Transcripts For CNBC Closing Bell 20171122

View on facebook, stick around for this story the social network announcing a new tool to see if they followed russian propaganda he had to have liked one of those pages. Youre nots on facebook anyway i didnt like anything are you sure you dont like anything well, i didnt capitalize like anything. Thats what i mean. Thats pretty, you know, thats hard core, bill. Were running out of facebook video. Record number of americans will be driving today, but gasoline prices are at the highest level in nearly three years. Were going to look at where those prices may be going from here as we look at the parking lot last night in los angeles. Although, you know, they showed that, but its like that every day in l. A i dont know why took a while to come up from d. C. To new york last night though what, five or six hours. Old 95, always busy lets begin with the breaking news this afternoon from the federal reserve. Steve leaseman, those exciting minutes. Fed officials continue to grapple with the persistent conflict of inflation on the one hand, thats too low and asset prices are worrisomely high. Minutes to the october meeting show the central bank is likely on track to hike rates in december, another quarter point, but the minutes also showed abroad inflation debate with a few participants saying the fed shouldnt hike until data show that continued low u. S. Inflation is convincingly ontrack towards the feds 2 target most think the fed will ultimately end its inflation target many are also concerned the forces behind low inflation could prove to be consistent that is not temporary as they said in the past many fed officials think the economys operated at or above the Unemployment Rate that could spark inflation. So after the meeting, 93 chance of a fed rate hike in december, but theyre split on whether another hike follows in march of 2018, and then theres a 44 chance now of a second hike in december of 2018 the minutes also show some worry that keeping rates too low for too long could cause quote increased risk to financial stability, translation, stock prices may be too high and some of them on the fed are worried their own low rates could be fueling the bubble, kelly. And it sounded like janet yellen made comments like that last night too, steve. Exactly she really gave us a curtain raise here on that where she kind of made a change to saying shes more uncertain now that the forces behind low inflation are transitory shes starting to worry that some of the issues out there are really persistent. If you go back and look at that inflation chart we just had up, 1. 9 year over year on core inflation on the feds preferred inflation indicator and 1. 3 even while the Unemployment Rate declined and growth has ticked up to around 3 . Thats remarkable yep Something Else steve, thank you very much my pleasure lets get to the closing bell exchange, talk about the minutes today. We have rob morgan joining us, keith bliss and Rick Santelli from the cme in chicago. Whats the Market Reaction and the latest talk from janet yellen do you think . It was pretty undane reaction when you look at the markets more of that has to do with where we are on the calendar right now the day before thanksgiving its been a pretty quiet week. I think more important when you look at the minutes, the fed now finds itself in all the tools that its put in place to try and inflate us out of the situation that we found ourselves in in 2009, certainly have put the economy back on track. Certainly the market has liked it, but its just not ginned up the inflation that youd normally see now theyre at this point where the asset markets will continue to rise because any time you have Interest Rates below 2 , you get double digit returns inside of the equity market, but yet its not translating into price increases and the ability of companies to increase their price and their sales in there for their wages. Its a big issue they have to get sorted out and i think its a little bit more structural than theyre keeping their eye on and its sorts of things that powell and his fed will have to figure out. And rick, after the minutes came out as you saw longer data deals went down, whatd you make the market response . Yeah, even the twoyear note dipped a little bit. It was very illogical, its certainly the december rate hike theres no doubt in most traders minds and the minutes didnt diminish the fact that that will occur. Whether its march or a different date next year traders arent looking that far ahead. Dollar index was taking more of a pounding another incongruent aspect of a fed thats tightening in december as a matter of fact, as the crow flies now, in a dollar index is going to have the lowest close and its a close call between october 13th and october 19th. So more than a month, and i think that that is the dynamic to pay closest attention to the Foreign Exchange markets have been honkered down, just like treasuries, six, seven sessions and a tight range. Today it was a breakdown of that dollar index, and i think its meaningful especially when you consider all the dynamic in germany politically and how the euro seems to have weathered that better than the dollar index is weathering 3 growth. Rob, what are your picks in this market . Especially given the rally weve seen and the time left between now the and end of the year . Kelly, were really in a strong time for stocks here. Were going to close the year with a strong stock market and i guess from more of a macro standpoint, i would like small cap Growth Stocks here and utilities, financials, and materials would be sectors i really focus on. Rob, are you tempted to sell anything before the end of the year without even knowing what the Tax Implications will be theres no tax reform yet . As far as looking at sectors that are under way, not really looking at tax reform, im looking more at valuations and visible Earnings Growth and technicals, and some of those would be energy industrials and telecom in my book yeah, were showing ibm, verizon and ge there as a couple of your picks. Yep all right guys, got to go, thank you, happy thanksgiving, everybody. Thank you, happy thanksgiving keith bliss and of course Rick Santelli. It has been relentless. A few hours ago, the ftc saying its aware of the reports and quote evaluating the serious issues raised in ubers handling of the breech. The latest could open uber up to criminal liability uber says its in touch with several state attorney generals and its ready to cooperate. Is in its negotiations with investors, soft bank to raise billions of dollars and make major governess changes. It also wrotes the trust that uber is desperately trying to gain with drivers. He found out today that his information was breached and he told me, lots of companies are being hacked these days, but ubers the only one trying to cover it up. And kelly and bill, this is yet another mess from ubers past as you well know, he has on his hands, well, hes trying to move the company forward. Im about the only thing you could say to that is now he clearly has a chance, i mean, sounds like he already cleaned ranks for officials directly in charge of this and does this give him anymore emp distance to show that hes in command now and is going to shape this company more to his liking i think such an important part of that kelly, and this is why i said, its deal with soft bank if it can get this deal done to not just raise money, but that will usher in major governess reforms at the board level, at the shareholder level, that will allow dara to do more. So you know the stakes are high for him, for him, but you also have to wonder what other skeletons are in the closet here hes been in the job for two months and dealt with crisis after crisis already im sure hes asking himself that by the way, im not trying to make light of this because this is a serious issue, am i the only one who thinks they got off cheaply . The sad part is if youre a criminal reading that, you could say if it were me, id ask for a million. Thats a very good point. I talked to experts said today its not that rare for companies to pay ransom ware demands hide this information and gives hackers the emp distance to hack again and more more. They could be facing, you know, millions of dollars in fines, they could be facing class action lawsuits. Very good point, absolutely. Going into the close, 50 minutes to go go with the dow down all four major averages closed at record highs. The russell is buildingen to just half a point right now. S p is down 1. 