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SCARLET: WE ARE MOMENTS AWAY FROM THE CLOSING BELL. I AM SCARLET FU. ALIX: AND I AM ALIX STEEL. SCARLET: GLOBAL STOCK COMMUTED THAT COMMODITIES AND IT THEIR BEST WEEK IN YEARS, AND OIL CLIMBING. JOE: THE QUESTION IS, "WHAT'D YOU MISS?" SCARLET: EARNINGS SEASON IS ABOUT TO REALLY KICK OFF, WILL THE RALLY KEEP RALLYING? JOE: RISK OF A NEW SURVEY FOR JUST IT IS MORE LIKELY THEN IT HAS BEEN, WE TAKE A CLOSER LOOK AT ALIX: AND THE SECRETARY-GENERAL. WE TALKED TO HIM AT THE WORLD BANK MEETING. SCARLET: WE BEGIN WITH MARKET, THE S&P 500 HAS HAD THEIR BEST IN THE YEAR, BUT WE DID BOUNCE AROUND MOST OF THE AFTERNOON. FOR THE WEEK, CERTAINLY A BIG WEEK FOR THEM. DATA AND COMMENTS FROM THE FED SEEM TO INDICATE THAT ANYTHING GOES, SO THEY'RE STARTING TO LOOK AT THE ANECDOTAL EARNING SEASON. JOE: TODAY WAS QUIET, HARDLY HAD TO WATCH TODAY, BUT WE ARE ON AN IMPRESSIVE STREAK WITH THE S&P CLOSING IN THE GREEN, EIGHT DAYS. HAVE TO BE IMPRESSED WITH THE MARKET. ALIX: WHAT WAS CONFUSING WAS ENERGY STOCKS TODAY, BECAUSE WE GOT TWO PIECES OF NEWS THAT SHOULD HAVE BEEN BULLISH. YOU HAD THE LAW TO LIFT THE BAN, THE PRESIDENT WILL VETO THAT. BUT IF IT OF HEALTH WITH ENERGY STOCKS -- HELPED WITH ENERGY STOCKS. BUT NONE OF THAT REALLY HELPED OIL THAT MONTH, THEY MADE ME WONDER ABOUT THE EFFICACY OF THIS RALLY. JOE: THEY HAVE NOT BEEN REALLY HOT. SCARLET: LET'S LOOK AT THE LONGER-TERM TRENDS, WHERE ARE WE AT, SOME SORT OF MARKET TOP? THIS IS A 20 YEAR MONTHLY CHART OF THE S&P 500 AND BETWEEN MUCH OF 2000 AND OCTOBER 2007, THAT WAS ABOUT 92 MONTHS AT THE TOP. OCTOBER 2000 SEVEN TO MAY OF 2015, KIND OF A SIMILAR PATTERN. IN OTHER 92 MONTHS -- ANOTHER 92 MONTHS, WE HAVE BEEN STUCK AT THIS TRADING RANGE, HAVE WE RUN OUT OF THE TESTING -- STEAM? JOE: EVERYONE AGREES THAT THE BULL MARKET IS GETTING PRETTY OLD. SCARLET: WE ARE DUE FOR A DOWNTURN. WHEN YOU LOOK AT THE LONG-TERM , I HAVE A CHART FOR THE SHORT TERM. GLOBAL STOCKS HAVE RALLIED 7.5%, MARKET VALUE, THIS BLOOMBERG WORLD EXCHANGE, WE HAVE SEEN $4 TRILLION OF MARKET VALUE RESTORED THROUGH YESTERDAY. THANK YOU TO PETER FOR POINTING THIS OUT, THIS LEAVES US WITH THIS PEAK TO THIS LOW. ALIX: INTERESTING. SCARLET: RIGHT ABOUT THEIR, 50%. ALIX: MAYBE YOU HIT SOME RESISTANCE WHEN YOU HIT THOSE LEVELS. JOE: I WANT TO TAKE A LOOK, GO INTO MY TERMINAL AND LOOK AT CHART, THIS IS THE PHOTOS AND CONCENTRATE OF -- FROZEN CONCENTRATE ORANGE JUICE, THE BIGGEST STORY OF THE DAY. FIRST OF ALL, THIS ASSERTS 5% TODAY -- SU RGED 5% TODAY AFTER IT WAS SHOWN THAT FLORIDA ORANGE JUICE OUTPUT WILL BE THE LOWEST IN FIVE YEARS. THE BEST WALL STREET MOVIE OF ALL TIME WAS ABOUT ORANGE JUICE, SO THIS IS THE REPORT THAT THEY REALLY WANTED TO SEE IN THE MOVIE. BUT FROM A MACRO STANDPOINT, THIS IS ONE OF SEVERAL BULLISH COMMODITY STORIES WE HAVE SEEN. WE SAW THINK AND -- Z INC, SOY GOING UP, MAYBE THIS IS ANOTHER PART OF THE PUZZLE. WE ARE STARTING TO SEE SUPPLY AND DEMAND LEVELING OUT. ALIX: THAT IS A SUPPLY STORY. JOE: BUT THE IDEA WOULD BE IS THAT WE ARE STARTING TO SEE SUPPLY AND DEMAND DOWN. SCARLET: WERE THE DUKE BROTHERS POSITION FOR IT? THIS WEEKEND, WE WILL WATCH TRADING PLACES. ALIX: EARNING SEASON IS UPON US, WE HAVE S&P 500 COMPANIES REPORTING NEXT WEEK AND JOINING US TO DISCUSS AHEAD OF U.S. EQUITY, ALWAYS A PLEASURE. >> GREAT TO BE HERE. SCARLET: WE HAVE SEEN REPORTS SO FAR THAT SHOW -- FROM CHINA. WILL THIS OVERSHADOW OIL AND THE DOLLAR? >> THIS QUARTER WE HAVE SEEN A SMALLER CUT, BUT WE HAVE SEEN WEAKER GLOBAL GROWTH, SO IT MAKES ME NERVOUS, BECAUSE NORMALLY, IF YOU REMEMBER THE LAST COUPLE OF QUARTERS WE WENT IN WITH A HUGE CUT AND WE CUT EARNINGS BY 6%, THIS TIME WE HAVE ONLY