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tv   Closing Bell  CNBC  December 2, 2016 3:00pm-5:01pm EST

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against trump so congratulations. >> absolutely. thanks for watching power lunch. >> we head into the closing hour with the dow basically flat off about one fifth of one percent. >> and welcome to "closing bell" m yin for kelly evans at the new york stock exchange sdplmpt with welcome aboard. >> stocks in a bit of a holding pattern. the monthly employment report showed 178,000 jobs added to the pay rolls last month and unemployment rate fell sharply to 4.6%, the lowest level we have seen since august of 2007. financials have been on fire since the election. they are under performing today. the most part if it has been up
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lately it is down today. >> taking a bit of a breather. we have a big financial executive for you coming up at the top of the hour. that is steve schwarzman, the ceo of black stone who was just announced as the chairman of president-elect trump's new strategic and policy forum. he will join us live on a first on cnbc interview and talk about what they have planned and how this dialogue is going to go with the president-elect. >> looking forward to that. a couple of hours ago fed governor warned against easing up on bank regulations in dodd-frank. he went directly against what treasury secretary steve mnuchin told cnbcc earlier this week. let's get to steve liesman with details on that and the unemployment number. fed governor kind of stirring up some dust today. >> interesting remarks. he is the senior official when it comes to banking regulation. he is defending dodd-frank
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following comments from treasury secretary dezinginate. >> the number one problem with dodd-frank is it is way too complicated and cuts back lending. we want to strip back parts of dodd-frank that prevent banks from lending. that will be the number one priority on the regulatory side. >> here is what he said today defending the landmark regulatory reform regulations. >> i do not think there is a sound something case for generally weakening the regulatory requirements applicable to the largest banks and i certainly do not think that taxpayers should bear the risk that would be entailed by any such weakening. >> cautioned against back sliding on the regulatory progress that had been made. he said reforms provided strong foundation for financial stability and shouldn't forget
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losses from the great recession. pointed out the u.s. he says has strongest most diverse system in the world. we have an exclusive interview with bill dudley. >> thanks very much. we have president-elect trump announcing the president's strategic and policy forum which is chaired by steve schwarzman. he joins us now along with williford frost. >> bill, thanks very much. yes indeed i am joined by founder, chairman and ceo of black stone steve schwarzman. congratulations. thank you for having us. >> thank you. >> great to be here particularly so soon after the announcement was made. when did you speak with the president-elect? >> i speak with him in some frequency. about a week and a half ago he approached a variety of
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different alternatives of things that might be able to do and that was in the context of having substantive discussions on alternatives of what to do with the economy and other things. he asked if there would be any chance that we can meet on a regular basis to provide advice in areas where he wasn't as familiar and ideally if possible he asked me if i were to form a group of terrific people who were experienced and wise and sort of experts in their field to join for meetings where he would be able to learn from them with meetings on a regular basis and i should pick the people and he would review them and he loved them all.
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and there was no issues of partisanship. he said i don't care about that. i don't care about anything but talent and wisdom and judgment. >> so you picked all of these. if we look at the break down of the types of sectors that these people come from there is a big tilt towards the financial industry well covered whether wall street as asset managers. some people noted there is no silicon valley or facebook or amazon or microsoft. >> sort of interesting. i just got an e-mail from bill gates who said i can't do this on a regular basis but if you need me just let me know. there are many people sort of who run those types of companies who are like flat out and all have said to cases i can't do this right now but can you give me a little bit of time. i'm really interested in this. >> you mentioned at the top
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there was lots of conversations between you and president-elect about how to help. did he offer you more? did he offer you a cabinet position? >> that is not a relevant discussion. so this is something that worked for me because i can't do something full time given the different things i'm doing now both not for profit and for profit. >> and yesterday if we can focus on one story that has a lot of attention in the business world, president-elect donald trump went down to ohio and announced this deal with carrier that 1,000 jobs would be staying. in his speech after that he said there would be clear consequences for companies that tried to do the same thing. is that dangerous? is it corporate shake down? are you a supporter of that type of rhetoric from a politician? >> this was the first time for me. i heard it when you heard it. and you know the issue is how
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you build the united states, how do you create jobs or in this case keep jobs. and that's an election promise of sort of donald trump and it's an important thing to develop and create jobs here in the united states. so i anticipate that there will be a variety of things that come up that nobody really thought would come up and they will either be developed or go away but the basic instinct not to punish people particularly but to find a mechanism to create a vibrant economy is something that is a good objective. >> on the flip side is there now not open season from other corporates to come to the government and say i'm considering moving people abroad, as well? you have to give me the same tax breaks or else we are going to go.
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it creates a precedent that will be followed. >> i think part of what this administration is going to do and i don't know on this one particular issue i know on other things because this one just sort of dropped in that there are going to be new things tried. it's the nature of change and some of them will work, some won't. there is nobody who not the going to get this one that it's a symbol in a way of the seriousness of his commitment to deliver to the middle class and lower income people in the country. >> as you said, that was a big commitment on his campaign make america great again and particularly towards the working class yet some of the appointments have been made to the cabinet and some rhetoric towards deregulation of certain sectors and the way the stock market has performed banks have
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sored. i have seen people calling the phrase that it is make wall street great again. what is your view towards that and the goldman sachs alumni being appointed? >> i don't see that as overwhelming, compelling narrative. what he has been doing is pib ing people he is comfortable with. some of the people in finance touch enormous parts of the economy. a company like ourselves has 300,000 employees with our portfolio companies in america. so you know an enormous amount of stuff as compared to just one company. and so i think donald comes from the financial services world. i think he tens to pick people who he is comfortable with and who are confident. i think that is where thal comes
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fr from. >> you said you had a full time job here and with others too busy to take a full cabinet position. what is your view on the conflicts of interest between president-elect's political role and business role? >> i think that is a tough one because he is so intertwined and his life has been basically his company. and playing golf. those are the two principle things that he does. so he's not one with a lot of hobbies. he's got enormous focus and so disconnecting from that is an unnatural act for him. i realize that president technically is not sort of subject to the same exact
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criteria as cabinet people. i think it will take a while to work this out. i think he is sensitive to the issue. >> what about yourself now? clearly you are on an advisory board. you are not taking a cabinet position. however, you are going to have a better influence and a better knowledge of upcoming policy than your rivals at apollo to name a few. is that not a conflict of interest? >> i look at things and say we are going through a period of enormous change in the united states. this will not be regular way. and if i can help make the country better, make it safer, make policy lower risk if we can help bring the country together that is sort of an important thing and it's an obligation. particularly as you get older in
