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tv   Closing Bell  CNBC  January 4, 2017 3:00pm-5:01pm EST

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holiday season. people are spending money on everything else. i think we hit dow 20,000 tomorrow. >> that's your prediction? >> because i'm not shehere. >> thanks for watching "power lunch." "closing bell" starts right now. yes, hi, everybody. welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> i'm bill griffeth. busy day. a busy couple of hours coming up. the fight over repealing obamacare heating up on capitol hill today. president obama and vice president-elect mike pence both met with congressional leaders today on that topic. we have details coming up. plus, former aetna ceo ron williams will be here at the new york stock exchange to talk about the impact an obamacare repeal would have on insurers. that will be a cnbc exclusive. we're looking forward to it.
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rex tillerson said to me with members of the senate, any minute now we'll bring you comments or news that might come out of the meetings as they happen. we're expecting to get the final numbers for u.s. auto sales in 2016. that's coming out any minute now. could be a record-breaking year. are we nearing a top for the auto market? we'll pursue that topic coming up in a little bit. and, of course, dow 20,000. a late-day rally could send us over the level. up 57 points on the dow now to 19,939. we need another 60 points. you're purposely keeping the dow 20,000 hats out of the picture. >> off the premises. >> so it can possibly happen. starting with the fed's december policy meeting minutes. they came out with these within the last hour. steve liesman has been poring over them. this was the day they voted to raise rates. >> they were thinking about it and they raised rates. they were talking and fretting
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over fiscal policy and the possibility of massive fiscal policy that could be coming in the year ahead. that would be this year, from the election of donald trump. in fact, the minutes show they were fretting over the fiscal policy and warned of the possibility of higher or tighter monetary policy, tighter rates, if there was an expansionary fiscal policy. it did see upside in growth and employment and inflation from fiscal policy, it was uncertain ultimately over the timing and the amount and makeup of those new fiscal policies that were coming. and it was a little concerned or cautious over how much the market had reacted to it. it also saw the possibility of downsides from the coming policy. they mentioned, for example, the possibility of trade barriers was one concern mentioned in the minutes of the december meeting. concern about dollar appreciation and the kind of struggle between the dollar getting stronger which reduces
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inflation and the fiscal policies by increases inflation and a concern that the fiscal policies could fall short of market expectations. these are some of the questions i will get a chance to ask john williams when i meet him and talk to him tomorrow, the san francisco fed president, in an exclusive cnbc interview at 1:00 p.m. tomorrow. there is also a lot of fed-speak this week, kelly, that we'll be hearing about, how they're factoring in this issue of fiscal policy and the possibility of higher rates. >> so, clearly they're shifting from being data-dependent to policy dependent right now. did i read -- >> aren't we all, bill? >> did i read a line in there that they would expect, if the fiscal policy is pretty aggressive, they would be more aggressive with their tightening as well, yes? >> yes, absolutely. there is concern, you know, that you've got the expansionary fiscal policy into an economy that they see is running at or around full employment. there is another section of the minutes, bill, where they discuss, if the unemployment rate falls below what they
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believe to be the natural rate of employment it could also lead to tighter policy. two separate warnings in the minutes of the possibility of tighter policy in the year ahead, depending upon the policy that comes from the fiscal side. >> steve, we'll let you go. catch that plane. we'll see you tomorrow with john williams. >> thanks. >> steve liesman. to the other big story of the day, auto sales hoping to set a record for 2016. phil lebeau has more. >> we're awaiting the final numbers from auto data in terms of the total seattlales for 201. when you look at the makers who reported december sales, almost all reported better than expected numbers. gm, toyota, nissan. honda reporting record numbers. nissan, honda, porsche, mercedes-benz all reporting record years for 2016. that's why, when you look at december, a few things stand out. strong transaction prices. trucks and suvs still in hot
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demand, helping the auto makers lower inventory. a look at annual auto sales. last year the total was $17.46 million. in a few minutes we'll find out if we got just a little bit higher than that. that's the expectation out there. as we look at the auto stocks, almost all of them moving higher today on the optimism that perhaps this bull run that we have seen for auto sales will continue into 2017. one last stat, guys, seventh straight year likely that we'll see higher auto sales in the u.s. we haven't seen that since the early 1920s. back to you. >> i want to go back briefly to your interview with carlos ghosn last hour. i was struck -- you asked him about the impact a tariff or border tax would have. they are the number one automaker in mexico. >> mm-hmm. in mexico. >> he said they're taking a wait-and-see attitude. i am stunned by that. don't you think they'd have reps
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in washington putting their ear to the ground to figure out what may be coming? >> i'm sure they do. absolutely. they have lobbyists and the auto industry as a whole is very tied in with what's happening in washington. i thought it was a pragmatic answer from carlos ghosn. he was faying, yeah, we have a huge plant in mexico. another plant opens this year. that doesn't mean we'll shut those things down. we'll have to adjust if some type of border tax comes in. it was not a defiant tone which we have heard a couple months ago from some auto makers saying, oh, we'll still build in mexico. >> that tune has changed a bit. thanks, phil. to the closing bell exchange. joining us today jonathan gottlieb from rbc next to keith bliss and rick santelli checking in from chicago. keith, your notes, i was reading
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earlier, in neutral. a report was out today -- i am not asking you to second-guess it, but morgan stanley said you bought the election, sell the inauguration. that's becoming sort of a prevailing feeling on wall street that that's the time to correct the gains. >> i would be hesitant to play it out. as we've seen in the last few months, every time someone bet the market was going down, also in the last five years, they were absolutely wrong. i would be a little bit nervous. the key will be the noises leading up to the inauguration and in the first couple of weeks up to the first 100 days after trump takes the office and the congress gets to work. certainly there is a lot of euphoria. people are getting nervous about some of the bull indicators you see on the survey. six straight weeks on some at high, panic levels where you'll see a 10% selloff.
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i don't see anything to move us out of this. we've been edging sideways and i see the trend continuing into january 20th and beyond. if they come out with really big news around taxation and with news that they can actually get it employed, taxation, health care, regulation and other things, i see the market can still get to work. a look at the money flows, they've been flowing into financials, industrials, consumer noncyclicals and the like. that's a bullish sign for the run to continue. >> jonathan, you brought us baskets with a couple different plays. higher rates, competitive advantages, cyclical opportunities. what do you think about the fed minutes just now? maybe a shade dovish? does that mean it's time to put on the higher rates trade? >> this is a reflation trade, interest rates with up 100 basis points since july. while they have taken a breather in the last few weeks, the indications are that a tight
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labor market will force rates higher, continuing to benefit the financial sector and beat up on the bond proxies. i agree with the point keith was making a second ago that i don't see any reason why the cyclical trade will stop short here. this will be the first earning season where energy is helping earnings and not a drag. >> rick, what did you think of the market's response to the minutes? it wasn't dramatic but the dollar index is lower. the yields initially lower. they've come back a bit. what did you think of that? >> the moves in the dollar index slashed the euro versus the dollar and the curve were minuscule. both reversed out completely. the dollar index is now a bit higher than it was and rates are a bit higher than they were. i don't know. i think that the market's response to the minutes was spot on. there wasn't anything new in there, but the overriding notion that we have a fed fretting
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about draino coming to fix the clogged pipes that they most likely caused, and they are worried where is all the drainoff water going to go. if fiscal policy works, the fed will take the credit. if it doesn't the fed will point to fiscal policy. it's the only way out. in terms of what i think of the market so far this year, let me see. we had a 1600-point rally. the dow isn't any lower today than it was at the end of last year. the dollar is not any lower than the last day of last year and interest rates are almost identical to the last day of last year. i am not sure about buy the election and sell the inauguration. i think i would like to see how the market reacts to the first couple tweets by any of the democratic senators or congressmen that try to stand in the way of the trump train. that will be an interesting day to handicap what the market thinks about future legislation. >> we got the numbers overnight.
