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tv   Closing Bell  CNBC  November 28, 2016 3:00pm-5:01pm EST

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next 17 months before castro, the next castro supposedly steps down. >> thank you so much. continued good luck and good reporting from havana. thank you so much for watching power lunch. "closing bell" starts right now. welcome to "closing bell" i'm in today for kelly evans here at the new york stock exchange. >> welcome back. cracks in the trump train. we have winners since the election day giving back some of those gains today. some of the biggest losers have seen signs of life. everybody is switching places here. we will look at what it means for your portfolio coming up. it is cyber monday. many retail stocks have been on fire since the election but they are in retreat today. we will look at whether the rally in the names could be coming to an end.
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>> have you bought anything yet today? >> i have not. online over the weekend on my cell phone. i have been working all day. >> very mobile device trend. oil prices are on a wild ride today ahead of the key opec meeting. lots of rumors about whether a deal to cut production will be reached. but the price has just been all over the board today. and the power of a ticker symbol. why underarmer shares are popping today. this is an interesting story and at least one of their shares are popping more than the other. >> my favorite story of the day. let's start with the market and what appears to be a fading trump rally. the dow down 40 points right now after setting an all-time high on friday. bob pisani, what do you think? >> obviously, we are just off historic highs. take a look at sectors that have
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had the most gains. those are small caps, transportation stocks and bank stocks. what is down today? russell 2000, dow transports and bank stocks. look at the etf for banks. basically it has flattened out. the big gains were two weeks ago. the last week or so banks have been mostly side ways. same with treasury yields. they had big spikes up and have been side ways for the last week here. another little bit of concern retail investors getting bullish. the retail survey, 50% bullish. that's the highest level that we have seen in about two years. these are indicators when retail investors get bullish usually it is a sign of market tops in the short term. traders over the weekend, long list of things that could slow the rally down. dollar strength that can be a
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big problem overall. more aggressive rate hike talk from the fed. maybe trade war talk from the trump administration and a lot of talk about stimulus and tax cut and reduced regulations. we have no hard data on any of this. most of these events 2018 events particularly on things like infrastructure spending. the markets move a very long way in a short time. >> good to see you. welcome back. let's get to our "closing bell" exchange. renee norris is back with us. so is peter costa of empire executions. and rick santelli checks in from chicago. peter, i think you characterize this as a tired trump rally right now. >> i think it is tired. i think one thing you should look at is if this is really a sell off because people are taking profits and maybe rotating back into the tech stocks again market would be down a lout more. i think there is a baseline.
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there is still money waiting to be spent and you can just by looking at the charts you can see that the money has a level where it starts getting active again. we bounced off the level twice today. that is actually a fairly positive thing. i think what bob had said before about the individual investor and retail investor being more bullish, i think that says it all. that's almost one of the most fool proof investing things that you can have is having that retail on the market. i don't remember seeing the market going higher. i think that is a very good sign as far as a bearish sign where we have a little bit of sell off. >> have to watch sentiment indicators. how have you repositioned post election and do you think that the trade continues and why? >> i think it will continue. we are getting our clients ready for reflation trade. we are paying attention to four is. the first one is interest rates.
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people have to make a decision about looking at their fixed income very differently. we have been in a 30 year plus bull market as far as bonds are concerned. i like financials quite a bit. insurance companies. >> run up about 11%. >> yes. i do. insurance companies in particular, asset managers i think are also great. we are taking a little bit of a break right now. i do think that nancy reagan is still quite a bit of road ahead. banks and financials have been in the toilet for quite some time. the other areas we are looking at are inflation. there has been a little bit of uptick in wage growth. so we are positioning our clients to pay a little more attention to what kind of impact that is going to have on their portfolios. increased growth with the very high likelihood that we are going to see a cut in corporate taxes, less regulatory ties. we like small to mid cap growth even though they have moved up
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quite a bit. the small to mid cap stocks we think will do great. last is inflation. we haven't had inflation in our system for quite some time. with infrastructure build out materials and industrial companies are going to do great. >> i have been reading so many eulogies for the bond bull that we have seen since the early 1980s. are you convinced that it is over? >> i am pretty much convinced. keep in mind when you say a 30-year bull market things happen slowly even though you say it quickly. i think it has ended. i think rates are going to go up. i don't think they are going to go up in an extraordinary fashion. many would say 40, 50 base points before the election and after the election isn't that extraordinary? i would say it is aggressive but not extraordinary considering that it happened from a level around 135. i do think that interest rates may continue to hold and slowly move higher, though.
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i would look towards what happened in august. we made a base in the 150s in august. the entire month closed there. we are putting a long string of 230 closes in. building a base most likely for yields to move higher. same said for the dollar index building a base with 101 or higher closing with today's minor setback. last equities i look overseas, banks in shambles. deutsche bank recovering. i think the equity markets here will find many new investors from over there in europe especially considering mario drrks ragi can't put his arms around policy because there is no policy to do magic sheets better than markets themselves. >> so peter rick brings up the italian referendum this weekend. the ecb meeting we have a jobs report this week. we have an opec meeting and we
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are hitting key event risks after the election trade may be fading a bit. which one do you think matters? >> i think we start off with wednesday. i think with the opec meeting the thing about opec is that you have 15 or 17 countries or whatever it is maybe less or more, they couldn't agree about anything. so for them to come across and agree on cutting production i think is probably about a 25% chance of that. i think they never get their stuff together. i think once you get past that you have to look at the jobs report. i think the fed is obviously watching that. then we wait until next week to see what the fed determines the right move is. i don't think they should be raising rates anytime soon. i don't think we have enough momentum in the economy. >> there is 100% odds in the market. >> i think that i agree they will raise rates. i doingt had it is warranted. i think the momentum in the economy if you have to say
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something to stop it that would do it. why would you want to stop the momentum in the economy? >> 25 to 50 longer? >> i knew that was coming. >> i don't think we should do it. i'm dead set against it. >> i wish you had said that earlier because that would have made for interesting conversation. thank you all. the fight for who will be next secretary of state heats up. john harwood is outside trump tower in new york with the latest. >> reporter: we are seeing a lot of people walk into trump tower including paul atkins former sec commissioner who is heading the financial regulatory portion of donald trump's transition team. we haven't seen a lot of decisions come out. no announcements today. we don't expect any. here are big decisions we are
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waiting to get from the president-elect. first of all, there is the secretary of defense, general james mattis is considered the front runner. there is former george w. bush national security adviser and waiting to hear about secretary of treasury steve mnuchin. others including jeb hensauraling. and you have john allison active in the kateo institute. secretary of state is a huge decision for donald trump to make especially now that the policy choices have become more dramatic on cuba. you have rudy giuliani, david petraeus is meeting with donald
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trump today. he is another possibility. also tomorrow bob corker, the chair of the senate foreign relations committee will be meeting with the president-elect and so will mitt romney for a second time. don't know whether mitt romney is still a vibrant candidate. we saw kellyann conway. >> it is fascinating to watch. keep the one camera planted at trump tower. we are going to take a break. we have 50 minutes left in the trading session here. any gain will be new all-time highs. so far that is not happening. the dow down 37 points. >> and the russell down for the first time after five straight days of going up. we look at the reaction for cuban leader fidel castro.