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life you want to do good things. and so i don't know what treasured secrets i'm going to learn. that's not the object of the exercise. >> in the press release today that donald trump released with the announcement of this board it said this. ceos and business leaders who know what it means to create jobs and growth are being appointed. he made that point a lot both about the people he is appointing and about himself. he brings private sector business acumen that perhaps politicians don't have experience with. on the flip side of that, is there a risk that he lacks political skills that are needed most notably with dealing with congress and getting some of these ideas that you know will help generate made into law. >> i guess he is not a particularly ineffective political person since he somehow got elected to be
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president. so if you start from that as a baseline and the fact that a number of the people he is involved as cabinet people and people at the new white house are quite knowledgeable, quite sophisticated and remember there is a congress there and the same people who have been there, tla accessible. they have a vision of what they want to do which in many cases has a huge overlap with the new administration wants to do. between all of them i think they are going to find common purpose. >> i want to pick up. you said the same people, republican congress as president obama just experienced. in that sense do you feel a little bit sorry for president obama because there is upbeat euphoria that the fiscal expansion will improve growth to levels that hasn't been possible
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in president obama's term yet he had favored fiscal expansion himself at times but that was blocked by a republican congress. is it fair that it might be passed because the party has changed? >> it's not so easy just to pass because there are still two parties there. at the moment i guess there are 51 senators and the majority of two, that's not much of a majority if a lot of laws need to get to 60 the way the current rules in the senate are. there is tugging and pulling to get certain things done. one of the advantages in the short term is that the concept that is called reconciliation where you can pass tax oriented things of 50% puts the republicans in a unique position to be able to effect tax reform
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of all types, to bring back moneys that are $2 trillion that are outside of the united states that can be brought back. so things of that type are going to require just the 50% which makes it a lot easier. >> so a lot easier in those areas and certainly work in tugging to do as you said. in that sense, is it possible in the short term the markets got a little ahead of themselves? >> markets tend to overshoot. this has been quite a run. it also reflects the fact that we have had a lot of drag on the economy through regulation and in a way the system needs to be debugged. that doesn't mean all regulation is bad but there is a certain balance. right now as a result of the regulation the u.s. banking system really is terrific.
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it's the best in the world and it needs the freedom to start doing some things like making more loans. you can't grow unless your banking system is expanding and you are extending credit. we have been shrinking. we sort of have with low interest rates one foot on the gas and with regulatory overlay one foot on the brake. what we are going to do is take off the full standing on the brake. >> i wonder how this stacks up in terms of moments of your life, all the achievements, nonfor profit work we were discussing and scholarships around the world particularly in china. being appointed to this role to give something back and make a difference, does it make you very proud? are you excited about it? >> yeah. when i went to college these were sort of values that were taught. i got to meet a lot of, you know, famous people.
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i was just like a middle class american and there was a certain obligation and i had that with my grand father in the charitable area that is a responsible to do that if you can. i'm fortunate that i can. if i can use my background for productive thing for other people to keep the country on a good course, to help out, to tell people what you know if it is useful, then i'm very happy to do that. not to make this about me, the people that were recruited for the forum both republicans and democrats their motives are all the same. >> the same at donald trump's motives? >> no. the same as the motives of myself to help get the country through this period of change
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where there could be a tremendous number of good things and other things by the sheer volume of it and the newness of the group that might look loud. it is worthy talking about them. >> absolutely. i have no doubt that you and that group will have hugely significant ideas to share with the president. i'm very grateful for your time this afternoon and congratulations on the appointment. >> thanks a lot. steve schwarzman here. >> thanks so much. black stone's steve schwarzman. let's get reaction to the interview from chief economist jeff cleveland. steve liesman is with us. we were talking about the comments from fed governor about the banking system and we just heard steve schwarzman say the u.s. banking system is terrific, the best in the world but needs to keep growing. there was some optimism in his commen comments. >> i think it amounts to how
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much regulatory reform. this is a very interesting panel. there are some people we know to be more to the left or some more to the right. i think what is interesting about them is there are a lot of zeroes after salary numbers. what i look ad it from an economics point of view, this panel shows to me that the trump administration very much believes that the problem with the economy come from the supply side and not from the demand siepd. these are not necessarily those people who immediately deal with problems of labor but more with the problem of capital. whether it works or not is unclear. >> and i'm going to ask jeff that very question. when you consider who is on this what you might call a blue
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ribbon panel and he is trying to solve the problems facing middle class americans in the united states today would it make sense to have a group of middle class americans who are on the front lines there advising rather than titans of business out there? >> i think that is a good idea, bill. it also struck me, i took a quick look at commercial and industrial lendings. bank lending and i know steve knows this, it is growing at about a 10% clip. >> not too shabby. >> banks are lending. you said it is shrinking and that is the idea that that is what is really holding back the u.s. economy. i think that is false. so i think that should -- >> what is? >> the u.s. economy is -- i think i have been coming on air all year and battling with the bears and saying the economy is about to wilt at maybe a rate hike. we continue to growism we saw that again today with the jobs report. we are down to 4.6% unemployment
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rate. the only thing missing for me is a little more wage growth. i think that would help build the man and woman on the street. wage growth we think is coming. you're at a 4.6% unemployment rate. that means you have labor scarcity issues. that should start to show up in higher wages. a lot of indicators you would look at for wages and many of them are already pointing in that direction. i think that is the story in 2017. >> i don't want to just dispute the idea that there are supply side issues. i think some issues are on regulatory reform and some on bank lending could be a little better. i think if you ask steve schwarzman the idea do you lack money to do anything you want in this world or ask that of almost any ceo on this commission i think they would say no. the question is why not and maybe it could be a lower corporate tax rate but maybe it is more issues on the demand side. >> these are executives who
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employ everyone from bank tellers to people who work in factories who are on assembly lines. i would push back against bill and say maybe these are executives who know how the lowelo lowest rung of their employee base is feeling. >> let me push back on you a little bit on that which is if you ask them what is their primary goal in life to give employees more money or higher returns -- >> they are the people who can tell the president-elect what incentives they would need to actually pull the trigger on increasing those wages for those employees. that's where the conversation begins at the highest level. >> i would say they have a shareholder duty before an employee duty. some of them and all of them i would say have duty to employees and act that way. if you ask primary duty it would be shareholders. >> the precedent was set in indianapolis this week when mr. trump picked up the phone after watching a worker on television
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rue the fact he was going to lose his job before the holidays and he made that phone call and that prompted him to make the decision to try to go after carrier. so i'll push back on you on that one which i am happy to do here. >> we are all friends here. thank you both. good to see you. >> have a good weekend. 37 minutes in the trading day left for this week. it's been a very interesting week for the markets. sort of a cooling off day here. the dow is down 35 points. >> the market you want to watch over the weekend is that in italy. stocks locking in best week since october. that is ahead of sunday's key referendum on constitutional reform or italy's version of brexit. up next we go live to rome for a special report on high stakes and how the outcome could effect wall street on monday. >> hopes that a donald trump white house will be good for defense industry.
