Transcripts For CNBC Closing Bell 20180104

Recordbreaking day for the stock market we cross one more millennial, have more to go . The president is talking about 30,000 who knows where were going. The important thing is to note how broad the rally is, not just tech stocks, in fact, theyre not necessarily the most important part of the rally. Lets look at the sectors moving financials is been big Interest Rates have been moving up materials, thats a rally thats continuing to ratchet. Energy strong with oil over 60. Even Consumer Staples are leading. You know whats not doing anything anything thats Interest Rate intensetive. Real estate, investment trusts, utilities lagging for a long, long time. Of course, those are bond proxies. A lot of new highs in financials as the higher Interest Rate scenario is helping the banks out. This is a small spattering i could go through American Express, etrade, key corp, suntrust, all sorts of banks all the Major Money Center Banks as well as the super regionals at 52week highs a cyclical rally, not just a bank rally fedex, norfolk southern, dover, textron, deere material stocks, again, the rallys been going on for a good part of 2017, its continuing into 2018. New highs in a lot of these sectors as well. Whats not on the list is generally tech stocks. Were not hitting a lot of new highs. Cisco is one of the very few, of course, dow components sitting at 52week highs i want to bring in art cashin, lets talk about it, by the way, heres the guy with the hats. With the hat. The 25,000 hat. One thing that worries me a little bit, i smell a little euphoria for the first time. We know the markets have been high priced for a long time. It hasnt been you foeuphoric seems like a lot of people think things are going to go right in 2018 do you smell it . Since the santa claus rally reasserted itself, look at the latest poll of investors, 60 are bullish, only 15 are bearish. Last time we had lopsided numbers like that was back in 2005, a year later things were not going well at all. But im not ready to say anything we want to complete the first week of january on the upside. Thats the first signal, then the entire month of january. And then hopefully the month of february they dont have to be rocket rides, they dont have to be parabolic, but if these two months are up consecutively, history says the year will be okay. One of the thing thats amazing to me are the economic numbers are so much better than anticipated, adp number 250,000 expecti ining 180,000. Market moved up on that. A big story tomorrow with the jons repo s jobs report. Were expecting 180,000. What would it take to move the market forward given expectations are very high now if we get 240,000, will that move the market . I think it will i think the other side of what youre saying, earlier you mentioned the reits and utilities and bond roxc proxiesl suffered people are thinking pt the economy may be getting Strong Enough the fed may live up to the dot plot and maybe even exceed it. Im not one that believes it. The dot plot being their projections where Interest Rates are going. Prep zenatirepresentation ofh members of the board yesterdays release of the fed minutes was more hawkish than people thought. Interesting, the market shrugged it off. It did. It gave a little twinge. I think the other thing they noticed is youre transferring people mester is going to a voter, a noted hawk thats a bit of a problem. Any significance to the fact that letters are blue this time for the hat . Did Peter Tuchman just get a bargain on the blue ink this time hows that work . Shopping for bafrgains is something wall street does yes, they do, very well. The president appears to suggest we go out and preorder the dow 30,000 hats. Well see what happens. Go ahead, bill. If i know tuchman, hes got them lined up. Toipt go bai want to go back point, if the Economic Data keeps advancing, beating expectations like this, could we go to the point now where good news becomes bad news because were actually concerned the fed may be much more aggressive in their rate hikes as i said in the interview that i did for you, the year end, i would watch not so much the economy perking up, but does inflation follow suit . If inflation remains dodormant, the fed will not be that active. Gentlemen thank you, guys see you later. See bob at the close arthur, as always, tip of the hat from the man see you later. Now to washington where President Trump earlier today weighed on this historic milestone for the dow. Cnbcs eamon javers has that story from the white house right now. Eamon . Reporter you know, bill, here at the white house they wear those red make America Great again hats, not the blue dow 25,000 hats art cashin was featuring. Theyre no less enthusiastic about the milestone. We saw the president earlier cheering on dow 25,000 and offering us a prediction of just how high he thinks the dow can go heres what the president said at the white house earlier today. We broke a very, very big barrier, 25,000, and there were those that say we couldnt break 25,000 by the end of the eighth year and were in the 11 the month. We broke 25,000. Just as we came in now i have to be a little careful because as we walk out, maybe it goes down. You always have to be careful with that, tom but we did, in fact, break 25,000, very substantially break it, very easily. So i guess our new number is 30,000 but what it means is every time you see that number go up on wall street, it means jobs, means success, it means 401 k s that are flourishing reporter so is the president a perma bull not exactly. Heres what he said calling into squawk box in february of 2016 when the dow was a rlot lower than it is now theres the president that year. I hope were wrong. I think were in a big fat juicy bubble. Reporter so the president then saying we