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tv   Closing Bell  CNBC  December 9, 2016 3:00pm-5:01pm EST

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>> awful idea. >> a couple people say they do it on wifi that sometimes is strong enough. >> that is apparently what we were talking about using wifi. >> show you how to do that later. >> you are so bad. >> thanks for watching power lunch. "closing bell" starts right now. . welcome to "closing bell" i'm kelly evans at the new york stock exchange. >> tgif i'm bill griffith. another record setting day for stocks on wall street. if the dow, the s&p and nasdaq close higher today it will be the first time in five years that all three have closed higher five consecutive days in a trading week. we will bring you some under the radar names that could be good buying opportunities. could the increasing market
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exuberance lead to a flood of ipos. we will look at which companies go public. >> very high profile names. breaking this morning, goldman sachs executive has reportedly been offered a position in the trump administration. we have more on what that could mean not only for the trump administration but goldman sachs itself and the issues they may face. >> and president-elect donald trump's team is starting to take shape. larry kudlow will discuss whether the picks will bring that deregulation so many investors are now expecting. speaking of which, let's start with the market new highs. bertha coombs is in times square and bob pisani is behind us on the floor of the new york stock exchange. ladies first today. >> nasdaq all time highs stoked by small and mid caps since the election. today it is really a big cap
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rally. we are seeing a little more love for the tech big caps like apple up nearly 2%. alphabet is up more than 5% for the week. that is the best weekly gain it has seen since july of 2015. not huge gains today the big cap tech etfxlk is at a 16-year high. it is 25% below march 2000 all-time high. we are seeing an historic high from microsoft. at least in terms of the chart. its market cap is still well below the record 619 billion back in 1999 but price earnings ratio is about half what it was so the valuations are much different on big cap tech names. bullish earnings and bullish outlook helping to take the index for fresh high. chips have been among the best
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tech gainers year to date. take a look at some of these. nvidia up. applied materials. f 5 is up 47%. that is more of a networking play. micron up 43%. i have to look at bio tech. they are bouncing back after having been on pressure the last couple of days. it looks like they are not quite yet positive. we are positive for the week earlier this week. if they lose for the week it will be a four-week losing streak. kelly, bio tech still very much under pressure, people not sure what will happen in the next administration with regard to pricing regulation. >> the nasdaq trying its best to shake that off. let's get to bob pisani on the floor where we are less than 300 points away from dow 20,000. >> still hitting new highs every day because we rotate into new sectors. new leadership comes forward as the old one takes a little bit of a break.
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take a look at the sectors. finances are continuing to lead. we are getting real estate, consumer staples and utilities. these sectors lagged all through november. industrials still okay but that was a big leader. that is taking a little bit of a break. you can see this in the dow. yes, the financials still up there. coca-cola and nike, consumer staples and tech, apple has been strong and then caterpillar was really big in november. that's taking a break. this is the rotation and you can see it in the dow. take a look at what is happening. it is happening again. another mid day lift. traders watch the market. they say i don't want to buy at the top and they say okay all clear so let's keep buying going right into the close. this is a slow melt up and a lot of psychology going on.
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>> not a gather of wall street people but this is just anecdotal but the topic of conversation was the stock market. >> there is that old classic signs at the top. there is something very big going on here, broader psychological interests. my hope for 2017 is we broaden participation of stock ownership. we all know the small group of people in the united states about 10% own most stock. wouldn't it be nice if people started getting interested again in the stock market? >> absolutely. are they asking you for like stock picks? >> it's like is this going to continue? we have to get the dow 20,000 hats made. look what's happening up 101
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points on the industrial average. not only record territory but those are highs for the session. let's talk about this in our "closing bell" exchange. joining us at post nine sitting next to peter costa of empire executions and rick santelli checks in from chicago. peter, i'm curious. you famously were out of this market for a while and then you got in when we got the 20% dip or 10% dip that you had been expecting. now what? how much longer does the costa family fund -- >> costa family fortune. we are out. i think that we probably have a little more room on the upside. i think long term i think the market is definitely still in the bullish cycle. probably the third leg, maybe fourth leg of that. right now i think that we are seeing a lot of retail investors get in this market. if you look at the vix it is trading at a point.
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anytime it goes below 12 i don't want to be in the market because i think that is the turning point. i think that we are probably going to see some sort of small -- not major sell off. i'm out. i'm going to let the chips fall. >> very interesting. >> you are looking at places that you think still offer great value in this market. what are some examples? >> we are long term investors and hold securities for five or ten years. we are looking out for the next cycle. we would welcome any volatility and opportunity. we run a small cap portfolio. we look for businesses that genera excess cash flow. as we have seen what is happening so far all of the agenda and policies set forth are very pro growth which favor small caps as asset class. >> small caps. >> you have three picks here.
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is that right? >> the largest wholesale distributor of pool supplies. chemicals, equipment, anything that if you have a pool and it is open you going to continue to maintain. able to grow the top line mid single digits. and had it has been able to groweps 15% to 20%. we think that is sustainable, as well. >> we show the stock is up 14%. it is everybody -- >> pool party. >> new pool construction peaked at 30% is currently 10%-12%. long term call option. >> rick, so all the focus clearly now is on the equity market but yet the dollar continues higher back above 101 comfortably here and yields getting ready for the big fed meeting next week. what is going on in your market?
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to rick santelli. >> i think we need all three lenses to take an accurate picture of the landscape. you have for the week tens of eight, 30s up nine. for the dollar index you are sitting close to the level that was the high trade in the third week of november which was 13 plus year high. stock market you can see all indexes on turbo drive. i really think this continues. just by the charts i wouldn't let anything go on a profit basis until i see a 20,000 handle for the dow. i think that will come a lot quicker than people think. in terms of interest rates it is hard to call a top. i continue to say you want to watch the 2.30s. i went to the possibility of dabbling in low 2.60s. i think we will moderate and take a breath. i don't see reason to fade the three pillars of growth trade which make perfect sense to me. i think the fed meeting next
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week and statement on wednesday i think many will be surprised at how the market reacts to a fed tightening. >> what were you going to say? >> that is pro growth environment we are seen rates back up accompanied by stronger dollar which we think favors u.s. centric businesses which if you look at manhattan associates or tyler not exposed to foreign currency and not exporting anything. domestic centric businesses we think will continue to be favored. that is well populated. >> peter costa, what are you waiting for now? what is the green flag you are going to wait for to get you back in the market? >> i think a pullback of maybe 5% or 7% i don't think you will see more than that. i do want to bring this up and i think that people are not really
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looking at this but the fed could potentially raise rates more than 25 basis points next week. i think that they don't normally let the market determine what they do but there are a lot of other data points that are very, very strong. they originally wanted to raise rates twice this year. they can get it done in one shot and let the market take a hit. it is not bad letting the market take a hit when it is at 20,000 as opposed to 18550. >> i wonder if i look at it from the fed's point of view are they going to look at increase in yields and think the market has done additional rate hikes for us? >> that is more than likely the scenario. if you look at the bigger picture and look at how strong everything is they have to be able to put that rate hike into and have it absorbed into the economy without having a bad effect on the economy.