HAD A 4% CUT IN GLOBAL GROWTH HAS BEEN A LITTLE WEAKER. CHINA EXPOSED STOCKS HAVE SHOWN SOME CRACKS. WE LEARNED ABOUT THIS, U.S. STOCKS WITH CHINESE EXPOSURE HAVE NOT SEEN DOWNWARD REVISION WERE COMMODITIES AND INDUSTRIALS, ANYTHING WITH EXPOSURE TO METALS FOR ENERGY HAVE SEEN MASSIVE DOWNWARD REVISION, SO THAT IS THE ISSUE THAT HAS DROPPED TO -- DROPPED. JOE: SO JUMPING OVER A LOWER HURDLE, YOU THINK MAYBE THAT IS NOT AS LOW GOING INTO THIS QUARTER AS PEOPLE EXPECTED? >> THE BAR IS NOT AS LOW AS IT NORMALLY IS, BUT ON TOP OF THAT WHAT IS REALLY JUST 30, THAT'S DISTURBING, THE NUMBER OF COMPANIES THAT HAVE ACTUALLY ISSUED GUIDANCE OVER THE LAST FEW MONTHS HAS DROPPED TO AN ALL-TIME LOW, SO COMPANIES ARE GOING RADIO SILENCE ON WHAT THEY EXPECT TO SEE. JOE: YOU CAN SEE, JUST 26 PAST DECEMBER VERSUS 65 FOR THE AVERAGE. >> NORMALLY IT IS 100 COMPANIES TELLING YOU WHAT THEY WILL DO, BUT THIS TIME EVERYONE IS WHY IT AND THAT IS NORMALLY -- QUIET AND THAT IS NORMALLY NOT A GOOD SIGN. ALIX: SO IS THIS GOING TO SPOOK THE MARKET EVEN MORE? >> THE LAST TIME YOU SAW COMPANIES STOPPED ISSUING GUIDANCE WAS DURING THE FINANCIAL CRISIS WHEN NOBODY KNEW WHAT WAS GOING ON, SO IT SHOWS LACK OF CERTAINTY AND REAL GRASP OF WHAT THEY WILL BE ABLE TO EARN. I ALSO THINK THAT THE FED NOT HIKING WAS A SURPRISE AND THAT COULD CHANGE THE STORY FOR THESE COMPANIES. ALIX: THIS REMINDS ME OF WHAT WE HEARD FROM MINING COMPANIES , GLENCORE BASICALLY SAYING I HAVE NO IDEA WHAT IS HAPPENING IN CHINA AND OTHER PLACES WHERE COMPANIES SAYING, HEY -- NO IDEA WHAT IS GOING ON IN THE MOST IMPORTANT COUNTRY FOR THEIR COMPANY. SCARLET: WHAT DOES THAT MEAN FOR COMPANIES WHO CAN OFFER GUIDANCE, ARE YOU NATURALLY SUSPICIOUS OF THEM? >> THE ONES ISSUING GUIDANCE, YOU CAN STILL TRUST THE NUMBERS, BUT GUIDANCE OVER THE LAST FEW MONTHS HAS BEEN POSITIVE, BUT THE FACT THAT MOST COMPANIES ARE SHUTTING DOWN THE INFORMATION FLOW, TO ME THAT IS A WARNING SIGN. JOE: I WANT TO GET YOUR TAKE ON THE DOLLAR, FOR SEVERAL QUARTERS OF THE IMPACT OF THE DOLLAR ON EARNINGS HAS BEEN SOMETHING WE WATCH FOR AND MENTIONING THE DOLLAR IN THE FED MEETINGS, IT IS KNOWN AS A COMMODITY. WHAT DO YOU PERCEIVE AS THE IMPACT AND WHEN WILL THE DOLLAR STORY BE OVER? >> I THINK IT IS STARTING TO BE OVER NOW. ONE THING THAT IS INTERESTING IS ANALYSTS SLA EARNINGS FOR THOSE COMPANIES THAT HAVE SALESSHED OVERSEAS. AND NOW THEY ARE UNDER TENSION OVEREMPHASIZING THE DOLLARS AND FACTORED MULTINATIONALS -- DOLLARS. MULTINATIONALS ARE --, THEN THE MORE DOMESTIC CORPORATIONS. ANALYSTS GOT A LITTLE NEGATIVE ON THE DOLLARS IMPACT, A LOT OF MULTINATIONALS DO WELL IN DOLLAR ENVIRONMENT, BECAUSE THEY ARE QUALITY ANY SCARY WORLD, THEY HAVE HEDGES WHICH MITIGATE THEIR NEGATIVE EXPOSURE TO THE DOLLAR, SO IT HAS BEEN HAPPENING FOR SOME TIME, THEY HAVE BEEN WRITING ABOUT IT. WE ARE AT THE OTHER END OF THE TRADE WHERE YOU WANT TO BUY MULTINATIONALS THAT MIGHT HAVE LOOKED SCARY A FEW QUARTERS AGO. ALIX: YOU HAVE A WHOLE BUNCH OF COMPANIES AND AND AND AFTER OCTOBER -- AND THEN AFTER OCTOBER, WE GET BORED. SHOULD THEY BE PUTTING UP SIGNS ALONG THE WAY? >> ONE THING WE NOTICED WAS LATER REPORTERS HAVE WORST NEWS AND THE EARLY REPORTERS, SO THE GUYS THAT DO NOT HAVE GOOD NEWS, THEY WAIT UNTIL THEY ARE FURTHER OUT IN THE EARNINGS CYCLE, SO THEY WAIT TO SAY THEY DID NOT TOO GREAT. EXACTLY, WE ARE FOCUSED ON OTHER THINGS. IT IS WORTH MAY BE PAYING ATTENTION THE WHOLE SEASON AND REALLY FOCUSING ON THIS AS THE QUARTER PROGRESSES. I DO NOT THINK WE WILL SEE A LOT OF BULLISH CATALYSTS OVER THE NEXT MONTH. SCARLET: YOU ARE STICKING WITH US THE NEXT HALF HOUR. WE WILL BE RIGHT BACK. ♪ ♪ ALIX: LET'S GET BACK TO MARK. MARK: MORGAN VIOLENCE ON A COLLEGE