were in a big fat juicy bubble at the time the president made that comment, heres where the dow was. The dow closed that day at 16,000, just over 16,000 its been up about 56 since the day that the president worried that we were in a big, fat juicy bubble today, though, no talk of bubbles here at the white house. And, you know, the old saying is one mans bubble is another mans rally. Even, i guess, sometimes when its the same man, guys. Back over to you. Eamon, i have to say, i thought they put out a masterful statement about dow 25,000 today. It read so beautifully i think it might it was written by cnbc. Com. It was. Is hat tip to fred there. Reporter yes, hat tip definitely the white house put out two statements today that were just cnbc. Com articles. So they are very enthusiastic and the press machine here at the white house is pumping out cnbc. Com content so theyre embracing this story. Theyre riding it. They wish a lot more folks in the media were talking about it. The press secretary here began the press briefing by talking about the dow. We saw recorded video from the president brought into the briefing roof, a special occasion, weve never seen that before, to talk about the economy. It they re they really want to hit that hard because theres a lot of political churn going on around them, a lot more negative. They like this positive story line. Eamon, thank you very much. Fred can add that to his resume. Id have it framed on my b l wall. There you go. Stocks as these levels, we turn a new year, new milestone, does it mean you turn to a new strategy will you stay with growth, go with value lets bring in a couple of experts on that. Liz bell is from Jaguar Growth Partners which tell you where shes coming from and cnbc contributor, michael fardam to make the case for value. Liz, clearly this has been a Growth Market for a while. You say stay the course, is that the idea for us we look to emerging markets for growth, thats where were very bullish right now p we like the demand drivers particularly real estate they have strong demographic trends, rising middle class, consumerism, increased availability to credit all that is really supporting the real estate markets that we look to invest in across emerging markets. Michael, you feel differently, do you think growth is too overvalued here or what i think you have to know the markets expensive right now weve seen the market increase over 30 since President Trump was elected and earnings have increased about 13 or 14 so weve seen the priced to earnings multiples just go higher this markets more expensive the one thing that didnt participate last year was the value sector the russell 1000 value index was up around 12 for the year the s p was up 21 and the russell 1000 growth was up 31 so i think if you have to look for opportunities and things that havent participated as much, and arent quite as expensive, you have to look at the value index. Im curious, though, michael, i mean, we usually identify sectors, but with the sector rotation that weve seen constantly in this market, every sector, it seems, has its day in this market. So can you identify a sector you feel is value oriented or cheap at these levels . Well, you know, when i talk about value, you have to look at the russell 1000s, there we go, russell 1000s thats a great cheer, definition of value, i think youre not talking about necessarily the rust and dust bucket stocks of old that you just try, hope you buy them cheap enough and sooner or later the pieces and parts get sold off. So i think you do have to look at solid Balance Sheets and thats a lot of the blue chip companies, solid Balance Sheets, not too much debt, higher returns on equity, again, that arent overlevered. Exxon, for example, is a company thats now in the value category in past years its been considered in the growth category i think it still represents value and i think its a way to hit them where they aint. Liz, when you hear people constantly saying, especially with some particular names in the tech sector, that theyre overvalued, the earnings arent there, whats your explanation or justification for investing in these names you know, we think there are still attractive opportunities in the tech space. However, we think theres more attractive opportunities in real estate, especially in developing markets. For example, brazil, we invest across america, but we think theres a lot of opportunity there today. Theyre coming out of recession. Theres been a lot of pentup demand for residential buyers. There are people are shopping in malls again. So i think for us, you know, we really see a lot of growth in these markets. And thats where were focused on for 2018. So im curious, does that mean that you feel that growth in the United States is overdone now, overextended . Is nno, i think there could e growth in the u. S. , i think its going to moderate a little bit for us when we look to the real growth drivers, were an opportunistic Real Estate Private equity firm. We see long term strong growth in latin America Emerging market any others youd mention, briefly, brazil real estate, you said, who else were looking at mexico right now as well. We think with the elections coming up in 2018, across the region, there could be a lot of narcotic volatility. That could lead to a lot of exciting opportunities for us you know, right now were looking at mexicos election coming up, it could go with the leftist president and, you know, that could create a lot of opportunity where theres market dislocations and if we can find a Real Estate Company that is trading at values that are below the Intrinsic Value of the real estate, we think thats an attractive opportunity. All right liz bell on growth, michael farr on value thank you, both, for joining us. Thank you. I like that it was growth that wasnt about