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inflation in the euro zone better than expected but pretty low at 1.1%. it's easier to see the picture in the u.s. in terms of better economy, fed pulls back and fiscal stimulus, i guess, but what does it mean for europe? >> i think europe is really in a bind. i never use -- inflation being higher as necessarily an unqualified always good thing. i don't believe that. i think japan -- i would rather have their very steady rate for a very long time. it's other issues that are encumbering their economy. but i just don't see a lot of positives out of europe. i will say it for the millionth time. there is no way any economy, any developed economy on this planet is going to have a growth economy without a healthy banking system. end of story. it's digital. it's one or the other. >> keith, we have gone through periods where it was oil calling the shots. the dollar calling the shots. you know, fed policy.
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what is it now? are we just uber focused on washington, d.c., and waiting to see what kind of fiscal policy comes out of the -- out of the congress? >> i think we should be focused on washington, d.c. when you talk about -- when you look at some of the policy prescriptions there were illuminated during the campaign and could now be put in place with trump and his party controlling the moving parts down there, those were very pro-growth stimulative types of policies. it's the thing we'll have to focus on of the if they're able to be implemented and executed properly it will dictate what happens on the monetary policy side and will dictate what happens on the taxation side and where the money flows inside the equity market. one thing that gives me cause for concern, the rallies have been driven by a narrow group of constituents. look at goldman sachs. it's rallied 33%. russell 2,000, the financials and been carrying the weight.
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i would like to see it more broad-based before i feel good about a longer rally. >> you have a list of companies you think have competitive advantages and should do well in almost any environment. who are they? >> it's not in any environment. in this reflationry enenvironment, there is a reason why the goldman sachs of the world are doing so well. they do better when the economy is getting stronger. the whole financial sector screens extremely well. old economy companies that are really at competitive disadvantages, i am talking about brick and mortar retailing and old economy tech stocks look really attractive here because this is an environment where a rising tide kind of lifts all boats. and then, within the industrial sector, you have the transports, you know, really looking much more attractive than some other parts of the group. so there are clearly some
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winners on this reflation trade. and yes, i agree with the comments made a second ago about these groups being a little bit narrow. but there is a reason. those that are levered to more economic success really should reflate. that's exactly what they are doing. >> all right, guys. good to see you and thank you all for joining us. appreciate it. see you later. we're up 59 points. we need another 59 buoyanpointst the dow to 20,000. s&p 500 up 13 points. nasdaq up nearly 1%. russell up 1.5%. certainly some strength. we'll talk about why applications for new mortgages dropped at the end of last year despite a slight declaine in mortgage rates. aetna's former ceo ron williams speaks with us exclusively on the best and worst scenarios or health care
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companies and the businesses they serve. you're watching cnbc, first in business worldwide. s stton i
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state designate, has just completed a meeting with one of the democratic members of the foreign senate relations committee. >> there you go, guys. rex tillerson on his way into chris coons' office, a democratic of delaware. we asked mr. tillerson whether he thought mr. trump should sell any of his assets. he had no comment. we're expecting a press briefing. you see mr. tillerson on his way into what they call the photo spray with senate coops. he is making the rounds today. this is a hello, get to know you series of meetings with the senators ahead of his confirmation as secretary of state. this will be an important meeting to try to reach out to some of the democrats and get a feel for what their reaction is to his nomination. you've seen comments from greenpeace and environmental groups that are not entirely excited about having a former
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exxon executive as secretary of state. that's the challenge they have to navigate here on capitol hill. back to you. >> we should point out, chris coons, the democratic from delaware said publicly he would prepare a challenge to this, and he has said that he bets there might be some republicans on the committee that might not vote for rex tillerson as well. so these meetings are very critical for his nomination. >> this lays the groundwork for whether they'll be able to pull some of the democratic votes, whether they'll be able to hold all the republican votes they need to get mr. tillerson confirmed as secretary of state. the other key issue to think about is how these democrats are strategize for the rest of the year, not just these nominations. will they mount a vigorous on all fronts defense against anything donald trump wants or will they pick and choose their battles and will this be one of their battles. they may think they have an opportunity here because of the putin connection, rex tillerson
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accepting a medal from vladimir putin. the democrats may feel there is a weakness there and they may be able to pull over republican votes. some republicans are not comfortable with u.s./russian relations changing dramatically under a trump administration. >> thank you. we'll listen to see what he has to say. applications for new mortgages and refinances plunged at the end of last year. >> mortgage interest rates came down slightly to end the year, but not enough to end the bleeding in the home loan market. application volume plunged 12 frs for the week ending december 30th, seasonally adjusted compared to two weeks easier. weekly volume was not reported last week but included an adjustment for christmas. volume usually drops over the holidays. but this was bigger than usual. higher rates since the presidential election hit refies hardest. applications to refinance fell 22%, seasonally adjusted during
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the two-week period. they dropped by more than half in the last four weeks, and ended the year 13% lower compared to a year ago. this is the average account interest rate for 30-year fixed rate conforming loans fell to 4.39% from 4.45%. mortgage applications to purchase a home have also taken a hit from higher rates, though less severely falling 2% during the two-week period and ended the year 1% lower compared to the end of 2015. they may have gotten a boost but people trying to lock in before rates rise more. next month may take more of a hit. >> tradition suggests that people rush in when they expect rates to go higher. that seems to be what's happening here. do you think we are past that period or is there more to come? >> i think we have seen the blip in december when people were out saying, oh, god, i have to get the rate now. i think as we get into january and start spreading to the
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spring housing season which begins in february, we'll see big reaction to higher mortgage rates. it hits people, especially the first-time buyers. >> the spring season can't come soon enough. we haven't even had a winter to speak of in new york. thank you, diana. 40 minutes left in the trading session. dow up 53 points. just waiting to see if we get to dow 20,000. i am contractually obligated to say that. >> a certain number of times per hour. weight watchers surging today. not just because of oprah. a big move in the shares on top of what we've already seen. also ahead, aetna's former ceo ron williams will be here weighing exclusively in on the battle shaping up to repeal and replace obamacare. that's coming up. ..
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. welcome back, with 35 minutes to go, we are once again talking about markets approaching dow 20,000. took a respite there over the holiday period. in fact, we didn't even get the santa claus rally. we rallied hard going into it. >> i told you it was going to happen, right? two weeks ago. i said they were going to tease us for 20,000. >> the teasing continues. we're still about 62 points away from that level. in any case, the dow is up a third of a percent. the s&p is up more than .5%. nasdaq up 1%. small caps up 1.5%. weight watchers up more than 20% today, not just because of spokes woman and investor oprah.