5. Up next, we will see whats on tap for black friday with the former ceo and sears canada. He now hits up the Retail Studies Program at columbia. Hes started without us, apparently and the race is on, traditional retailers are clambering to keep up with amazon when it comes to getting orders fast to customers up nxt, were putting retailers to that test and of course we love to hear from you, you can reach out of the show on twitter, facebook, or you can send us an Old Fashioned email youre watching cnbc first in Business Worldwide most American Homeowners would be shocked if they knew just how rich they were. The average American Home value has increased 40,000 over the last 5 years. But many dont know you can access that money without refinancing or selling your home. With a home equity loan, you can pull cash out of your house for anything you need Home Improvement, college tuition, even finally getting out of credit card debt. Come to lendingtree. Com to shop and compare home equity loans right now. Because at lendingtree, when banks compete, you win. Every day, on every street, in every town, across america. Small businesses show their love to you. With some friendly advice, a genuine smile and a warm welcome they make your town. Well, your town. Thats why American Express is proud to be the Founding Partner of Small Business saturday. A day where you get to return that love, because shopping small makes a big difference. So, this saturday get up, get out, and shop small. Shares of deer jumping on the heels of an earnings beat out this morning the heavy equipment maker says i that the overall market improve sales in south america saw especially strong rebound. And that stock is up 4 helping to boost the market today. Guess matched estimates for earnings, but missed on revenue due to a sales decline in its Americas Region in that stroke is down 13 right now, kelly. Also on the retail front, many stores this Holiday Season are using their locations as a mini Distribution Center so that customers can buy online and pick up in their stores. Courtney reagan is here with the especially pickup challenge to see how well that all really works, courtney. Hey kelly cnbc and nbc affiliate partners in chicago, dallas, and san diego, tested out six retailers, same day, buy online, pick up in store programs each placed as similar as possible orders at three pairs of competing retailers throughout the day on cnbc, weve given you the four city average winner in each pair, now for the overall ranking. Walmart and target, macys and kohls, home depot, and lowes have an order online pick up in store option to save you time this Holiday Season. The good news is, no matter which macys we shopped, the experience was consistent. It was the same case for each retailer we tested not all experiences were without hiccups. I just got a call from lowes that our order is ready for pickup except for one item, tree skirt isnt available reporter that happened at chicago lowes too, ordering online is supposed to be convenient, but each team thought it was the more cumbersome part. Your Pickup Stores this isnt even closest store, it keeps going back pick up was the easier part. That was easy the order was ready in one minute from the time i got to the counter. So which retailer was the fastest . Target all four orders were ready in an average of 33 minutes. Kohls was second, averaging 46 minutes. Though, when ease of ordering and pickup was factored in, kohls was slightly ahead of target home depot, third fasters at 1 15 macys, fourth, 2 11 lowes, fifth, at 2 45 walmart comes up last. Averagie ining 6 32 the dallas order was placed just before 5 00 p. M. , but wasnt ready until after 9 00 a. M. The next day so overall, when each city ranked their sixth retailers from first to last, taking into account speed, ease of ordering, and pick up, the average rankings put kohls slightly ahead of target. While walmart wouldnt provide an average pickup time, the company said it is quote quite a bit less than what we experienced. Bill and kelly wow, im very surprised that the number this is all anecdotal, obviously, but still, they had to wait overnight to get that exactly and that one location, the order was placed at 4 51 p. M. , they didnt get the notification that it was ready for pick up until 9 11 a. M it was supposed to be sameday so we asked walmart if it was potentially a staffing issue, maybe only one person pulling orders until 5 00. They said they werent sure theyd have is to get back to us and then again said on average, while they dont share the number, it is typically lower than that that our four cities averaged out to. All right courtney, thank you. Stay there with us we got the globe trotters in the house. And theyre bothering us right now. Well get to that a little bit later. Lets talk about how retailers can find a balance between online and brick and mortar sales. Thank you this has been a water shed year for retail. Youre still advocating for brick and mortar, arent you 20 years ago if a customer wanted to shop, unless they were a catalog customer and there werent very many of them, they had to go to a store, mall, downtown, they had to go to a physical space, now they have a choice and that choice is the marketplace that amazon created, and then amazon has a dominant position in that choice is growing the internet is now global, you can literally shop the world and transact at the stroke of a key from anywhere in the world from the comfort of your living room in the middle of the night. The one thing about that, at least in my experience, amazon cant always deliver, especially every part of the country is media si meanwhile, theres a walmart in every community thats probably for more people, 10 or 15 minute drive. If anything, shouldnt walmart be the one to say look, were going to get it to you within an hour were going to try to undercut amazons advantage there, especially say get the distribution out to the rest of the country and not just the urbancenters is that where brick and mortar can find an opportunity here well instant gratification is a big idea its always been the basis of shopping i shopped, i saw it, i i wanted it, i bought it, its mine weve been spoiled. Amazon has brought that instant gratification down reliably to two days, and my zbesz theyre conspireing to bring that down to one day and same day in major markets. In fact theyre doing that already in many parts of the United States. Courtney, we could blame that on the millennials, but you know, im the same way yeah, exactly and so i think thats exactly what these retailers are doing and why theyre saying hey, we can get it to you faster to kellys point, 90 of the country, ten mimes of a Walmart Store. So that could be faster than even same day if thats what amazon gets to but of course figuring out the difference between whats Available Online the endless aisle and whats in store. Walmart has 60 million Items Available on its website. You know, theyve got what, 150 of,000 or so available in a store. When youre looking for same day and doing that combination, buy online, pick up same day, you have to be able to facilitier that out and make sure youre only shopping items in that store if thats what you want. And then if you want to wait a couple day us. You can pick it up at the Walmart Store and get you a discount its a simple idea thats very, very complicated and of course customers expect perfection to expect a customer to be happy about waiting two hours, four hours, six hours, for something thats been promised them immediately is tremendously befaced. Why is am distance able to do it then. If its that complicated and people do expect per ferks for the most part, amazon delivers that amazons been working on what they do for about 20 years so they have a tremendous head start from a systemic point of view there they are operating disciplines are the best in the world. So they work on a synchronized clock everywhere they do business Legacy Department stores, Legacy Stores like walmart dont have that expertise theyre trying to wire it, theyre putting on happy face. I dont think theyre quite there yet. Mark, what do you think though about the last word, courtney the balance, seems like retailers and brands think they have to have both. A great online experience and great store experience youve got these brands that started online that are building the stores whats the ultimate balance . Is it 50 50, 50 of the sales instore or online thats what pete said recently i dont know that every online retailer has to have physical presence. Especially if their blood category retailers like obviously amazon i think every legacy physical retailer though has to have a very, very attractive, inviting, powerful, extreenlly wellmanaged web component to them, and thats the rub its easy to talk about. Its Something Else again to deliver, and even folks like nordstrom who have tremendous head start on most of their peers are struggling in that regard are you going to be shopping on friday . From the comfort of my living room thats how we go. Thats how we do it. Come on guys, come to the store. Get involved you enjoy that, courtney. I will. Well see you on friday okay. Ill see ya. Thanks, courtney reagan, mark cohen, good to see you happy thanksgiving. Happy holidays. 35 minutes to go here, wheres our handy little clock the dow is down 55 points, the s p down half a point. That didnt last long less than 15 minute type thing. All right but the russells up a little bit here and the nasdaq is up about six have you wondered which pages on facebook were the subject of russias propaganda . The social media giant is going to show you now. We have those details coming up. And more than 40 years ago, their game was priced at 17 a share, but through the decades, the Harlem Globetrotters have proven priceless up next, we talked to the teams president about the state of the Sports Entertainment business and yes, well play a little b ball with a couple of the players as well. Stay tuned zar one of our investors was in his late 50s right in the heart of the financial crisis, and saw his portfolio drop by double digits. It really scared him out of the markets. His advisor ran the numbers and showed that he wouldnt be able to retire until he was 68. The client realized, i need to get back into the markets i need to get back on track with my plan. The Financial Advisor was able to work with this client. Hes now on track to retire when hes 65. Having someone coach you through it is really the value of a Financial Advisor. Welcome back we have a news alert from leslie picker right now what do you have hey bill, this is a report out of reuters showing that broadcom is considering raising its offer if qualcomm by offering more broadcom shares. Thats according to people familiar with the matter that talked to reuters. Now if you recall, last week, qualcomm actually rejected broadcoms first bid at 103 billion bid. It looks like its coming back to the table now trying to boost