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>> for jim grant is with us. he says president-elect trump will in his words fumigate the fed once he takes office. we will talk about what that means and the impact it could have on so-called trump equities.
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you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. welcome back. let's get you some other movers in today's trade. time inc. shares soaring after word got out that the company reportedly rejected a takeover bid. the new york post reporting that it was offered $18 a share which would value the publisher at $1.78 billion. he is a former chief executive of warner music and has a long history in the media and entertainment world. that stock up to $16.10. shares of cognizant technology higher on the news that elliot management is calling for changes there.
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elliot says the i.t. firm should boost profitability and return more cash to shareholders instead of just focussing on revenue growth. elliot holds a 4% stake in the company and trading up almost 7%. the death of cuban president fidel castro and incoming trump white house raising a lot of questions. bertha coombs has a look as how cuban americans and businesses are reacting there. >> reporter: one attorney who works with american businesses in cuba summed it up best. fidel's death changes nothing in some ways but changes everything for others. the revolution may be entrenched if you ask the owner of this restaurant who came over just 12 years ago. some of the younger generation say still want to keep things the way they are. he is not spigexpecting things
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changeover joith. >> i don't think will change. same structure. strategy to change the cuban system. >> reporter: but there are those who support donald trump in this community who feel that the president-elect has an opportunity to seize the moment and push the new generation of cuba to move this economy forward. >> we understand what rule of law is, what the institutions are all about. we get that. it is important for us to work that and try to not implement it but try to influence the way that business is done. >> reporter: he thinks there is a strong appetite there in the next generation to make things more open. perhaps not the way we want them, though. back to you. >> thank you. bertha coombs in miami.
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which companies or sectors are positioned to benefit from these eased relations between the u.s. and cuba? >> joining us now for answers is philip peters and jose fernandez. welcome to you both. jose, he has been out of power for a few years now but has fidel castro's death changed the equation for u.s. businesses that have been hoping to do more in cuba and find those growth opportunities? >> his death comes at a difficult moment in u.s./cuban relations. you have the election of donald trump and now the death makes it a lot more difficult. you already have a number of u.s. companies that are doing business in cuba some in the hotel sector. there is a lot of interest in agriculture. one of the things that president obama did recently is he liberalized services in infrastructure and also liber liberalized a strong sector in cuba which is pharmaceuticals.
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that is something i think you can expect a number of joint ventures. >> what about you, philip? you think that there will be no change. how can there not be with the kind of talk we heard from the trump camp on the beth of fidel castro that he is not opposed to changing the whole relationship? >> the death of fidel castro will not change the equation in cuba. he has been out of office for ten years now. and cuba is opening up in some ways the economy. raul castro has a much more market-oriented vision in the kind of socialist economy he wants for cuba. bit by bit, not fast enough, but are opening up more foreign investment. private investment expanded a great deal. that has created a lot of opportunity. the issue now with regard to opportunities that jose was listing there is whether the
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trump administration is going to change u.s. policy and eliminate some of the openings in our regulations that is allowing the businesses in renewable energy and hospitality and airlines. today jet blue flew from new york the first direct flight since the revolution. that is the issue. since the days of scott masterson. that is the issue now is how the trump administration is going to act. >> that is a broadway reference, by the way there. >> agriculture, that is low hanging fruit to extend that metaphor because they have a lot of fertile land that has been under utilized for the last several years. does that necessarily mean that presents an opportunity for an amd or caterpillar or deere, companies identifying with that industry? >> you have a fairly schizophrenic policy. on the one hand they want
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private investment. cuba has been importing most of its food. they still want state control. they need u.s. companies to navigate the fine line between the state and private sector. >> don't we need congress to lift the trade embargo? >> the agricultural piece has been liberal and sales has been liberal in terms of selling products to cuba. you will need a lot more congressional clarity. right now people are not willing to invest in the long term given uncertainty that exists following the election skbrmpt the thank you both. appreciate it. clearly the discussion on cuba has only just begun. philip peters of the cuban research center and jose thank you for joining us today. less than 40 minutes to go before the closing bell. all three major averages are lower. we are off of lows of the session. the dow down 37 points coming off of record highs we set on
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friday. s&p 500 is down. so thunderstois the nasdaq. the russell breaking the 15-day winning streak. what is in a name? a lot apparently if you ask under armour. >> malls were less crowded on black friday as more consumers chose to shop online. coming up, we will talk to former sacs ceo who tells us what retailers need to do to stay relevant in the digital and mobile world. alzheimer's disease the fi is out there.survive and the alzheimer's association is going to make it happen by funding scientific breakthroughs, advancing public policy, and providing local support to those living with the disease and their caregivers.
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under armour announced plans to change ticker symbols. the prices have been separated by a wide margin. class a shares do have voting rights and currently trade under ua. that is going to change to uaa. meanwhile their c shares trade at a big discount to a shares by about 20%. the ticker of those shares do not come with voting rights. that will change from ua.c to
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the old ticker symbol which is ua. the change becomes effective at the start of trading on december 7. have you seen the shares today? >> it worked. >> i think companies realize that the way to achieve great shareholder value is to buyback your shares, increase your dividend and change your ticker symbol. >> that could be one recipe. at one point there was a 22% spread in between the two. it is right that the c shares should trade at a slight discount. >> this is a big discount. >> they are bringing attention to this. the wall street journal put out a piece saying this is a no brainer e brainer. nike is the worst performer in the dow. athleisure looking more fattish. >> i think the markets fell asleep on that one. market overall trading a little
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lower. dow down 42 points as we head towards the close. trump rally losing steam. two money managers give us stocks that they believe has room to run here. we'll be right back here on "closing bell."