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earning four top rankings in the u.s. news and world reports survey, nutritionists and physicians. best weight loss. best commercial diet and easiest diet to follow. last month it spiked after open r -- oprah said she lost more than 40 pounds. i guess they don't just rank colleges. >> weight watchers stock has moved inversely from oprah's weight. the more she lost, the higher it went. >> precisely. nutrisystem, marie osmond has -- >> there is tremendous competition. weight watchers is not the only one. they're just high-profile now because of oprah. there are a tremendous number of companies doing the same thing. >> they said, she lost 50 pounds and kept it off for ten years. the stock will continue to follow oprah's weight and how it's being perceived by ef
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everybody else. the dow is up 58 points. a leading trader will tell us what he is watching coming into the close. former aetna chief ron williams speaks with us exclusively on health care reform and whether he thinks obamacare should be ditched entirely. stay with us. s a th
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welcome back. 30 minutes left with the dow up 60 points right now. amazon is planning to create its own line of workout clothing. that according to online job listings posted by the e-commerce giant last month. the news has failed to dent shares of under armour, nike and lululemon, all trading higher today, kelly. >> ath-leisure can be shared by everyone. in the final half hour of the session. joining me now me is mark newton. technical analyst from newton advisers to talk about health care and the which you see the xlv playing out. >> it's showing signs of strength, it's normal to see the bottom-feeding laggards. health care was the worst performer last year, the only sector down for the year. down 4.5%. recently showing increasing signs of the move up. when you look at really this area, the xlv, for the first time last summer has broken out
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of the declining down-trend. i view it as positive for the group. starting to see pharmaceuticals moving up. we may see biotechs come show better performance. xpi getting over 62 would be positive. >> let me ask you, i know you are not looking at the from the fundamentals. it's obvious from the headwinds are. drug pricing. obamacare and the effect the repeal might have. >> yes. >> even looking at a bullish chart like this, you try to figure out why it's happening or just say, hey, i think it will carry on no matter what the conventional wisdom is. >> i think a lot of stocks underperformed when obamacare was put into place. health care did well in 2014 and '15. so it's gradually showing signs of strength. there will be obvious laggards and leaders in the group. more people are retired than working so health care is something you want to own. it's in a great longer term
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uptrend. technically it makes sense here to own versus reaching for something like financials or industrials that are very extended. looking for groups gradually starting to bottom out. you can make a bullish effort technically. >> that's the xlv, the health care spider. bill. thank you both. time for a cnbc news update with sue herrera. >> iraq says it's recaptured a neighborhood in mosul but heavy shelling and gunfire still continuing in the area. a quarter of the city has been recaptured by iraqi forces, but they continue to face intense resistance from isis fighters. members of turkey's main opposition party laid wreaths at the entrance to the reina nightclub from istanbul to commemorate the victims of the attack. turkey has extended the state of emergency for another three months following that attack. fog and smog continued to blanket central and eastern china, closing highways, disrupting traffic.
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the smog is expected to begin easing tomorrow, and both fog and smog will likely disperse on sunday because they're expecting some colder air. and gleeden, a dating site for people looking to cheat, revealed its website is the busiest on the second monday after christmas. it's january 9th this year. last year on the second monday it recorded a 320% increase in registrations. the site has 3.3 million members. it says activity always rises in the new year. >> let's see. we have black friday, cyber monday. what should we call that day? >> cheating day. >> cheating day? >> cheating day. >> that's gushy. >> 3.3 million members! >> how long until it's hacked. if they could do it to ashley madison. >> that's exactly what i said, kelly. watch out. if they can do it to ashley madison. any day now. be careful what you sign up for.
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>> indeed. thank you, sue. >> you're welcome, bill and kelly. >> i feel up to date. vice president-elect mike pence and president obama held competing meetings with the top party members on capitol hill today. both sides planning their strategies on health care reform and the future of the affordable care act, we all know affectionately as obamacare. pence and senator minority leader chuck schumer had this to say after their respective meetings today. >> we have a great deal of optimism that the good things that have happened in aca are going to stay. >> the first order of business is to repeal and replace obamacare. >> timing will play a key role in the republican party's plans. bertha coombs walks us through the tightrope that lies ahead. >> it will be a balancing act for the republicans. they have to make sure they don't up end it too fast or
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delay a replacement plan too long. by next month a repeal vote needs to lay out just how long obamacare subsidies remain in place because insurers are developing plans now for 2018, ahead of a may deadline to submit rates for next year. the trump administration will have to approve those rates and finalize them in 2018 -- the 2018 rates in august. analysts say it will have to be a lot of progress on a replacement plan over the summer because, if insurers do not see a clear road map they may pull out of the exchanges in september ahead of open enrollmen enrollment. >> that might mean they'll scale back participation, they may have to raise premiums. all of this uncertainty comes at a pretty big cost for consumers. >> and that's just talking about the exchanges. the biggest uncertainty lies on the fate of medicaid expansion,
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which is providing coverage to millions more under obamacare. bill and kelly. >> thank you, bertha. let's dig a little deeper into what it would mean if obamacare were to go away. >> joining us, ron williams, the former ceo of aetna. you had a smirk on your face when bertha was talking. what do you expect to happen? do they just rip up the current infrastructure and start over or do they try to build on the exchange system that's been put in place here? >> i would say there is a lot of semantics and rhetoric going on. when you think about the 20 million people who are covered, you're going to have to have a bridge from what they have today to what they'll have in the future. if you think about the calendar as bertha described, we're talking about, in my opinion, 2019/2020. because without that you really have no way to accommodate the infrastructure, the programs and just the amount of work to be done. >> even assuming this happens, what do you think health care
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will look like? more like it did ten years ago or some new, different kind of way of piecing coverage together? >> a few things we can look at. one, it will be more market based. the way the medicare advantage program works is one model to look at. every senior who has medicare is eligible for it. they are entitled to the benefit. the government regulates it at the federal level. some states have other additional requirements and the market goes to work and offers a variety of plans to consumers, and the best plans win that offer the consumer the best value. i think we will continue to see that as one option. i think it's a little too early and i think what we'll see is repeal with a long lead time and then a lot of debate to try to find a program that is market based and a program that is financially sustainable, both from a patient point of view but also from a taxpayer point of view. that's going to mean some hard conversations about what the
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country can afford. >> president-elect trump weighed in today via twitter, warning them to be careful not to -- too much of an overhaul. it sunounds like a president-elt who is not too inclined for the complete overhaul of obamacare. what do you think? >> one of the things i would encourage the administration to do is to look for some kind of bipartisan support. if you look at the history of the country, most major social initiatives were bipartisan in some sense of the word. not every member of the opposing party voted, but there were enough elements that they were able to get a broader base of support. and i would encourage that. i think, when you don't do that you end up with what i call the wounded bear syndrome. >> what about people in these health savings accounts trying to do it for themselves the way the model evolved for retirement? will that play a big part in where this is going?
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>> it's going to be a positive. it could be an important plank. i don't think it's the answer. the answer could range from a refundable tax credit, if you were an individual of modest income you may have a larger tax credit, and if you are someone like me you would get a much lower tax credit. i think we're going to have to have the policy debate. we need a bipartisan solution. we need to certainly tell the american people the truth of what are the tradeoffs you're going to have to make. >> if we're doing medicare advantage, as you mentioned, why not just expand it to all ages, then? do we really need to create a stand alone obamacare advantage type thing? should we just say we're going to expand medicare with different thresholds for younger people and let the private market work on top of that much like the way it does now for those over 65. >> medicare serves a special population. there is a whole array of benefits and services. pediatric, maternity, et cetera, that are not part of medicare, it's financed differently. and i think i would leave medicare alone.
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i think it is working reasonably well. i think this is a different problem. consistent with the president's commitment to make certain that the 20 million people are covered, i would encourage them to develop solutions that make certain everyone has access. >> the insurance companies, bertha's contention based on the analysts, what they have been thinking right now is that the -- they're going to have to see something out of washington by this fall before the next enrollment period or they're going to start pulling out even more than they already have from some of the exchanges out there. how does it play with the time line you see where we're not going to see anything meaningful for a few more years? >> i think what the insurance companies really want to see is everyone covered. as a former ceo of a health plan, i talk to a lot of executives. everyone believes that everyone should have access to health care. i think what you'll find is that the health plans do want certainty. i the long lead time for whatever unfolds will provide
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certainty for '18 and possibly even '19. i think health plans will probably bend over backwards to support any kind of initiative that makes sense to try to keep people covered. >> last quick question. everybody wants a smooth transition here, even speaker ryan said today they don't want to pull the rug out from under anybody. it is still government by committee. it is still congress that we are relying on to come up with this. d do you expect a smooth transition to whatever comes next? >> i would say i am not a politician. that's by conscious choice. i would say that i would encourage them as a citizen to recognize that they're there to represent us, that the fear-mongering should stop, that people should stop being terrorized and we should get to work on the fact that there was an election, there is a new president, a new congress, and they should find a way to collaborate and work together on behalf of all of us. >> ron, i am glad you are here. thank you.