this offer after consultation with some of its shareholders so well see where things go from here. We have calls out to both companies and well report back with what we learned, back over to you i know, i know, i know. Stand by. Leslie, just real quick, does it say what that equals out to the last offer was at 70, right . It doesnt give a price in the first report that im seeing here on what what exactly that would raise the offer to, but its something that would absolutely sweeten the bid for broadcom shareholders, but no, i dont see any pricing details in this story as of now okay. Very good. Thank you, leslie. Thanks, leslie. Send it over to sue herrara for our news update, hi sue. Held low kelly and bill heres whats happening that the hour nancy pelosi and Chuck Schumer as well as republicans Mitch Mcconnell and paul ryan will head to the white house on tuesday for a meeting with the president. The group will discuss items that need to get done before the end of the year including funding the government by december 8th and the republicans tax plan. Amtrak says today is its busiest day of the year and they expect more than 760,000 passengers to use its trains. The railroad is also beefing up its security by increasing Police Visibility at its stations the dish blackout of cbs sports and Live Programming will begin tomorrow in a statement, dish said its subscribers will not be able to watch several highly anticipated games. Cbs programs havent been pulled by a distributor since 2014, the company says it does stand ready though to go to the negotiating table to try and get a fair deal and those famous macys thanksgiving day parade balloons are starting to take shape crowds gathered to watch workers inflate the multistory characters the parade airs tomorrow morning, 9 00 a. M. On nbc. Grab your coffee, sit on the couch, and enjoy thats the news update this hour back to you guys, bill yeah, thats what well be doing. Were there on the couch only. See you later how many entertainment entities can you name that are 90 years old in a very lowtech entity in a hightech world . Right . I mean the Harlem Globetrotters were around since 1926 thats what i thought. The great gabe creating them back then. And its 90 years since that time and they still sell out of ryans, they do 400 events a year thats a lot. And a couple are here and joining us now is the president of the harlem globe trotters, good to see you. Thank you why sl have they lasted this long its amazing. Its familyfriendly entertainment. Everybody loves the globetrotters, were here kicking off our 2018 Amazing Things of basketball world tour right here from the New York Stock Exchange playing two games at Madison Square guarden this weekend. We can entertain all the new yorkers and their families ups and downs over the years. Whats the key to making it successful in todays day and age with the rise of streaming and just so many different ways that people can access the content . Well, we create we bring Families Together and create memories worth repeating so its a live experience. Live and inperson, thats the emphasis of course our social media fans are growing very, very quickly. Clearly with trick shots like bowl and cheese will be doing here later today very, very social mediafriendly i grew up in the era of emen and kurly neil we knew who some of those players were will chamberlain played for them for a time where do you find the players . They are so skilled. Theyre great showmen and women too by the way thats right, we have six women superstars on our team now. First of all, you have to be a tremendous basketball player second, you have to be someone who wants to entertain put on a microphone and light up Madison Square garden and third a great person im like wondering whats going on behind us from the globetrotters, hey bull kelly wants to do the thing on the finger. No. I havent touched a basketball in about 15 years look at the camera, smile okay. Tell everybody hi dont move youve got this. I think my all right yeah. Give her a hand thats what im talking about. I would like to know, cheese, do you think you guys could beat the warriors they are a good team, were a good team. Good nba team, were the globetrotters. Do you think you can beat the celtics . We should give it a try one day. I agree can you beat the Washington Generals of course every night. Have you ever lost to the Washington Generals . Im going to ten years, i havent lost yet why play for the globetrotters . Why not play in the nba or anything you guys could play there too. Obviously could do anything you want to do in life, so when i came out of college two years ago, this is one of the things i decided to do on top being a 2008 slam dunk contest and after that, the new york jets calling me up for a tryout yeah, the jets called you i was there for three days dodged a bullet there harlem called me, 66 countries around the world havent got one bad review yet anything to add there tremendous tradition. Over 90 years. Spreading joy and love around the world from military bases to here in our home soil. And im very honored and blessed. How do you avoid getting injured . 400 events milk, water, lots of cheese i love cheese we could guess. And good food. And right over there, you see why theyre still popular. The young people out here today to see the globetrotters thanks guys. Appreciate you very much howard smith as well. Thank you. The president of the globetrotters. Theyll be bring p ringing the closing bell and they have a demonstration coming up here as well on the floor of the New York Stock Exchange. Well be right back after this dow watch, down 56 points right now. Stay tuned go. Us. Its what this country is made of. But right now, our bond is fraying. How do we get back to us . The y fills the gaps. And bridges our divides. Donate to your local y today. Because where theres a y, theres an us. 57 year to date meanwhile facebook has been under fire for its role in enabling the alleged russian manipulation of our president ial election last year today the company is announcing some changes julia borasen is in los angeles with a look at that, julia reporter bill, facebook announce is creating a portal to enable people to see which facebook pages or instagram accounts Research Agency that they liked or followed between the start of 2015 and this past august planning to launch the year and the Facebook Help center the Facebook Says this tool will show results for millions of its users, but only those who liked or followed pages, not the estimated 140 million users who may have seen kremlinbacked content. Now facebooks announcement comes following pressure from congress after testifying on capitol hill, senator bloomen that will earlier this month asked facebook and google and twitter to disclose who interacted with russian content by today senator blooming responding saying quote my hope is that itll be a responsible First Step Towards protecting against future assaults on his platform. We must do more to protect against the kind of destructive Disinformation Campaign russia mounted during the last election now bloomenthal calls on google and twitter to follow facebooks lead this is certainly just the beginning of the kind of transparency that congress is demanding as well as the public. Back over to you i wonder to what bill was saying earlier, if theyre going to show people the ads they would have seen and not just the pages they would have liked. I think theyre going to be various steps to this. I mean the pages are just one part of it because of the way facebook works though, people share posts, people like things, people comment on things and then that information is shared. Remember, its 140 Million People total, so this is definitely just the tip of the iceberg. All right julia thank you. There in l. A 20 minutes to go now still decline for the s p and dow today. Russell slightly higher. And the nasdaq is hanging on to about a sixpoint gain if youre hitting the road for thanksgiving or already did, get ready to pay more at the pump why gas prices are higher and how much this weekend travel could cost you and why those people at los angeles are still on the 405 what is that about and yes, weve already had inquiries about this, tune in to this friday for a special black friday edition of closing bell, well be on the air here Shopping Mall no, wont be in a shoppingal year or amazon beginning at noon eastern because the market is trading on a half day nmiss that. Come join us on black friday please do why do you put up with it . Believe it or not you actually like what you do. Even love it. And today, you can do things you never could before. Youre working in millions of places at once with iot sensors. Analyzing social data on the cloud to create new designs. And using blockchain to help prevent fraud. So get back to it and do the best work of your life. Allow you to take advantage of growth opportunities. And using blockchain to help prevent fraud. With a level of protection in down markets. So you can head into retirement with confidence. Brighthouse financial established by metlife. I love you so much. Were going to be best friends forever. Let out your inner child at the lexus december to remember sales event. Experience amazing at your lexus dealer. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. All right. Globetrotters are still in the house as you can tell. Well listen to sweet Georgia Brown for a while as we head toward the close great stuff. Pro bowler cheese chizism entertaining on the floor of the New York Stock Exchange. Broke news this morning that proctor and gamble is going to contest that proxy vote that narrowly gave activists investor nelson a victory at a board seat last week. Today the votes are going through a customary review to ensure a final and accurate count. Nelson pelts firm responded by saying and we quote, the review and challenge process will be a continued distraction. Hes not real pleased about that lets get on to gas prices which this thanksgiving are hitting their highest level in three years. Morgan brennan is at a rest stop in new jersey and has more on if prices are deterring travelers, morgan hey kelly, thats right, theres a price of crude climbed so too has the price at the pump so the National Average for gallon of regular gasoline right now, 2. 53, thats according to gasbuddy and that is the highest thanksgiving price since 2014 when Energy Prices first created. So why are we seeing this . Were still recovering from the capacity that came offline during hurricane harvey. And since then, weve seen crude Oil Prices Climb with the benchmark to which gasoline and other Refined Products are linked, up 9 over the past month alone. So, with nearly 51 million americans expected to travel 50 miles or more this thanksgiving week, according to aaa, we caught up with folks here at this busy new jersey restaurant many of them seem to be shrugging off these higher expenses 40 cents higher from where we live, yeah actually, it seems to be lower down here than it is up in maine because thats where were coming from. It does seem to go up just right around thanksgiving. I sleep the whole time. So reporter now interestingly many of the folks we spoke to are traveling this thanksgiving week for the first time in years. And were not talking little trips either, maine to d. C. , North Carolina to new yorks long island, boston down to delaware, so perhaps this is speaking to the fact that consumers seem to be more confident about the economy right now. Thats something that experts have been saying as we go into this Holiday Season. Guys, back over to you i do feel like theyre shrugging it off i mean, not that its a huge number of and of itself, but you combine that morgan with what people say in terms of how much theyre going to spend this Holiday Season thats about 15 it does feel like theres some extra i dont know, i dont know what the right word is, confidence in the air. Reporter absolutely. And by the way, youre seeing it in trucking data as well, the American Trucking associations came out with truck for october yesterday, showed that for the month, truck tonnage spiked 10 and some of the other data were seeing is also indicating that retailers and other shippers are really betting that people are going to spend more this Holiday Season all right, morgan thank you very much. Morgan brennan there out in new jersey 13 minutes to go. Dows down 54. Remember, we had all four closing at record highs yesterday. Itll billion notable if the nasdaq hangs on to the fivepoint lead there. From taxes to companies tanking after earnings its been a busy week and its only wednesday. When we come back, david darst is with us hell wrap it up with his market theme of this week thank you. Lets begin. Yes or no . Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Im all about my bed. This mattress is dangerously comfortable. When i get in, i literally say ahh. America loves the leesa mattress. We have more five star customer reviews than any other mattress of its kind. This bed hugs my body. Im now a morning person. Hello bed of my dreams. Discover how leesas innovative design provides an extraordinary sleep experience. Then place your order. Well ship your leesa mattress right to your door. So you can enjoy a riskfree trial at home. I love my leesa. Today is gonna be great. Sleep on it for up to 100 nights and love it, or youll get a full refund. Returns are free and easy. Order now and get 125 off. Plus, a free pillow worth 75. And Free Shipping too. Go to buyleesa. Com today. You need this bed. Welcome back we have ten minutes left in the trading session. Welcome back to our friend, the independent investment advisor. Long time no see. Wearing a very fetching turkey tie here. As you well know, im going to do my imitation of david darst Benjamin Franklin wanted to make the turkey the National Bird over the bald eagle. Thats right. Unfortunately that didnt work out it was given 228 years ago by George Washington who made thanksgiving a national day of prayer and celebration there you are now, im disappointed. I thought your acronym was going to be happy thanksgiving or turkey or all afternoon. Or gravy, gravy we try to keep it to five letters. Its got to be taxes given all the talk and back and forth between the house and the senate on the tax proposals, okay of course the t is tame inflation the fed is really the Consumer Price index. And if that stays weak, its going to slow down their pace of Interest Rate increases. I do see that jp morgan is expecting four increases next year next year Morgan Stanleys had three. Tame inflation secondly a is the aerial valuations aerial means alpine or lofty valuations well come back to that. X is xijinping, hes come out of the congress and taken aim at the debt products that swelled up so big in china the serks europe, and there we see Angela Merkel having difficulty forming a government. We may have to have another election or else a minority government where they work with other parties. Neither of which are very happy outcomes for the germany, nor for europe and the s is small and midcalf stocks which have done so well now theyre catching another bid. Theyre up about 11. 9 for the russell 2000 that made a new record high, i think you want to basically start to rotate into telecom and to financials, okay. That would be helped by modest Interest Rate increases. Also energy and industrials, and theres where youre going to get a big bang for your buck with going from 35 on the Corporate Tax rate down to 20. The effective Corporate Tax rates already about 27 because youve got these big multinationals you want to focus on small and midcalf domestically oriented. Thats of course your telecom and your banks and also the industrials which would be very much helped by them what about this valuation point that you are in . And this has been a big point of contention is it overvalued or isnt it youve got price to book, price to earnings, price to sales, and price to gdp which is buffetts favorite measure all of them are in elevated territory, but most of your viewers have to remember, valuation is never the trigger the trigger is always a detier ration in fundamentals, or two rapid rate increase by the fed or psychological something psychological. If it is a psychological incident could be something to do with the middle east, it could be something to do with reform tax reform doesnt make it then you probably would want to use that as an opportunity to buy. Valuations are high. When you get higher and higher, at base camp two where david and i climbed on mt. Everest you want to basically watch every step you take and pay attention, hands on the steering wheel, not driving on auto pilot, this is not a time for driverless car investing. Thats for sure hold on next week, we have the case schiller home prices home billing stocks have been on fire this year you all have talked about that i think thats area of strength for the economy, the retailers outlooks this week so many talked about a very nicelooking Christmas Season Holiday Season so you want to basically look at that em theres only 20 days until hanukkah starts. And if your wife, mother, spouse says, dont get me anything, they do not mean it. Thats lesson number one for all of your viewers. Thats the only lesson. Thats right. Exactly see, we would have had time for happy thanksgiving. We would have done it thank you thank you so much and happy thanksgiving everybody. You too. Thank you so much is it that time already . Closing countdown in just a minute then after the bell, amazon leaning on whole foods to sell its digital assistance in stores were going to discuss if its new offline ragystte will translate into sales this Holiday Season well be right back. 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Get ready, because were helping leading companies see it and see it throughwith digital. Letsfist word that comes to mind when you think of lowcost futures trading. Was it happy . What about a dedicated service team with futures licensed specialists . And what about being able to react to the 24hour futures market with integrated trading across web and mobile . Still happy . Good. Then its time for power etrade. The platform, price and service that gives you the edge you need. Etrade. The original place to invest online. About two and a half minutes left as we head towards the close here we are joined here on the floor of the New York Stock Exchange, how are you . Happy thanksgiving eve. The dow pulling back today, so is the s p, the nasdaq though is the one that looks like it may finish with a record high here, but the dough, you know, thats to be expected on a day like today slight pause. Volume is low as well the vix is lower as well slight pause in whats been a record one for equities. Best gainer in the dow today, verizon, thats been a stellar performer here recently. Thats the biggest gainer not by a huge amount and dow is one of the drags, but its also tied for decliners with johnson and johnson and American Express right now. Cerner corporation, the medical Technology Company may be working on a deal with amazon. And the amazon Cloud Business and cerner has taken off just the tieups, the way amazon is trying to diversify its business. Of course something that we are trying to get more details on. Whether it be health care or retail, food everything the big decliner was today hte. It was just on the news that meg is leaving now its down 7 one of the reasons tech lag and although we should point out energy