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a leader analyst and a fund manager weigh in with many names that you want to add to your portfolio in the defense sector coming up as we continue to push back on each other. you are watching cnbc, first in business world wide. what if a company that didn't make cars 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.
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>> julia chatterly is live in rome with a look at the high stakes. good evening. >> reporter: good evening. as you rightly said the count down well and truly are on now prime minister renzi trying to convince voters to vote yes in sunday's election. it started out as a referendum on constitutional reform here aimed at stream lining government but it has become way bigger. why? because renzi offered to resign if the vote is a no. that is what investors have been pricing for even with the bounce that i think we have seen in italian stocks so far this week. this is a crucial point. the italian ceo of the stock exchange this week said there are colossal short positions on italian stocks from u.s.
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investors. the big surprise like brexit and donald trump would be a yes vote win on sunday. if that is the case renzi won't resign and the risk goes away and you have a bunch of u.s. investors caught on the wrong side of this trade come monday morning. something to focus on. guys, back to you. >> we will all wait with baited breath to see how the vote comes down. julia chatterly in front of the coliseum in rome. >> we called it itileave. >> serious impplications. time now for a cnbc update. >> attorney general loretta lynch in washington. it houses the bureau of alcohol, tobacco and fire arms and explosives. it is being renamed for the fallen atf agent, the first such
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agent killed in the line of duty. united airlines will pay to settle civil charges after it reinstated an unprofitable flight route to accommodate david sampson according to the sec. the agency saying that the route harmed united shareholders. and patriots head coach bill belichick addressing the loss of rob gronkowski who will undergo back surgery today and will likely be out for the rest of the season. >> obviously, we are all disappointed. nobody has worked harder than rob and been a better teammate and all of that. hopefully things will work out positively as possible with him. >> we wish him the best of luck. that is the cnbc update this hour. >> thanks so much, sue. appreciate it. smith&wesson tumbling.
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reported better than expected second quarter earnings but the company guided current results below consensus. shipments of fire arms could begin to slow in light of inventory stocking ahead of the election which incorrectly assumed a clinton victory and people expected it would be harder to obtain a fire arm so there was spurring of activity. >> that is a group that turned on a dime right after the election. we are going into the last half hour of trading. the dow is down 18 points just off the lows of the session. a leading trader will tell us what he is watching to the close when we come back. >> we will bring you highlights from cnbc's exclusive interview with outgoing starbucks ceo howard schultz. ♪ 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
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today? >> i think you have tremendous rotation within sectors of the market. clearly a lot of winners and losers this month. i wouldn't really be too upset with a lot of the profit taking going on in technology stocks. some of those high flying so-called fang stocks have come off quite a bit. keep in mind that a lot of people have very substantial gains in those over the last few years. i think they are just redeploying money into other sectors that they think might do better in the next couple of years. >> financials, industrials, health care, materials and some of the standouts. have they gone too far too fast this soon? >> it would not be unusual for them to back and fill a little bit. the other thing that we also frequently see in december is a lot of cross currents in the market where you can get some fund redemptions. you can have selling for reasons that aren't fundamentally based.
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and for the short term trading sometimes that is difficult to navigate. there will clearly be positioning by the larger players for the next couple of years. that is still going on. >> this month off to be interesting, too. thanks. have a good weekend. >> thanks. starbucks shares off lows after howard schultz announced yesterday he would be stepping down as ceo next year bill will remain executive chairman. kevin johnson will take over the role. cnbc sat down with both of them this morning to talk about why now is the right time and whether this is, in fact, the right time for new leadership at starbucks. this is not the first time howard schultz stepped down. listen to what he had to say when asked what is different now. >> on a macro level i left right at the beginning of the
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cataclysmic financial crisis and starbucks had a difficult time navigating through that. we did not have the quality of the team. we didn't have the resources and capabilities that we have now. we didn't have the leader. i think on a personal level i don't think i was as emotionally prepared to lead the company and not medal at that time in my life. >> even kevin in the conference call last night said you were one of the world's most iconic leaders and entrepreneur. why would i want to own this stock of starbucks if the man i most identify with starbucks is only the executive chairman and working on a division that may or may not pan out as i know kevin is a strong leader? >> starbucks has been in business now for 45 plus years. i'm not putting myself in the class of tom brady or any other athlete that has been at the
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cornerstone of success on a team sport, but this is a team sport. it has always been a team sport. i have gotten more credit than i deserve. the company has a large base of fantastic leaders and i'm not going away. >> i have to be authentic and lead in my way. i can't try to be howard. i'm not howard. howard and i share many things in common, the values, the way we think about the business, the appreciation for the mission and what this company stands pr but we come at it with different lens because we have different life experiences. acknowledging that and knowing that i need to lead in an authentic way and leverage the world class leadership team. >> do you feel that the starbucks brand is at odds with the administration and donald trump? and the reason i ask is there have been boycotts as it relates to trump.
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people would ask baristas to write trump on the cups. and what the starbucks brand represents? >> 90 million customers a week are going through starbucks stores and i assume many of them voted for donald trump. we feel very strongly as a company that our role and responsibility in addition to making money and building shareholder value as you know is to demonstrate a level of social impact in the communities that we serve. we as a company, board, me personally, kevin have been deeply concerned about a number of issues, social issues that for the most part have not been addressed by the republican administrations in the past and hopefully will be addressed by the president-elect. >> howard schultz there with kevin johnson. i was surprised he used the sports analogy.
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compare himself to tom brady and not russell wilson. >> tom brady hasn't had unscathed last couple of years. skeptics say kevin johnson is more of an operator. at least he will have the founder whisper at the executive chairman level. that should give some relief to shareholders. we have got about 20 minutes left of the trading session here. the dow holding steady just below the unchanged level. as you can see the s&p, nasdaq and russell going out with gains. two big blows in favor of cord cutters with cbs and amazon striking major content deals that could help the cable bundle. we'll break down those deals. >> there are two sides to every story. president-elect donald trump made the deal to keep those 1,000 carrier air conditioner
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jobs in the u.s. coming up we will go to mexico where the jobs were supposed to move. you're watching cnbc, first in business worldwide.