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>> my pleasure. >> former chairman and ceo of aetna joining us today. breaking news on auto sales. here we go! phil lebeau, how did they look? >> bill, much better than expected. in fact, 2016, here is the big news. a record year for auto sales coming in at 17.55 million vehicles, compared with 2015 when it was 17.46 million. all of this is due to a huge december. most were expecting a sales pace of about 17.7 million vehicles. came in at 18.4 million vehicles. i haven't seen the raw numbers, and all of this is according to the research firm auto data. guys, if i look at the raw numbers, i believe december might have been the month with the greatest volume of sales of vehicles. i have to double-check, but it may have been the strongest of the year just in pure numbers in terms of vehicles being sold. >> pickup trucks for christmas. >> i was going to say, a lot of trucks under the tree this year, i guess, or something. >> look at the shares of gm and
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ford. >> absolutely. >> gm up nearly 6% today. this thing barely budged, even as the sales pace picked up. now that we talk about it peaking, all this interest. 18 minutes left in the trading session. the dow, look at that, creeping ever higher, up 73 points. we are 46 points away from you know what. there is a market legend that says, as trades january, so goes the rest of the year. this piece of lore may not be all it's cracked up to be. campbell's soup dipping into his past for a limited edition recipe. ceo denise morrison very much has an eye on the future. she'll join us later on the "closing bell" after ringing the "closing bell." stay with us. ÷
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welcome back. the dow is now up 70 points on the session today. putting it less than 50 points away from hitting 20,000 for the first time. >> look at the russell. that would be record territory right there if we were to close there. we're about 30.3 points above the old record high for the russell. >> a lot of different things
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overnight. better youeuro zone inflation d. >> the stock marketplace is full of owld adages. sell in may, go away. there is one for january. eric, mr. snopes, from now on, joins us to set the record straight on the importance of the first month of the year to the market. >> thank you, bill. many point to january as a way to predict how the rest of the year will play out. we ran the numbers to look at how the s&p 500 does in a full year compared to how it performs in january. the one conclusion to actake aw. it doesn't matter. january did have predictive power in the post world war ii years up through 1980, but since 1981 it has told us almost nothing.
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even when january is negative, the return for the markets full year is positive. 15 times we've seen negative januarys and 11 years saw positive returns in the next 11 months and a full nine of the years saw big enough gains to finish the whole year in the green, more than making up for the loss in january. so just look at last year. the market dropped 5% in january, but easily made up for it, ending the year up 10%. take the opposite sxaexample. 1987. that january up 13% but the rest of the year was down 10% including the famous october crash. the lesson is, don't freak out. january is the start to the year, but it's just that. just a start. back to you guys. >> you know, when you are finished there won't be an adage left. >> we'll bust all of them, bill. >> they're all going away. finally. thanks, eric. good stuff! all right. 12 minutes left in the trading session here. the dow is up 56 points. should i do market on close orders? i hate to interrupt because we
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have the beautiful animation we could use. art told us just now the market on closed orders shows $650 million to buy. slight buy to the upside. one street vet says it's time to buy bonds over stocks. you're watching cnbc, first in business worldwide. to wame thr .re , le to le
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welcome back. markets have been moving higher all session today, the dow is now up 60 points. nine minutes until close. look at how much we've moved higher over the last couple sessions. remember what happened on the bell yesterday. >> market close yesterday was 1.4 billion to buy. today 650 million, not seeing too much movement here right now. but hey, we're close enough. it wouldn't take much. >> with the buy orders in there, that's how we go from having a 70 point gain on the bell yesterday to all of a sudden 115-point gain. we'll see if we get higher on the bell in a raid that could put us over. >> joining us on the floor, david levivitz with jpmorgan asset management and keith learner with sun trust in
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atlanta. i mean, i know it's just a number. >> yep. >> but what does it mean here for us to be approaching this milestone, this millennial milestone right now? >> psychologically i think it's very important. and in a market where it feels like animal spirits are doing a lot of the heavy lifting, reaching a level like dow 20,000 could have significant implications for what multiples do over the next few months. the key to returns in 2017 i think will lie in earnings growth. the icing on the cake would be multiple expansion. perhaps hitting dow 20,000, getting people excited about investing stocks again is what helps to move the market higher. >> which one of you thinks we should buy bonds instead of stocks right now? is it you. >> as interest rates rise the scale of valuation becomes more unbalanced. as rates back up, eventually the ten-year will start to look attractive. i'm not sure we're there yet but
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i think it's coming sometime in the next few years. >> keith, you have the advantage of being in atlanta away from wall street. what do you think about this market and the gains we've seen since election day? where do we go from here? have we gotten too far ahead of ourselves or not? >> we still think there is upside. we have been telling clients to continue to lean bullish. we think there will be more price swings. we have low recess and risk. those are boom market killers. david mentioned we'll see an earnings market rebound. the last two years stocks moved sideways because earnings moved sideways. sentiment. people forget how much fund flows moved out of the market before the election. we are already starting to see it reverse. we think there will be further fund flows to support this market into 2017.
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>> we should mention there have been really strong credit markets this year, dave. $14 billion of corporate ig issuance heard. a lot of demand. seems to be telling us the underpinning for risky assets like stocks will continue to be strong too. >> as long as credit spreads are well behaved i think the market still has legs. we have priced a lot in since the election. i am still of the view that cyclical sectors will outperform more defensive sectors. will industrials and materials benefit? we don't know. rates are headed higher, that's good for financials and credit markets help to underpin the broader trade. >> i know it will be a bullish trade when brian reynolds puts out the alert saying the cost of insuring against the spread rise. it was collapsing. that was happening in the market again today. >> keith, very quickly, the feds seemed to signal in the fantastic that if the fiscal policy is aggressive out of
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washington they'll start to raise rates more aggressively themselves. what happens if that happens in the stock market? >> we get a little bit of a hiccup if they start to raise more aggressively. at the end of the day that's the sign of a better economy. before this financial crisis we saw the fed raise rates 17 straight times between 2004 and 2006. and the market still did okay. >> a little history lesson for us. keith lerner and david lebowitz. thank you for joining us. breaking news right now? >> let's go back to hq. >> s&p 400 mid caps up over 1%. tenant health care up 9%. u.s. steel up. look at tenet. it's on pace for its best day since november 14th when it gained nearly 13%.
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keep in mind. it's still down over 40% over the past 12 months. health care a big part of the discussion as we await for the president-elect to enter the white house on january 20th. meantime, also in focus is the u.s. dollar, retreating from the 14 -- those 14-year highs after we got the fomc minutes, the fed minutes, showing that policy makers are uncertain about the pace of rate hikes. we have three minutes left in the trading session. we are close enough right now, it wouldn't take much to get to dow 20,000. we wondered if, at 2:00 when the minutes came out from the december meeting would that be enough. would we get some fireworks if there was a surprise. there wasn't. we got a little bump. the dow up 40, 45 when the minutes came out. we were suddenly up 60, 70 at the high today. we're 56 points away now.
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we're away from the 14-year high on the dollar index. even then it did came back a little bit everafter the fed mis came back. even with the dollar moving lower, oil also did the same thing. wti crude -- sorry, guys. that's moving higher today, up 1.45%. we're now at $53.09. brent crude in the $56 range right now. and then finally the volatility index itself tumbling today. right now down about 8%. we are back with an 11 handle right now. >> what's extraordinary -- normally the fed minutes are not that interesting, this one was. the fed came out and basically acknowledged that, if we get an aggressive fiscal stimulus package the fed may have to get more aggressive in raising rates. if that hint would have been dropped a year ago, the markets would have gone crazy. we would be down 300 points in the dow right now. what happened was nothing.