CAMPUS, ONE PERSON DEAD AFTER A SHOOTING AT TEXAS SOUTHERN UNIVERSITY IN HOUSTON. THIS OCCURRED AT A STUDENT HOUSING COMPLEX. THE TSU CAMPUS IS ON LOCKDOWN, IF POSSIBLE SUSPECT IS SAID TO BE IN CUSTODY. ONE PERSON DEAD AND THREE WOUNDED INSIDE STAFF AT THE UNIVERSITY. THEY SAY THAT THE SUSPECT IS IN CUSTODY. THIS TOOK PLACE AS PRESIDENT OBAMA HEADED TO OREGON TO MEET WITH FAMILIES OF THOSE WHO WERE KILLED IN LAST WEEK'S SHOOTING. THANK YOU, BUT NO THANK YOU, THAT IS WHAT ALL RIGHT HAS SAID SO FAR WHO -- TO PEOPLE WHO WANT HIM TO MAKE A BID FOR SPEAKER OF THE HOUSE. HE IS SAID TO CONSIDER A RUN. RYAN REMAINS RESISTANT TO THE IDEA, BUT STAFFERS CONTINUE TO SAY THAT HE DOES NOT WANT THE JOB. HE REPORTEDLY PLANS TO TAKE THE WEEKEND TO WEIGH HIS OPTIONS. MORE EVACUATIONS FOR RESIDENTS OF SOUTH CAROLINA, THEY ARE BRACING FOR THE POSSIBILITY OF EVEN MORE FLOODING. THERE IS STILL TROUBLE ON THE HORIZON, A STORM SYSTEM EXPECTED TO COME NEAR THE COAST THIS WEEKEND, BRINGING AN ADDITIONAL INCH OF RAIN TO SOME AREAS AND THREATENING THOSE SWOLLEN RIVERS. AND GROUPS IN TUNISIA WILL SHARE THE NOBEL PEACE PRIZE, THE DIALOGUE QUARTET IS THAT HEALTH IN -- PANELISTS SAY THAT THEY WANT DATA BROUGHT TUNISIA BACK FROM THE BRINK OF CIVIL WAR. BACK TO YOU. ALIX: WE ARE BACK WITH THE HEAD OF U.S. EQUITY AND HIS AT BANK OF AMERICA. JOE: WE HAVE SEEN A REVERSAL WHERE FORMER MOMENTUM DARLINGS LIKE NETFLIX AND BIOTECH HAVE BEEN UNDERPERFORMING AND IS SOME OF THE MOST HATED STOCKS HAVE BEEN RALLYING, HOW MUCH LONGER CAN THIS LAST WHERE PEOPLE ARE UNDEREXPOSED TO SOME OF THE BEST? >> IT IS INTERESTING, IT COULD LAST LONGER. THE REASON THAT I SAY THAT IS THINK A LOT OF WHAT WE HAVE SEEN OVER THE LAST MONTH OR TWO HAS BEEN GERMAN BY -- DRIVEN BY THE RISKING -- DERISKING. THIS HAS PUT PRESSURE ON POPULAR STOCKS. HOW MUCH IT WILL GO, IF YOU LOOK AT MUTUAL FUNDS, AND PHYSICIANS HAVE NOT BEEN CHANGED THAT MUCH. YOU CAN SEE TECH COMPANIES, THEY ARE UNDER -- AND I THINK IF WE GET ANY SORT OF POSITIVE POINT OUT THE CHINA , OR A SIGN OF THE DOLLAR IS STRENGTHENING OR FLATTENING OUT, THAT COULD HELP -- THAT COULD HURT THE LONG-STANDING SHORTS , SO I DO NOT THINK THAT WE ARE CLOSE TO THE REVERSAL. ALIX: BUT THE LONGS ARE HOLDING ON TO THEIR POSITION, DOES THIS GIVE THEM A CHANCE TO DOUBLE DOWN? >> IS REALLY HARD TO ADD ON TO YOUR BIOTECH POSITION, SO IT IS ALMOST LIKE, HOW MUCH MORE EXTENDED DO YOU WANT TO SEE YOUR FUND MANAGERS GET? I WOULD NOT BE THAT EXCITED IF I SAW THAT MY MUTUAL FUND WAS GETTING EVEN MORE OVERWEIGHT IN A SECTOR THAT IS PRETTY EXPENSIVE AND CROWDED. IT IS A RISKIER PROPOSITION WHEN YOU ARE THAT OVERWEIGHT ALREADY. ALIX: WHAT KIND OF A VELOCITY INJURIES CAN WE EXPECT IN THE FOURTH QUARTER, SO MANY UNDER PERFORMING, WHAT KIND OF LOSS CAN WE EXPECT? >> I THINK WE WILL SEE SOME BENCHMARK HUGGING. IT IS HARD TO SAY, UTILITIES DID TERRIBLY THEN THEY STARTED TO WORK. IT IS ALMOST LIKE WINDOWDRESSING, HOW THE WINDOW JUST YOUR PORTFOLIO IN A YEAR WHERE IT HAS BEEN SO BIPOLAR. I THINK WILL HAPPEN, EVERYBODY JUST CLOSES IN ON THE BENCHMARK. IT IS CORPORATIONS, THEY DO NOT KNOW WHETHER EARNINGS ARE GOING TO LOOK LIKE, SO HOW DO YOU INVEST IN DOCS -- STOCKS? I DO NOT THINK THAT THE REVERSAL IS OVER. JOE: YOU HAD THIS GREAT CHART RECENTLY SHOWING THE COLLECTIVE -- CUMULATIVE LOWS AND PASSING MANAGEMENT VERSUS ACTIVE MANAGEMENT. IT IS NOT LOOK LIKE THERE HAS BEEN BOUNCED BACK FOR ACTIVE MANAGEMENT. IS THERE ANY LIGHT AT THE END OF THE TUNNEL, OR WILL ACTIVE MANAGEMENT DIET IS THAT DIE A SLOW DEATH? >> IN SLOW MARKETS, YOU DO NOT WANT TO BE PASSIVE. I DO NOT WANT TO SAY IT, BECAUSE WE ARE FORECASTING EQUITIES, BUT LET'S SAY THAT THE MARKET TURNS OUT, WE WILL REALIZE THAT ACTIVE