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you are looking at all 30
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stocks from dow jones. yesterday goldman sachs was among the best. intel was the worst performing stock and look at today. intel is number one and goldman sachs is -- >> very interesting. hbo is expanding horizons and cbs piling up more content for over the top video service. julia boorstin is live in los angeles with details on that. >> instead of having to pay for a tv bundle to surf between hbo and cbs now you can pay to watch content on channels over the internet. cbs nfl games will be available on all access which is a $6 a month streaming service and now it will be easier for amazon prime subscribers to sign up for hbo and cinemax joining
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channels. turner just launched a subscription movie service film struck on apple tv with plans to launch on roku and google chrome cast as well as the rest of the major services next year. these advancements come as directv now launched. not only was it missing cbs and access to show time but error messages sparked critical tweets and headlines about those errors preventing streaming. directv responding quote engineers resolved the issue and we haven't experienced it since. we will have to see how the news impacts the decisions of cord cutters. >> it's interesting to see these developments. it feels like it is all very incrementme incrementmental. amazon had access to hbo's back catalog. was it seen as a front runner? >> i think with amazon and what
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they are putting together is seen as just a matter of time. what amazon is doing is not giving you access to hbo go for free. they are making it easy for you to subscribe all in one place. amazon wants to be the destination not just where you go to buy everything but where you go to watch everything. interesting to see if amazon introduces more packages next year. we are expecting to see more over the top tv services from hulu and google. >> directv and at&t came out with directv now and cbs is not there because they need us more than we need them. it's a little competitive action going on there. >> he has said he wants to be part of every bundle where they get paid fair value. so he is hollywoding out not ju
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for payment. there are all sorts of different terms of digital tv distribution deals such as how the content is presented, how long you can watch a show after it is aired. there are other terms that it seems like cbs wants to iron out. they don't feel they have to rush into the agreement because they have their own service. you can subscribe now and their service separately but he is going to make sure he gets what he wants there. >> anything is available for a price. looking for a little more money. >> thank you. >> with just about 15 minutes before the bell the dow is basically flat. it is down less than -- 0.1%. down 18 points. the s&p 500 and nasdaq are barely positive although that is reversing where they were in the earlier session today. >> if it was down yesterday it is up today chances are. president-elect trump has been putting together his new
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for the tech heavy index. >> one of the worst performers down nearly 3% for the week. small cap is part of the reason why. small caps have been hot all month. they snapped a three-week winning streak, as well. chips this week real under performers, the worst performing sector although today they are best overall. part of it is we are seeing the rotation as people come to the end of the year. chips have done so well. they are getting some of that selling pressure and we are seeing more volume on the days when chips sell off overall. bio techs down for the third straight week. they have the big pop right after the election but they continue to see pressure as we have seen some names having trial difficulties and people really wondering about the high price drugs and what will happen with or without regulation. one interesting outliar is
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netflix. a lot of those names have been under pressure since the election. big cap tech in particular. netflix up for the third straight week. maybe finally starting to come back into favor. people binging, if you will. >> thank you very much. joining us on the floor of the new york stock exchange the independent investment consultant, as the transition continues you thinking about teamwork this week. sgla i think our market theme acronym. first is trump's words and actions. i think abraham lincoln said he is doing a good job if half are happy and half are unhappy. so i think by that rubric mr. trump is doing a pretty decent job. i would go out on a limb here and say the 77th treasury secretary steven mnuchin high exstudent from yale college will be a great treasury secretary.
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>> adam parker believes that at the end of 2018 when we look at the end of 2017 you are looking at 2018 earnings you can earn about $140 and put a 16.2 multiple on that. multiply that out. the multiple going down because of interest rates going up. and that would give you 2,300 which is only 5% up for the indexes. therefore you want to basically concentrate on things that can work, financials, energy, defense. but they have run up a lot so let them come back. let them come to you. asia, japan is up 5% this month november. china same thing and japan's currency has weakened 8% in nov november. everything is good. things are going well in japan and china.
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the m is mending psychology. psychology we know is the biggest driver of the market over long periods of time. mending psychology, mend comes from the word amend, british word emend and from latin and menda is trouble in latin. coming out of trouble psychology. >> this will be on the final. love your tie. >> s is saudi arabia and russia. they agreed to 1.2 million barrels a day cut of which about 600 is russia. so how is that going to be policed? that is where we are. >> pessimists would rearrange your word to spell steam. why is this real? >> steam engine was invented by isaac watt in the great britain and set off industrial
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revolution. i believe this administration will be either a phenomenal success or maybe not. so the market is believing it will be a phenomenal success and the steam will be a steam engine. >> he has an answer for everything. >> i'm trying to stump him. >> i said during our production meeting i was surprised you weren't using i anywhere for the italian referendum but it occurred to me there is no i in team. >> john wooden great coach of ucla you know him only purb ever to make basketball hall of fame as a player and coach and he won 88 games in a row. notre dame and then 88 and then notre dame ended the streak. john wooden said no i in team. you want to be careful with the five star movement in italy does not take over because they are antieuro and that could set the
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market aloig. >> we will get answers soon. >> coming up next on "closing bell" the closing count down. >> and a lot more after the bell we will take a close look at the defense sector in the wake of president-elect trump's surprising his staff last night by announcing retired general james mattis as choice for defense secretary. what that means for your portfolio just ahead on "closing bell." miles per hour.g over 200 to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t.
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we close out a very interesting week, bap. i have the gain build a chart for the last five days comparing components with the dow jones industrial average with the nasdaq composite which went in two different directions here. >> they are using technology stocks as sources of funds. you have stocks like semi conducters down about 6% this week. those semi conducters have had huge moves up. take them, sell them, buy things you need like industrials. >> we have seen a bit of a reversal for a lot of trends today. for example, the dollar index until about mid week and pulling back a bit.