faang. Brazil and mexican real estate. Right interesting. Anyway, we got about 45 minutes to go until the close here dow is hanging on to a 151point gain, puts us at 25,074, comfortable margin. I just saw somebody walk by, that may have something to do with the applause. Somebody just walked by with a 26,000 hat. Is that what thats what he was wearing. We got much more coming up next on the closing bell, how we got here. What hit and what missed will the laggards lead the way to dow 30,000 . Plus, after President Trump changes the rules for oil drilling in the atlantic and pacific, were examining the real impact on the Energy Industry and the usa this special edition of the closing bell as the dow crossed 25,000 for the first time in history, returns in two minutes. nadia white the moment a fish is pulled out from the water, its a race against time. And keeping it in the right conditions is the best way to get that fish to your plate safely. dane chauvel sometimes the product arrives, and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. tom villa we took our world class network, and we developed devices to track environmental conditions. This device allows people to understand whats happening with the location, but also if its too hot, if its too cold, if its been dropped. Its completely unique. dennis woloshuck if you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. Who knew a tiny sensor could help keep the food chain safe . Welcome back to closing bell, im Courtney Reagan at the New York Stock Exchange. Ste sears is announcing it will be closing 100 more stores between march and april. 64 of them kmart stores, 39 sears stores this is on top of the 350 stores that sears closed last year in 2017 the company saying we will continue to close some Unprofitable Stores as we transform our Business Model so that our physical store footprint and digital capabilities match the needs and preferences of our members thats the way they refer to their shoppers as they try to move into a membership model kelly and bill, back over to you. You know, kelly and i have been talking about this all Holiday Season, i equated it to, like, football season and when the season ends yes. The next day you hear about all the firings of coaches of the losing teams. And we knew that following the Holiday Shopping season, you were going to get these announcements. Neiman marcus gets a new ceo, Macys Closing Stores and now sears doing the same. Yeah, again, sears has been Closing Stores over time, so this is not a huge surprise, and macys told us in august of 2016 that they were going to be closing 100 stores over the next several years. So the announcements today from ma macys of the 11 stores was really part of the 100 youre exactly right, when the Holiday Season ends, thats when they identify the stores they sort of pretargeted in advance now we have the exact list back over to you guys. Courtney, thank you, Courtney Reagan keeping an eye on retail. Its been less tlahan a year since the dow crossed 24,000 for the first time as we sit here over 25,000, what stocks led it . Co kelly, bill, its been a hand chl of stocks. The cacaveat, the dow is a priceweighted index shares with the highest prices per shares carry the most weight with that being said, take a look at the march, less than a year between 20,000 and 25 thoir25,000, the stocks is been the biggest movers boeing shares added nearly 900 points to that move. A huge contributor United Health group, 429 points from them, alone caterpillar, 407 points added. 3m, 406 points home depot and mcdonalds are vying for the fifth spot, both around the 355point mark. If you total these up roughly, it means half the gains in the dow during that time span just these five stocks, alone it hasnt been all positive. There have been three stocks in the dow industrials that have actually lagged or been negative during that time span. Only three of them merck shares, theyve been down, but they dragged 27 points down. Theyre not as high a priced stock. They dont have as much of an impact General Electric, same story big percentage loser but dragging 82 points off the dow big blue, ibm, down 114 points as it lagged the overall market. Bill, kelly, as we talk about how the dow is going to be moving, highest priced stocks carryi carry the most weight. Those are the stocks to watch. The highest weighted ones. The ones that carried the most weight and have the most momentum, guys back over to you. All right stay there we want to have you join the conversation as we talk more about this market milestone with the godfather of technical analysis, ralph, from Altera Capital partners is joining us from maybe the place thats colder than where we right now, minnesota. And it occurs to me, ralph, youre going to have to add another milestone to the side of your barn where youve been painting the history of the dow now that were at 25,000, right . Oh, yeah. I already did that, bill in fact, i had to stop because it got too cold. Well, now what do you think how do you assess the market are we getting overextended or not at this point . Bill, i am so bullish, i cant i have to sit down and calm down. You know what, and it isnt what just happened in the last couple of days, i think this started in the second half of 2017 when we started to see a major shift, rotation in sectors. You know, i appreciate the fact that the dow is an average, but look at the stocks in there that havent performed in 2017. Like ibm and exxon i think theyre going to start to take over some of that leadership this rotation is very powerful, bill, and i think we have a heck of a lot more left you know, ralph, looeheres e thing. Were talking about the momentum of the plarmarket, breadth of te gains weve seen can you explain why you feel so bullish about it, why theres no bones in your body