MANAGERS, THE GUYS I DO PICK STOCKS HAVE ACTUALLY PROTECTED US. JOE: SO DO YOU SEE SOME STARS THAT ARE OUTPERFORMING? >> I THINK THOSE WHO DID WELL WILL SEE IN FLOW, THEY WILL -- IT TAKES A COUPLE OF THINGS COME ACTIVE MANAGERS LOOKING BETTER THAN WHAT THEY HAVE DONE OVER THE LAST SEVERAL YEARS. LAST YEAR, WORST YEAR ON RECORD FOR MUTUAL FUNDS, LESS AND ONE OUT OF FIVE MONEY MANAGERS BEATS THEIR BENCHMARK. THE BENCHMARK DID REALLY WELL. BUT I THINK IF WE GET PAST THAT AND A FEW YEARS WERE ACTIVE MANAGERS ACTUALLY ADD, THAT COULD GET INVESTORS BACK INTO THE ACTIVE WORLD. ALIX: ACTIVE MANAGERS, SAYING THAT THEY FOCUS ON HIGH-QUALITY STOCKS, WHO DOES NOT FOCUS ON HIGH-QUALITY STOCKS? HAVING SAID THAT, WHAT MANAGERS AND DO YOU USE TO SCREEN FOR HIGH-QUALITY SECTORS AND WHO QUALIFIES? >> WE LOOK AWAY EVERYBODY IS DOING. WE FOUND THEY ARE ACTUALLY OVERWEIGHT IN LOW-QUALITY STOCKS. SCARLET: DEFINE LOW-QUALITY? >> WE ARE LOOKING AT EARNINGS, IF THEY ARE NICE AND SMOOTH, THAT IS HIGH QUALITY. IF THEY ARE ALL OVER THE PLACE AND HE CANNOT TELL WHAT A COMMITTEE WILL DO IN THE NEXT QUARTER, THAT TENDS TO BE A LOWER QUALITY SCOTT. SOME MANAGERS HAVE BEEN GETTING MORE OVERWEIGHT, SMALLER, LOWER QUALITY COMPANIES THAT MIGHT HAVE PERCEIVED GROWTH, WHERE HIGH-QUALITY COMPANIES, HERE I WOULD LUMP THOSE MULTINATIONAL COMPANIES WITH SMOOTHER EARNINGS, THESE HAVE BEEN SHUNNED BY MONEY MANAGERS BECAUSE THEY ARE SEEN AS HAVING NO GROWTH, PERCEIVED DOLLAR RISK, SOME KIND OF HAIR ON THEM THAT THEY HAD BEEN AVOIDING. I LOVE QUALITIES, THIS IS MY NUMBER ONE THING, LOOK FOR HIGH-QUALITY COMPANIES THAT HAVE ACTUALLY DONE WHAT THEY HAVE SUPPOSED TO DO AND IT GENERATED STABLE EARNINGS OVER THE LAST CYCLE. THESE WILL GET YOU INTO SOME SURPRISING BIG -- HIGH-TECH INDUSTRIAL, THESE ARE LOOKING LIKE HIGH-QUALITY STOCKS, VERSUS THOSE WITH HIGH DEBT BURDENS AND PROBABLY WILL NOT DO WELL AS INTEREST RATES GO UP. SCARLET: A GREAT PLACE TO LEAVE OFF. WE WILL BE BACK WITH MORE. ♪ ALIX: "WHAT'D YOU MISS?" -- THE CHANCE OF THE THAT -- FED RAISING RATES IN DECEMBER IS AT 39%. >> I BELIEVE THE ECONOMY IS ON A SATISFACTORY TRACK, SPEAKING FOR MYSELF, IS THE THAT I SEE A DECISION LATER THIS YEAR IN DECEMBER AS LIKELY APPROPRIATE. ALIX: THERE IS THE BEAR, EVANS DISAGREES WITH LOCKHART, AND HE SAYS, "WE THINK THAT THE LIEN OF THIS UNTIL THE MIDDLE OF 2016 AND THEN A GRADUAL PATH WOULD BE CONSISTENT WITH GETTING INFLATION BACK TO PERCENT WITHIN A REASONABLE. OF TIME." LET'S SEE WHERE YOU STAND IN THIS DEBATE, A LOT OF CONFUSION. >> IN MY OPINION, ARE THEY LOOSEN UP TO TIGHTEN -- LOOSE ENOUGH TO TIGHTEN? I WAS SURPRISED THEY WERE NOT GOING IN SEPTEMBER. IT IS NOT A DONE DEAL. I THINK THAT THIS WOULD BE FOOLISH -- BULLISH DIVIDENDS THAT IT WAS READY TO TIGHTEN. I THINK WE ARE ON THE OTHER SIDE OF LIQUIDITY. WHAT I MEAN IS, REMEMBER HOW THE LAST FIVE YEARS WE HAVE HAD THIS MARKET AND LIQUIDITY HAS BEEN EVERYWHERE. EVERY TIME THAT YOU HAD LPR O, DID YOU NOTICE THAT THE RALLY WAS A LITTLE BIT SHORTER THAN THE EARLIER ONE. THE MARKET HASN'T SOLD OFF ON THE NEWS THAT THE SAID -- FED SAID THEY WILL NOT TIGHTEN. ALIX: I THINK THE WORST SIGN FOR EQUITIES AND THE GLOBAL EQUITIES OVER ALL IS THAT WE GET ANOTHER ROUND OF U.S. QE. I KNOW THIS SOUNDS CRAZY, BUT I THINK THAT THAT WOULD BE THE DEATH NOW FOR U.S. STOCKS FOR CHINA, JAPAN, FOR EUROPE, BECAUSE IT MEANS THAT $4.5 TRILLION IN THE U.S. WAS NOT ENOUGH TO FIX OUR PROBLEMS AND EVERYTHING GOING ON IN JAPAN AND EUROPE IS NOT GOING TO WORK EITHER. SO TO ME, GETTING OFF BACKGROUND ZERO IS WHAT WE NEEDED TO FILL LIKE THIS WHOLE OPERATION WORKS, IN ORDER TO FIX AN AILING ECONOMY. JOE: SO YOU THINK, SINCE SEPTEMBER WE DID NOT GET THAT HIKE, SINCE THEN WE HAVE