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>> you notice the changed when we had the jobs report. i think there was a little disappointment that we didn't get the wage growth that we thought. that was a bit disappointing. >> the bet on oil was that there would be no opec deal and prices would continue lower. they were lower in the week and then we got a deal. comfortably above $50 a barrel for both. >> to show you how powerful the rally is we keep rotating. the banks are down in the last few days as you see here. energy stocks have come to the floor. they had been real laggards earlier in the week. we keep getting market rotation. you is a day when banks are down we get industrials. >> yields went higher on the long end ahead of the jobs report and we have no real market response to today's report. >> i think it was fine. we did see a little response in
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the credit markets, though. great week overall. >> now we wait for the italian referendment. we'll see what happens on sunday. >> surprise would be a yes. >> we'll see you later. down 22 on the close for the dow jones industrial average. stay tuned for hour number two. >>. >> welcome to "closing bell." here is how we are finishing the day and the week. the dow closed marginally negative, snapped a win streak. we have been looking for any positive move which would have been a record close for the dow. the s&p 500 and the nasdaq and the russell all closing in positive territory. the s&p 500 and the nasdaq, though, both negative on the week snapping a three-week
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winning streak following the election. and donald trump picking retired four star marine general james mattis as defense secretary. what this means for the defense sector and whether you should be a buyer there. we start with the markets. cnbc pro columnist michael santoli. cnbc contributor evan newmark and for more on today's market action we are joined by fast money trader guy adami. michael santoli, i will start with you because it seems like everyone was using the same play book post the election but maybe today was the day they ripped it up. >> it took a rest today. this urgent rotation that you were talking about, it definitely has -- when the bond market rallied a little bit it did kind of put a halt to that. i think it is probably a healthy thing. the way money was moving so desperately from group to group especially yesterday was almost
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buying panic and selling at the same time. it makes sense that the market should settle out here. s&p 500 up 2.5% since the close on election day. it seems like a bigger move because those rotations have been so dramatic and then you have the sell off in the bond market. your diversified portfolio kind of stood still. it felt like things got better because cyclical groups are working. >> have you tried to play this game of whack a mole. >> not a game i'm great at. i'm not good at many things and this -- >> that's not true. >> that is true. am i confused? absolutely. does it make sense that banks rallied like they have? yes. then you start looking at valueuations you are talking about banks are close to 1.7 times tangible. as the environment improved that much it is as if everything with mr. trump will do over the next
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four years he can only wave his magic wand and good things come. it is as if everything that was disappointing or scary going into it has magically been forgotten. the s&p is effectively the same levels. the rally in banks and material names has been unprecedented and dare i say a little bit excessive. >> it has people asking whether maybe you get out of financials and small caps and you go back into some of those defensive names that people just left for dead a couple of weeks ago. >> it is hard to see a full direct unwind of what has gone on here. i think part of it was a recognition that things have firmed up in october and you start to see the macro data and the bond market told you what to do. the bond market selling off that gave you the signal to do that. >> i have a theory that the fed is going to take a back seat
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now. we have been so obsessed with it. take a back seat to fiscal policy we will be talking about. >> i agree with you. >> is there a meeting coming up? >> i happen to think that what is going on is bigger than just a week to week. i think there has been a fundamental shift in the market and i think for a lot of your viewers out there that are thinking about what to do with their money, try looking out a year from now or two years from now from what may or may not happen. what i mean by that is the following. you either believe that there is going to be a successful reflation trade bond yields are going to continue to go higher, oil prices will probably go higher, the global economy will encounter greater growth than it has been seeing. if you believe that is what is going to happen then that will lead you to do certain things like stay away from bonds. if you don't believe that then you are going to go back to the old paradigm that we have had
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which is very slow growth, low bond yields. i believe you have to make as an investor that is the decision you have to make over the next month or so. >> the hard part about that decision is just because we feel good in this country doesn't mean that that positive psychology flows to the rest of the world, guy. because we are looking at a stronger dollar. we are looking at stronger growth in the u.s. but all of that makes life and and death very expensive. what happens if you are in europe or asia and you see what is going on in the u.s.? >> i think that is a great point that you bring up and something i was trying to elude to before just because we are starting to feel great about things here doesn't mean the ills of the world have been solved. we have been talking about the referendum vote.
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in march you have the debt sealing that needs to be discussed. there are things that can potentially derail this market. to your question, though, i think what is happening here all we have done now is masked all the hills that still exist. 250% give or take. the good news is i guess 80% of that is owned by chinese banks. i guess you can't delve in too far. you are seeing currency moves and magnitudes. bond moves we can argue whether or not bond rates are going or yields are going up for the right reasons or wrong reasons. when yields and ten year go from 170 on election night to 240 that to me doesn't speak to stability. it speaks of -- it rankles me just a little bit i guess. >> that is the look of a rankled guy adami right there.
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>> i have been traveling y. was in manhattan beach this -- last night. it's really nice there. a lot of cool things going on. >> that is not a place that -- >> anybody that goes to manhattan beach doesn't want to leave. >> which is why i am rankled right now. >> the real manhattan beach. let's talk about a sector that is very important to the economy, transportation. the dow transports on a tear getting closer to breaking that all-time intraday high set in 2014. since the elections the transports are up 9%. >> let's bring in donald for more on how trump's infrastructure plans will impact this industry. your thoughts on when you think we will see meaningful and material legislation to spur spending in this sector and how investment looks between now and
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then. >> we'll see exactly what he puts up there. right now the market is looking at what they believe is higher growth but they believe is lower taxes. and pricing it all in as if it has happened. no politician is able to give you everything promised. >> we are in the all-important holiday season. fed ex up 7%. ups up 4% since the election but really since the start of what is this extremely busy holiday season. what are your expectations for growth for those companies in the holidays? >> i continue to be very bullish about the air fright express. those are some of my favorite names. fed ex being one of them. let's face it. if it looks as if if you look at trucking volumes as if we are going to have a pretty decent
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holiday shipping season and shopping season. if that is true for brick and mortar retailers that means e-tailors are going to have a phenomenal shipping season, shopping season and that is fabulous for people like fed ex, ups, xpo, et cetera. >> i have a question. how do you model a trump presidency? by that i mean the following. you have someone who has taken office. unemployment today was reported 4.6%. we have been creating jobs for the last nine years. how can trump not juice the economy? how can you not see growth in infrastructure and transports and then claim at the end of the year or year and a half from now that he has a successful presidency? i guess what i'm saying is, is it conceivable that transports do badly under a trump presidency? >> the first thing i would say
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is not all transports are created equally. perhaps it is because of proliferation of passively managed money. all of the rails moved up in lock step with each other. all of the air freight stocks moved up in lock step and not all railroads are created equally. the individual companies and the segments aren't created equally. you can have different stories. i will tell you the strength in the dollar is very bearish for railroads. if you look at the index, look at what happens when the dollar value goes up, railroad volumes go down. they are inversely correlated. the rail was negative 15 versus 14, 16 versus 15 and it has been negative 89 out of the last 94 weeks. bottom line is with reacceleration that is not good for railroads. we published research.
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railroads have lost volume and pricing power and in some segments they have seen pricing go negative. if you are moving less product and getting paid less to do so that is not a story for profit growth and earnings per share growth. >> good to see you. appreciate your thoughts on a very important sector there, the transports. appreciate it. >> always a pleasure. >> guy, thank you. have a lovely weekend. >> send that tweet out that you know that the i'm looking for. >> it will be an hour late tonight. it will be there. >> better be there. >> good to see you, as well. >> good to see you you can catch the rest of the crew coming up on fast money. they have an apple analyst who says the tech giant could be in for a decade of pain coming up at 5:00 p.m. eastern time. let me correct something it was
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isaac watts who invented the steam engine. isaac watts wrote joy of the world. one of my favorite twitter correspondents said it was eli whitney. he did the cotton gin. robert fulton invented the steam engine. >> he did it -- james watt was transportation secretary. >> the original was scottish. >> they are begging us to go to the tease. president-elect trump making selection for defense secretary. which defense stocks could see the biggest benefit under the trump administration? >> trump working to save 1,000 carrier jobs from leaving the u.s. what does it mean for the plant carrier built in mexico and the
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company's presence there? we will head south of the border live for reaction. you're watching cnbc, first in business worldwide. ease is out there. 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. but we won't get there without you. visit to join the fight.