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>> clearly the fed has taken a back seat now to what's going on as far as fiscal policy goes. >> that's right. >> that's what the markets are keying in on right now. >> more importantly, the market believes that the rewards from the fiscal stimulus and the less regulations and the tax cuts will outweigh the possibility that the fed may have to get more aggressive raising rates. they've levitated. maybe they're fooling themselves but they've levitated themselves into believing that. everything is doing well these days. normally the first few days of the year losers do better and the winners do a little worse. home depot and nike, two underperformers last year, they've been doing well the last couple of days. stocks that did well, goldman sachs and boeing, they're also doing well. the whole market is quietly levitating itself on the upside for the last two days. >> you just wonder, are we going to see a sky rocket take us across the line, or are we just going to tiptoe across the 20,000 line one of these days?
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>> i think tiptoe is the way to look at it right now. 5 to 1 advancing to declining. every day more advancing than declining. >> we're going out with a minor gain. wouldn't take much to put us over dow 20,000. but not today. maybe we'll hit an all-time high on the russell. stay tuned. campbell ceo ringing the closing bell. she'll join kelly on the second hour of "the closing bell." see you tomorrow. thank you, bill. welcome to "the closing bell," everybody. i am kelly evans. a rally across wall street put us within distance of dow 20,000, back by 60 points. we are closing with a gain of about 59 on the dow to 19,941. not quite getting there today. the buy orders on the bell certainly didn't bring us that much closer. the dow was actually the worst performer relatively speaking, up .3%. the s&p gained double that, went up to 2270. nasdaq up nearly 1% closing at
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5477. small cap russells up 1.6% to 1,387. transports had a strong day. dollar index was notably weaker. we'll come back to all of that in just a bit. joining me on the panel, cnbc market analyst and senior markets commentator, i should say, pro analyst mike san tolli joining us. michael and stephanie from tia global asset management. mike, what do you think about the broad-based rally today. the dollar is much weaker. >> the rally was broad, the two-day action -- you can't extrapolate a lot from the first few trading days of the year. there is a lot of mechanical money entering the market. it's a god thing in the sense that there was not this wall of selling that was feared.
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that's positive. you are seeing a lot of anxiety drain away. it shows you there is a certain stability to the market. yes, the dollar backed off a little bit. so i don't think. fundamental picture changed that much. what i am more interested in is the s&p 500 getting to 2270. it's flirting with its recent and all-time highs of a few weeks ago. we have been just hovering for four weeks now in the market. it seems as if it was not a breakdown in the making. you want to keep an eye on sentiment. the santa claus rally, by the way, closed with a positive result. >> overall? >> yes. >> just with yesterday's -- >> as of today. >> with today. >> today is the determination. so we're up during that period. all it does is remove a potential negative sign, if you believe in those things naecany. >> stephanie, what do you think about the performance here? a strong start to the year. >> it's a strong start to the year. we have seen some of these laggards actually leading, which is very encouraging.
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health care like biotech leading, after a horrible year last year. and you have had retail, autos, and even the fang stocks, the growth-tech stocks leading. at the same time financials and materials still participating. i think this broadening out is very healthy. i think 2017, the narrative is better growth, better earnings growth, higher interest rates, stronger dollar. i think that's still the reflation trade, but i like that we are broadening out and i think you can participate in those sectors. stock picking, sector picking this year will be a lot more important than it has been in the past. >> what about you, michael yoshikami? we are seeing the strength. it's coming back. we went into a bit of a hiatus over the holidays but have had quite a rally already. >> the key in the rally is stocks that didn't participate in the initial bump after the election are starting to come back, names that everybody
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basically bailed on to buy the infrastructure stocks, you're starting to see health care come back, maybe affordable care act gets phased out rather than eliminated completely. you are starting to see the big tech stocks come back as well. it's a huge positive fort the market that you are starting to see a broader rally. i would also add that i think we this a phenomena occurring with the individual investor where panic is starting to set in where people are afraid they are missing out on the rally. i think that's tremendously supportive to the stock market. we hear it from investors all the time. they were incredibly frightened going into the market. now, after a month or so, people are wondering, why do i do now? the market has rallied. it looks like there will be lower taxes. that's an important consideration going into 2017. >> coal shares are moving big. courtney has more. >> this is from kohl's. saying their comp sales for the
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holidays. november and december, down 2 had the 1%. the full-year 2016 adjusted guidance, they are now looking at 360 to 365. the street was looking for 394. that's far short of what analysts were looking for. the company ceo calls the holiday season sales volatile saying the black friday weekend was strong as was the week of christmas. >> when did they see strength? >> they said there were strong sales on black friday and during the week before christmas but that it was very soft in between the two periods, the big lull that we always see sounds like it was deeper than normal. >> there were indications of that during the period. something about people maybe waiting until the very last minute. >> true. >> i was going to ask if macy's was moving in sympathy but it sounds like we have more news from them. >> we have news from macy's, several announcements.
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sales, restructuring and real estate. macy's november and december comparable sales on an owned plus licensed basis down 2 h.1% over last year. the lower end of the guidance. macy's is maintaining the previous year's guidance but lowering the full year earnings guidance. i spoke to the ceo briefly on the phone. he calls the holiday sales disappointing. he added we thought december would have been stronger than it was but momentum didn't materialize for the entire holiday period. he also says there was strength in apparel, cold-weather business was good but not enough to offset the weakness in hand bags and watches. he says the online business is booming, up double digits. macy's is detailing a restructuring effort to improve productivit productivity, efficiency and reduce costs including laying on 110,000 employees.