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little less than half an hour before the closing bell. the s&p is down. utilities, telecom and consumer staples have been the losers of november so far after the election and the winners post election, the financials are the worst performing sector down 1.3%. energy, health care, consumer discretionary getting hit despite the fact that oil prices are highhigher. >> yes they are. we have this laundry list of things coming along, the opec meeting, the jobs number. the referendum in italy over the weekend. >> i think the referendum in italy is going to be the overarching theme into the weekend as we move through the week. it is happening on a sunday. once again markets will be
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anxious going into it. italian markets are down 25%. a lot of people seem to think the no vote is priced in. so he decided to create that walking out the door and will leave a political vacuum and potentially a financial vacuum. we saw that today. a lot of banks getting clobbered in italy over what the future is going to mean. >> especially in a delicate time. >> that just throws it right back into the picture. the comedian from the far right in italy and brings up the conversation about does italy need to be in the eu. france is around the corner. it continues to bring up the issues and gives people an opportunity to get a little off the table. >> imagine a guy name polcari worried about the italian referendum. time now for cnbc news update with sue herera. >> here is what is happening. police in columbus have
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identified the somali student who went on a car and knife rampage at ohio state university this morning. 18-year-old was shot dead by police after plowing his car into a campus crowd and then jumping up to stab people with a butcher's knife. the incident was reported as an active shooter situation but he did not shoot anyone. the first commercial flight from the united states to havana in more than 50 years has landed in cuba. the arrival came as the island begins a week of memorial services for fidel castro. in germany the pilot's union is expanding strikes after national carrier failed to resolve a four-day walkout. and a skating rink in southwestern japan has been shuttered amid protests after it froze 5,000 fish into its rink.
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the idea was to give visitors a sense of skating on an ocean. now the rink's manager has been forced to apologize. that is the news update. i will send it back to you. >> that is a wild sight. >> thank you so much. >> you are so welcome. >> see you next hour. you may not think of omaha, nebraska as the center of e commerce but if you made an online purchase today there is a pretty good chance your transaction was processed in omaha. kala is in cyber command center with details. wondering if you saw the transaction go through? >> i didn't but i can imagine that sara has transacted many times today and if she hasn't she probably still will. if your transaction doesn't get processed here very likely it originated here because it prints 250 million credit and debit cards. they process $2 trillion in
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transactions a year between those cards issued by banks and their merchant network which as you can see behind me is nearing $5 billion of transactions processed just since midnight. we have been talking about exclusive data that they are seeing all day today. we are told by executives that e commerce sales growth is still on pace for close to 15% compared to that in 2015. and that cyber monday activity has been brisk but momentum has been picking up and that the portion of transactions that are e commerce transactions on the company's network is double that of a normal monday. they are currently processing 4,000 transactions a second. traditional volume there is 2,500 per second. if you haven't done your transacting yet and if you are trying to search for deals we spoke to president about when the biggest periods of activity are and it turns out it is the window we are in right now.
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take a listen. >> last year on cyber monday we sold tremendous amount of activity one in the 2:00 to 4:00 p.m. timeframe and other in 6:00 to 10:00 p.m. timeframe. >> of course, there have been questions about whether consumers going online would see promotion fatigue. so many deals began early last week and have already had time to snap up a lot of hot items. online activity for black friday and thanksgiving was strong. there are questions about conversion because you go online and searching for something that you might want to buy doesn't meeb that you are going to buy it. smart phones had a rate of 2.4%. tablets just shy of 5%. desktop searches better than that. companies are hoping that cyber monday is different because so many people go online intending to purchase something and i don't know exactly what i intend
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to purchase yet but i plan on doing my part later today to help the u.s. economy as i'm sure you guys are, too. >> i'm looking right now. it's not just retailers. seamless is advertising get your e gift cards. all of those services. >> thank you. a national retail federation survey found of the consumers surveyed, 44% say they shopped online versus only 40% that said they shopped in store this holiday weekend. >> how can traditional retailers compete with e commerce? should they? joining us now former chairman and ceo of saks. good to see you. you have been out of it for a few years. so much as changed in that time you have seen this diffusion away from the big days like black friday and now we have cyber monday. a lot of retailers are starting their sales a lot earlier and then, of course, the role that e
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commerce is playing right now. >> i think everything is blurry. it is anywhere anytime the consumer wants to buy. i think it has all been driven by the smart phone allowing perfect information. you can scan the items. know the lowest price and the consumer is the winner. what is happening is that the traditional brick and mortar players have to invest very substantial dollars to be effective retailers. that is why you see a wal-mart buying a >> the narrative is there. the question is at what cost and how deep are the promotions. i did do shopping online this weekend on my phone because usually i wait for deeper discounts later in december. they were coming this weekend. 60%, 50% off type sales. maybe higher sales but lower margins. >> i don't know about that. i'm not so sure that that will be the case. this is everywhere it is a
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promotion. p vebt ve inventories were in line. i wouldn't be surprised if you see margins hold up pretty well during the holiday season. you found the big guys, dick's, targets, wal-marts, macy's were winners. they did extremely well during that black friday and cyber monday. you are finding even though aggregate numbers show relatively stable foot traffic the internet in the 20% range those guys did better than the aggregate. >> how about an amazon. >> amazon is a blowout. i think amazon is going to be a winner. they are the gold standard that everybody has to deliver the experience against. it is not just the volume but the experience that they deliver in terps of the checkout, the recommendations for you. that is the investment that other companies are having to make to meet those standards. >> it's interesting to hear you
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talk so optimistically about some of these big box stores and department stores because it wasn't long ago that we were seeing results that were soft and some real questions that were facing stores. what changed? was it an overall macro thing or are they making the drastic changes that are necessary? >> they are making drastic changes. eight out of ten top retailers are the big box brick and mortar. they are making those investments but they have threats that six months ago this category of sector was written off. take a stock like macy's down to $30 a share. you seeing earnings aren't that good. they had weather-related issues. it's never as bed as it seems and probably isn't going to be as good as some people want to make it out to be. however, the categories, the businesses are very healthy. i think they have the right investments that they are
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making. the traffic and the volume are good start to the season. you have a lot of heavy lifting to do in the next three weeks. you have gift cards. don't think it ends on christmas day. you have the after christmas is just as important as prechristmas and redemption of the gift cards, the returns. all of that is ahead of us. >> prices get lowered even more. >> prices are so low right now. you are doing the consumer is winning no matter what. >> former chairman and ceo at saks. we have a news alert. what is that all about? >> it is about a lawsuit. there are numerous reports out there saying that theranos is being sued for alleged fraud specifically the lawsuit alleges that the company theranos made false and misleading claims about operations and technology
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and results while soliciting money from investors. the suit alleges that the company was misleading and cites inspection findings by federal regulators. it says the inspection findings by federal regulators lend credence to its suit which alleges fraud after the inspection results theranos voided two years of test results run on testing platform and as you know has since shut down its laboratory operations. this suit is being heard in san francisco. it is seeking class action status. so we are going to keep a very close eye on that for you. back to you guys. >> how the fortunes have turned. >> absolutely. >> thank you. less than 20 minutes to go here before the closing bell. looking at declines. financials and energy getting hit hardest in the s&p 500 which is down about half a percent. russell down 1.2%.