that want to lean against this rally . Well, you know, yes, when you look at some of the accelerated trends, i do get i do step back and say, wow, were a little bit ahmed ead of ourselvs i used the word a moment ago, rotation thats the lifeline of every bull market. As long as you get the rotation, i got energy rotating, very positively got financials take a look at the consumer sectors. Discretionary and staples. I think theyre going to help support this and move it higher. A lot higher. And, dom, that has been a hallmark of this market since the bottom in march of 09 where we have, as i was talking earlier, about this constant rotation it seems every sector has its day as others step aside here, right . Yeah, i mean, it has been to ralphs point, the reason a lot of people have felt interestingly one way or another, theres positive or negatives here because technology is far and away been the best performing sector in the s p 500 last year. Its important because it is far and away one of the biggest sectors in the s p out there as goes tech, so goes some of those other parts of the market. What concerns people is if narrow leadership is there and other stocks arent participating, is it really that health in i . One of the things i find the most interesting about the move over the last month and a half or so, some of the more beaten down names in the s psuming thep position check out names like under armour, also kohls. Ralph mentioned Energy Halliburton is one of the best performers in the s p 500 since the s p 2,600 mark as we talk about the diversification of leadership, some people may feel better that other stocks besides technology are doing better although Technology Still remains far and away the biggest part of the market so as goes tech, so goes the market, right . Its true absolutely right. The point its not just about tech ralph f, go ahead, then . Where is this positioning us how would you be investing in this market . Well, just some of the names that we just heard, like halliburton, that still has a lot more to go the name that i mentioned like exxonmobil, big blue chip dow stock, a lot more upside potential. I would start making positions in those and the banks are not ahead of themselves yet bank of america, heck, buy it, and put it away. Warren buffett said put it away for five years hes absolutely right. Come on, guys, we got a lot more to go. My nearterm target for the dow is 25,900. I think were going to do that very easily. My secondary target for the year is 28,700. I think were going to do that, guys i was just going to ask you if you agreed with the president that next up might be dow 30,000, but well get ahead of ourselves here a little bit. Well, 30,000 is, what, 20 from here . Hey, bill, thats a 20 stock going to 24 why not . Why not, indeed. Im wearing my red stie, im very bullish. Very good always good to see you, ralph. Sit down and stay calm thanks for joining us. Thank you. Dom, see you later. You got it. 30 minutes left in the trading session. Its a barn burner of the day. Again, i think the energy here has a lot to do with dow 25,000 as much as it is about the inclement weather outside. Im just glad its not about bitcoin. Yes, we dont have that to face right now the dow is up 153 points 25,000 is the reality right now. Next, more on the markets record day were going to talk to traders to see how theyre positioning themselves, what their energys like, right after this duncan just protected his family with a 500,000 Life Insurance policy. How much do you think it cost him . 100 a month . 75 . 50 . Actually, duncan got his 500,000 for under 28 a month. Less than 1 a day his secret . Selectquote. In just minutes a selectquote agent will comparison shop nearly a dozen highly rated Life Insurance companies, and give you a choice of your five best rates. Duncans wife cassie got a 750,000 policy for under 21 per month. Give your family the security it needs, at a price you can afford. Since 1985, selectquote has saved over a million families millions of dollars on Life Insurance. Heres a look at the sectors of the s p 500 today up 13 points remember, we just closed above 2,700s for the first time two days ago up at 2,726. The dow is over 25,000 today we have, lets see, all but two in the green financials leading the way today with a better than 1 gain materials right behind them. Interesting telecom is third interesting, because the two who are down today, utilities down 1 , real estate, bill, down 1. 5 those intrasensitive sectors, thats for sure. Heading to the close, 30 minutes left we have jonathan from Meridian Equity Partners on the floor of the New York Stock Exchange where i was saying theres just this energy on the floor today. There really is. What do you thinks going on . With the snowstorm here, everybody makes in it and gets here, as weve gotten to the trading sessions we feel the energy we felt at the end of 2017 the momentum is to the upside. Looking at Economic Data coming into this week, knew we were going to get the jobs numbers coming out tomorrow. Something to look forward to overall as we continue to trend higher, the momentum is still building behind it. Bob pisani said he sensed a little too much euphoria what do you think . We dont want to get too far ahead of ourselves here. Looking forward to the jobs tomorrow retail numbers come in next week we have to manage expectations here every time we hit these milestones and new highs it gives us an opportunity to step back and see where we undervalued, are we overvalued, where should the market go i feel the momentum will be pushing the market higher. Energy still going higher, Interest Rates still going higher those used to be impediments i guess its the old Glass Half Full mentality now that that signifies a stronger economy, is that the idea . Thats where it