HAD ONE PERSON AFTER ANOTHER, SAYING WE WILL PROBABLY GO DECEMBER, YOU THINK THAT HAS HELPED THE MARKETS RECOVER? >> I THINK SO, BUT THERE IS STILL SKEPTICISM AMONG -- AROUND THE IDEA THAT THEY WILL GO IN DECEMBER. IF WE WERE AT PRIOR HIGHS, I WOULD SAY THAT THE MARKET BELIEVES THINGS ARE GOING TO GO, BUT WE ARE NOT, WE ARE STILL IN PURGATORY, WE ARE IN THIS , WHAT IS GOING ON, WHAT WILL IT FEEL LIKE WHEN THE FED ACTUALLY TITANS. ALIX: THE REASON I ASK, BECAUSE GLOBALLY MARKET CONDITIONS HAVE ACTUALLY TITANS -- TITANS. WE HAVE NOT SEEN IT HERE. >> WE ARE IN A CURRENCY WAR TYPE OF ENVIRONMENT WHERE THE ONLY AREA THAT IS NOT DOING THIS IS THE U.S. THIS IS THE REASON THAT A LOT OF PEOPLE THINK THAT THE U.S. WILL NOT TIGHTEN, WE HAVE THE UPPER PRESSURE ON THE DOLLAR AND THAT REALLY SCREWS EVERYTHING UP. I DO NOT THINK THAT THE FED PAYS ATTENTION TO CURRENCY, BUT THEY LOOK AT WHAT OTHER ECONOMIES ARE DOING. BUT ULTIMATELY, THEY ARE LOOKING AT INFLATION AND GROWTH. SCARLET: SUCH A PLEASURE. SO MUCH GREAT STUFF. WE WILL BE RIGHT BACK. ♪ SCARLET: "WHAT'D YOU MISS?", WE WILL GET TO MARK WITH THE NEWS. MARK: PRESIDENT OBAMA IN OREGON MEETING WITH FAMILIES OF VICTIMS FROM LAST WEEK'S SHOOTING, EIGHT STUDENTS AND A PROFESSOR WERE KILLED AFTER -- AND AFTERWARDS THE GUNMAN TOOK HIS OWN LIFE. NOT EVERYBODY IS HAPPY ABOUT THE PRESIDENTS VISIT, GUN SUPPORTERS ARE AGAINST THE VISIT. AND ARTILLERY AND AIR STRIKES ARE NOT ENOUGH AGAINST ISIS IN SYRIA, NOW ISIS IS IN CONTROL OF THE, THIS ADVANCE THE MOST SIGNIFICANT IN MONTHS. THIS IS AFTER A WAVE OF RUSSIAN ROCKET TARGETED MILITANTS. AND A TRAIN WRECK WAS PREVENTABLE, THIS ACCIDENT THAT RESULTED FROM A BROKEN RAIL THAT SHOULD HAVE BEEN DETECTED BUT WAS MISSED THE TRAIN WAS CARRYING 3 MILLION GALLONS OF OIL WHEN IT DERAILED IN A SNOWSTORM IN FEBRUARY. 27 OF THE 109 CARS DERAILED AND 20 WEEK CRUDE -- L EAKED CRUDE. AND A MAGAZINE SAYS THAT STAFFERS BRIEF PEOPLE WHO REPRESENT THE VICE PRESIDENT EARLIER THIS WEEK, ALONG THE TOPICS, THE PRIMARY CALENDAR AND DEADLINES. THE DMC HAS HELD SIMILAR MEETINGS WITH OTHER 2016 PRESIDENTIAL CANDIDATES. THAT IS YOUR FIRST WORD NEWS. SCARLET: WE WILL GET A QUICK RECAP ON HOW U.S. MARKET CLOSED. AND UP DAY FOR THE MAJOR INDEXES, THE S&P 500 BEST WEEK OF THE YEAR AND FOR THE DOW, THE BEST WEEK SINCE FEBRUARY. NEWS SURPRISE THAT ENERGY STOCKS HAD THEIR BEST GAIN OF THE YEAR, COMMODITY STOCKS ALSO DID VERY WELL. ALIX: I WANT TO TALK ABOUT ONE OF THE BIGGEST MOVERS OF THE DAY , LOOKING AT MY TERMINAL 2 LOOK AT THIS LEAD AND SILVER. THE WHITE LINE THAT YOU SEE IS LEAD , THAT WARNED THE SCENE, YELLOW IS A ZINC HAD IT THAT MOVE EVER. AND THAT IS BECAUSE GLENCORE CUT BACK PRODUCTION, 3.8% GLOBAL PRODUCTION. IT IS NOT JUST ZINC, LEAD AND THE SILVER ARE A BYPRODUCT WHEN YOU MINE IT. WHEN YOU CUT BACK IN OIL RIG, YOU END UP INFLUENCING NATURAL GAS. THE SAME THING. SCARLET: THIS IS SOMETHING THAT NO ONE EXPECTED, WHEN ALL OF THESE CONCERNS CAME UP ABOUT GLENCORE, THIS IS RIPPLED THROUGH THE REST OF THE MARKET. ALIX: THIS IS GOING TO PUT ZINC INTO A DEFICIT THIS YEAR AND NEXT YEAR, SAID GLENCORE WILL LOSE OUT ON EARNING POTENTIAL, BECAUSE THEY ARE GIVING UP MONEY, LEAVING IT ON THE TABLE, BECAUSE IT IS GOING TO BE A MUCH TIGHTER MARKET. JOE: LOOK AT MY TERMINAL, A VERY CLOSELY RELATED THEME, THE TOTAL OF OIL AND GAS RIGS IN THE U.S.. THE TOTAL COMBINED IS NOW LOWER THAN IT WAS DURING THE FINANCIAL CRISIS, IT DOES SHOW THAT OIL RIGS ARE STILL HIGH, BUT COMBINED THEY ARE LOWER. IT SHOWS THAT THERE IS A LOWER SUPPLY COMING ONLINE, SAME THING YOU ARE SAYING ABOUT GLENCORE, PRODUCERS GETTING OUT OF THE GAME, THE SAME THING WITH FLORIDA ORANGES, MORE BALANCED COMING INTO PLAY. ALIX: GLENCORE IS