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i don't think 25 basis points is going to do nothing. the market will probably rise from that. if they raise it more i think this economy, the market and everything can absorb it a little bit and the rally will go on. there is a pullback i will buy. >> your sister is online two. >> so is trump. so is trump. i think peter needs an elevator ride. i think 50 basis points by the fed is exactly what it needs. >> everybody is on record now. >> they won't do it. >> we'll see. and look what the market is doing as we speak here. >> fresh session highs. bob talked about it keep seeing mid day rallies. it is picking up steam. this is the highest level for the dow all day putting it 19,732. s&p up 11. the russell is lagging today. >> one of the intriguing stories out today goldman sachs number
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two executive gary cohen has been asked by president-elect trump to head up the white house national economic council. we will talk about goldman's prospects. dow component coca-cola higher after announcing a ceo change. we have details and reaction from the head of coke's biggest shareholder, warren buffett. you're watching cnbc, first in business worldwide. 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. but we won't get there without you.
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than slow internet from the phone company. say hello to internet speeds up to 250 mbps. and add phone and tv for only $34.90 more a month. call today. comcast business. built for business. >> translator: had juggernaut continues. the dow up 129 points right now. all of this in record territory. the dow 20,000 caps haven't come back from printer yet. they may not get here in time. >> the quickest move was from 10,000 to 11,000. that was something in the 20s in terms of days. if we do this in the next day or two that would be a fresh record in terms of the speed. >> just remarkable. american airlines, united continental, they are higher. american says higher average
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fares per mile have increased its revenue and profit forecast for the fourth quarter. united says it expects higher profit margins on stronger bookings and lower than expected expenses related to employment benefits. i can hear that. >> goldman sachs shares lower up mo than 30% since the election according to nbc news gary cohn has been asked to head up the economic council. a look at what is in store for the investment bank if a shakeup takes place. >> the potential departure of gary cohn not only points of increasing presence of goldman sachs alumni but would wrap up a series of major changes at the top leadership. it comes after the last two remaining executives with the coveted vice chairman title left
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recently. cohn has been closest lieutenant and stand in. if cohn did leave it is probable his titles would be sflit with co-head david solomon and harvey schwarz. outsiders in the running are co-head of the securities division, martin chavez and stephen scherr. earlier this week i interviewed scherr and asked him about a potential cohn departure. >> gary has been and is an enormously positive force in the firm. i think the opportunity may well be presenting itself. i don't know the details. i read it as you do in the paper.
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if you are just joining us, yes it is happening again today. a rally on wall street pushing major averages into record territory and we are just looking at the 30 stocks that make up the industrial average. 26 are positive today. >> and to the point you have been making the leadership keeps
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changing. today pfizer is leading the way. this is a company that they are up there. they had been hit before on comments. and now they are finally on the rebound today. >> caterpillar which had been a leader early on is the big laggard today. coca-cola is among best reformers. replacing ceo who has held that position for 8 1/2 years. kent will step aside in may and retain his post as chairman. james quincy will take the reigns. >> warren buffett is coke's biggest shareholder and praised the move saying muhtar -- i believe the company has made a great investment in the future. we reported howard buffet announced his resignation from coke's boards which did raise questions. >> something else to keep an eye
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on with warren buffett. let's take auick break with the dow up 124 points. 35 minutes left in the trading session. a leading trader will tell us what he is watching to the close. and larry kudlow weighs in on whether the new cabinet picks will deliver the deregulation that investors are expecting. stay with us. this is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit to see what adding futures can do for you.
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heading into last half hour we have the dow up 127 points. somebody tell kenny his mic is on. the sectors. kelly, i don't know if you can hear me. everybody is green. all 11 sectors inside the s&p 500 index are green and if you push in a little more, is that technology at the top of the list there? the financials are at the top all. health care is the laggard but still positive for the week here. kelly is talking right now. >> where have you seen a week like this where you have sectors up 5%?
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that is amazing. >> good stuff. >> i'm on the floor here with kenny polcari. we are continuing to pick up momentum. that chart is almost lifting off. >> 2250 which was the high yesterday if we pierce that you have to keep your eyes on it because it is almost that psychological number. we are getting to the end of the year. 2 1/2 weeks to go. you need a lot of asset managers playing catch up. >> is there a sense everybody will rush in and kind of jump on the band wagon? >> i think we are seeing it almost every day up another 130 points without thinking about it. i do think as we move into the end of the year we will see more of this. >> what are you watching for? next week we have the fed meeting. it's hard to tell how much of an event that is going to be. >> if that is not priced in -- every time you talk about raising rates they take another 150 points. it's almost like because
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remember -- >> signs of an economy. >> in september we talked the market was down. now you say they are raising rates and can't buy them fast enough. >> that's why colleague was telling us that he thinks maybe they have to do more. maybe people are getting too excited. >> i think the market is also pricing in two hikes for 2017. if she starts to indicate three or four hikes then i think you see the market take a pause back because people have to re-evaluate. >> oil used to be the story for the market. these things have a way of bursting back. china, too. the money outflow that has been happening, the pressure, it seems like no matter what is happening we should shrug it all off. >> i think there is a change in mindset and psyche of not only the american investor but global investor in terms of what is going to happen in the u.s. of next year and the year after with the policies that trump is discussing. >> it is very exciting.
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we will see where the rubber hits the road. thank you so much. >> meanwhile, the dow continues higher up. 137 points right now. but time for a cnbc news update with sue herera. >> here is what is happening at this hour. president obama has ordered u.s. intelligence agencies to deliver him evidence that the russian government intervened in the 2016 election. intelligence officials are concerned about disclosing info that could show russian involvement fearing it could compromise sensitive sources. joe biden turn meeting of premieres that he is confident the u.s. will continue to make progress on low carbon future. less than two weeks after wild fires tore through gatlinburg, tennessee, the town reopened to visitors. most of the tourist area was spared from the fire but 14 people died and about 2,500
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homes and structures were destroyed. residents of a florida apartment complex were forced to evacuate. that is a giant sinkhole which opened up behind several units. it is about 20 feet deep. luckily no one was injured. that's the cnbc news update this hour. >> so scary. >> a lot of that in florida recently. >> one of those happens in the wrong place it would be a disaster. >> it's terrible. >> ipthis case it wasn't. >> sue herera. president-elect donald trump was in hawaii thanking supporters and basking enthusiasm for his new administration. >> i believe we are in the process of putting together one of the great cabinets that has ever been assembled in the history of our nation. i want people to make a fortune because now they are negotiating with you. no different than a great
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baseball player or a great golfer. we have a lot of people in nebraska. a lot of good wealthy people. that didn't work. but those wealthy people aren't so unhappy now because the stock market has gone up so much because of us that those wealthy people just got wealthier. >> joining us now to weigh in on cabinet picks so far, larry kudlow. as we all know an informal adviser to the trump campaign. you met with mike pence in washington yesterday. gary cohn to be national economic council chair. what do you think of that pick? we are all speculator why he would take that job at this point in his career. >> look, i don't know gary cohn as well as others do. he is a real smart guy. i have met him. i have spoken to him. i think he wants to help trump. he is willing to take a pay cut to do it.