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the trump rally taking a bit of a breather today. oil is heading higher at least it is right now ahead of this week's opec meeting. we will head live to find out what is fuelling the crude comeback. and could rising interest rates be the biggest threat to the trump rally? jim grant weighs in on that plus the potential politics of a changing federal reserve later on "closing bell." why pause a spontaneous moment? cialis for daily use treats ed and the urinary symptoms of bph. tell your doctor about your medicines,
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looks like stocks are pulling back after what has been a strong month and a strong post election rally. the dow is down about 65 points. nike interestingly is the biggest decliner in the dow. s&p 500 down a little more than half a percent. the banks are getting hit the hardest. they have been winners. the nasdaq down 0.6. this comes out to three straight weeks of gains for the major averages. threatening to snap what is the longest winning streak since 1996. let's send it to seema mody for a quick market flash. >> one sizable move we are seeing is in the gold miners rising after precious medal
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rebounds. the etf hitting session highs up almost 4% but keep in mind still down 15% this month as we see a bit of stability in the price of the dollar. meanwhile, gold prices are down almost 8% over the same period. a pullback in the dollar is helping gold regain strength today. large cup exponents, gold corp all up about 4%. we have to see if this rally can continue. >> thank you. that pullback in the dollar might be also having an effect on oil prices which are stronger today. there is also this big opec meeting on wednesday. jackie has the details. >> good afternoon. this little meeting on wednesday cause ag lot of trouble and volatility in oil prices. it is the anticipation of what the cartel will and will not do.
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remember where prices are right now. still range bound stuck between $45 and $50. there is some event risk. we can fly through that $50 handle if we get a good substantial deal, maybe a cut of more than a million barrels or fall under 45 if we get the same lackluster deal that they were expecting or no deal at all. that is on the table. right now you have the saudi energy minister saying he doesn't think a cut is necessary. maybe setting the stage to kick the can down the road once again which would be an unfortunate scenario because the cartel has strung the market along. it is looking for something at this point. where do we go from here? everyone is being very cautious as we head into wednesday's meeting. that event risk might have caused short covering as well today. this will set the tone for where oil prices will finish the year, whether we see the strength as we go into the weaker demand sea
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breeze or maybe we see that three handle again very possible, too. >> we wonder what would happen first, opec cutting production or fed raising rates. we have been waiting for both of those. >> thanks very much. 13 minutes left in the trading session. the dow down 55 points. >> the trump rally taking a pause today. we have two top stock pickers with names of companies that have more room to run under a trump administration.
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art cashin just stopped by. a billion dollars to sell going into the close. the trump rally pauses today. many investors wondering if they should buy stocks or etfs on a dip like this. joining us, senior portfolio manager and shark tank cohost kevin o'leary. good to see you both. we have seen clear winners and losers following the election. do you stay that course? in other words, the financials have had a pretty good ride here. do you stick with them or is it
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time to take money off the table? >> i do like the banks. banks can benefit from not only rising rates but also a better regulatory environment under the new trump administration as well as lower taxes potentially, as well. i do like the bank group. >> it sounds like you are on the other side of that trade when it comes to regional banks. >> i'm going to go the other way and i will explain my position. i will short the regionals. i will do it as a theme. they have had a fantastic run some 15% to 18%. all on two reasons. one as we just heard a better regulatory environment and increased interest rates. we had a move on the ten year north of 2% now. here is why i like the short
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side of regionals. this concept that we wave a trump magic wand on january 21 and unwind dodd-frank in my view is beyond optimistic. it is highly not probabilism i think you will find that on trump's stance card will be tax reform and obama care repealing long before he deals with dodd-frank. i think the idea that regulatory body is changing for regionals is not going to be there in 2017. the profitability of those banks is based on the ability to lend and reduction in capital requirements. neither of those are going to happen. i'm happy to be short that sector right now having watched it have a huge run. >> and another anticipated strategy from donald trump is the loosening of regulations on energy, more drilling, perhaps. so you're going for energy infrastructure play here in mrc
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global, right? >> yes, they are largest provider of pipes, valves and fixtures. they are the ones that help build the pipelines. they earn a lot of revenue from maintenance agreements with the energy companies. i think they are in a really good position to benefit from the future and build out of energy infrastructure. >> i find it interesting that you are on the infrastructure band wagon. i think you like industrials and materials given your skepticism around rolling back dodd-frank. infrastructure spending you might need democrats to pull that offment we don't know when it is going to come or whether his party will be on board. >> again staying with the king trump theme i think infrastructure spending will be on both sides of the aisle. everybody likes it. materials and industrials are the major beneficiary.
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xli and xlb because i'm capturing both materials and industrials. i like thematic moves. i love etfs. they have had big moves. my thesis is after january 21 that pounding of the drum will be heard on both sides of the aisle saying we need to rebuild america. we need infrastructure. these two particular etfs are major beneficiary of that theme and move. we will have a lot of political momentum unlike deregulation of financials. >> good to see you. kevin o'leary. thanks for your -- >> unhedged long trade. 24% exposure to the pound. coming up next closing count down. >> after the bell jim grant is here to tell us why he thinks president-elect donald trump will, quote, fumigate the fed once he takes office.
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>> i think appropriately so. remember what led the charge. russell down had most. transports down more today. and the bank stocks leading the charge, they are also down. >> some volatility for oil today as we still try and wait for a white puff of smoke to come out of opec meetings. some of which were today. the big ones on wednesday. >> meetings before the meetingsism we have come off that high this afternoon. >> hopefully the market seems to be anticipating that something is going to happen. why? i don't understand. >> and because sara is on today we had the dollar index which pulled back after coming darn close. >> i will show you the bank index. banks had the big run up in the first two weeks and now you see an issue here. other groups have declined.