did have a strong day that coming ahead of the opec meeting. The last opec meeting of the year in vienna yeah, the price of oil was available. On the settlement there, just below that right now now we get ready for the Retail Retail bonanza. They traditional deploy well this is their seasonal time of the year, and im talking about the stocks right now as we head toward the shopping season. And those estimates, as soon as we get them on friday how consumers are shopping, how much theyre putting into this market, whether it be online or at department stores, thatll be a big topic of discussion. I also want to highlight hotel stocks didnt get a lot of attention today, certainly something that we were watching this intensifying battle between airbnb and the hotel industry. It is heating up if you look at the performance theyre all up 35 or more that the point, doesnt seem like airbnb is as big a threat as we thought. Have a good holiday. The rest of you, dow going out with a decline of 61 points as the globetrotters ring the bell here. Stay tuned for the second hour of the closing bell and happy thanksgiving everybody, well see you on friday for a black friday special at noon eastern time kelly, its all yours. Thank you and welcome to the closing bell looking to see if they launched one of the shots on the bell, thats a better than quarter percent drop here down from yesterdays record high close s p dropping a couple points to 2597 the nasdaq staying in positive territory just slightly today, closing up a couple to 68. 67 russell 2000s in the ring for most of the session. Two points on the dow there, 1516 coming off yesterdays record high. Index funds are set to surpass assets by 2024 according to movies but john levin says indexing has gotten out of control. Hes going to tell us why and what those risks are, coming up. Michael stan toely on set with us here. And here from alpine funds joining us this afternoon. Thank you everybody. Leading dow was verizon. Over in the s p, top stock is over there today, by the way is the last old trading day of the week. Markets close at 1 00 p. M. On friday theyre closed tomorrow for the thanksgiving holiday showed some concern over low inflation, something fed chair janet yellen expressed last night at the New York University event. Oh no. One more i dont think he made that one either fed chair janet yellen, lets get back to that she expressed last night her views about inflation monitoring saying quote, it can be quite dangerous to allow it to drift down im going to watch and make sure no rebound comes this way. Yeah, while the bank shot may be one of them try end to there, investing, try to get a few more rate increases in there while also trying to sort of make sure the markets dont get too frothy a lot is in the mix. I dont think it changed anyones view on how the next few months will go and only talking about that flattening yield curve, two years yields going up, the rest of the curve staying compressed. Whats your expectation, sarah for rate hikes next year i think thats pretty accurate for me. If i look at december, theyre pretty much telegraphing and they have so far i think when you switch fed chairs and if youve said that this is our path, you probably want to stay on it at least to begin with now theres a lot of game fare that can go into that. I would think that unless the data is different that probably you would get something in margin and then its really going to be, youre going back to much more data dependent and where inflation is and where Everything Else is, i think. Theres a split lately in thinking between this idea of looking at where Interest Rates are, the feds shouldnt raise anymore at all and those on the street who think theyre going to raise three or four times, what do you say . Two to three and moving closer to two now. I was also going to say give the ball to kelly because i saw you spinning it earlier in the segment. Inflation is definitely something they have to be watching and i think the fact that the fed is still mystified by the lack of inflation is troubling because many of us know that you know, you look at amazon, they buy a walmart and prices get slashed, amazon looks at furniture and wayfair gets hit i think were in a sustained period where maybe were no longer transitory that this is a period where inflation, low inflation is going to stay with us and that would argue for fewer rate hikes Going Forward in 2018. And is that a reason for you to own stocks . Yeah. I mean, it depends it all depends on the effectiveness of productivity through cap x and rising dramatically. And wage pressure, but yeah, absolutely wed like to see some of the tech leaders take a breath, but we still own stocks, were still long, were overweighted and we think theyve got room to go all right tech has been a big winner lately, but its actually underperformed today, Hewlett Packard enterprises and were among the biggest laggards in the s p 500. Mike, i was surprised that hpe country bounce back a little bit more but again, this is the area thats traditionally kind of powered us forward say anything that we have this weak performance. Kplingted by the fact that meg is leaving as ceo. Im not sure were looking at whether the Enterprise Business as a whole stands, i think theres a sense with meg whitman leaving, the main reason to think theres a high energy further rationalization of this Company Maybe goes away. In general, its modest taking across tech. The question for me is everyone loves it, hedge funds are loaded up with the tech stocks. Biggest inflows in the last two weeks in history is it a little bit overloved in the short term yes, very difficult to make a fundamental argue. Thats where the argument takes place. We have a news alert on carl ikahn to get to. Whats happening there i want to draw your attention to Sand Ridge Energy that company is one where carl ikahn just took a 13 stake. That spoke with dow jones. Those headlines crossing just now. Ikahn is the latest holder to oppose a deal for Bonanza Creek. Those shares are flat right now in aftermarket trading, but sand ridge is down 25 year to date and Bonanza Creek down 71 year to date. So well keep an eye on that and well get back if we learn more, back over to you. Leslie, thank you weve also seen sarah oil price, the gas priet effect into the holidays oil has done okay here lately. Is that an attractive sector to you guys or not . We have Energy Stocks for dividend people. We have the big majors like vp i think the energy youre finally starting to see discussions about the supply side, not only being the most important thing youve got demand, youve got supply being constrained to some degree, although theres always concerns about production but i think that the oil price coming up is hard for transport stocks, but its not so bad for the Energy Sector and its not so bad now that i think its going to be a big effect i would have to go higher i think for that i was going say, speaking of transport stocks, looks like another news alert this time on ups hey kelly, colleagues over at cnbc. Com with the story and the scoop here, ups has obtained a license in georgia in order to distribute manufactured drugs. Why is this important . Theyve obtained a license that allows them to relabel those drugs and also repackage them. Something that the middlemen once again, we are seeing this area where there are a lot of different players starting to try to creep in on the middle men when it comes to drug distribution, an area that a lot of folks say that is ripe for destruction. It could very well be perhaps a move to try to save off amazon which some people say may be looking at this area as well with a number of the licenses that it has obtained however, to do this is very complicated because this is health care. You need to obtain these licenses in all 50 states if youre really going to be a major player in this particular sector this is an interesting one, no real reaction and you mentioned there, bertha. Terrible year anyway big news there for ups potentially, sort of relatedly, cnbc. Com was breaking news that Amazon Web Services is about to break into the health care space, with an announcement next week on cerner one of the best performers in the s p actually the best today. Its a big move and it could put a dent into other Cloud Businesses eyeing the health care sector. Cerner was up 5 on the news nancy, theres a couple Different Things going on here on the amazon piece of this, what is a partnership with cerner with an effort to put it into the cloud say to you . I actually like im going to answer that, i love this ups news, its proactively disruptive and again, you know, pharma has reacted as have some of the pbms i like the fact that some companies are taking proactive advantage. On the aws deal, i mean, i think, you know, we know that amazons the cloud leader, and i think this is interesting and potentially disruptive, but i dont think we knee enough yet to know just how much and what the implications are so for you the ups move is more significant its more interesting to me because thats not what you would expect from ups. So i find that compelling and it shows that they are taking to amazon seriously as a delivery competitor as well all right, ups shares by the way, not moving too much on that report after hours Record Number of americans are expected to fly this thanksgiving weekend, and its not necessarily going to help Airline Stocks Contessa Brewer is in new jersey with more, contessa. Reporter yeah, so kelly here we are at united newark hub. I asked about how much this Holiday Travel season affects the bottom line. They wouldnt give me specifics, but its one of the busiest travel times of the year look at the Airline Index here gang busters for the First