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i think he is a very pragmatic guy. some of my conservative friends are not happy because he apparently is a democrat. i'm a guy who just wrote a book about jfk and reagan and how important having some democrats or some republicans, if you are a democrat, in your cabinet because ultimately you have to reach across the aisle in congress and try to bring a bipartisan bill, for example, a bipartisan tax cut or bipartisan health care reform. >> that was good. i have to remember how to mention my book like that as a -- >> i try to be as helpful as we can. i can give you the sales numbers. >> larry, trump said he is putting together a cabinet. you heard how excited he was about it. what about actually getting approved? are there a lot of bumps in the road or is it too many to really protest kbens all of them?
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>> the hearings are one at a time. it's not the bulk so much. they go through this every four years. it's interesting to me. number one, i like the fact that many of these people are very successful men and women in business. i like that fact. we are talking about our friend willbert ross, my pal linda mcmahon going into small business administration, gary cohn, for example, i like that. i think trump is exactly right. i am tired of this, again, the left is still going to class warfare. you made money. you're a rich person. you ran a rich corporation and that's bad? would you like somebody who ran a corporation into the ground or someone who was unsuccessful? no. put the class warfare away.
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let's have talented men and women and try to make this country strong again. >> here is my question for you. i don't know that this is answerable until we see it in action, but, you know, some of the people who have been nominated by mr. trump seem to differ with him on certain areas. i think of willbert ross who says tariffs are the last resort you use even though mr. trump keeps mentioning them. you have mr. perut who is said to be a denier of climate change yet mr. trump said after the election that he is keeping an open mind on that issue. when it really comes down to it, who is going to be in charge? will they be allowed to impose their own views on this or is donald trump the guy, the final arbiter on a lot of critical issues? >> from my own personal experience in the reagan years and later on helping presidents
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and cabinets, it is the president who makes the final decision, period, end of sentence, end of paragraph, end of foot note, end of paper. it is the president who makes the decisions. having said that, i think it is terrific that you have somewhat different points of view inside the cabinet and senior white house staff. i can tell you mr. trump enjoys hearing different points of view. you can be persuasive. you might change his mind. you might not. when i worked for reagan i would say in all honesty, bill, i would say a third of his very top senior officials disagreed at the beginning with his lower marginal tax rates, a third. we had massive battles sometimes fought on the front pages of the "washington post" or "new york times." this isn't so unusual.
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you are going to have options. you will have discussions. you will have meetings. what's wrong with that? make no mistake about it particularly regarding this president he is the final decision maker. >> this morning ed lazeer told us he thought the first thing trump would look to do was lower tax rates on capital, not necessarily lower income tax rates. do you think that's the correct assessment? are people going to be disappointed if that is the case? >> that's an interesting point. i, myself, would prefer the business tax cuts to go in first right away first 100 days. that's what i would like to see. i believe you can cross the aisle and pick up 15 democratic votes at least along the way. i think that would be the single most powerful stimulus possible. lower corporate rates, expensing, you have heard me say this every day for the last five years. so i would like to see that.
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on the other hand, there are different points of view. i can just tell you as someone who has been privy to some of these conversations, some people want to go after the health care reform first. some people do not want to split up the tax bill. they want the whole bill, personal and corporate to go together. those are legislative strategy issues that would be determined as the white house works with mr. ryan, speaker ryan and majority leader mcconnell. me, i want to do the business tax cuts first because by the end of the year the american economy will be growing at 4% per year and then i got to sneak this in. i got to sneak this in. give me 30 seconds. if the economy grows faster as we expect interest rates are going to rise as they should. so 2% average interest rate today in the next four or five years will go to 5%, maybe 6%.
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i want the u.s. treasury debt management to issue 100-year bonds as soon as possible to take advantage of generational interest rate lows that we will not see again for hundreds of years. 100-year bonds. other countries have done 50s. other countries have done 100. we need to do that so we cut the interest expense for the next century. >> i think the yield on a 50-year uk is lower than 30-year because there are funds out there. >> the demand for insurance companies and pension funds and so forth would be huge. we are the united states. the dollar is reliable. even italy sent 50-year bonds. >> that's a risk, too.
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>> thanks, larry. we're about to turn the lights off at the new york stock exchange. good night. have a good weekend. less than 20 minutes to go. 18, in fact. s&p up 11. nasdaq up 22 and russell turned green. could this trump rally spur an ipo comeback next year? openn help you take on a new job, or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at
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we have been picking up steam into the close. the dow is up 127. s&p is up 11. russell is up a point and a half. any higher close for these major averages will be new records each of five trading sessions. haven't done that in about five years. let's get a market flash now. >> consumer staples are outpacing health care as the best performing sector. leaders include dr. pepper, coca-cola, walgreens and cvs. the sector up 2% year to date.