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pharmaceutical astocks have big runs up. pharmaceutical stocks have been declining overall. regulatory hopes pushed off. >> see you later. we are going out with minus signs. let's talk about that coming up plus more on the second hour of "closing bell." and welcome to "closing bell." i'm sara izen in for kelly evans. a down day on wall street. down pretty much all day long. we finished lower the dow by about 0.3%. s&p 500 losing more than half a percent. here is the russell 2000 index down 1.3%, the first down day in the last 16 sessions. that snaps its 20-year longest
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winning streak. investors widely expecting a fed rate hike in december. we are going to talk to jim grant, publisher of grant's interest rate observer and will note whether rising rates will be a threat to the trump rally. let's talk about the market. we have michael santoli along with ralph. for more on today's market action fast money trader guy adami. mike, the pullback today, a lot of people saying the trump rally was just built on hope and it is over. >> didn't take great plays really. happened fairly low amount of drama. i do think it is a logical place for the market to flatten out. you had some short term investor sentiment measures getting happy. it's not the decisive factor but
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the fact that people rebound. you would be selling stocks to buy bonds. you see that activity. the russell 2000 was on a bit of a ridiculous tear. so all of this stuff is at work plus you have big stuff happening, opec meeting, italian referendum. to me a logical pause. >> would you try to trade oil ahead of the opec meeting? >> no. you know exactly what i'm talking about, bill. i know you know. sara sara eisen is making one of these faces. playing the role with the transports. if you look at transports. >> is that a sports thing? >> there is a real potential for double fop you go back to heisman. in terms of trading oil ahead of this i will say that oil volatility index, that is elevated which leads me to
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believe the down side probably outweighs the potential for upside move. >> it was interesting to see oil prices pop. what stands out to you that the decline is worse day for stocks. >> since the election we are still pretty up. there aren't a lot of things that would make one excited about buying stocks today. mixed noise on retail sales. a lot of discounting out there. things like that make people a little bit weary. i always find something to worry about. the italian referendum, this is the most indebted country in europe about to have a real hiccup. >> how have you not turned gray yet? >> i don't know. good genes. >> do we worry about the italian
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referendum after brexit proved buying opportunity, trump election proved buying opportunity, both were consensus risk events that if you listen to most of the experts and most wall street firms you should sell into. now it's a little bit different with italy because we have the no vote in the referendum pulling ahead. >> supposedly. so were they buying opportunities? in retrospect, yes. should they have been? i have no idea. i was on tv with you the night of the election at 2:30 in the morning when the s&ps were down and i said i think the market can bounce from here but i think the real move is to the down side still. now 140 s&p points later here we are. i can't really understand why the market does what it does. all these things in a vacuum are not a big deal. collectively i think they become a big deal and with the overlay a market which i do think is expensive if you look at it just
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on a gap basis then i think the concerns are in play. with that said, technically it is hard to argue with what the market has done. the russell has broken out. as long as it stays above 130 i think things are okay. you have to watch your transports. you have to watch the material sector and i think you have to watch this for signs that maybe the next leg lower is in oil is down. >> very good. we have a news alert on at&t that we have been waiting for. julia boorstin has details for us. >> that's right. at&t unveiling its directv now service announcing they are actually introducing three different video streaming services. directv now which we have been anticipating as well as free view and full screen. there will be four tiers of service starting with $35 a month up to $70 a month. these are going to be over the top services accessed via the internet but will be having an
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introductory offer so you can get for $35 a month 100 plus channels saying this is limited time offer. this is going to be accessed on your television screen through amazon fire tv stick or iphone, ipad and apple tv. the idea is that this would be an alternative to the traditional service but at&t says its in release that they are really targeting not cord cutters but targeting the 20 million u.s. households who dropped cable or who are thinking about cutting the cord. so they also announced they are offering two other services, one is full screen for $6 a month and this is targeting people who are interested in the internet only content and then free view they say lets anyone enjoy content free of charge and supportive video service. the tv bundle alternative and
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then the free ad supporting content. back over to you. >> i have a question. how are they able to do this economically speaking offering more than 100 channels at $35 a month with all the rights fees that are out there? what is the business model? >> the analysts seem to think they are not generating very high margins on this. the idea is this is a valuable thing for directv to bring in more video subscribers. they may only be making a dollar per subscriber per $35 bundle but it is really about bringing more people into the ecosystem and maybe would generate more money with the $70 bundle. if they lure people in there might be options to make money down the line. you is to remember that at&t is in the process of buying time warner so all of that data about what people are watching and how they are watching could be very valuable for time warner as they
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figure out how to program. it is also worth noting that they are doing different tiers and offering this content without selling a cable box, without having to worry about a satellite. it is a different model. if you can figure out how to get the internet in your house then you can get this content and they don't have to worry about sending the set box to your house. amazon trading lower on one of the biggest shopping days of the year. while investors are not buying the stock customers have been busy shopping online. courtney reagan is at an amazon fulfillment center. how is the data stacking up there? >> reporter: all the shopping that you are doing is buzzing over my head. amazon hopes that cyber monday will be another day for the record books but has to beat last year when sellers received orders for 23 million items. that is up 40% from the year
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before. amazon senior vice president isn't so sure that amazon will be able to top its amazon created prime day from this year which is currently the biggest day ever. amazon's black friday did beat black friday 2015. it is estimated amazon will grow twice as fast as other traditional online retailers logging about 2% of annual sales today and it is doing it by getting very aggressive on price. according to price blink which finds the lowest price on products on a typical day amazon's prices are the lowest only 60% of the time. cyber monday is far from a typical day. says the first ten deals on cyber monday, seven beat competitors price by average of 19%. only one is cheaper at best buy by 33% and the other two are exclusive to amazon. amazon shares are lower today
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and that is not actually abnormal for a cyber monday. a study shows since 2005 amazon has been negative on six of the last 11 cyber mondays. shares actually have not logged a gain on cyber monday for amazon since 2012 and the average performance is a negative 0.2%. >> interesting historical perspective on amazon trading. thank you. mike, sort of buy the rumor and sell the fact. >> amazon for multiple reasons, i think it is interesting to get the detail as the season goes on. it is one of the longer stretches you can have between thanksgiving and christmas. had we front loaded a lot of activity you have first days where you have the flurry of e-commerce. i think that stuff is going to be at play when it comes to the stock. >> we had the former ceo of saks
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here. he said amazon doesn't have to beat on every item because the experience is there. their service is so good and so fast that people trade convenience for price. >> it's like a lifestyle. there are people like me who basically don't shop anymore for christmas or whatever. you send it all. this weekend i sent eight people the same book because we have this conversation. it is just so easy. it is seamless. other things like hardware stuff i can't tell you. >> you have to wait to get it in the mail. >> you have stuff like amazon echo. you have the hardware, those things are fascinating. you heard me on the show talking about it. it is one of the game changing devices. the thing about amazon i'm waiting for is when will they start to be like a normal company? post election there is a trump effect when he called them out for antitrust.
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it wouldn't surprise me if you start to see the move trying to generate profits eventually i think breaking out webs service business. >> guy, you can love amazon as a consumer but you can hate it as a stock trader for evaluations or whatever. where do you stand? >> this should come as no surprise but i never bought anything from amazon or anything online for that matter. i'm sure you are all -- >> no. >> i'm being honest. >> what country do you live in? >> i live in the united states of america. i live in new jersey, a fine state. i also say this. rob talks about ease of use. you are supposed to get in your car and wrap the presents. that is what it is all about. ease of use never comes into my sunacular. amazon bounced off of lows. the move lower should come as no surprise. i think the stock does find
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footing again. rob mentioned rolling out aws as its own company. that will probably happen. we can talk about valuation all day long. that has been the knock on amazon for the last 6 0 00 or s dollars. >> i feel like i am in an episode of x files. i think we found one. >> i think guy was at that game in '41. >> now we are tying it all together. i'm going to buy a rookie card on amazon. that will be my first-ever purchase. >> i already wickapediaed it. >> be sure to stick around. you can catch guy and the crew on fast money. a hedge fund manager who called $30 oil is back with an even bolder call at 5:00 p.m. eastern time. first here scientists making
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major medical advances in cuba under fidel castro including developing cancer vaccine not approved in this country. while drug kaechs traded lower today could they benefit from easier access to cuba's bio tech industry? and donald trump has two vacant seats on the fed to fill, maybe more. jim grant says the president elect will have to what he says fumigate the fed. we'll talk about what that means and the impact on the market rally coming up. you're watching cnbc, first in business worldwide.