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president-elect donald trump surprising even his staff in
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announcing his pick for defense secretary retired general james mattis last night during his victory tour. morgan brennan has more on who general mattis is. >> i will try to squish this down. james "mad dog" mattis led battles in iraq and afghanistan. he ran the u.s. central command overseeing 34id east operations until 2013 when he retired early. by law defense secretaries must be civilians for seven years meaning congress will have to pass legislation for him to take that position. the defense experts i have spoken to expect that will happen given strong support from both sides of the aisle. mattis is very outspoken about
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russia and china and iran. he apparently swayed president-elect trump with his opposition to water boarding and is perhaps best known for matticisms like be polite, be professional but have a plan to kill everybody you meet. the most important six inches on the battlefield is between your ears. and i am pleading with you with tears in my eyes if you f with me i will kill you all. the other complication, i should say, defense contractor general dynamics board. he will have to sell the holdings he has accrued. sound familiar? >> sounds like a fun guy. morgan, thanks. >> someone you would want at a cocktail party. >> what does the choice mean for
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defense stocks? >> joining us now barry james, president of james advantage funds and senior equity analyst. we'll start with you. it is a very rare scenario to have a general in the post of national security adviser, as defense secretary and now potentially general petraeus in the running for secretary of state. very rare to have generals in all three of those jobs. what does that signal to you about the importance of military in a donald trump presidency? >> i think he emphasized it from the beginning he was really focussed on the men and women of the armed forces. i'm a veteran myself, was a fighter pilot. fortunately, i didn't see combat. general mattis is a prime example of a soldier's soldier. they are not as beholding to weapons systems per se but more
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focussed on what actually accomplishes the mission. i think the whole thing with generals being involved is to cover to some extent his lack of experience in this particular area but also i think it will provide him some balance in terms of how do you know what systems to focus on and how to spend the money that is going to be piling up as it were in the next few years. >> i was going to say, does it automatically mean defense stocks are going to be a slam dunk when you have a man who has had strong opinions about what the makeup should be of our defense industry? more planes, more submarines. does that mean more spending for these guys after a time of trying to down size the military for years? >> i think there is going to be more spending. one of the things that president-elect trump did state, also, is that he wants to cut government employees through
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attrition. that is going to be -- he also wunts it build up the cyber intel world. that is good for companies like allen as well as caci, government services companies i think will benefit very well from the spending that trump is going to bring into it. >> what do you think about the contracts that the government already has with some of these companies because we know that donald trump wants to rip up trade agreements? any sense that he might revisit what companies are supplying the government with the weapons and the services that its military uses? >> i think there is a very strong possibility he will look at all of those and have his defense department do the very same. one thing we see defense stocks are up 10% since the election. they are up 100% since the sequester back in 2013. it's not like they are hidden. they are really trading at high
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valuations. i would say there is a lot of risk there. if some of this goes on and it is not really taken into account it can cause prices to pull back. we would think the defense stocks even though there will be more spending it is built into the price so we don't think they will perform as well. we say it is not an area to be overly aggressive in unless you are going down the size avoiding the lockheeds, general dynamics and those sorts of stocks. we think that is where the real money will be made in the defense industry. >> i was going to ask about that given the year to date performance is there a risk that we have gotten ahead or is the overall pie available to the defense industry going to grow? doesn't seem there is a lot of play based on tax cutting and the appetite for bigger deficits. >> i agree that the growth is questionable. there is going to be some growth
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there but maybe not dramatic. that is why i like the services group. that is why i like that group that we will spend more on cyber and intel. there is down sizing of federal government. those government services and solutions companies are the big ben fishiaries from this. >> good to see you both. thanks for joining us today. president-elect donald trump also assembling a team of chief executives for advice on jobs and the economy including jamie dimon, mary barra and the whole thing helmed by steve schwarzman of blackstone. mr. trump is making cyber security a top priority of his administration. now he has even more on his
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plate. we will talk about a new way that so-called cyber arms dealers have been able to wirelessly hack into your phone. , but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations... creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital works for your business.
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but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet? donald trump putting together an economic team of high profile ceos. steve schwarzman will chair it.
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williford frost sought down with steve schwarzman to talk about everything from tax reform to banking regulation. he joins us now with highlights. >> reporter: steve schwarzman revealed he has spoken regularly to donald trump since the election. that he hand picked the rest of the members and he had not ruled out that he had been offered a cabinet position. given how many alumni are in it i asked whether donald trump's agenda was whether making america great again but making wall street great again. >> i think donald comes from the financial services world. i think he tends to pick people who he is comfortable with and who are confident. so i think that is where that comes from rather than any desire to reward any sector. >> reporter: now, after that i
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asked him about the carrier deal yesterday and the way in which donald trump seemed to threaten companies not to take jobs out of the united states. i asked for reaction to that. >> this was the first time for me. i heard it when you heard it. and you know the issue is how do you build the united states, how do you create jobs or in this case keep jobs. that's an election promise of sort of donald trump. create jobs to the united states i anticipate this from being a variety of things that come up that nobody really thought would come up and they will either be developed or go away but the basic instinct not to punish people but to find a mechanism to create a vibrant economy is
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something that is a good objective. >> schwarzman then ended with a sense of pride in taking a job which he framed as giving something back and helping his country. >> one of the most interesting parts of the conversation i thought was when you asked about how he pulled this group of executives together because president obama had his own jobs council which had a ton of executives from the technology sector, many women. steve schwarzman said there is no partisanship and no vengeance involved. what did you make of that? >> he made picks from both sides of the political aisle. he said that he picked them all himself. he gave the list to donald trump and donald trump loved them all was his quote. as for sector break down because i asked about that and mentioned
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the lack of mark zuckerburgs of this world. he mentioned bill gates' name and said that bill gates said he was too busy all be it available if necessary. >> the half hour bell ringing right now. we'll end it there. >> we will say our prayers. >> have a good weekend. >> thanks with a pretty spectacular conversation. time now for a cnbc news update with sue herera. donald trump supporters filed legal challenges to presidential election recounts in pennsylvania, wisconsin and michigan. the michigan attorney general saying the recount would be too expensive and criticized green party presidential nominee jill stein for what he called an inexcusable request. rescuers pulled a 22-year-old woman alive from a collapsed building in south dakota. it is unknown what triggered the
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collapse but officials say general construction was going on at the time. according to the centers for medicaid and medicare services health care spending increased nearly 6% to $3.2 trillion in 2015. officials believe it is due to affordable care act which led to increase in the amount of people with health insurance and access to expensive drugs. cuteness alert. twin giant panda cubs celebrated their second birthday in western japan. the twins were named after sherry and peach. so they were given ice shaped like chef cherries and peach flowers as birthday presents. i told you cuteness alert. >> we could watch that for -- >> i certainly could. obviously, a lot of other people could. there is the cherry flower. have a great weekend, guys. last time, i swear.