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still worst performing sector just after real estate and health care which are negative on the year. >> thank you very much. so the ipo market is getting a boost today after athen at the new york stock exchange. the stock is up 11% at 44.28. >> brian hamilton joins us now to talk about that along with our own bob pisani. who do you see in the pipeline if the market conditions persist? >> well, all the big names. you have snap chat, spotify, uber, they are all big companies. they are growing well. i see those. >> there they are. bob, is this ipo today a prestage of what will happen next year? >> ipo market is coming back
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since july. we have been consistently disappointed and again in december. where are they? we keep seeing -- here is the best things for ipo market. the markets are doing great. this is the number one thing for ipos in general with markets should be doing better. we are going to supposedly get deregulation and lower taxes. this is fantastic news. you can make an argument that the valueuations of small cap stocks including ipos should be higher on the trump rally. more should want to go public. we have higher rates. i think that might help and discourage private companies from borrowing money. in theory i don't know how you feel about this, this should be a great year for ipos. where are they so far? >> so you're totally right and totally wrong. this is the way i look at it. 50%. that is good. right now here is what is going
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on. i think you absolutely right. the ipo market follows the stock market. things are great. we have this big rally. but we are seven years into an expansion. when is the party going to end? so really you got lots of dynamics here. you got a long expansion and also here is the thing. you have private companies that can get money elsewhere. you go public guys like me, you have to file 2,000 government regulation forms all the time. that is not going to change no matter who is in office. you have a lot of good entrepreneurs on the sideline. 30 years ago there were 20,000 publically traded firms. i don't see that ending. you are right. it is all driven by the market but really you have a lot of entrepreneurs who are waiting and seeing and i don't blame them. >> uber is a classic example of that. they have been able to get a lot
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of money in the private sector and have been coy about whether they want to go public for a lot of reasons like regulation. >> there has been a valuation gap. private investors want prices high. the public investors are saying we have been burned on this. we have been burned before. we want you to lower the prices. that is good and healthy for the market. if you believe you are getting more deregulation and lower taxes you can argue for a higher valuation. that's why i believe this may make a difference. this trump rally big plus for ipos. >> do you think it is an inflection point? all the action has been in the private markets. now people are excited about the public markets again. that can be a major ground change if it happens. >> wouldn't it be great if the private investor started coming back to the stock market in general and ipo people started saying it is a good idea to go public. they haven't felt that way in a while. >> guys, i was just listening to larry before.
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he made good points but remember even the reagan revolution never really rolled back government regulation. i don't really see that. i don't see seismic changes there. i think the market is terrific. i think bob is right. the ipo market will be driven by that but you have a lot of money on the sidelines in the private market. i don't see huge changes there. >> good stuff. we'll see you in a few minutes because we are ten minutes from the closing bell with dow up. >> look at this. the dow is marching towards 20,000 and it is not lost on david. his market acronym of the week when we come back. the greatest population shift in human history is happening before our eyes. 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
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the dow up 129 points off the highs for the session. if you are just joining us, records galore. we were talking during the break here i think there is a new energy, an energy we haven't seen in a while on the floor here. i think the rally certainly has a lot to do with that. >> sure, even today we weren't up that much at the beginning and then start getting into the last hour and then the thing
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takes off. >> joining us here on the floor of the big board is our friend the independent investment consultant. you can sense that energy on the floor here, as well. >> you can feel the buzz. you can feel the vibe. the word for this week that captures that is record since we have been making so many records. the recovering confidence. business confidence, investor confidence and consumer confidence. consumer confidence this year sound like fm radio station numbers, 107.1. >> rock and roll. >> european central bank said we are going to keep doing this easing and stretch it out. people like that. i think very, very important is how the market responded to the italian vote. everybody said that is going to be apocalyptic. they said forget it. it doesn't phase us. >> what about china? >> china is basically we have
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had the producer prices and the consumer prices, imports and exports all surprise to the upside. that massive stimulus which may haunt us all sunday but has helped the chinese automatically move forward. o is opec and oil. and oil at 50.5, almost 51. basically they cut one point. they are trying to get another 600,000 out of russia. we'll see whether that works or not. they are nonopec members. the r is retreating bio techs. building on comment you had with bob pisani they pay high taxes. so basically if you cut down taxes that will help and they are candidates to take over. you can buy some bio tech right now. the final d is the strong dollar. you want to be careful that it
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noget too strong. it is up 40% since 2011. it has strengthened a lot. he wrote about the big epic battle between sparta and athens 431-404. he has a lot of quotes. he says always in victory prepare for defeat. therefore you want to basically be very careful with this return of animal spirits. >> how should people do that? >> i think you want to look at industry groups that are having defensive characteristic. right now it is all energy and it's all financials which have done so well. you mentioned this morning in a different outfit, by the way, i was watching. >> i have things to do in between. >> you mentioned this morning
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how strong the financials have been. i think you said 27% since the election. so therefore you want to begin to rotate out of some of these things. technology has been pushed to the side and starting to go back. bio tech is another example. >> stay right there. you have to go here in a minute. >> i was going to do it in hiding when we go to commercial. >> we have a market flash with seema mody. >> talking about the stronger dollar. gold prices hitting a ten-month low today on track for fifth straight weekly decline. those expectations of a federal reserve rate hike next week. gold mining stocks which have been popular this year are down by around 3% for the week. ticker symbol gdx to watch. >> thank you very much. so we have 2 1/2 minutes left in the trading session. i have bob pisani joining david and i for the closing count down. here is something that hasn't
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happened for five years but it is happening as a result today. turn your mic on. the dow, the s&p and the nasdaq will have closed higher every day this week. funny they are in record territory. there is the dow up 131 points. i was going to show you a five-day chart of all three major averages. >> animal spirits are back. bob pisani said that. >> let's move on. now i want to show you charts before and after the election and the impact it had on some markets. run through these. here is the dow. the leader by far goldman sachs leading financials. a huge influence on the dow. >> highest price on the dow. that is literally driving it. >> a laggard has been apple
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which would be symptomatic of technology which has been a laggard. there is that. look at the dollar index. you mentioned 40% gains since 2011. since the election it has been up sharply, as well. the ten year yield has moved higher, as well. we all know that. it has gotten into the 240 range. almost at 2.5%. what has gone down is volatility index. look at the spike before the election. got to 22 and now down to 11 here. >> and gold and gold mining shares. they have been pushed aside. and your utilities. >> real estate, utilities, consumer staples have come back. what is remarkable is four days in a row. stocks, they figure this is the
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all clear so i will keep buying going into the close. >> fear of being in is now fear of missing out. >> in the meantime, the rally continues. we close at records for the major averages. and you have the dow up 139 points today. stay tuned now for the second hour of "closing bell" with kelly evans and company. have a great weekend. thank you guys. welcome to "closing bell." i'm kelly evans and another record breaking session on wall street today. we started off quiet and ended with a bang. the dow up about 250 points shy of hitting 20,000 good for three quarter percent gain for blue chips and new record high 19,757. s&p 500 up. the nasdaq up half a percent.
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5444 39 50, 2,259 are new records. and the russell in the red for much of the session did turn positive slightly on the close. that gain of a tenth of a percent is good for a new record. 1,388. big and small, broad market or narrow you are seeing record levels here for u.s. equities. goldman sachs has also been surging since the election. part of the whole trade that lifted financials. it is up more than 30%. does that company have more room to run as it nears 2007 era highs? joining me on the panel we have cnbc senior markets commentator michael santoli along with evan newmark and steve grasso will join us off the floor momentarily. mike, another mid day session. we start off quiet and then ramp into the close. >> it has been pretty relentless. that pattern where it opens in a quiet way but firm and below the surface is strong.