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today is the third day of mourning for fidel castro. >> reporter: first there was a question because of donald trump becoming president of the united states would the u.s. attitude change? now fidel castro is dead. does that mean the cuban
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attitude will change in any way? certainly the future of the country is on the mind of the thousands of people that we have watched here at the plaza of the revolution stream in to pay their final respects to fidel castro. the people here have suffered economic deprivation over the decades and there were hopes of imimprovement. we poke spoke to a lot of peopl line today. >> all cubans are really, really sad because we lost a leader. we lost a human being. >> do you think things are going to change in cuba? >> nothing is going to change. we will continue the legacy from fidel castro. >> reporter: you're crying.
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why? >> becaunine days of mourning h folks. we are just in day three of this. we expect to see a lot more emotion over the coming days. back to you. >> a mixed emotion from people around the world. thank you. one of the main industries where cuba invested has been bio technology and medical research. just last month the fda approved a clinical trial for cuban developed lung cancer vaccination to be made available for patients here in the united states. >> this is really an untold story. we are wondering what is next for u.s. involvement with cuban bio tech after the passing of fidel castro and as donald trump assumes presidency which companies can stand to benefit or not. joining us is jason colbert and les frontlighter.
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this is something i have not heard. is it an opportunity for u.s. companies going forward, do you think? >> i think it is. it surprised me when i started to look at the facts but in the early 1980s the cuban government started prioritizing the investment in both medicine and bio technology and has spent over a billion dollars since that period developing new drugs. the number of new patents that are held by the cuban government is really surprising. and the amount of drug development going on you mentioned a vaccine against cancer. there is a very interesting an a tibody for head and neck and even brain cancer. and so i think you are going to see interest building particularly among the major pharma companies. >> you were coming at this as a portfolio manager. i think you owned pfizer.
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are those the kind of companies that tend to benefit and be exposed? what sort of names and groups are you looking at? >> the way we view it is we are looking at this as emerging market. part time i invest in africa. it reminds me a lot of african investing. the first ones in are always major multinationals. they have the resources. pfizer, j&j, all going to be players. just remember cuba only has about 11 million people. it's not a huge market but it is a market that has been relatively untapped by our larger pharma and it's close so the logistics of getting there aren't too bad. >> who will actually benefit from opening up the bio tech market in cuba? is this money that goes straight to the raul castro government? is there any way to make sure that this isn't just going to a
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regime that still leaves a few things to be desired? >> i have to go back to my experience in africa. and that is often the case that money finds its way back to the government since it is usually and in this case totally government sponsored. i would say the government is going to make a lot of money particularly out of things developed in cuba. >> the spirit of les's answers this will take a long time. we are not talking about something that will happen overnight and these business opportunities for pharmaceutical giants. >> that is right. the lead times can be years and years. the good news is that all of the research of the last 25 to 30 years in cuba is going to be opened up. i believe it will be opened up and you are going to see it is not so much what is exported to cuba, but which of those research ideas are going to be
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imported and developed for larger markets like the u.s. i think that is the potential that companies like a pfizer or mercke are looking at when they look at research dollars spent in cuba. >> have to go at this point. good to so you both. thank you for joining us today. fumigating the fed. jim grant says donald trump will have to do to the central bank. he will tell us what that means and whether higher interest rates are the biggest threat to this trump rally. >> i think jim would make a fine fed governor. >> the rivalry between boeing and airbus showing no signs of slowing down as the wto rules against the former, boeing, saying key tax benefit for 777 jet violated international trade rules. what this means for both companies' bottom lines coming up.
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we have a news alert by tvo. try not to skip through this report by julia boorstin. >> netflix and tivo announced a licensing agreement. that will include search across the content catalog as well as netflix button on remote controls. separate agreement gives netflix
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a license to tivo patent portfolios. >> thank you very much. julia boorstin. major indexes breaking winning streak today and fed hikes rates in december, will that hurt the trump rally even more? we will talk to jim grant here to discuss that and a whole lot more next. is happening before . sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim the global investment management businesses of prudential.
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you've got to ensure that you do things right, environment included. learn how you can save at together, we're building a better california. welcome back. let's look at how wall street finished. saw something you haven't seen in a while. minus signs. dow, s&p, nasdaq, russell all moving out of record territory after all kinds of win streaks here but not today. the dow down 54 points. the big decliner, the russell down. >> let's get a quick market flash here. >> as you know the outperformance in health care sector has been a topic of discussion in the after math of the election. united health group just reaffirmed the 2016 forecast but perhaps more important for wall street its 2017 guidance has
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come in above analyst expectations. earnings it sees between $9.30 and $9.60 shares are higher by around 2% after hours. >> i have questions about that but i have to move on. how do you provide guidance when you don't know what will happen to obama care next year? time for a cnbc news update with sue herera. >> here is what is happening. a somali student who went on a car and knife rampage at ohio state university has been identified as 18-year-old abdul ortan. he was shot dead by police. nine have been hospitalized with nonlife threatening injuries. health authorities in texas say a woman has become infected with the zika virus. they are now on the alert for that state to become only the
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second place in the united states where the mosquito-borne virus might spread locally. the other, of course, is florida. rick medlin died over the weekend. he ran the kentucky-based business for the past six years. it has 30,000 employees. a time table has been determined for a recount of wisconsin's votes in the presidential election. the state's elections commission says it must be done by 8:00 p.m. on december 12. the commission rejected a green party request for the count to be done by hand. that is the cnbc news update this hour. i will send it back to you guys. >> thank you very much, sue. long term treasuries have risen dramatically as we know since the election. rates themselves as investors seem to know that the fed will be raising interest rates next month when it meets. but will rising rates kill the market? >> that is just one question we
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have for our next guest. joining us jim grant founder and editor of grant's interest rate observer. i think we have to first start with donald trump not sure we have spoken to you since that happened. you voted for him? >> i did. >> on economic reasons? does it have to do with the fed? >> because she is worse. that was my entire approach. two contestants for the worst possible president slight exaggeration. i thought it was a contest for the worst person in america. it was close fought, but i -- >> he has openings to fill next year on the fed. we have been quoting you as saying he will have to fumigate the fed. >> nice piece of alliteration. i think the fed would be better if the business model were radekally overturned. if he will perpetuate the fed.