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robert fulton invented the steamboat because the steam engine was invented by james watt. we got enough. that's all i'm going to say about it. >> steam roller? >> we'll let the people on twitterville tell us about that one. a thousand carrier workers thanked president-elect trump for helping keep jobs in the u.s. we will talk about which other companies are heavily dependent on government contracts like carrier's parent united technologies and whether they may be forced to rethink plans to move offshore because of incoming trump administration. how one ivy league entrepreneur is using oregon's legal marijuana laws to create the first tribal-owned marijuana cultivation operation in the country and help solve a massive unemployment problem on his reservation. that story is up next.
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here is how wall street finished a crazy week on the day. the dow down 21. it was the laggard today when it has been the leader lately. the s&p and nasdaq finishing positive. russell 2000 up a fraction.
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>> just about 24 hours ago president-elect donald trump announced he convinced air conditioning company carrier to keep 1,100 jobs in indiana rather than moving them to mexico. >> getting reaction from workers on the ground about what exactly happens when these jobs don't go over the border. >> reporter: there is a lot of concern about that. donald trump may have convinced one company not to move jobs to mexico, but all the reasons they wanted to move them in the first place are still true. there is the obvious one, lower cost wages. mexico has free trade agreements with more than 40 countries, double the united states. what that means is when parts like the ones manufactured here get sent to a different country they are far more likely to be
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shipped tariff free. auto manufacturing has blossomed in the wake of nafta. mexico exported 3.4 million vehicles, 60% of those went to the u.s. and canada. here in this facility this is a mexican-owned manufacturing facility where they are making exhaust systems. they send the parts here eventually to another factory that they own in detroit for final assembly. they are going to end up in general motors vehicles. manufacturing has done very well here. it suffered in the united states as a result of nafta. take a look at these data points about what is happening. back in 2005, 16.3 million manufacturing jobs in the u.s. is down to 14.9 as of 2013. that is a decline of 8.6%. keep in mind at one foint used to be 19 million manufacturing jobs. in mexico they have gone up from
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6.8 million. an increase of 13%. those kind of data points, that's the reason why donald trump got elected. back to you. >> even the economic official you talked to a couple of hours ago said people in mexico don't believe nafta is working for them. we will see how the two sides figure this out. our thanks to you and tune in to mad money with jim cramer on monday. he will be talking to gregory hayes, chief executive of utx. that interview happens at 6 p.m. >> donald trump's new bff. united technologies is one of the biggest defense contractors president-elect trump striking a deal with the company to keep jobs in america but does set a precedent for other companies with government contracts to ask for similar incentives? >> eric chemi has that start of the story. >> the market sent stocks soaring on the assumption that trump will spend big money there
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carrier is looking to keep jobs in the u.s. is leaving people to wonder what other firms. utc urnz about $7 billion a year from the government. compare that to others. they make over 10 billion a year from the government. the defense revenues cut in half and dropped it on the list compared to the year before. utc gets meager 12% of overall corporate revenue from the government. but consider this list if you rerank it based on how dependent they are for government revenues now you see big names get vast majority from the pentagon, many well over 50%. we went through track record and found many have been named in government filings by workers who applied for federal help. the records show boeing and
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lockheed are frequently named. so consider those three the kaechs that could possibly find themselves with similar scrutiny to utc. firms also have a track record of moving jobs out of the country. finally, index of government contractors has outperformed since the election. contractors may have to play ball to actually get that money. back to you guys. >> if you took the model of what he just did with carrier and apply it to a company like boeing it would totally destroy the company. company like boeing has manufacturing operations in multiple countries. they sell planes to multiple countries all over the globe. they can't assemble. if you told them they have to manufacturing all components and parts in the united states it
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would destroy the company. >> most of those companies, most of it is direct defense contracts which mostly it would have strings attached. to me it is the companies like utc whether honeywell or somebody else in the business of trying to get better productivity. >> who make products for consumers and not for the government. when you think companies are going to start threatening to leave? >> not boeing. general motors. >> a lot of these great companies, their whole business model has been constructed over the last 30 or 40 years on free trade. if you start getting in the game of going you can do this and not this their whole business model falls apart. maybe carrier and utc can do this with air conditioning company. as you move up the value chain and products get more complex you start picking that apart and you end up with just as i like to say the dog's breakfast.
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mess. >> very kind of you. thank you. >> thank you if you are still there. good report. appreciate it. president-elect trump saying that cyber security is one of his top priorities going into the new year. keeping citizens safe from cyber crime got a lot harder thanks to a new malignant spyware. we have details coming up. the unemployment rate falling to lowest level in nearly a decade. joblessness is a real problem for native american confeteerate tribes in oregon. how they are using marijuana cultivation to combat that you're watching cnbc, first in business worldwide..