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i think every day we go up and every day longer that this rally persists is really more of a measure of how under exposed the stocks are or how defensive people were going into the phase. we have people who say i would rather own stocks than not. the market is running pretty hot. it has gone almost vertical. it is good that it is rotating around different groups. some leaders are different. you have to be aware that sentiment is building up and fear of missing out is driving things as much as it is sober. >> that is another theme. going back to what you are saying health care stocks down. pfizer were among best performers. it has had a great week and is one of the best performers on the dow. the major averages dow, s&p and nasdaq up five consecutive trading days. just kind of a fun sentiment. >> even being down on the floor is a little bit of happy days
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are here again kind of thing. i expect people to run around with party hats. the real thing that is going on is what we talked about a couple of weeks ago is there is a tectonic shift of money coming out of bonds looking for a new home moving into equities. i expect that to continue. nothing has really happened in terms of policy and in terms of better earnings, economic data. you got to believe that things will move in the right direction. if you do then i would say i would avoid bonds at all costs. i think that is a bad place to be. i thought that for most of last two years. it's come really very true you lost 20% of your money or almost if you want long bonds over the last months. >> until that point they were better performers. >> absolutely. >> amazing how much things have
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changed. >> a lot of the investors were looking at mutual fund statements. they won't believe i was in a bond fund. probably down around 20% from highs. 18%. i think it peaked around 143. >> this is very long term treasuries. >> talking about 20 to 30 year dated treasuries. this is the end of the bond spectrum that has performed phenomenonally well. you made a ton of money on this end i think that trade is over. >> steve, what is going through your mind now? >> when you look at the sheer velocity that this is happening, up 8.5% from november lows. so to everyone's point here, everyone is still trying to soak in what just happened. they have not done it yet because there is asset allocation and then there is the
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sector allocation that no one wants tob buy the market at the highs. >> the every day keeps going is the day you could have bought. >> exactly. that is part of the point. i do think that it is healthy. mike touched on this, that you are seeing different leaders. you see after financials, energy, materials. you see retes take over. it gives something for everyone who wants to buy something so they don't feel like they got their picture taken. >> the action sort of speaks to people thinking the market would let you in in a more comfortable way. a lot of people were looking at these and saying december is strong but in the back half and the first half you are getting a dip. we didn't get it. so you felt like you had to buy it where it was. >> psychology works until it
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runs out. for your viewers out there especially people who feel like they missed out i advise patience. when you see stocks i know we talk about it like goldman sachs. >> you could have advised patients and here is the problem. why would you sell the market in january? the market traded up on lower gdp or flat gdp. the market will go higher. wages came in or stayed stagnant. those are going to go up. tell me why the market would -- >> i'm going to explain something. i was going to explain it but you interrupted me. goldman sachs is almost at its all-time high. goldman sachs in 2007 was the peak of finance, the golden age of finance. there was not an -- goldman sachs was making their money hand over fists in a thousand different ways. the world has radcally changed. for it to be near all-time high
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you have to be convinced that it is about to enter a new era. >> it is interesting to look at a different animal today than it was back then and different things that are happening in the credit markets are strong but nothing like the kind of activity we saw back then. i wonder and talks to bank analysts and feels like they are not raising earnings projections fast enough because of move in interest rates, because of trading activity, positive fundamentals that you see playing out here. >> i'm sure that is very true. you wouldn't see that they are expensive right now. when they go up at this steep angle anything can -- if we get the fed decision as expected it is a perfect buy on the news because you sold for bonds. if the yield curve flattens a little bit basically anything can happen once you are at this steep angle. >> the whole idea is this last month not about valuation but
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rotation. does it last forever? we're talking bet trading right now. you not going to sell them -- i'm just coming up with a blank when it comes to why you would sell. >> institutional retail investors are trying to get in on the rally. steve liesman joins us with details on his all american economic survey. >> this feeds right into the conversation you are having and shows americans are more optimistic than they have been in years over the outlook for stocks. we asked is this a good time to invest or a bad time to invest. now we got a seven point spread on the optimistic side. 40% of the public say now is a good time to invest. 33% say now is a bad time. take a look here at who has become more optimistic. 33%, big surge by republicans in their views of stocks, noncollege whites, seniors, independents and people with lots of money and more money in the market.
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investments over 50,000. we follow that group closely. what is the best investment? continues to be real estate. you can see that the shine is off gold a bit. the shine is off real estate and stocks becoming the pick for more american whz it comes to what the best investment is. this is part of a broader surge of optimism on the economy. the most in several years. we have a big surge when it comes to people's views for will the economy get better driven in part by outlooks by party. counter acting democrats becoming more pessimistic. >> which makes sense coming off the election. it is interesting how flows follow performance. so to your point if there are people who look at bond portfolios and get freaked out, can they ignore the fact that we are at record highs? >> steve grasso is a trader. there are lots of people, people
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who appear on the show generally speaking are traders but they are very interested in the flows. most individual investors were thinking about things. the time to think about not to be in bonds was over the summer when bonds were at their all-time highs. >> can i just make one point? it's not static. it's never too late to get in relative to where you are in your life cycle. you can get in now a little bit and get more next month. we talked about it like a binary decision. it isn't. if somebody said what should i do? i would say how much do you have and get a little bit in now and next month. don't play it. think about the long term. if you are investing for 10 or 15 years it is not that big a deal. it is not a binary decision. >> i agree 100% with that. i have never been a follow the momentum, put all your money. i'm not like that at all.
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you want to be invested over long term but people have to take a one to two year time horizon at least when they are putting the money to work. don't put your money into goldman sachs thinking it will double in the next three months and get a profit. >> what if you are a boomer who lost a lot in your 401 k portfolio or maybe you saw it coming and you got out and never got back in. now you are older, do you get back in now? >> the problem is you should never -- if you -- i have never been a believer who say you have to get out or in. that is exactly the wrong advice. >> the complaint has been i'm not getting paid for my savings. yields are too low. people used to be paid to be rich and low yields meant they were not getting paid for that anymore. if you look at corporate bond at 4% if your math works at 4%
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without a lot of risk then do that. it doesn't have to be about what the opportunity cost is for doing something. >> you can capture that now. what if you got in when things were down closer to one or two? that is the interesting question. steve, i don't know if there is a sense from the survey about what people think as to where rates are going. it makes sense if rates top out at 3%. >> we don't ask the public about their view of interest rates. i will tell you it is worth pointing out that they do believe in almost record percentages to how much the wages will go up and how much the housing crisis will go up. there is optimism and potential drivers of inflation but they are not just yet. i think depends on why things go up and why rates go up if people are making more money or wages are going up then rising interest rate is not that hurtful to them. >> you are going to be asked
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this weekend at holiday parties what do you think about the market and what do you tell people? >> i do believe in that long term and i do pick my spots around it. right out of the election i bought macro, merging markets because i thought it was consensus against it. i am a firm believer in what everyone has said on this desk where you average and buy a certain amount because you can't argue with the long-term trajectory of all markets. >> i just want to tell you one quick anecdote that reminded me of crazy days of late '90s. when i parked my car in the garage the parking attendant said all i want is one small cap and one large cap stock. just give me that. that is what he said to me. >> that is very tactical. a small cap and a large cap. >> i want to talk to grasso.