Six Months of the year and the Airlines Start lags under pressure here from rising jet fuel prices and increasing competition which lowered the air fare in fact, customers right now are paying 23 for their average Airline Ticket than they did last year, and that means a lot of people took a look at the thanksgiving air time travel and said hey, theres an opportunity here i met a guy who found a great deal on a ticket to amsterdam, decided to take a chance on one of the busiest travel days of the year, and he got to the airport early. Did something happen . Why is it so empty here . This is the first time ive ever traveled today because i know its usually like a mess, or thats what ive heard dont believe the hype, its not so bad reporter its no hype here, 51 Million People traveling this year, and if you and your best friends are hitting the airport, look at this board almost everything on time here no major weather headaches to speak of Newark Airport just day than they did last year were talking 44,000 united passengers departing newark today, thats a lot of people climbing up there hitting the check point. The good news is, the big rush guys was over yesterday along with chicago, were talking washington, d. C. , seattle, l. A. X. , the big rush was already over today, free flowing. Easy going kelly. Not the escalator. Oh god it opened. What do you think about them as an investment a lot and because of that, theyre actually generating cash, much more of the time than they used to there is, there tends to be seasonality with airlines, but theres also, you know, right now, if youre in a fare war, thats not a great time and oil prices are coming up those are things that are not so easy to get through, but generally speaking, theyre making money and they didnt do that on a regular basis. American only one of the majors in there. Thank you, sarah, nancy, for joining us today and happy thanksgiving thank you thank you, kelly. Retailers are hoping sales kick into high gear starting on black friday up next, well break down some proprietary data on which retailers could be big winners and which could deliver a lump of coal. Tesla is reportedly burning through cash at 8,000 bucks a minute and could exhaust its cash supply next august. Ahead, well discuss whether the company can survive that kind of cash burn and we to want hear from you contact the show on twitter, facebook, or over email share your thoughts with us. Youre wchg bcfit atincn, rsin Business Worldwide trust 1 doctor recommended dulcolax. Use dulcolax tablets for gentle dependable relief. Suppositories for relief in minutes. And dulcoease for comfortable relief of hard stools. Dulcolax. Designed for dependable relief. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. 115 million americans plannen to shopping this black friday each company is fighting for consumer dollars michael biel is here with a look at what the big datas telling him about the winners and losers here no pressure, you have a good track record, okay. We do youre putting it at risk. Indeed, were 55, so this is a little bit of a risk there i think its an interesting time for retail going into black friday when you look at it on a historical basis the sector has tended to immediately coming out of black friday doubled the average daily returns. We expect for this to be different. When we look at traditional data, you have sentiment that is strong whats very interesting when you look at the alternative and proprietary data is that over the course of the last month, youve seen a dramatic increase in the amount of advertisements going on regarding friday, it is about two weeks earlier than normal that is actually led to retaildriven apps boil it down for us what are the names as winners and the losers well the name i would start off with the winner is i think walmarts going to have an interesting showing and continue to make this place on the economy. And thats the number of reasons. One, when we looked at every single website globally and walmart actually has discounts on their sales that is not as dramatic as the rest of the industry when they do have their discounts, its in labeled goods. One of the reason thats been able to occur, theyre in the top 15 of all apps across apple and samsung. Thats higher than netflix, higher than pandora. And second to amazon you think they can be a winner and amazon and best buy that you think amazon and walmart can win together i think they can both win walmart is very interesting because when you look at the black friday search and activity thats been taking place here, its actually very strong surprisingly in brazil as well and while amazon has recently announced theyre going to be making penetration into in a space walmart has been there since 1955 also through the online channel, particularly via the phones. What about the losers too Tractor Supply. Company i followed for a while im interested to hear what the indications are. Yeah, im sorry to is a that on National Television in history, they have have a lower winloss ratio an the rest of the sector coming out of black friday on average, losing 1. 1 per day. This year actually, i think its going to be very interesting because they have a concentration and when you look at differentials between what are National Allegiance tends to really care about, houston actually has a much higher propensity to be looking for Home Improvement goods and big ticket goods now we look at used car sale and those have held up over the data over the last six months those have really held up in particular because theres been this inventory snapback in replacement cycle coming out of the different hurricanes so what we see is going to be an impact that a lot of these people in these regions who normally would beer have vernt customers have likely already spent a lot of their free disposable income. And thats particularly distressing in that what we see with Tractor Supply company is that they, looking at the data, they just very recently put a lot of inventory on deep discount and given that their average inventory days outstanding has been increasing from 108 last year to 118, that makes us wonder whether theyre just recently realizing that they may have a little bit of an inventory problem and having to really deeply discount. Kohls and jcp, we know the story better michael, love junior insight thank you very much. Happy thanksgiving. 66 dont jinx it thats michael biel. Tesla shares surged more than 40 this year will reports the companys burning through cash at an incredible rate end up slamming the breaks on the stock. Later, asset manager, john levin says index investing is out of control and people are making a big mistake hell explain why still to come on the closing bell. And the wolf huffed and puffed. Like you do sometimes, grandpa . 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Looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Tesla burned through a whooping 1. 4 billion in cash last quarter and will likely spend another billion this quarter. New plans for a semitruck but model three is experiencing production delays and the lawyers are lined up at the door here to discuss if investors should worry, Christian Hoffman and colin rush whos managing director at open hiemer. Welcome to both of you. Christian, let me start with you on the concept here that investors need to worry about how much money tesla is going through, and in a way, do you think these new product deposits are just a way for them to raise capital without tapping the markets . Kelly, thats the cynical view, and i think thats totally an accurate view we saw this before, this company burned over 5 billion in the last couple of years its dependent on Capital Markets. So if our Capital Markets have remained open, but Capital Markets can be fickle and if the euphoria around the story changes, which by the way we saw in the last two years of trading history and public company, that could change quickly and should cause people concern i mean, colin, the fact they were asking people for the whole 250,000 for the roadster up front, combined with a deposit for an electric truck that wont be out for several years and theyve done this time and again, is that a way they need to bring the money in the door sure, theyll be able to collect over the next quarter and i think that helps particularly as you are a new credit out in the high yield market thats still getting familiar with the company, but you led with the billion dollars, that was a cap x number, not the operating burn, and if they actually do start producing more model 3 vehicles, theyre going to have to pay additional cap x costs what is the operating burn at this point 500 million. Per quarter per quarter youre looking at billion and a half to 2 billion burned in the Fourth Quarter with about 3. 