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on what matters to you. morgan stanley. as a result of last month's election marijuana is legal for medicinal use in 28 states and recreational states in eight including oregon. our kate rogers joins us now with details. >> reporter: that's right. residents of the confederate tribes in oregon where seasonal unemployment can reach as high as 85% are betting on an ambitious cannabis venture to help create jobs. he grew up on the reservation watching those around him
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struggle with joblessness and poverty. when recreational cannabis was legalalized he had an idea, a tribal-run cannabis operation. >> the cannabis project is 36,000 square feet greenhouse located on the indiana reservation that will grow, cultivate, extract. >> to pass the project which is in the planning phases the tribe put things to a vote. the endeavor will cost up to $7 million and create about 70 jobs. the only catch, cannabis isn't legal on the reservation. >> it is a dry reservation. alcohol use isn't permitted. we treat cannabis in a similar stance. our goal is always to invest in our people and get family wage jobs so our folks can take care of their families. >> reporter: so the venture would be among the first of its
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kind in the nation. they hope to break ground as soon as this winter. they want to grow their own product and then retail it and wholesale it back into the state. back over to you. >> we were debating you are live in denver but the reservation in in oregon. is marijuana legal on the reservation? why are they growing it where you are? >> reporter: so we are live at a different dispensary which we featured this morning. the confederate tribes are growing this marijuana hopefully within the next year and then launching the project really shows how desperate they are to create jobs. it is not legal for tribal members to use cannabis on the reservation. alcohol also is not legal there. they will grow it on the reservation and then retail it off of the reservation and use the proceeds to fund all of the economic prosperity they need and will create about 70 jobs
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some on the reservation and some off the reservation. >> really interesting and ambitious. >> thanks, kate. see you later. we have a news alert on president-elect trump. sue herera stepping in with that. >> it is a financial times report, bill, that says that donald trump president-elect reached out and had a telephone call with the president of taiwan. telephone call was confirmed by three people. it is believed to be the first between a u.s. president-elect and a leader of taiwan since diplomatic relations were cut in 1979. it also has the potential to aggravate and anger beijing because beijing considered taiwan as upstart renegade province. it is interesting to see whether we get response from chinese leaders as to this call that reportedly went on between the president of taiwan and
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president-elect donald trump. i'll send it back to you. >> that's a stick in the eye. that's a finger in the eye. >> it started. >> it will be very interesting to see whether or not we get response from china. keep in mind earlier this week chinese officials said that they were watching the progress of the president-elect as he put together his cabinet very closely. so they are watching. >> i was reading the story which issen clear if he intended to make this gesture or whether the opportunity came to make the phone call or not. >> we will see. >> maybe somebody can jail break it and find out. >> programmers call it a jail break when a hacker breaks into a device to monitor the user's communications and take control of it. >> see what i did there. there are details of spyware that allows hackers to control anybody's iphone from anywhere
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in the world. we have details on the latest weapon in the cyber arms race when we come back.
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as a supervisor at pg&e, it's my job to protect public safety, keeping the power lines clear, while also protecting the environment. the natural world is a beautiful thing, the work that we do helps us protect it. public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. we want to keep the power on for our customers. we want to keep our community safe. this is our community, this is where we live. we need to make sure that we have a beautiful place for our children to live. together, we're building a better california.
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our national security, i will ask the department of defense and the chairman of the joint chiefs of staff to develop a comprehensive plan to protect america's vital infrastructure from cyber attacks and all other form of attacks. >> president-elect trump promising to make cyber security a top priority during his first 100 days in office. and it could not come at a better time, because iphones are now targets of so-called cyber arms dealers with access to surveillance tools who can hack your phone from anywhere in the world. and control it at the same time. this chilling development is detailed in an article called
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"the hack that scared apple straight." it appears in the current holiday issue of "van at a fair". >> brian borough joins us now. it is a chilling story, especially for everybody who carries around a device which is pretty much everybody, these days. how did you find this phenomenon and find the grad student who uncovered it? >> well, the incident was reported back when it happened in -- on a late friday afternoon in august. it didn't get a lot of wide play and i went in and basically said, good lord, did this actually happen and tell me how it happened. what we're seeing -- what this marks is the gravitation of cyber ware, weaponized cyber ware that used to be exclusively used by the nsa, china and russia. we're seeing that now moving into the private sector. >> you know, the hackers that
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are discussed in your article, brian, are described as being evil james bond-like villains. is there a james bond character, though, that can stop this. or is it inevitable these guys are going to be able to maintain control of iphones at will down the road? >> it is a battle that will never end. the genie is out of the bottle. once these capabilities are out there, they are going to be continued to be updated, just as apple and microsoft, everybody else will continue to update their defensive measures. right now, if you're john smith sitting there in des moines, this is probably not going to happen to you. the type of people that are targets for this so far have been dissidents, political dissidents often in the middle east who have used these new tools being sold by what are called cyber arms dealers to spy on and harass their own dissidents.
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>> brian, is that the principle goal of the attackers, to get to certain people for political means, or is it also kind of an economy where essentially it can be used for extortion to be used for other things? >> it can be used for all sorts of things. up to now, largely we're seeing this type of spyware being used by smaller governments. pretty much any government that can afford 3 or $400,000 worth of weaponized software. so you're seeing it used in a political guise, more often. but as said, the genie is out of the bottle and it doesn't take much to imagine the day when a large corporation, if it were so inclined, might want to use weaponized spy ware against its own corporate dissidents or unions. >> what tools to companies have to combat this? we all get prompts to up date our operating systems so often. can they write code fast enough to fix this? >> well, that's one of the great debates, is who is winning.
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i think the bad guys are pretty clearly winning. this incident, weaponized software, which is the first time anyone has ever seen what's called a remote jailbreak, an ability to take control of an apple iphone from a remote source. that had actually -- it had actually been out there for probably four or five years, being operated all over the world, often against political dissidents and it's only being found now. >> all right. it's a great article. it's a scary article, but an important one in "vanity fair" written by the great investigative reporter, brine borough. thanks for joining us. >> bill, thanks. not to be flippant about an important story but they don't talk about this when it comes to blackberries. thank you. >> you're hold and tight. >> goldman sachs falling nearly 2% today. the stock retreating after the big rally since the election. what's behind the decline he asked? we'll discuss, when we come back.
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shares of goldman sachs falling today after hitting their highest level since 2007. yesterday, goldman gaining about 23%. >> gary cohen, though, president of goldman sachs, is scheduled to meet with mr. trump's
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transition team again this week, and there are reports he is considering leaving the firm. we wonder what does that mean to the stock? >> i don't think it means anything for the stock. >> because? >> because i think he's kind of perceived already as not the successor to blankfein so kind of out of the chain of command. >> and that -- government sachs very friendly. >> >> i would be shocked if he would be head of the omb. he's a trader. omb should be run by an administrative type. he's not that. >> if you look and try to interpret the stock, it's happy days are here again. >> you don't think it's just the yield curve? >> lower cap. >> double digits again. >> exactly. if you're dismantling the volcker rule, they're back to evaluation highs. so the big bet from here is, they actually do get freed up. i think it's questionable how much is going to change. >> yeah. it's a big run in a very short period of time. >> yes, it has been for a lot of companies. evan, always good to see you. have a good weekend.
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>> good luck with the blackberry. >> a steam-powered blackberry. >> i don't think they're manufactured any more. >> i feel very safe with my blackberry. kelly is back with us monday. >> you have a good weekend as well. >> same to you. >> that is "closing bell." "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. steve grasso, tim seymour, guy adami. a top analyst says apple is in for a lost decade. the man behind one of the most controversial calls on the street today will be here to explain. plus, billionaire steve schwartzman, speaking about president-elect trump's dream team of ceos this after trump warned companies about leaving the country. is trump a friend or foe of corporate america. and later, did you miss the trump rally? don't panic. we've got the one sector that could have you rolling in cash before the end of the year. we s


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