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6200 of the 10,100 are corporate employees. that's 17% of total corporate staff and 3,900 store associates will be laid off this year. lundgren told me, we don't stand by and do nothing. with challenging results we take action. last year they said they'd close 100 stores. now they're planning to close 68 this year. that will negatively impact sales by $575 million, saving $550 million in annual expenses. that estimate up slightly from what they told us in august. they've also reached an agreement to sell the downtown minneapolis store to 601 w companies. it will redevelop the space for mixed use. that transaction will close by the end of the fiscal year. lundgren tells me some of that will be invested in other strategies including the
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partnership in alibaba. >> big moves. the stock is down about 4%. courtney, please stay there for a second. stephanie, i wanted to get your thoughts on this dramatic announcement from macy's and the sales figures from kohl's. >> wow! the department stores have had a tremendously difficult time. we know with the competition from amazon and online, they've been trying to get traffic in the doors and can't. no one can do it. amazon is just eating their lunch. now you have the bigger cloud on the sector with regards to border and taxation. that would hit this group hard. i think, if you had to look at between the two companies. macy's is kind of a special situation story, because while sales are bad, and they are, and they've done a lot to try to get them better but it hasn't been working, they do a good job restructuring and they have the real estate piece that's very
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valuable and can create value for shareholders. the yield is good. the stock is cheap. kohl's, on the other hand, i think they are a tweener. i don't know really what they want to be, who they are. i am not sure the strategy of what they've been doing in terms of private label and increasing that will help going forward in this really challenging environment. >> their shares are down 10%. courtney, what's the ongoing relevance of same-store sales to these companies? it's the point stephanie was making, if they are moving more into an online world, what's the point of continuing to tell us what's happening in their stores? >> that's an interesting question, kelly. we used to get those comp sales by month. it's rare that we get them from the retailers now. now we often get them for the quarter. it's relevant because we look at the same store or comp sales we're comparing the like for like year over year. that's especially important because, as stores close or open, you are comparing like to
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like as opposed to a smaller or larger fleet. then, many of these retailers are now actually folding in what they sell online into the comp sales number. in the beginning they were breaking it out, but actually, if macy's is having double-digit strength online and it's still down 1.2%, then the store number is probably even weaker. target is one retailer that will often break it out for us in the quarter. they give us a total number and then tell us how much dot-com contributed to that and how much the stores did. not every retailer does that. >> wouldn't you think more transparency? at least investors want to know what's going on. >> one of the problems for these companies is that the online piece specifically, the discrete online sales numbers, especially profit numbers, are not necessarily material in every respect. in other words, it's the way companies have gotten used to measuring their own performance
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internally. i think the way -- look, i think a lot of people viewed this holiday season as make or break for a lot of the mall-based stores. clearly it didn't go that well for a couple of the big main lines one. >> michael yoshi kami. that's what i was going to ask you. a lot to infer about the death of the mall and those things. what happened over this holiday season, is it just unique to the brick-and-mortar, mall-based retailers? >> here is the bottom line. you will a he see a complete remaking of the retail landscape. what macy's actually announced today is encouraging, that they are willing to make this strong action to really adapt to the new environment. and frankly, retailers that don't are just going to go down the tubes. there is no way you can live in this environment. >> michael, do you think macy's is doing the right thing here? you get caught in the middle if
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you try to pivot strategies. should they be more aggressive or stick with more of the sears approach? >> i certainly would not go with the sears approach. i don't like what kohl's is doing. i think that what macy's is doing is the right strategy, pivoting towards a more online presence. they're keeping the cash cow that they have now. people still go to malls, just less. people will go to malls less, to the big-box retailers, every single year. i don't see any way that you'll see a retailer actually improve same-store sales on a retail foot traffic basis. it will just all morph online. if retailers don't adapt, they'll fall by the wayside. that's part of the challenge that costco has had. the online presence is not as strong as it should be. companies have to make this change. it's a hard change to make but they have to bite the bullet and
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make the change. >> costco is one of the best operators bar none. >> it's its own animal. kohl's is a $43 stock. it is down 11%. it ran almost to 60. this idea that basically the good retail season might float all boats is being unwound. it's not to the depths of the mid 30s. >> do you buy it now? mike said we made a round trip here. do you avoid it because of the challenges? >> i think it's too hard, kelly. you can pick the special selection stores, macy's. i own a little bit of it. i am not that encouraged to buy more, though, the headwinds are too great. i would rather own experiences and something like mgm grand or lvs. i would rather own mattel. there are special situation stores within consumer. of course, i think media continues to do well in
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discretionary. like disney, comcast. those are the areas i would continue to be focusing on. >> some really interesting stuff here. >> i heard somebody thinks bloomingdale's is still an experience. >> i am proving again what a counter-indicator i am. >> michael and stephanie, thank you both for joining us. >> thanks, kell. happy new year. >> happy new year. the dow inching closer to the 20,000 mark. we'll talk to to financial planners about whether investors should be cautious about this bull rally. first, another banner year for auto sales. we'll discuss whether it could be a top for the year here. you're watching cnbc, first in business worldwide. doar
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welcome back. u.s. auto sales hitting a record in 2016 with 17.5 million vehicles sold, but with rising interest rates and gas prices ticking up, could we be nearing a top? bringing in rebecca from kelley blue book and david from morn g morningstar who covers the car manufacturers. rebecca, the better the sector does, the more people seem to think we've reached a top. do you see signs of plateauing? >> there are not really a lot of
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signs, kelly. it's kind of amazing when you think that we've really been soft and a little bit pessimistic all through 2016, where the forecast would often exceed what people were projecting or what actually happened. i feel like there is maybe more consumer confidence. i think people are still out there who want to buy a new car and this is a great sign of a strong and strengthening economy. >> david, looking at the performance of gm and ford today. you would have thought being in the president's cross-hairs, they're both up. you couldn't budge these things for the last couple of years and you are bullish on both. why? >> well, gm is actually on our best ideas list. i just think people don't truly understand how much more efficient and how much more global they are now versus a few years ago and how much they still have to come.
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they are still with a lot more global platforms to bring out. we were talking about the u.s. auto sales. we've had a period of peak auto for nearly a year. look at the full-year number up .3% roughly plateauing but there is a big difference between peaking and crashing right away and peaking and going along the top for a while and i think we're very much in the latter. >> part of it is because we've experienced so many of the boom and bust cycles lately. it's hard to imagine whether it's silicon valley. oil prices. that was more dramatic. can car sales go up and hang there? >> not absent -- they can hang there. i think the answer is yes. they can roughly stay in the general zone. i think the question has been what does the industry have to do to keep sales at that level, right, in terms of pricing, loan availability and the rest of it. one of the reasons the big auto stocks in the u.s. have worked well, traders are buying the laggards. the stocks are extremely cheap based on last year's earnings,
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if they're going to stay flat or go up or down a little bit, they remain cheap and people like that idea. i questioned david, as to what level of sales do you think is now currently implied in now gm and ford are valued today? >> i would probably say something right around now, because we're basically in the first quarter of last year everyone freaked out about the market topping out and thought there is no growth, i can't buy out of stocks. i disagree. even if you fell a full million units you're at a very healthy non-recession type of sales level. combine it with the bottom-up story on gm and ford and the nice yields at the two companies. it's an interesting story. >> rebecca, it was interesting the way ford emphasized the shift to electric vehicles. the market is clearly demanding big, classic, suvs, cuvs, crossovers, would these companies be better doubling down on the trends as opposed to the more electric and autonomous
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vehicles that arguably will be the future of driving? >> they are. part of the push for electric vehicles is actually the california zero emission vehicle mandate, the zev mandate, we call it. that basically says that by 2 5 2025 15% of all vehicles sold in california have to be zero emission. that leads you to electric and hydrogen vehicles. also we have global demand here. in china, where they have very strict emissions and other parts of the world. so a lot of the products that ford announced yesterday whether actually not just for the u.s. mark fields even referenced some european push that they are making as well. this is very much a global solution that they are presenting. >> yeah. teslas are everywhere in norway, not that that's as big as a china market. rebecca and david, thank you both for joining us. back to courtney reagan. what's happening? >> i just want to bring the
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viewers' attention to various other retail department store stocks that look to be falling in sympathy with what we heard from macy's and kohl's both reporting comps down and lowering estimates for the full year. nordstrom is down more than 5%. after hours. john podesta penny down 4% and dillard's more than 3% after hours. those three likely falling in sympathy. >> we'll not get earnings from them for a month or so. do you expect the retailers to tell us what happened during their holiday period? >> we often do get the holiday sales numbers from retailers and it depends if they give us an earnings based on holiday sales. we rarely get the full month but november and december often happens. we have to be on our toes. >> i'm not sure no news is good news this time around. >> yes. >> the stocks down 4% to 6%. you mentioned there may be tweet
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risk on top of it. >> with the big, splashy job cut announcement from macy's and the president-elect has had an uneasy history with macy's because his goods were excluded now from macy's shelves. >> there was going to be a boycott of macy's from his supporters. >> it's been a fool's game to anticipate exactly where his tweeting interests will go. >> i agree. 7,000 people or so they said they were going to lay off at macy's, 17% corporate. the rest at stores. trump tapping a top wall street lawyer. we'll speak to campbell soup ceo about the state of the consumer and how she thinks trump is changing the business landscape. we'll be right back.
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welcome back. president-elect trump jnaming jy clayton to return the securities and exchange mission. jay has more on what investors can expect. >> i think investors can expect jay clayton will likely be confirmed. he'll take flak from democrats for the fact that he is a wall street lawyer. donald trump, of course, ran for president as somebody who was going to take on wall street. jay clayton represented goldman sachs, among other clients.