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>> thank you for joining us. >> just going to pass along the tips. >> you're already building layers into this thing. be sure to stick around to catch more next hour with the fast money crew. less than 250 points away from dow 20,000. what can get us there next week at the top of next hour. ahead here goldman higher since election up nearly 32% and closing in on 2007 highs. is it running too far too fast? the dow rapidly closing in on 20 k. if you think the trump rally won't last we have ways to play it without going straight to cash coming up. you're watching cnbc, first in business worldwide. ♪ ♪ well, if you want to sing out, sing out ♪ ♪ and if you want to be free, be free ♪ ♪ 'cause there's a million things to be ♪ ♪ you know that there are ♪ and if you want to be me, be me ♪
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♪ and if you want to be you, be you ♪ ♪ 'cause there's a million things to do ♪ ♪ you know that there are ♪
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there is the dow up 142 points. the bulk of that right in that last hour of trading where it really just lifted. that gave it a close of 19,756, less than 250 points away from 20,000 for the first time. and the biggest winner since the election is the financials. goldman sachs in particular is up nearly 33% since november 9. the stock within striking distance of all-time high.
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joining us to discuss whether this is a good investment, portfolio manager of large cap financials fund along with jackie reaves. thanks to you both for being here. this is a hotly debated one. dav david, what do you think of the valuation? >> i think the conversation was good before. i own the stock. they benefit from higher stock prices, more ipos, more secondary offerings, more activity, probably more bond, more equity selling. >> can you quantify that for us? >> i think the earnings are maybe 13, 14 times earnings now. it is about 1.5 times book which is kind of in the middle of the range historically. to me the earnings are generally going to move up and it is a
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company that is best in the business they are in. those are the kind of stocks you want to own. you hold it and let the market take care of itself. >> what is your view on goldman? >> we like it, too. we also own goldman as well as a number of other financials. we would agree with some comments that david was mentioning. there is an overall bias here on financials. ipo activities looking better for 2017 especially as a stock market and some people come to market that might not have thought it was a good time to do so. those are really strong underlying tail winds for goldman as well as other financials. >> i have a question for both of you. you don't have to give a whole full explanation. are financial markets undergoing -- are funds flows shifting towards passive fund
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management, lower cost products or do you think there is still a role for active fund management and what we call a lot of trading? i would argue that the industry especially since 2007 is undergoing a maybe not secular decline but secular flattening. if there is pickup in activity are you going to get big fees? are you going to get big fees from hedgefund trading? are you going to see the big margins for most parts. >> i think this market my sense is that the market has moved up across the board. >> remember the financials have moved up and people are saying the financials have run too far. remember the market is making all-time highs, as well. the financials aren't the only
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thing that is going up. the question is which is the tail and which is the dog. i think in terms of kmaudatization that has happened and happened in every industry. our fees are under pressure like everybody else's. kae companies make adjustments. they made a lot of adjustments and now you have a little lift in rates, little better economy and loan demand and those adjustments which are on the cost side will start to show up in much higher margins much sooner than what people are anticipate. >> there is also a little bit -- >> maybe executive risk. gary cohn has been running things at times. if he goes to the white house what does that mean for goldman? >> earlier on in the segment i heard about deep bench. goldman has a deep bench of
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talent. we would agree that there is opportunities should he choose to move on to d.c. that somebody else very strong would take that opportunity up. we don't really think there is any risk on that side of the equation. and also look back in history how many times have d.c. really tapped goldman sachs and other wall street executives to come to d.c. to help them frame policy. >> you want to give us any inside baseball -- >> i'm not going to give you any inside baseball about my friends. i will say it's just interesting how short relatively short the stock market's memory is when it comes to the financials. what i mean by that it's not the way that they were making money ten years ago, they are not able to make money in that way today. i'm not saying there won't be regulatory shift but it is interesting to me how quickly
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the investors and analysts are willing to go. it will be just like before. it will not be just like before. >> i would jump in there and say that i agree it is different. there is a lot of things that have shifted. alone taking a hook at the regulatory element and we don't know what is going to happen going forward but i think the confidence that the dodd-frank regulation and the tone that is out there won't continue to be pursued at the pace at which we saw over the last few years and that the overall departments and hiring that a lot of financial institutions have had to do whether a community bank up through the biggest of wall street firms out there had to hire tremendous amount of people. now think about that. they might be able to actually shift and hire more on the revenue side. hire more for loan production and increase demand because of stronger economy across the u.s. and the globe.
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>> we'll see. thank you for joining us talking goldman there. >> i would just point out that we are at the same nominal price as '07 but at 1.3 times book value. goldman has been building up book value. doesn't mean the stock stays here. >> inflation adjust the terms, too. >> breaking news on donald trump's search for secretary of state. john harwood, what can you tell us? >> rudy giuliani has joined chris christie in having a rough fall from grace during the transition. giuliani initially was seen as front runner to be secretary of state. he publically auditioned for the job. donald trump put out a statement saying rudy giuliani has withdrawn his name from consideration after it was clear that the president-elect was not satisfied with his choices and was looking elsewhere to mitt
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romney, rex tillerson and others. and he said in his statement that rudy giuliani had withdrawn, that he still considers him a friend and will seek his advice as appropriate and can see an important place for him in the administration at a later date. tough day for rudy giuliani. >> john, do you read this as a rebuke for rather public campaigning for the position? >> it is impossible to say what all went into this. you did have some murmurings of opposition from people like rand paul, the senator from kentucky to rudy giuliani's nomination. there could have been some resistance that played a role but there was nobody in the campaign that was a more diligent surrogate and more loyal surrogate to donald trump than rudy giuliani and this has got to come as a big disappointment to him. >> as we await that announcement
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for the position. dow component coca-cola rallying after announcing ceo will step down next may. the stock has been under performing. what the executive shakeup means for the company and shareholders next. according to reports the kpks on mobile ceo top contender. we will take a look at rex tillerson's track record and foreign business ties.
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welcome back.