LEAVING IT, THEY'RE GOING TO GET PRODUCTION BACK ONCE PRICES RECOVER, THE SAME THING WITH THE RIGS, YOU WILL GO BACK IN THE SECOND OF CHRIST IS BETTER. -- THE PRICE IS BETTER. SCARLET: LOOKING AT INFLATION EXPECTATION, THIS IS THE TOP PANEL SHOWING -- AND ON THE BOTTOM, CRUDE. OIL IS SUPPOSED TO BE TRANSITORY. YOU CAN SEE THAT THE CLEAR CORRELATION, OIL PRICE SHOWS UP IN THE LONG-TERM EXPECTATIONS, WHEN OIL WAS SINKING, IT DROVE THOSE LOWER, EVEN THOUGH IT IS SUPPOSED TO BE TRANSITORY. WHEN WE COME BACK, WITH THAT THIS MEAN FOR CENTRAL BANKS? JOE: THIS IS DUMB, YOU ARE JUST LOOKING OUT MORE OIL AND NOT GETTING ANY MORE INFORMATION. ALIX: WORLD LEADERS AND POLICYMAKERS WERE MEETING IN PERU FOR THE WORLD BANK ANNUAL MEETING AND OUR COLLEAGUE HAS BEEN THERE COVERING THE EVENT AND INCLUDES A NUMBER OF GUESTS. FRANCINE, YOU HAD THE CHANCE TO SIT DOWN WITH THE U.N. SECRETARY GENERAL BAN KI-MOON TODAY. >> I DID. WE ENDED TWO DAYS OF COVERAGE WITH BAN KI-MOON WHO WANTED TO TALK ABOUT CLIMATE CHANGE, ONE OF HIS MAIN CONCERNS. HE HAD SOME PRESSING ISSUES, HOW HE SHOULD DEAL WITH ISSUES RISING BETWEEN THE U.S. AND RUSSIA. BAN KI-MOON: WHEN WORLD LEADERS ISSUE FAR-REACHING AGENDAS, THAT MEANS GOALS ARE PEOPLE HUNDRED AND WE MUST ALSO PRESERVE -- OUR MAIN REASON IS TO HELP PEOPLE AND MAKE THEM SAFER, MAKE A SUSTAINABLE PATH, THAT IS THE MAIN DIVISION. NOT ALL THE PEOPLE, GOVERNMENT OFFICIALS, VARIOUS COMMUNITIES AND SOCIETIES, PARTICULARLY -- THEY SHOULD GO BY THE RULES , BUT IT IS A GREAT DISAPPOINTMENT TO ALL OF US WOULDN'T HAVE A VISION, WE SHOULD BE IMPLEMENTING CIVIL SOCIETY AND I AM COUNTING ON ACCOUNTABILITY, MAKING PRODUCTS. >> WE TALK ABOUT CHINA, INTEREST-RATE HIKES, THE UNCERTAINTY OF GLOBAL GROWTH, HOW MUCH OF THAT IMPACTS THAT? ARE YOU WORRIED ABOUT WORLD GROWTH? BAN KI-MOON: ACCORDING TO THE WORLD ECONOMY AND PROSPECTS, THE WORLD ECONOMY REMAINS SUBDUED, LOWER THAN THE LEVEL OF 2008 GLOBAL FINANCIAL CRISIS. WE EXPECT GLOBAL ECONOMIC GROWTH WILL REMAIN AROUND 2.8% BY THE END OF THIS YEAR AND THERE WILL BE MODERATE INCREASES BY THE END OF NEXT YEAR, MAYBE 3.1%. THIS IS TRUE OF LINGERING WEAKNESSES, AGGREGATE DEMAND TO ADVANCE THE ECONOMY AND VERY HIGH RATES, THERE IS POLITICAL INSTABILITY IN MANY PARTS OF THE WORLD, THAT REALLY CAUSES THE SLOWING DOWN OF OUR ECONOMIES. WITH ALL OF THIS, THERE IS THE GOVERNMENT AGENDA, SOCIOECONOMIC ENVIRONMENTS. IF WE PUT THESE SINGABLE DESK SUSTAINABLE AGENDAS INTO PRACTICE, I AM SURE THAT THE WORLD ECONOMY WILL GRADUALLY INCREASE. >> KICKOFF ABOUT POLITICAL INSTABILITY, HOW SHOULD WE DEAL WITH SYRIA? BAN KI-MOON: IT REQUIRES GLOBAL SOLIDARITY AND STRONG EMPHASIS ON HUMAN RIGHTS. I AM DEEPLY CONCERNED THAT THERE IS A LEVEL OF RESPECT FOR HUMAN DIGNITY THAT MANY PEOPLE, TENS OF THOUSANDS OF PEOPLE BEING KILLED BY CONFLICT, BUT WHAT IS IMPORTANT IS THAT THE LEADERS EXPECTATIONS SHOW A STRONG BUSINESS ON HUMAN RIGHTS, THEY SHOULD THINK ABOUT THEIR OWN PEOPLE. BUT, HUMAN RIGHTS AND HUMAN -- COMES FIRST. THE UNITED NATIONS HAS TAKEN HUMAN RIGHTS UP FRONT AS THE NUMBER ONE PRIORITY, LOOK AT THE HORRIFYING IMAGES WE ARE LOOKING AT IN EUROPEAN PARTS OF THE WORLD WITH REFUGEES, THEY ARE FLEEING THE WARS AND PERSECUTION. THEREFORE, YOU ARE PROTECTING HUMAN RIGHT, THAT IS OUR TOP PRIORITY. >> IN THE LAST FEW DAYS, THE SITUATION IN SYRIA HAS GOTTEN MORE COMPLICATED, SO WHAT DO YOU THINK ABOUT TENSION WITH THE U.S. AND RUSSIA ? BAN KI-MOON: THE RUSSIAN AERIAL ATTACKS, STRIKES HAVE BEEN CONTINUING, WE ARE CONCERNED THAT MILITARY ACTIVITIES SHOULD BE STRICTLY CONDUCTED UNDER THE HUMANITARIAN LAW AND HUMAN RIGHTS LAWS, THIS IS WHAT HAS WRITTEN TO RUSSIAN LEADERSHIP AND IT IS MY SINCERE HOPE THAT WHILE IT IS IMPORTANT TO