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some people liken his populism to that of andrew jackson. jackson famously killed his central bank. trump is going to need his. his program is protectionism. his program is infrastructure. his program is nationalism. his program is import substitution. he is a real estate speculator. i think we will get william miller again. >> two open seats right now. even if he goes for people who think differently may not be -- >> it's nothing faded about this. i'm guessing as we all are. it seems to me the hopes of -- i think trump is a kind of empty vessel into which people are pouring hopes and fears and dreads and the great aspirations and it could be that he is going to appoint the second coming of
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adam smith himself to the fed. he is going to appoint somebody who will advance his program. trump on the stumpf said we are in a big fat ugly bubble. i expect he will like the bubble and adopt it as his own. the stock market was 20 1/2 times earnings. when reagan was sworn in it was 9 1/2 times. rag skpn markets were set up for failures. trump's markets are set up for trump's success. >> you say also in the piece that reagan did soon after he got in there touched off this very long 35-year bull market in treasury bonds which we may have seen. do you think that is the case that we likely have seen low in treasury yield? >> i think it is definitively the case. it would be uncanny if a 35-year
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bear market gave rise to a new -- the preceding bear market was 35 years. the following bull market ended perhaps in july, july 8 would have been 35 years. apart from coincides it seems the lows in yield and hiez in price in july were characterized by such extremes of sentiment and zaniness that that would constitute a plausible bottom in yield. i have been one of the world's leading authorities. great practice at it. they are not there for the highest authority on whether it actually happened. >> of course, it is a separate question if those were low in yields exact lehow quickly they go higher. >> it took ten years from 1946 to 1956 to get from 2 1/4 to 3 1/4.
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i think many reasons to suspect that the journey upwards would be faster. >> does that get in the way of the stock market rally? >> no. stock market make a fabulous low and kept going. >> we have been so obsessed with monetary policy. >> like watching the world series. let's talk about the umpires. >> my premise is that we will be focussing more on fiscal policy during the new administration. >> i think we have been focussing on monetary policy because we have come to believe that the central bankers control events. my conviction is that events will be controlling central bankers. >> so you got two openings on the federal reserve board and potentially janet yellen not seeking a second term. you used miller as the example. that was a ceo, is that right? >> he was ceo of a very highly regarded ceo. wall street journal described him as a mix of solomon and
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maybe einstein. everyone loved him when he came in. turns out he was an obedient yes man who advanced carter's program of not rocking the boat. >> what kind of candidate would you be looking for and who could fumigate the fed? would it be someone from the outside or -- >> someone from the outside. the fed is protected by law as a monopoly and is protected by the institution of tenure in colleges. there by insulated intellectually. you want someone from outside the world of academic. i think judy shelton would be fabulous. she is thoughtful. she wrote a book in the '80s. she has a way of looking ahead. she is a student of monetary policy and a gold person. >> somebody who has donald
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trump's ear. >> hard to find a mainstream economist that voted for him. >> my mother told me never accept an intiivation unless it was extended. >> this is tv. >> i see. >> good to see you. >> thank you both. boeing climbing more than 5% since the presidential election as the entire transport sector has been soaring. shares fell slightly today on boeing after the latest shot fired in an ongoing trade dispute between the u.s. and european union. and donald trump's business savvy appeal to many voters but his international business ties that are potential conflicts of interest when it comes to foreign policy. we will take a deeper dive into those when we come right back. what if a company that didn't make cars
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made plastics that make them lighter? the lubricants that improved fuel economy. even technology to make engines more efficient. what company does all this? exxonmobil, that's who. we're working on all these things to make cars better and use less fuel. helping you save money and reduce emissions. and you thought we just made the gas. energy lives here.
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guyhey nicole, happening here? this is my new alert system for whenever anything happens in the market. kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh. alerts on anything at all? not only that, you can act on that opportunity with just one tap right from the alert. wow, i guess we don't need the kid anymore. custom alerts on thinkorswim. only at td ameritrade. let's send it to seema mody with another earnings alert. >> let's talk about recreation vehicle industry thor industry with earnings and revenue beating street expectations thanks to low fuel prices and steady economic conditions. it sees 2017 as a strongest year
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for wholesale shipments since the 1970s. shares up 7% nearly in after hours trade. we'll look at shoe carnival. $600 million of market cap. earnings and revenue missing street expectations the company says the slow sales of boots and slower sales of seasonal merchandise hurting the company's bottom line. shares down 10% there after hours. >> thank you very much. so the world trade organization ruled against boeing saying a key tax benefit that it has enjoyed goes against international trade rules but the decision may not have teeth in the long run. phil lebeau joins us now. at a minimum it will be tied up on appeal for a number of years as these rulings typically are. here is the ruling. this is about a complaint lodged by air bus against boeing.
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one of seven complaints lodged where only one was upheld and has to do with 777 tax on revenue which is a benefit that was waived by washington saying when the plane begins production the impact depends on who you are talking with. boeing says could be as little as $1 billion. airbus says closer to 5.7 billion. subsidies are often disputed between boeing and airbus. it wasn't long ago that boeing accused airbus of getting launch aid when it came to launching the new a 350. as a result airbus is appealing the $22 billion wto ruling as all of this shakes out -- this is going to likely stretch out over many, many years. not like these guys are writing a check right away for these disputed sums. what is interesting is seeing what impact donald trump's
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presidency will have on how the u.s. approaches trade and its relationship with the wto. >> then we are going to renegotiate or pull out. these trade deals are a disaster. world trade organization is a disaster. take a look at airbus. they make more planes than boeing. they got together, all of these countries got together so they could beat the united states. so we are in competition. so we are in competition in one way and helping in another way. it is so messed up. >> that was donald trump as a candidate. let's see what he does as a president in terms of u.s. relationship with the wto. take a look at shares of boeing and airbus group. they tend to move relatively in tandem although boeing is out performing the air bus group. as i said earlier, while we may see judgments come down occasionally, because of appeals and how long this stretches out, rarely do we see bottom line
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impact on the airplane makers where they have to write a check. that is not the way the wto works. it gets a lot of play. i'm not sure it is one where investors say i see a substantial benefit here. >> it is a headline. we can talk about this. it is a headline that i think we are going to get used to, the rising tide of protectionism. it didn't start with donald trump. it was happening before him. the eu imposed, made apple pay back taxes and back and forth. you seeing a lot of it. >> in the context of incoming president who likes to talk about cutting a better deal as if it is just a matter of will, not necessarily adhering to what the world trade organization. >> i thought it would be interesting to see how he deals with the -- basically helps finance sales of big ticket items. if you're america first but -- are you going to have the collision between america first and pro free markets.