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coca-cola rallying today. it is one of the leaders on the dow after announcing ceo will step down next may with james quincy taking over. >> well, the change means this is a smooth transition, the most orderly in the history of the company is what the current ceo told me this morning. we looked at the three big accomplishments of kent in his 8 1/2 years as ceo and three challenges facing incoming leader james quincy. let's start with muhtar kent. under his watch seven brands including fuse and smart water became billion dollar businesses. he grew the international foot print. and he made coke the company more lean and productive spinning off most bottlers which is expected to complete by the end of next year cutting
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billions of dollars in cost and productivity. as for the challenges ahead for quincy when he takes over on may 1 soda consumption is still falling. it has been declining for the last decade especially in diet coke. pepsi expanded snack business as response. coke has done mini cans and focussed on stills portfolio. currency swings have grown. protectionism has been rising overall and this is a company that operates in more than 200 countries around the world. finally, we are buying food and beverages online and on our mobile phones and that is a big switch for a company that has worked hard to secure prime shelf space over the years with major retailers. digitizing the company in the words of quincy this morning when i asked him about one of his big challenges that he faces. he says james will be his biggest legacy for his part.
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some may be pinning it to the idea that warren buffett owns 9% stake did announce that support. this one day after his son decided he is resigning from the board of directors to focus on his charity. that was seen as a good support potentially from a major shareholder. >> important leg of the stool. coca-cola shares up 2.5%. the dow is up 142 put it at 19,756 for the close 250 points shy of 20,000. the s&p 500, nasdaq, russell all closed at new records and for the first time in five years for the five trading days we have had all three major averages have been up on everyone. it's time now for a cnbc news update. let's get to sue herera. >> for the first time dylan roof's video confession was played at his death penalty
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trial. while the video was played roof sat at the defense table hardly looking up. on the video he is seen laughing throughout the questioning. two of the largest suppliers of life saving drug have dramatically increased prices threatening to make it less likely that someone can be saved from potentially fatal overdose. the warning published by the new england journal of medicine. bands of snow dumping one to two inches per hour have hit places like jamestown. residents have received more than 19 inches of snow and there is more on the way. and a bee caused quite the buzz at the franklin templeton shootout in florida. on the 7th hole partners matt kuchar and english had to stop play because a bee landed on the
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golf ball. an official had to be called in and try to pry it off the ball. i don't know why but there you go. that's the news update. >> because the players can't touch the ball. >> if i had an official to follow me around. i am terrified of bees. always have been. >> i'll see you in a few minutes. the markets are surging since the election. can the rally last? a debate and how to position the portfolio is next. we are going to hear from mom and pop shops around trump tower that are seeing a decline in business. that's still ahead.
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because i grew up here in oakland, my family still lives here. every time i go to the customer's house, i treat them like they're my family. if they smell gas, or they don't have hot water, i'm there to ensure that by the time that i leave, they feel safe and they can go back to their day to day life. to learn more about gas safety in your home, visit together, we're building a better california. welcome back. pretty much everything was rallying today. the dow up 142 points. the s&p 500, tech heavy and health care heavy nasdaq and the small caps, russell 2 thousand only up about a point and a half. the trump rally has been roaring higher. since the election up more than 7%. s&p up more than 5%. as the dow inches its way up to the 20,000 level there are those questioning just how far this
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rally can really go. david tice says pullback can come after it hits 20 k. no reason to fight the rally. welcome to you both. you're not a believer? >> i think i'm going to predict we will hit 20,000. >> you are really going on a limb there. that's 250 points. >> after that i'd say this is dangerous. i would say on a risk/reward basis there is a lot of things out there a lot of us know the problems. wall street tends to focus on one thing. they are now focussed on the honeymoon period for trump because of infrastructure has lower taxes there are a lot of other problems. interest rates gone up. we have a stronger dollar now that will hurt earnings. six straight quarters of down
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earnings. >> let me ask you where would you put your money right now in cash or other parts of the market that you like here? >> i really feel gold is giving you a gift here. we ended up having a nice rally off the bottom. off the january low where they have been down 80% so they rally more than 100%. market down 33%. gold is money. it always has been. gold you can see the value of a good suit. it's at low risk, no risk investment. you are still a believer in good old fashioned stocks. make the case as we approach
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20,000. >> well, we are still seeing the turn in the data. that is what we are keying off of. coming into the year we were under weight stocks. we were overweight bonds. when we hit round about brexit we saw a dramatic change in the tone of the data. the data picked up. the economy started looking better. we are now looking at earnings that are rising. we like the firmer dollar. as we have come into the back part of the year here it's been joined by an improvement in sentiment, credit sprea hav come in. there is no rean to fight this. we went from under weight to overweight in the middle of the year in terms of equities. as we come through the back part of the year we still like financials. we like technology and we would take another look at utilities which backed up here. industrials, as well. i think those would be the areas to look at. >> kevin, i have a question. is there a valuation at which
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you would say don't buy anymore? let's say between now and the end of the year all of a sudden the market ran another 5%, would you tell clients at that point it's run far enough or would you go don't fight the momentum here no reason to fight it? >> i'll tell you how we factor that in. if you look at valuations they do matter. they are always squishy. it is hard to put a precise number on it. if you look at forward multiple on s&p it is above average. maybe 15% to 20% ahead of average for the past years. if we make investments we are thinking 15, 20% probably bleeds off over the long term. we would make a deduction to our expectation for a return maybe knocking off a point and a half or two points over the long term. then you still have to compare it to what is available. cash returns are still not particularly attractive. you look at bond returns we are
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not seeing much there in terms of return from here. so you really have to look around and see where the opportunities are. we are not at very high multiples like the late '90s. >> we dpaut to go, guys. thanks for joining us debating both sides. we have a news alert on china. sue herera has that story. >> concerns china and world trade organization. the obama administration has officially decided that it is not going to grant china the official market economy status that that country thinks it deserves. china contends that washington and all the other wto members should grant it that kind of status which would lower tariffs because it is the 15th anniversary of china's ascension into the wto and under the terms of the deal beijing is claiming that is what should happen. however, the obama administration says if china wants to benefit from treatment as a market economy country then
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it must change its own practices to let the market play a decisive role in the economy. so it's sure to heighten tensions between the u.s. and china and with the incoming administration it is going to be interesting to see how all of that plays out. back to you. >> thank you. all eyes on state. some wonder if the energy leader is right to lead our nation's foreign policy. we will look into that next.