5 billion on the balance sheet. And i think what theyve always said, they wanted a billion and a half to two billion on the sheet to operate the net 500 million of incremental deposits gets done around the area where they feel comfortable, but the big news is going to be how many model 3s they produce and with guidance in the First Quarter january 3rd which is one when were expecting them to release in a number it is where the amazon comparison breaks down and i think its gone from a position where tesla had time on its side because when 2020 was way out there and they were talking about the production targets there, then you could say fine, i believe in the big vision, ill wait. Now its a little bit closer and more show me christian, what kind of transparency would you like to see from tesla to get investors more capital with what their Capital Needs really are id like to see a very clear timeline of the cash flows and cash burn. I think if you go back and look at the three huge script, youd see people asking questions about cash flow and they dodge the question or couldnt answer. I cant tell you what the cash flow is going to be and i dont think they can tell you either frankly they have no idea. Theyre in a challenging production process and look, i think to believe in the story at this point, youre making a james bond trade the Company Needs to dodge the avalanche, avoid the gunfire, ski off the cliff, pull the rip cord on the parachute and glide to safety so they can save the world. Which i believe is in teslas mission statement. Well, if anyone can beat james bond, it would be elon musk colin before we go, do you think theyre going have to raise capital from the markets enequity or debt next year were expecting them to come to the markets the questions are what sort of terms are they going to end up with and what market theyre going to tap if they end up back in the equity market or if they are able to dip back in the high yield market again like earlier this year. Thank you both. Especially joining us this thanksgiving eve Christian Hoffman and colin rush time far cnbc news update now lets get over to sue herrara, sue hi kelly, heres whats happening at this hour eastern time off the coast off of japan the aircraft was on its way to the uss Ronald Reagan at the time of the accident 18 increase over last year. Well what does it take to feed an army the department of defense certainly knows and its revealing just how much food it expects to feed the troops tomorrow for thanksgiving dinner it includes more than 98,000 pounds of turkey, 10,000 pounds of stuffing, and over 6,000 pies as the holiday approaches, the city of paris is brighter tonight. The city switched on its Christmas Lights along the famed area lighting up 400 trees along the one mile stretch of street it is a beautiful sight. Thats the news update this hour, kelly, have a wonderful thanksgiving you too, and this is all making me feel like theres no excuse for not cooking one turkey and putting up one pair of Christmas Lights. Exactly, i know. Why theyre stressed out at least you dont have to feed all the troops you too sue, thank you very much sue herrara heres a quick look at how we finished up on wall street today. Just about a fivepoint gain on the bell there everyone else a little bit lower, but the dow is down 64, thats a quarter drop for the session today. Let get to some of the other big stories today. Heres our rapid recap proctor and gamble has made the associates to go through and have lawyers present t challenge and make sure that their count was correct. We had the best Product Portfolio weve had in a long time weve had real momentum in the marketplace. And antonio and have crafted that strategy together and felt like this was the time for a new generation of leaders to take charge of Hewlett Packard. From a returns perspective, if the board people visit kohls stores and get the experience and the opportunity to transact more often low inflation concerns continued to dominate fed Monetary Policy makers Decision Making on when to raise key short term Interest Rates on the flipside, other participants caution, waiting too long to remove accommodation or moving too slowly could result in a substantial overchute of the level of employment. Im just wondering if p e should accept it its going to drag on if it goes on like this anyway. Apple is going to launch a cheaper, smaller iphone next summer chinas Economic Daily news says itll cost 450 bucks and aimed at developing markets. Its surprising to hear such big news from a source like that the thing is, i didnt realize that iphone se was still on the market the back catalog of apple products doesnt get a lot of attention at all you go into the store though sometimes and you can kind of see theres yesterday sitting there on the table but it is interesting, i mean look, a lot of the criticism of the newer generations not everybody wants that big high capability phoned in at a high price tag. Does make sense. I think apples a long way from having product clutter to where they have so many it rations if its still on the market, wasnt a 5c experience where they came out with a cheaper phone that was not well received, scrapped it if this is getting them into that market. Well see, again, considering the source we will see. Next, Justice League hasnt done terribly in the box office, but it hasnt done well enough given its cost. The Warner Brothers film reportedly cost 300 million a make, 150 million to market and that has rob cain saying its on tracking to lose between 50 and 100 million on the movie. How big a blow is this for the studio and for at t in the middle of trying to acquire this company . Its not really trying to have this as a basis for a franchise. Also, its really remarkable that a basically software, i mean, this is a cgi move here. Costs 300 million theres not any efficiencies attached to doing a movie this way, blow things up in real life but, you know, i do think theyre not going to give up on the franchise. Theres a lot of pieces of this. Characters can be put in different type of contexts im sure theyre going to try it a lot of people of my generation are saying calling this super friends. They were based on the saturday morning cartoon. Saturday morning cartoons again. Captain planet, im telling you, thats the way to go finally is the Business World over excel the wall street journal says that Cloudbased Software or adaptive insights, excels owner microsoft says it allows for collaboration too and many users export back to excel from those new tools anyhow does he have a major problem on his hand this is news to me. I definitely think excel came to seem like just your standard default like toolle to use and almost every situation whats fascinating to me is a lot of people trace back this whole era of Financial Engineering to the invention of spread sheets. Lotus or something as well it is interesting that basically the world has gone beyond the capabilities just to me, from microsofts point of view, if they can do this and google docs has been a product on the market for a while now. Yes. There must be some urgency in washington now 100 million data entries now, excel can access how many people really need that kind of Computing Power people dont. Maybe the computers need it these days our next guest says if youre jest investing in the dow or other funds youre making a huge mistake asset something here to lay out his case look at how the Holiday Season can be different now that its selling its echo device what impact will that have coming up . Whuuuuuat . Rtgage offer from the bank today. You never just get one offer. Go to lendingtree. Com and shop multiple loan offers for free free . Yeah. Could save thousands. You should probably buy me dinner. No. Go to lendingtree. Com for a new home loan or refinance. Receive up to five free offers and choose the loan thats right for you. Our average customer could lower their monthly bills by over three hundred dollars. Go to lendingtree. Com right now. According to morning star, more than 500 billion was put into passive funds last year alone. But are investors indexing too much joining us now to discuss is john levin thank you for coming down here and you think this is a major problem for people, why . Well, let me just say first, kelly, indexing has done a great job for many people. V vangard, state street. Theres a but coming. There is a but. Some of the Specialized Industries which im so negative on and spend one minute with active compare why did you think the russell 2000 in particular is such a problem . The essential problem is that well, i could read the names that are in it, 30 to 50 of the companies have nowhere, roughly. 10 of the companies have earnings from 50 to 200. Truly i dont believe anybody knows what they own and why and im going to read what came off my bloomberg today and they change a little and a little more, littleless than 2,000 names on this because of the takeovers on the day. You want to own it, exact sciences, mks, grub hub, mgic curtis, sterling, Aspen Technology is that what indexing was all about . The counter to that is that this is a one stop way of getting exposure to the small cap universe and i dont have to know all of those names because this is just a proxy for it. Obviously thats the selling point. That is 110 true what it really is is a pure momentum trade it is momentum in a bottle, and as long as the momentum goes up, people are buying it but the thing that i dont understand is, why is it a problem for somebody to just say okay i want to own this, you know i want exposure to the russell 2000 i want that because its more stocks than the s p 500, its smaller stocks and so i get a chance to maybe outperform in the longterm and its a lowcost way of owning it. So is there any part of that that you take issue with yeah, all of it i understand investment to be and when i think value and active management is all about anyway, to round the circle is buying something, measuring the risk, and judging what the aappreciation would be according to whatever value system youre using, asset value, cash, new product, management, traumas, none of that exists in this. Nobody knows what they owe theres no price recognition this thing could create at any price. And as an investor, 151 today, 149 youre making that choice so for example, when Warren Buffett says he wants his assets put into an s p index fund, the premise is not that hes going to know everything in the s p once he passes and be able to judge its value its just that he trusts the companies that will in that index got there somehow, will leave there somehow and its a low cost way of having that diversification. You could make the same argument for the russell 