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nevertheless, he has the kind of background that is typical for an sec chairman. different from mary jo white, a former prosecutor, who is there now. she has put a lot of effort on enforcement. the incoming trump administration has talked about reducing regulation, you can expect a different tack. the question will be, is he -- while reducing regulation will he still protect investors. we'll have to see. unless on the other two vacancies donald trump will be able to fill. >> i asked dan gallagher what he thought about the pick. he said he's the real deal, smart, incredibly hard-working and very savvy. it's another position we are learning about today. meanwhile, treasury secretary designate steve mnuchin may have a are you ever road ahead after a memo emerged about a bank he once ran. >> i think steve mnuchin also will be confirmed in the end.
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he is going to take flak for a similar reason that jay clayton will. that is to say, he is a former goldman sachs executive. donald trump ran about going after the corrupt establishment, specifically singling out goldman sachs, this report from the intercept is about what happened after steve mnuchin acquired one-west during the housing crisis. it was about their foreclosure practices, deemed by some california regulators as too aggressive. there was back-dating involved and there were elements that sort of gave the bum rush to people who were delinquent on their loans. however, the california attorney general declined to prosecute that case. so i think there is fodder for democrats and critics of steve mnuchin to use, not sure it's risen to the level yet that it could imperil his nomination, kelly. >> it was interesting to read about what might have happened back then. why kamala harris, the ag of
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california at the time, now a senator, didn't pursue the case. the bank said it's only the federal level that could pursue charges against us, then it was dropped. >> it seemed to be caught up in the post-crisis log-jam of charges, noncharges and what was industry practice and what wasn't. there was a lot of these things that would matter if there were three fewer republican senators. it seems like maybe a lot of this as we already know doesn't matter. >> john, there are so many different candidates going through the confirmation process, you have to wonder how much time they are going to spend on each one of these. >> yes. i think what's likely to happen, kelly, is that democrats will try to pick on a couple of most symbolably important and most vulnerable come knees. i think the two they'll focus on most intensely are rex tillerson because he is the chairman or chief executive of exxonmobil.
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i think in the end rex tillerson will also be confirmed. for vulnerable i believe is tom price, the conservative georgia congressman nominated to health and human services. he is somebody who not only shares president-elect trump's desire to get rid of obamacare, and paul ryan's desire, but he has also talked about big changes to medicare and medicaid that donald trump himself rejected during the campaign. i think democrats are going to put a lot of energy into using him to dramatize what they consider the extreme republican position and try to peel off some moderate republicans and stop him. >> john, thank you. we should mention we showed rex tillerson arriving to meet with democratic senator chris coons, expecting coops to make public remarks about the meeting 45 minutes ago. they're actually still sitting down together. so we'll bring you the news, of course, when and if it happens. it's time for a cnbc news update with sue herrera. >> here is what's happening this
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hour, everybody. for the first time a coalition spokesperson has acknowledged that u.s. troops have been operating alongside iraqi troops in mosul. colonel john dorian said that during a briefing americans have been operating as advisers while staying behind the forward line of troops. victims of the charleston church massacre described their loved ones to a court during the sentencing phase of dylann roof's trial. roof, who was accused of the crime, is representing himself. he also spoke, saying there is nothing wrong with him psychologically. the prosecutors, though, are asking for the death penalty. how cold is it in duluth, minnesota? well, it's so cold that the air rolling off of lake superior instantly freezes. the next couple of days temperatures will be sitting below zero in northern minnesota, with windchills making it feel like up to 30 degrees below zero. favorite story of the day right here. nearly a century ago robert marchand was told by a coach he
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should give up cycling because he wasn't good enough. today, at 105 years old, the frenchman set a world record in his age category. he created -- created especially for him, the age category, he rode 14 miles in one hour to a cheering crowd. 105 years old! god bless. >> that is awesome. >> isn't it? it's my favorite story of the day. >> i am with you. >> i try to find one for you every day, kelly. >> between him and the 95-year-old marathoner. >> exactly. >> puts me to shame for sure. >> they make you feel like a sloth, i know. >> thank you. >> see you tomorrow. >> sending it over to season lee or an earnings alert. >> not as bad as feared for sonic. an adjusted right of 24 cents what sonic put in. the market looking for 21 cents estimate. sonic was at risk of putting in
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its first eps decline in half a decade. they came out ahead. revenue a slight miss, missing by $1 million. they had $130 million in revenues in the quarter. $131 million is what the market was looking for. as i keep telling you, kelly, when it comes to restaurant it's all about same-store sales. system comps down 2% in line with estimates. they also repurchased two million shares in the quarter. back to you. >> there is sonic down .5%. susan, thank you. the dow, meanwhile, up nearly 9% since the election as the march to dow 20,000 rolls on. up next, the ceo of campbell soup tells us whether she thinks president-elect trump is making the right moves to fuel economic growth. plus, the nation dealing with an opioid epidemic. the prices for drugs to reverse the effects are on the rise. the troubling trend, later on "the closing bell."
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they're revving up ways to apply this technology to the auto industry and leaving their competition in the dust. for more, watch your business sunday mornings at 7:30 on cnbc.
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welcome back. we had a strong session today on wall street with the dow gaining 58 points. the s&p 500 and the other averages relatively stronger.
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s&p up to 2,270. nasdaq up. and a new close for the russell 2,000. shares of macy's and kohl's down sharply. macy's by 8% and kohl's for 12.5%. they lowered their outlooks. macy's is making a series of layoffs. campbell's has been outperforming the broader market. last year up 15%. how is the company positioned to grow in the new year with a new administration, fresh off being on the platform to ring the loud new bell is campbell soup ceo denise morrison here in a cnbc exclusive with sara isen. >> you're here for national soup month. >> we are. >> bringing your new soup cans to the new york stock exchange. >> celebrating for 25 years. >> does it matter that it's sort
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of warm in new york city and not the most frigid of winters? >> we have over 300 varieties of soup for people. >> what are you expecting in terms of sales, because following the company for the last few quarters it's been a story of higher margins, which you are being rewarded with from investors, but it comes from cost-cutting and not necessarily the kind of organic sales growth. >> we announced a $300 million cost-cutting program, but that's to reinvest the money back into our business to drive growth. we're focused on innovation, health and well-being and on snacking. so we are really focused on the top line. >> donald trump hasn't tweeted about you yet. what do you think about the way he has taken on correspondent america, and do you have any concerns? >> we believe that, if the new administration takes a look at how we drive growth in the country, you know, tax reform, at regulatory reform, we think
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that will be good for the country. >> what i wonder about is what we heard from macy's and kohl's. they had a pretty bad december. the restaurant same store sales looks bad in december also. what do you see happening? is there strength? pockets of weakness? >> we see some green shoots. consumer confidence is up. unemployment rate is at 4.6%. underneath that is the unemployment of young people, which is much more challenging. we have to deal with that. but these green shoots i think will be positive for the country going forward. >> within your portfolio what are you seeing now with campbell's fresh, and how are you planning to turn that around? it was a source of concern in the last quarter. >> we believe in the fresh strategy. we have been studying the seismic shifts and consumers are very focused on health and well-being. fresh and natural and organic are very important for us. we have retail refrigerated soup. we have a billion dollar
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business in fresh. we intend to double it over the next few years. >> i wonder about the environment for it. that's what the consumer previo preferences are right now. what do you think it's doing in terms of availability and price acquisitions, everybody trying to crowd into a similar space? >> in the health and wellness space it is very competitive. we have wonderful brands with garden fresh gourmet. we're in multiple categories. we believe we're well poised to compete in packaged fresh. that's $18 billion growing at 6% to 7%. that's so much larger growth than the center store. >> it feels like there will be more m&a. there is already word that 3g is gearing up for its next purchase, potentially funded by warren buffett. what do you predict? >> we have added four growth engines to our portfolio as we have diversified.