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just a short time ago we learned rudy giuliani will not be president-elect trump's pick for secretary of state. one of the candidates reportedly still at the top of the list is rex tillerson. he started there in 1975. tillerson is well known and has decades of experience in business. is he the right choice to be secretary of state? joining us now is national energy correspondent at the "new york times." thanks for -- i'm sure you need to be at your desk. at reportedly rex tillerson is the top pick. the only thing that i think a lot of the public is reading about him are ties to russia. just talk us through what you think the sort of pros and cons
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are of him being in this position. >> sure, kelly. thanks for having me on. you know rex tillerson would be a highly unconventional choice but i'm starting to get the feeling that this is going to be an unconventional administration. rex tillerson you know as you said, he spent his whole career at exxon mobil. exxon mobil has operations in about 50 countries around the world. they have relationships with countries that include qatar, russia. they have joint ventures. so mr. tillerson has a knowledge of world leaders and the world. that's the plus. i think you are going to have a difficult, controversial -- he'll have to prove himself before the senate. there will be questions about
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climate change, his relationship with vladimir putin, arctic drilling and on and on. >> cliff, i wonder about somebody who is a former ceo of exxon, that is a vast empire and you're the boss. somebody who is going to be really for an administration for a president and try to stick to certain diplomatic lines that they are trying to hold to, how do you think as a personality he might deal with that? >> that's a great question. i have spoken to people at exxon mobil and they have made that point themselves. he is a tough, take charge leader and he would have to take instructions from the white house. however, i think that he probably would be a very, very strong secretary of state if he took the position. i don't see him taking orders and doing things that he doesn't think is right.
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>> cliff, i know this is -- you are the energy correspondent but the secretary of state position, is it what you make of it? we have seen hillary clinton who is a world traveler. we know there are different approaches to this job. what do you think that rex tillerson would do in his role as secretary of state? >> we don't know that because the positions that he has taken as head of exxon mobil have not necessarily been the positions of the united states. for instance, he has publically questioned having sanctions at all generally as being effective unless they are complete. he has taken positions independent of the united states because he sometimes is working in parts of the world where the interests of exxon mobil do not fit neatly with those of the united states. so he has a deep relationship
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with russia. he's partners with the qatarys. we have an uneasy relationship with them frequently. so it would be a big adjustment for him. >> and it would be interesting to see what it means for exxon, too. we will wait for news for the news. thanks for joining us with information about him in the meantime. >> my pleasure. >> security around trump tower has disrupted some businesses as the president-elect continues to develop his cabinet. how local stores and shops are fairing since the election.
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welcome back. before the election, trump tower was a beacon of tourism along new york's fifth avenue. and now as the home of the president-elect, the neighborhood is looking a little
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different. kate rogers and the impact it's having on the neighborhood. kate? >> reporter: hey, kelly. that's right. there has been a lot of talk about high-end businesses from gucci to active niece feeling this security information. but small business just around the block told us they're experiencing major losses since the election of trump. >> this year we've had an excellent year up to this point. we've been up 20% on the average. november we're down 30%. police presence on the corner has just been, you know, intimidating. so what really puts us over the top this time of year are tourists. and they're scared to walk down 56th street. >> reporter: a higher-end italian restaurant told me they're down between 30 and 40% since the election. because their customers are having a harder time getting to the door. >> they like to be dropped off and picked up. and they can't do that. oh are if they can, it takes a half hour and a lot of people
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for lunch, especially if they have one hour for lunch. so they lose half an hour and they cannot come here. and a lot of other businesses around here. >> reporter: peter, the owner of the public house you heard from first on that tape, said he's putting together a petition of nearly two dozen neighboring businesses asking them to open up west 56th street, because losses of 30% or more aren't sustainable for any company, especially a mom and pop. back over to you. >> the traffic point is an excellent one. you can't get around trump tower at all, kate, especially this time of year with the holidays and tourists who are jam-packed along it. so i wonder, do you think the president-elect could come up with something creative here? this problem isn't going to go away any time soon. >> reporter: you know, when i heard them say they were planning this petition, it sounds like a great idea, but move the security tower to where? you can't walk fifth avenue, either, so it seems to be a losing situation for everyone involved. you have to imagine the pressure is on, but there is a long list
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of tasks for the president-elect. and i know that this is probably on it. but might not be the highest priority. we'll have to see what happens. i will say, one deli told us they're seeing more foot traffic from police officers and secret service agents, which i found interesting. they were actually up a little bit. so it's been bad for some, but good for others, if you got coffee, quick things, people are coming in and out. >> that makes sense. and maybe trump can hold meetings at the italian restaurant and go for a drink at the pub. you know. maybe it would work. >> reporter: you never know. yeah. >> and thanks for braving the cold for us. kate rogers outside trump tower. pensioners in dallas have to wait for payments. the dallas police and fire pension system halting. how dallas is trying to fix the problem and if other large cities are at risk is next.
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welcome back. halting withdraws and payments from its deferred retirement program. the vote stopped $154 million in request in withdrawals and the dallas mayor in ten years. this has been percolating.
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by the way, as a financial move, to take this payment as a lump sum, the fact they can do this in the first place, what is going to happen with that money? is it going to be invested wisely and if they withdraw at lower rates than the assumptions? the fund itself is subsidizing. >> right, exactly. >> the only way you get here is through some kind of mismanagement or bad policies in general. it wasn't funded properly in the first place and then you can't let the fund itself become so unstable based on the pace of lump sum withdrawals. but that being said, i don't see a way out of it, unless you have the municipality somehow -- >> they're talking about how the city is going to have to contribute 35%. >> what's interesting is not just the case of dallas, but huge pension shortfalls in new jersey, chicago, a lot of cities across the united states. is what this change in the market may do for the pensions themselves. because a lot of these pensions were very heavily fixed income, and if they had a couple years not hitting the 7.5%.
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>> still way too high. >> you can see some real problems, big, big pension. >> increase longevity, rates too low. they have kicked the can down the road in terms of trying to fund these things. in terms of worry, people go could there be a run on the pension system as people start to wonder, will they actually get the benefits. >> to the extent you have the ability to do that, that's a risk. the bond market selling off is more good than bad for them. they are holding the bonds to maturity. so if they can reinvest and match them up with liabilities, that's okay. the problem is the assumptions still too high across the board. >> a lot of them end up in structured products that are a nightmare and the equity thresholds are so low because they couldn't handle the quarterly volatility. >> in addition to the christmas rally, since i think we're running out of time here, it's going to be really, really interesting to see how the next couple weeks play out and what it means in terms of performance of the pension funds, of the hedge funds, of the active fund managers.
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this year may be another real awakening that people should put their money in indexes. >> a lot of people looking at the pensions and small investors at potentially baling them out and coming in late. >> mike, evan. thank you. that does it to be cloeg "closing bell." "fast money" starts now. >> and a lot of people in nebraska. a lot of good, wealthy people fighting us, right? that didn't work. those wealthy people aren't so unhappy now because the stock market has gone up so much because of us. that those wealthy people just got wealthier, right? ♪ money money money money >> and friends, donald trump is right. america is getting richer. how about $1 trillion? that's how much market cap the s&p p s&p 500 has gained since the election. the dow, nasdaq, s&p and russell closing at record highs. the dow just a mere 250 points away from the huge dow. 20,000 milestones. will it come next


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