2000, couldnt you . I think that if you wish to turn over your money to an S P Committee or iwm committee, and you work hard for 20, 30, 40 years and you wish to allocate it that way, you should do that. I think it would be a dreadful mistake are you saying that the markets pricing mechanism is brok broken the components of the russell 2000 themselves each sort of reflect what the market thinks that company although i would say just to back up your point a little bit and distinguish in the russell, one of the reasons people say indexing works is youre free riding on all active managers, maybe you could argue for lets say the bottom thousand stocks in the russell 2000 is not necessarily that great thats an interesting argument no charge what i do think and when you have 10 , 50, 200, and these kind of i dont think Warren Buffett ever contemplated allocating the russell 2000 is not appropriate for people to be long would it be okay to index the dow for you . I would not want to do it because again, i dont know what price the dow should trade at and i dont know what price the s p should trade at. Give us one company you would like and you look at it. One specific stock not to put you on the spot or anything well, i think one of the most interesting one of the most interesting stocks in the management over a long period of time which weve had a is the dow. You have one of the great managements in the world and whatever the value is, youre going to get it. And i dont think hes in the russell 2000 john hes in the dow thank you very much we have a news alert on peter keel hey kelly, this is a quite interesting trend in developments here with the gawker media bankruptcy, peters lawyers today filing in Bankruptcy Court in new york saying that the Plan Administrator should allow keel to participate in the sale process of gawker. Com if you recall mr. Teal funded much of the legal costs of an invasion of privacy lawsuit that resulted in gawker medias bankruptcy about it a year or so ago. The sister sights were sold to univision, the administrator is still attempting to find a buyer for gawker. Com specifically. Whether it was bidding for that access or receiving information on how the process was going quite an interesting turn of events that was interesting from the very beginning, kelly. Its like covering the short. Yeah. Perfect analogy soulcycle has more than 82 studios across the country now its moving beyond the bike as fly wheel heat up the latest workout the cycling studio is offering and what it means to the sbrand coming up. But first, alexa, buy a 20pound turkey. That could be how whole foods customers shop for thanksgiving meals. Those detailarne s e xt today, innovation in the finger lakes is helping build the new new york. Once home to the worlds image center, new york state is now a leader in optics, photonics and imaging. Fueled by strong university partnerships, providing the worlds best talent. And supported with Workforce Development to create even more opportunities. All across new york state, were building the new new york. To grow your business with us in new york state, visit esd. Ny. Gov. Excuse me, are you aware of whats happening right now . Were facing 20 billion security events every day. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. Yes or no . Gin. . Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Amazon is moving from the black friday shopping cart to the thanksgiving day table how the tech giant is working its way into tomorrows feast just next. And closing bell at a special time on friday, november 24th because of an early market close. Catch me at noon eastern time, noon to 2 p. 00. Meastern, dont miss it. A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley when it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. From turkeys to echoes amazons takeover of whole foods allows the tech giants online offline strategy to be on display this thanksgiving. Deirdre bosa has made her way to a whole foods. Reporter kelly, thats right. This is a different kind of Holiday Season for amazon. After its acquisition of whole foods, more than 450 brick and mortar Grocery Stores like the one right behind me. This year amazon is slashing the price on items like organic turkeys, shrimp, broccoli, potatoes, and other items just in time for the holidays organic turkeys are 3. 49 a pound. Prime members pay even less, 2. 99 per pound. Also on display, something that you would not have seen in previous years, lots of devices on display, from echoes to kindles to fire tvs, all amazon products within this whole foods and many others across the country, youll see amazons emerging online offline strategy. Some have suggested that cheap prices on thanksgiving foods are a gateway to get consumers who are used to shopping in physical stores into the door and accustomed to amazons ecosystem and line of devices. But kelly, that may take some time we were here yesterday and we spoke to six customers not a single one of them either had an echo or wanted one. They cited privacy and security concerns as some of the reasons they didnt want one those are the biggies deirdre, thank you shes at a San Francisco one i actually got the turkey at whole foods the other day, and there was no prime signage no tiein im sure theyre rolling it out. But, you know, regular supermarkets also discount, you know, the turkey itself, hoping you come in and buy other stuff. It just so happens amazon has electronics and prime memberships to sell. Yes im not sure i would walk in for a turkey and walk out with an echo either. A different mindset if it gave me out loud directions as i was doing to about what to do, now theres a prospect more soul, less cycle. Well have details on soulcycle next coming up on fast money, one man says stocks will move higher what we do every night is like something out of a strange dream. Except that the next morning it all makes sense. To power global ecommerce Fedex Networks are massive, farreaching and, yes. A little magical. Fedex. Com slash dream right in the heart of the was in his financial crisis, and saw his portfolio drop by double digits. It really scared him out of the markets. His advisor ran the numbers and showed that he wouldnt be able to retire until he was 68. The client realized, i need to get back into the markets i need to get back on track with my plan. The Financial Advisor was able to work with this client. Hes now on track to retire when hes 65. Having someone coach you through it is really the value of a Financial Advisor. Indoor cycling studio soulcycle will move beyond the cycle. Diana olick is outside a new york city studio where they plan to do that dia diana . Reporter kelly, this brand started the cycling boutique in new york city years ago. Now theyre separating the soul from the cycle theyre calling it soul annex, a small test location in manhattans Flatiron District offering three different workouts, from high intensity cardio to stretching and strengthening. No bike. The companys ceo says soulcycle is in the business of community and personal transformation and its never been about the bike what really drove this demand was the customer demand. This is really our first step in the annex and moving off the bike and out of the traditional soulcycle studio our riders were asking us consistently for other ways to spend time with our brand and instructors. Well continue to look for ways to do that reporter soul annex has its own branding and its own clothing line, of course, to go with it. Its a way to get more business from current clients who might do other workouts in other places she says its not about competing with other than the cycling space. When i mentioned the pelle eton home brand as well as flywheel which just recently launched a home cycling platform, she said putting a soulcycle at home, kelly, was not out of the question yeah, but these pelleton people are rabid reporter have you met soulcycle people same thing as soulcycle, trust me highly passionate you have a pelleton at home. Theres two things are they going to sell bikes in peoples homes, and the other thing is, are you going to go in the studio for some other kind of workout reporter i think youre going to go to the studio for another kind of workout. The people we met in this studio were all soulcycle riders already. What they were doing was following their coaches, they built that connection between the clients and the coaches. So they go to the soul annex to get Something Else, because not everyone can ride all the time that is for sure. Even you, diana. Thank you very much. Our diana olick at soul annex. Not as catchy, you think . Its catchy, just a little weird. Its this social tribal thing, not really about want workout itself thats also the problem with fitness in general, people get border bored of one thing just this hour ups has said it is making a move into the Prescription Drug business it will be delivering, because it just got a manufacturing pharmacy license in georgia, it will be able to repackage and relabel drugs directly from manufacturers and distribute them it sounds like its not going to disrupt the distributors so much as provide a service for Drug Companies like merck, interestingly. It is interesting there is an attack on this part of the food chain and pharmaceuticals in general Everybody Knows its a huge market to go through thats it for us happy thanksgiving happy thanksgiving. Closing bell is fast money starts right now. Live from the Nasdaq Market site overlooking new york citys times square im melissa lee. Tonight on fast, its an amazon takeover. Tech guru and fast money friend Roger Mcnamee will be here to talk about how high he sees the stock going plus the man who called the market rally says theres one thing keeping him up at