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we believe m&a is an important part of our strategy. you have to be disciplined about it, though, you have to watch what targets are available and the pipeline you're building, build those relationships with those targets. >> are you talking about bolt-on acquisitions as you've been doing? >> largely, yes. >> do you see bigger, broader consolidation in the space? >> i think there is a certain amount of consolidation because it's a lower growth market. however, for us, our strategy is building on the health and well-being and the snacking platforms and also some geographic expansion into footprints outside of the united states. >> there is also minimum wage going up in a number of states right now. just as you consider the input costs, whether it's food, whether it's labor, the changing ways in which we are shopping, you know, whether you guys need to be digital first or have these kind of make-at-home delivery kits and what kind of thing, how does that affect your ability to keep costs down and kind of meet the consumer where it's evolving to?
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>> our purpose is real food that matters for life's moments. we are very passionate about making delicious, nutritious food affordable and accessible to people. so we are very focused on keeping our operating efficiencies up so that we can keep the cost of food down and make it more affordable and accessible. >> you know i want to ask you about the sister ceos. we'll save it for another discussion. it's remarkable. denise, thank you for joining us. sara. fresh off ringing the closing bell. dow climbing 13% in 2016. it's now back up right near 20,000 today. a lot of investors may have missed out due to more cautious strategies. is there still time to get in, or should you beware? that's coming up. first, though, nearly 13,000 people died from heroin overdoses last year, in 2015, i should say. prices for the rescue medication are on the rise, what it means
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in the fight to save someone's life. you're watching cnbc, first in business worldwide. taatonths. me? htrth
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welcome back. deaths from opioid overdoses involving prescription pills were quadrupled since 1999 according to the cdc. meg joins us talking about how first responders are dealing with the overdose calls. they have headwinds facing them. >> one of the them is cost. we saw this during the epi pen crisis. firefighters carry just four or
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five essential medicines with them. one being epinephrine and the other being naloxone which can reverse an overdose. introduced in 1971 it acts as an antidote to opioid overdose. one study found from 1996 to 2014 it reversed more than 26,000 overdoses in communities. >> naloxone is a vital emergency for us in the emergency departmentsment it's departments. it's vital to emergency personnel. >> they want it in the hands of as many people as possible, especially first responders. >> it would provide our officers that first response to those situations where we might have an opportunity to save a life. >> there are multiple forms of the drug on the market, each with its own cost story. those stories are playing out across america, from small towns to big cities. >> naloxone has tripled in price for us. we are actually using more
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narcan. it's greatly increased our budget. >> for first responders it often means making hard choices. >> if our medications cost more, that's less money available to buy to upgrade bags, for instance or different things that we may choose to or want to. >> or sometimes not being able to carry naloxone at all. >> there is no way for us to put it in every vehicle based on its cost right now. >> public health experts are saying sometimes firefighters or police officers are the first on the scene and they need to have this if they get there, if it's a medical emergency. the rising prices are squeezing budgets even as the manufacturers say they have recen rebates in place. >> on the generic side there is one acquired by pfizer and smaller companies. there are new consumer focused formulations with fancy delivery devices, one called the kaleo,
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they make a competitor to the epi pe epipen. >> the price has still gone up with all these players in the field? it suggests no one is undercutting the other to get what is apparently a huge market out there? >> there are a number of generic players on the market but prices have risen in tandem. one doubled its price and the other then doubled its price. the others are in the same price. with the fancy auto-injector, the price has gone up more than 500% since the drug was introduced to the market. the company says it's to help people pay copays. it's a hefty price tag. >> there have been federal proposals or maybe even money allocated to help in general fight the opioid crisis. is any of it allocated toward the emergency service units. >> there is one billion dollars
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which goes partly to increase access for naloxone. other initiatives. pharmacies making it available without a prescription. >> to think anyone is losing their life because they didn't have access to na locloxone. young people are not taking enough risks with their portfolios, but the trend may be more widespread. why you should be increasing your risk appetite next.
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investors have been shying away from riskier strategies. it now accounts for 71% in total hedge fund assets compared to 20% in 2002. let's bring this two financial planners, tim morris, he is also a member of the cnbc financial adviser council. also with us, the chief contributing editor of chief fiduciary news. tim, this is about adding more risk or is about it the fee structure? >> it could be. that i believe both institutionally and individually people have had a tendency to take on too much risk and investing. we hear so much about the long term benefits of investing but people think they'll make eight, ten and some suggesting as much as 12% per year. then when they get hit by a bear
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market, they end to fall away and it creates some of the worst possible behavior when it comes to risk. we're learning from the field of behavioral science, is that we should recognize is that we feel the pain of loss twice as powerful as the joy of gainful i think both institutions and individuals should err on the survived conservatism. >> you think they should err on the side of conservatism? >> i do indeed. the worst-case scenario is that you take on too much risk and then you bail out at the worst possible time. you would be better off with a more conservative posture that you stick with indefinitely. >> where would you put hedge funds? are they risky? aggressive? do they simply just cost more? some would say they're willing to pay the fees because they're supposed to hedge the market and be safer. how would you categorize them? well, they built the reputation on a wild west approach to investing. they took a lot of risk and made
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a lot of great returns. ironically that attracted a lot more shareholders, investors, including the institutional investors, and they have a different risk metric than the individual investors. they're a little more cautious. so the larger hedge funds have more pressure to be more conservative than you would have traditionally assumed a hedge fund would have. if you're an individual investors looking at the hedge fund, you want to look at the others to make sure that their risk assessments are similar to yours. >> i wonder if there's another way to look at this die animal pick you put out there. that basically people perhaps estimate their risk as being higher than it truly is when it comes to difficult times. isn't that what financial planners do, to keep people on a plan when in fact they're starting to second-guess it? >> that absolutely is the case. that's part of our job, to help
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people stick with the plan. not everybody should have the same exact plan. their history with money, their tolerance with risk will be different for each person. so a big part of job of a financial adviser is ensuring the allocation is something close to what their tolerance for risk actually is and then help them stick with that plan. no matter what your portfolio structure looks like. you'll need hand holding throughout your investment career but we need start with a realistic point. >> thank you for joining us. the consumer electronics show now known as c.e.s. kicks off tomorrow. plus, stick around forrer "fast money." it is not too late to get into the rally. aoffoy he
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welcome back. the consumer electronic show kicking off in las vegas. how about electric concept grars chrysler and faraday futures. it has sleek interiors, autonomous driving capabilities.
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it may rival tesla. that is a four door suv. they say it can go from 0 to 60 in 2.4 seconds. now, gadgets, am i saying it right? curry? you have to wonder with these names. the curry robot nanny. you see it on the left. it looks like one of those wooden russian stacking dolls. and there's the smart mattress that responds to your needs. i kind of like that little guy. the sleep mattress uses sleep i.q. technology and some new tech for kids. how about some legos? we saw some news about this earlier. they're showing a new boost there. they have some programming capabilities. >> legos can can do no wrong. >> i love the idea of not only building something with the legos but coding something with
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it. >> i don't know that everybody has to be a coder but it doesn't hurt to have some familiarity. >> i might try it out. >> i think that's when cars first came out, everyone thought they had to be a mechanic. >> i wish i knew more about how cars work and more about coding. thank you so much. we'll see you later. that does it for "closing bell." "fast money" begins now. "fast money" starts right now. another day, another rally. the dow jumping about 60 points following yesterday's triple digit gain. now about 60 points away from 20,000. all this as washington battles over the future of obamacare. we started off with the biggest story, the retail wreck despite a strong day. macy's sinking on disappointing holiday sales. saying it will close and lay off 10,000 employees. kohl's taking after it. the rest


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