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this is just an example but will end up on the president's desk. >> i think america first comes first sblm first. >> i don't know. do we even question -- he is talking about questioning nafta. do we question the world trade organization at some point? >> well, he says as a candidate he said that. it's easy to say when you are a candidate it is easy to say we don't agree with the world trade organization. that is the kind of red meat that a lot of republican voters look at and say absolutely these are not fair trade agreements. we shouldn't adhere to them. it is a far different story when you are in the office and you decide we are going to change certain parts of these trade agreements because as you guys know you make one move in one area it comes back in a different area and might bite you. it is much tougher to do. >> he hasn't talked about tariffs yet. we'll see if he ramps up tariff
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talk again. >> thanks, phil. another black eye for wells fargo as it faces a new lawsuit filed by employees. first, donald trump has business interests in at least 20 countries around the world. while he is proud of the size of his brand that could be a very well source of controversy for trump as president. that story is next. it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?
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trump hotels, trumka see knows, trump golf courses. the president-elect has businesses in at least 20 countries and while he has said his kids will be running them while he's in the white house, there are still conflicts of interest and questions that could arise here. robert frank joins us with the
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details. >> this is a story that just keeps on getting larger. more news over the weekend about the blurred lines between president-elect trump and ceo trump, especially overseas. "the washington post" reporting that trump tower in the country of georgia had been bogged down in government red tape for years, but now it's been given the green light. trump's business partner in georgia saying, quote, there's only one word, pride, in having the american president's name on our building. "the new york times" reporting that trump's partner in the philippines, jose e.b. antionio met with the family just days a of the election. he's been named the government's official envoy to the u.s. that follows all that news about trump's meeting after the election with his indian business partners and a call with partners in argentina where a trump project has been given new life. the economist has a three-part solution. first, you create an independent
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board which should appoint a new ceo. you consolidate trump's hundreds of legal entities and partnerships into one consolidated company, and you make public those financials and all of its activities. lastly, all profits must be paid as dividends and that board would have the right to sell assets but not buy more and the company would be confined to the u.s. as the economist said this, would transform the trump organization from a con fligfli risk to a mature portfolio of assets which would generate rental payments but not conflict of interest stories which it's clear we're going to see no end of for the next four years unless he does something radi l radical. >> i don't see that happening. >> what about the -- at least the reverse idea of not having his children as advisers in his administrati administration. even if that's an artificial thig thing, put some kos met i can wall between the family business
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and the white house. >> a cosmetic wall would just be that. i think that solution -- maybe this is a media obsession and only a media obsession and that's what trump said, but i think you are still going to get these stories, particularly since ivanka has already been in official meetings with the japanese prime minister. you have jared in there, her husband, as some kind of sep my official white house role. so i don't think the kid solution is going to do it but that may be where he goes since his position now is legally i don't have to do anything. >> so the other day he met with john gray who runs global real estate for blackstone. the idea apparently was to talk about him becoming treasury secretary. blackstone put out a statement, very flattered but have a lot of things to do. but john gray and blackstone they have the capacity to take this entire port off their hands. they did it with sam zell, with a -- >> here is the problem. the problem is that the value of the trump organization is largely in the trump name and
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brand. if you take that out, which you'd have to do, it's not worth what it could -- >> but there's a royalty stream of some sort. >> maybe but then you're creating a separate company which still makes money off the trump name only by a different owner who was once affiliated with donald trump. so that's not as clean a solution as many would like. they say, well, just liquidate. that's very hard especially since the trump name is still the trump name. >> and it's going up. >> exactly. >> it is now, but what happens -- this is the problem. you know, this is going to be a tough one. >> yes, it will. >> much more from you on this. >> you're not hearing the hue and cry -- >> because he's not doing anything illegal. >> general counsel at the white house will be talking about it. >> robert, thank you very much. >> thank you, guys. $3 billion, that's how much a new lawsuit is claiming wells fargo pushed into expensive underperforming funds to boost its own balance sheets at the expense of its own employees. we have more on the fallout at wells coming up.
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wells fargo finding itself at the center of a class action lawsuit. employees are claiming that the bank steered $3 billion from the employee retirement savings into expensive underperforming wells
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fargo target date mutual funds. employees are looking to recoup the money lost because of those excessive fees claiming the fund cost 2.5 times more than the funds from rivals like vanguard and fidelity. we reached out to wells fargo on this and the bank said it didn't have any comment on pending litigation at this early stage. might not be such a huge deal except for the fact that wells fargo is under the microscope for its behavior, and this is sort of piling on. >> you do see this occasionally with other companies that also have a money management division, although the fact it was target date funds which basically are index funds that mix stocks and bonds, there's really not a way to run them that much better than somebody else, certainly not better than vanguard. >> and heavy penalties to get out. >> locks you in as a default option. it did cost them excessive fees. on the other hand, almost any option that you have if you want to compare it to a vanguard fund, it's going to be more expensive. does that mean it reduces everybody to saying default to
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vanguard funds? that's a big question. >> that might be one of their arguments. >> it's wells fargo, and wells fargo seems to have a culture problem. they're trying to deal with it. it's one thing to sort of bilk your customers. it's another thing to do it to your own employees. remember, they blamed employees for the cross selling gone wild that had happened before. i think they've got -- they've got to really think about -- i mean, they have a culture problem and they're going to have to figure this out and, of course, the plaintiffs' lawyers figured that out pretty quickly. >> you think? >> there was a soft underbelly on this one. >> i don't know all the details, the backstory on this thing, but i'm guessing it's not an employee who raised their hand and said i think we're paying too much for these funds. i think it's a lawyer who sens d ed an opportunity. >> if you do the math it's 0.2% point per person. it sounds like three times as expensive. it sounds kind of outrageous. >> tim sloan has his hands full trying to change the culture. >> the bank is up 12% so far
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this month. now only down 5% for the year. really participating in the bank rally that is the trump trade. >> indeed. rob, always good to see you. >> pleasure to be here. >> come back anytime. the three of us will be back tomorrow on cl"closing bell." "fast money" begins right now. >> "fast money" starts right now. live from the nasdaq market site overlooking times square, i'm melissa lee. pete najarian, brian kelly, dan nathan, and guy adami. tonight on fast the huge run in small cap stocks just took a breather today. but a top chart expert says the run has much more room to go. plus, the hedge fund manager to called oil's plunge to $30 is back with an even bolder call ahead of the opec meeting this week. he'll be here. later, it is the ultimate throwback trade. the market is partying like it's the 1980s all over again following trump's win. we'll tell you the names that could soon rally off this retro trend. first, we start off with the


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