'll see what's on the list and millennials may be on the way out. they're starting to make moves into home buying. that story when we come right back. [bell rings] ♪
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very interesting piece by jeff. people are eating it up right now. now, number two on the list is a piece by sharon epperson. you think college is expensive now? just wait until july 1st when all the student loan rates reset and you're going to be in for a big amount of debt. right now the average college debt for a college graut is $30,000. love it. and number 4 is a piece by diana olick. she took a look at the baby population and what it tells us about housing. basically the babies are all in the cities? why in the cities? the young adults have to go to the cities because they're renting not buying houses. it's an indicator of housing health. fascinating piece by diana. i checked on the stock tickers for you, kelly. it's the usual suspects except there's a strange ticker gpro floating in there somehow.
that is the story of the day for now. a new study finding millennials may be finds a way to without. nay be on the verge of buying their home for your the first time and we wonder if that will lead to husing boom. that's coming up next. and if you think you noam zon, think again. inside the retail giant like you've never seen before. the premiere of the cnbc dock plenty "amazon rising" don't miss it. sunday night at 9:00 p.m. eastern. i take prilosec otc each morning for my frequent heartburn.
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the fastest speed dial. the fastest office plant. so why wouldn't i choose the fastest wifi? i would. switch to comcast business internet and get the fastest wifi included. comcast business. built for business. welcome back. so get ready to pay more for your student loan because we're just days away from an interest rate hike and sharon evenp ev er walks us through it now. the most popular loan, the interest rate is going go from 4% to above 4.5%. for graduate students the rates will rise from just over 5% to over 6%. for parents the most expensive loans will jump to over 7%. these new rates will be for
those loans distributed between july 1st and june 20th, 2014. we're looking at rates that will be fixed for the life of the loan but they're going go up. student loan rates are goingyiee so low a year ago, most experts agreed they would go up. a lot of borrowers were caught off guard. few borrowers will pay about $4 more per month for every federal student loan. based on a ten year repayment period that's what we are looking at. they will hit the mandated maximum rate cap which could go as high as 10.5%. even with these increases, it's important to keep in mind, federal students loans are generally cheaper over the life of a student loan than private loans. >> thank you for now. i want to get reaction here from the panel. where the government should not be involved, they should not be financing student loans, they
make college much more expensive. when you subsidize something that is already so desperately wanted, all you do is drive up the price. people will find a way when they want to. >> increase demand, fix supply. it seems pretty obvious to everybody. >> i guess they're pushing at this point, you raise the interest rate on the interest rate. more people will probably defall, yay, nay? >> the federal government refuses to bear interest rate ricks, but they expect banks to do it. 30-year fixed rate mornings, you get a beautiful fixed rate forever, the bank has to suck it up for 30 years. >> that's the way they have the loan to decide. >> the federal government refuses to go along with that. >> smartly. they want to make sure they're not bearing the interest rate risk. >> fannie and freddie are buying back like 95% of all of the loans that, but, i mean, the banks aren't holding that paper. the banks aren't at risk.
the government takes it right back out. if you made the banks hold that paper, if you made, if you looked at the bank and said, will you loan me money for 30 years? what rate of interest will you quote me? they'll give you a floating rate. >> it's not the government's money anyway, it's your money, the taxpayer's money. >> hold that for one second. along with the schools at the future may not be so bleak for millennials, harvard joint center for housing study, find millennials are the key to a stronger housing study. contrary to public belief, they are getting ready to leave the nest, with us is christian herbert. welcome, i want to throw you into this discussion we have been having, which is basically about the pile of student loan debt the cost of that is going up. how much of a problem is this for millennials? who it sound like lately are maybe starting to strike out on their own? >> well, i think it is an issue going forward. you see a huge rise in the student loans in the last ten
years, by my own estimate, 2001, 26% of those 25 to 34 have student loan debt, since then, we have seen a total of student loeven debt rise by another 50%. it's well into that force where they are bearing student loan debt. i think it is an issue we don't know how they will act when they get a job and have a di sent income and have the ability to move out on their loan. we say the millennials hold the key, they are not ready to open that door yet. there are a lot of them. they desire to own a home and have independence the first thing they have to get a job or an income to be able to act on that. >> what we do know then is we have a huge portion of this swath of the population that's taken on these student loan debts. we know the cost of that debt is increasing. that's going to act as a head wind in terms of purchasing power and growth. so this is becoming a
significant cost of expense for the emerging millennials. those are the folks we feed to drive the rest of our economy and cover social security and medicare i think it's something we have to pay attention to. >> i think we don't really know the full story, too. there was a report out from brookeings that corresponds with our own findings, which is while there has been a rise in student loan debt, many aren't taking on excessive amounts the sheriff taking on more than $50,000 in debt by our own estimate, there is 19% of those with debt. so there is a lot of people taking on small amounts of debt so that maybe those folks will manage it. they will be hard pressed. >> i go es the question is, if they're moving out of their parents' house, are they in a position to be able to buy a house? i would think they would probably look to rent and for a long period of time. not only do they have that debt a lot don't have well payer jobs
either. >> that's true the normal thing is to move out and rent and save up to buy. i think rents are high, too, people out in the rental market are facing problems. i think we may see millennials will go straight from home to their own home. they are being able to manage their ability to pay off that student loan debt, put some money aside rather than putting that mine i money into debt. i think there is more than a boost and skip that middle step of renting. >> christian, thank you for now. we appreciate it. >> christian herbert. fifa is taking a bite out of world cup hopes, star ruiz suarez is suspended for biting a player. find out if his sponsors are sticking by or giving him a red card.
fifa headquarters in brazil, taking the stage as the secret weapon against joseph cornelius today. they could use him on the field, ferrell was referring to the bite heard around the world by louis suarez for biting an italian player earlier this week. it is the third time he's eaten an opponent. did they go too far in addressing the situation? >> biting. >> when it comes to combating crucian, they're great on biting, bad on broadway i don't yet it. >> there is a lot of ad dollars at steak. adidas, if we take a quick look. they said they fully supports fifa's decision. we have no plan to use suarez for any additional marketing decisions. >> i look at soccer players, not to objectify them, i wouldn't mind being bitten by several of
them. >> why are we talking about this? >> he can be the next spokesman for macdonald's happy meal. >> with the big happy meal. leave it there, guys, thanks to everybody at this hour. "fast money" begins right now. the rise on the nasdaq market site in new york city's time's square. i'm melissa lee. right now, the conference call is getting started. shares are moving higher on a solid earnings report in the last hour. we will bring you the latest on the call coming up. first, many investors are looking at the swing on the broader market today. it is the move in the bond market, treasury is, in fact, rallying for the fourth straight day t.tlc is up by a half a percent. what does that tell us about the markets at this point, tim seymour. >> i tell you what, the market is definitely under pressure here. i would go as far as t