CITE TERRORISTS -- FIGHT TERRORISTS, IT IS IMPORTANT TO PROTECT THE HUMAN LIVES, PARTICULARLY NOT IN FACT THE CIVILIAN -- IMPACT THE CIVILIAN POPULATION. >> WHAT YOU THINK IS PUTIN'S IN GAME, TO DISTRACT FROM UKRAINE? BAN KI-MOON: I DO NOT KNOW WHAT IS IN THEIR MINDS, BUT I HAVE MADE IT CLEAR, WHEN YOU HAVE JOINED IN THIS MILITARY -- YOU MUST PROTECT HUMAN LIVES. >> I ALSO ASKED HIM ABOUT IRANIAN SANCTIONS AND IF THEY SHOULD BE LISTED ALL AT ONCE OR PHASED OUT, HE DID NOT COMMIT ON THAT COMING HE SAID THAT HE NEEDED TO MAKE SURE THAT IRAN CAN RISE WITH THE AGREEMENT EVERY STEP OF THE WAY. ALIX: THANK YOU FOR ALL OF YOUR HARD WORK. SCARLET: BREAKING NEWS, DELL IS OFFERING TO BUY EMC, THIS IS ACCORDING TO PEOPLE FAMILIAR WITH THE MATTER, THAT WOULD INCLUDE THE VALUE OF A TRACKING STOCK. THAT WOULD EQUATE TO ABOUT EIGHT DOLLARS A SHARE . THIS COULD BE COMPLETED AS EARLY AS MONDAY AND IT WOULD INCLUDE ABOUT $40 BILLION IN FINANCING, WE KNEW THAT THERE WAS A BIG DEAL IN PLACE AND BUT $40 BILLION IN THE NUMBER. ALIX: EMC STOCK IS HIGHER , BUT IT IS TRADING UNDER THREE DOLLARS A SHARE, SALON BELOW OF THAT $33 OFFER PRICE. THIS IS AN ACTIVIST INVESTORS STORY, THE EMC OWNS ABOUT 80% OF VMWARE. THEY WANTED TO DO A SPINOFF OF VMWARE INSTEAD, MAYBE THIS IS ANOTHER OPTION, THE DEAL COULD BE ANNOUNCED BY MONDAY. SCARLET: WE'LL HAVE MORE OF THIS LATER, IN THE MEANTIME, WHAT IS COMING UP. ♪ [LAUGHTER] SCARLET: INCREASED EXPECTATIONS FOR A DOWNTURN IN THE U.S. ACCORDING TO THE SURVEY, THE PROBABILITY THAT THE U.S. WILL IN TURN RECESSION CASH WILL ENTER RECESSION HAS INCREASED 15%. WHAT DO YOU MAKE OF THAT, ARE WE THAT FRAGILE THAT A RECESSION IS LIKELY? >> KNOW, THOSE PEOPLE PREDICTING 10% WERE WRONG. THEY HAVE INCREASED IN THEIR PROJECTIONS AND THEY ARE STILL AROUND. I DO NOT SEE A RECESSION THIS YEAR OR NEXT YEAR. JOE: WHY ARE YOU NOT MORE WORRIED ABOUT CHINA AND MARKET VOLATILITY? >> THE U.S. ECONOMY IS ONLY A LITTLE BIT IMPACTED BY EXPORTS, IMPORTS ARE MAJORLY IMPACTED AND COMMODITIES THAT ARE PRODUCED IN THE U.S. ARE IMPACTED, BUT LOWER EXPORTS ONLY IMPACT IS A LITTLE BIT. THAT'S US A LITTLE BIT. THE KEY THING TO LOOK AT IS HOME SALES AND THEY ARE FINE. JOE: LET'S TALK ABOUT HOUSING, WE HAVE A CHART. HOUSING STARTS HALF, A LONG WAY -- HAVE COME A LONG WAY UP. >> YOU WILL SEE THE MULTI FAMILIES COME UP A LOT QUICKER, THAT HAS REALLY BEEN DRIVING IT. SINGLE FAMILY IS REALLY LOW. WE STILL HAVE A LONG WAY TO GO FOR SINGLE-FAMILY AND WHEN WE TALK ABOUT DEMOGRAPHICS, THE DEMOGRAPHIC ARE SLOWLY SHIFTING FROM RENTALS TO HOME OWNERSHIP, ESPECIALLY IN IN THE NEXT DECADE. ALIX: CAN YOU REALLY LOOK AT THIS ECONOMY RIGHT NOW AND SAY THAT WE HAVE NOT SLOWED IN THE LAST THREE MONTHS? >> WE HAVE SLOWED, BUT FOR THE REASONS EVERYBODY UNDERSTANDS, THE OIL, LOWER EXPORTS, BECAUSE THERE IS A SLOWDOWN IN THE GLOBAL ECONOMY. THAT IMPACTS SPORTS, BUT THE U.S. ECONOMY, I WILL NOT SAY THAT WE ARE IMMUNE, BUT IT ONLY HAS A SMALL DRAG ON THE U.S. JOE: WE HAD SOME WEAK JOB REPORTS, BUT WE HAVE HEARD FROM ECONOMISTS THAT MAYBE THIS IS OK THAT WE ARE STILL ADDING JOBS AT A RATE THAT IS MORE THAN SUFFICIENT TO TIGHTEN THE LABOR MARKET, YOU AGREE WITH THIS THEORY, WE COULD DROP AND THAT WOULD STILL BE FINE, GIVEN DEMOGRAPHICS AND THE CYCLE? >> I WOULD RATHER SEE 200 OR OVER 200, I EXPECT THE JOB GROWTH TO SLOW, THERE IS NO WAY TO HAVE JOB GROWTH WE HAD LAST YEAR GIVEN THE CURRENT DEMOGRAPHICS. ANYTHING ABOVE 90,000 ON A SUSTAINED BASIS WOULD LOWER THE UNEMPLOYMENT RATE, SO 150, I WOULD LIKE TO SEE 200, 150 SHOULD DO IT. ALIX: I KNOW THAT YOU DO NOT BELIEVE WE WILL HAVE A RECESSION , BUT WE DO HAVE ONE EVERY 7-8 YEARS. DO WE PRESUME THAT THE NEXT RECESSION WILL BE SHALLOW? >> I HOPE SO. I DO NOT THINK THAT YOU CAN PRESUME THAT, IT DEPENDS ON THE CAUSE OF THE RECESSION. THE MOST LIKELY CAUSE NEXT TIME IS TIGHTENING TOO MUCH AND WE SLIPPED INTO A RECESSION , THAT HAS BEEN THE TYPICAL CAUSE. THE LAST TWO RECESSIONS WERE CAUSED BY BUBBLES BURSTING, SO HOPEFULLY THAT WILL NOT BE THE CASE IN THE NEXT ONE. JOE: OK, YOU WILL STAY WITH US TO TALK ABOUT DEMOGRAPHICS. ♪ JOE: I AM JOE WEISENTHAL, "WHAT'D YOU MISS?" WE ARE TALKING ABOUT DEMOGRAPHICS AND HOSTING. YOU JUST A WERE TALKING ABOUT DEMOGRAPHICS AND HOME OWNERSHIP, WHAT DO YOU SEE HAPPENING IN THE ECONOMY? >> FIVE YEARS AGO WE WERE TALKING AND I WAS ARGUING THAT WE WOULD SEE A LOT OF MULTIFAMILY HOUSING STARTS AND RENTERS, ONE YOU SAW WAS FORECLOSURE TO RENTING AND THE OTHER WAS DEMOGRAPHICS, A LARGE COHORT MOVING INTO A NEW HE PREPARED. THAT IS NEARING THE END OF THE GROWTH SPURT, SO IN THE NEXT YEAR OR SO, THAT WILL PEAK AND WE WILL START LOOKING AT A PICKUP IN HOMEOWNERSHIP AND RENTALS SOFTENING. JOE: WHAT IS THE COVERT -- COHORT THAT IS MORE INCLINED TO RENT AND WHEN YOU PEOPLE START ACTUALLY BUYING? >> HISTORICALLY, PEOPLE RENT IN THE 20'S. OTHERS OVER 85. LESS SO IN THE 30'S. SO, AS THOSE PEOPLE MOVE INTO THEIR 30'S, THEY BUY HOMES. BEHAVIOR COULD SHIFT, STUDENT LOANS COULD SLOW THAT DOWN, BUT IT SHOULD HAPPEN AND IT WILL MOVE FROM RENTING TO OWNING. JOE: THIS SHIFT, COULD IS ILL BE BULLISH -- COULD IT STILL BE BULLISH AS PEOPLE CHOOSE TO LIVE IN CITIES? >> IT COULD BE. THIS IS ONE OF THOSE DATA ISSUES, IF YOU FOLLOW MULTIFAMILY, SOMETIMES THEY MIX CONDOS FOR SALE WITH RENTALS, SO YOU HAVE TO BE CAREFUL. WE COULDN'T SEE A LOT MORE CONDO COMPLEXES -- WE COULD SEE SOME MORE CONDO COMPLEXES. JOE: FROM YOUR PERSPECTIVE IN CALIFORNIA, WHAT DO YOU SEE AROUND YOU? YOU CHRONICLED THE HOUSING BUST OUT WEST MORE CLOSELY THAN ANYONE, SO DOES WHAT YOU SEE LOOK STRONG? >> THE ONE THING I HAVE SEEN IS A LITTLE BIT OF PICKUP IN INVENTORY IN HIGHER-PRICED AREAS, BUT NOT A RIDICULOUS AMOUNT. PRICING IS ILL STRONGER -- STILL STRONGER THAN I EXPECTED. JOE: WE HAVE CHARTS TALKING ABOUT HOUSING MARKETS IN PORTLAND, WHAT INTERESTS YOU ABOUT THIS MARKET? >> I WAS TALKING TO AN ECONOMIST THERE AND WE WERE TALKING ABOUT THIS ISSUE IF HE PUT TOGETHER A PRESENTATION SHOWING BASICALLY WHAT I PREVIOUSLY SAID, BUT JUST FOR PORTLAND, WHERE THE POPULATION IS MOVING INTO THE -- AGE GROUP AND HE IS THE ONE WHO CAME UP WITH THAT TITLE OF THAT POST, GETTING CLOSE TO PEAK RENTAL. AND PORTLAND, IT DOES LOOK LIKE IN THE NEXT 5-10 YEARS WE WILL MAKE THAT SHIFT. IT IS HAPPENING EVERYWHERE. HE PUT TOGETHER TWO GRAPHS, ONE FOR 2015, AND ONE FOR 2025 AND THAT SHOWS THAT WE ARE PROBABLY MOVING PAST PEAK RENTALS. JOE: THANK YOU, BE RIGHT BACK. ♪ . . SCARLET: I AM SCARLET FU. "WHAT'D YOU MISS?" J.P. MORGAN WILL KICK THINGS OFF TUESDAY. AFTER THE MARKET CLOSE, KIND OF UNUSUAL. ALIX: I AM TAKING A LOOK AT NETFLIX. THAT WILL BE A HUGE COMPANY TO WATCH. LOOK AT THE BLOOMBERG TERMINAL FOR THE NUMBER THEY NEED TO PAY ATTENTION TO. THIS IS INTERNATIONAL SUBSCRIBER GROWTH. THAT IS A STRAIGHT LINE UP. DOMESTIC SUBSCRIPTIONS COULD ADD BY 17%. WE HAVE LEVELED OFF A LITTLE BIT. THIS IS WHERE THEY ARE PUTTING THE MONEY. THIS IS WHERE THE GROWTH COULD BE. JOE: ANOTHER THING YOU DON'T WANT TO MISS NEXT WEEK, WE WILL GET MORE ECONOMIC DATA. RETAIL SALES WEDNESDAY. THE CONTROL GROUP, ANALYSTS ARE ESTIMATING GROWTH OF 0.3%. THE HERO OF THE U.S. ECONOMY AND ARGUABLY THE WORLD ECONOMY IS THE U.S. CONSUMER. ALL ABOUT DOMESTIC DEMAND. EVERYONE WILL WANT TO SEE IF THAT HELD UP THROUGH SEPTEMBER. WE WILL BE WATCHING. ALIX: THAT IS IT FOR "WHAT'D YOU MISS?" THANKS FOR WATCHING. SCARLET: WE WILL SEE YOU HERE MONDAY. ALIX: HAVE A GOOD WEEKEND.