looks at this point right now. Continue to talk about Interest Rates, were trying to figure out when will that next rate hike come, how is that going to affect the economy and the markets . Couple that in with tax reform, it seems like theres all these different potential marketmoving activity that con really help us move higher. Anything giving you sweaty palms at this point . Look at the vix trading down almost toward 9 bucks. Thats something really we got to keep an eye on. The more that comes down, that really concerns me a little bit. All right keep an eye on all of those. Ill let you get back to the trading. Thank you, have a good day. Kelly time for a cnbc news update, lets get over to sue herera hi, sue. Hello, kelly, hello, everyone heres whats happening at this hour President Trump expected to take up Immigration Reform next week. The white house announcing he will host a meeting with the Bipartisan Group on that issue Majority Whip John Cornyn says that meeting will focus on solutions to the socalled d. R. E. A. M. Ers immigrant children issue. Prince harry and meghan mark markles upcoming Royal Wedding creating a bit of a controversy in windsor a Government Official there is calling for the removal of Homeless People and beggars. He wants the streets cleared in order to leave a good impression on visitors. Hes getting a lot of kbregrief that. The massive new stadium for l. A. Rams and chargers is beginning to take shape. Its expected to have 70,000 to 100,000 seats. And include nearly 900,000 feet of retail space. The groundbreaking took place 14 months ago it opens in the year 2020. And a new york city bike is look at that is no match for this monster storm a parked bike was caught levitating as the wind gusted and ripped across the big apple today. Ci citi bikes weigh 45 pounds that gives you an idea of how strong the wind is today youre up to date. Thats the news update this hour, kelly, back downtown to you. Too heavy for me. I know, right sue, thank you very much. We were fascinated by that video. Kind of went viral. 45 pounds holy cow. There you go. Thank you, sue. That kind of day but inside here the rally continues very strong day. Volume is not, you know, huge, but still an impressive rally to begin this new year and, again, you get this new mentality, you were already feeling the effects of the tax bill, but now you get some new money coming into the market as we begin a new year. There are the components of the dow 30 today of course, were watching that as it nears k s we the way, almost at 25,001 look at ge leading the way again. This is a lot of the company we saw big selling at the end of the year and reversed here number two, ibm dow dupont number three merck is up there, number four intel is lagging again today yesterday it was down big on this chip news. You see walmart in the red. Retail has suffered today. Retail which shows a big leader at the end of last year. And took us almost to 25,000 is now lagging here even as we get pretty good numbers from some of these retailers. The store closures, that doesnt help this whole situation. Over in the s p worst performers at the moment, l brands down 11. 5 . Walgreens down nearly 5 . Still, overall, major averages in record territory. The Trump Administration announced a proposal to vastly expaend offshore drilling in ths country. Were going to talk about that and which stocks might stand to benefit ahead. This special editi oonf the closing bell 25,000 is back in two. A new market milestone today with the dow crossing 25,000 for the first time to join s p 2,700 and nasdaq 7,000 and thats just this week yeah, and that is just this week to begin the new year lets get to our Closing Bell Exchange today, jim paulson is with us today, michael block and rick santellis there in chicago at the cme michael block, you dont i mean, as impressive as this rally has been, to begin the new year, you dont think this lasts forever. Why . I think a lot is getting priced in here, but theres a lot of good news the Economic Data has been great. People are excited about the tax plan and with lower taxes, corporate earnings are going higher and those revisions are happening now. Analysts are back to work. I do think q4 earnings season is facing a high bar here, especially in sectors like financials i get the bull thesis in financials but i do think a lot of its running in, theyre not expensive, but i do think that a lot of folks are crowded into these names and were going to have to see if they can get over that bar its going to. Be difficult im not saying bearish here. Im saying we could pump the brakes and look at sector rotation, some things like tech and energy, where maybe theres more viability than sectors like financials and transports which are, frankly, vertical right now. Speaking of vertical, the Economic Data has constantly surprised do the upside these last several weeks, tht include this morning, jim, edp, private sector payroll number up 25k not that its the most relevant, china had a Services Index which was its best since 2014. Is it all coming up roses or does the market just want to see it that way and how long can this continue . Well, i tell you, it is coming up roses right now. I really think that what sticks out to me here as we start the year is the one Major Foundation of this bull market throughout has been climbing a perpetual wall of worry or chronic wall of worry. That is really gone. Its not so much even that investors are optimistic today, its that main street is the Consumer Confidence index is almost close to postwar highs Business Confidence is very, very strong. Small Business Confidence is very strong. We are finally at a point where everyone believes that it is roses, that everythings good. I think what happens a lot is when it gets good on main street, and everyone thinks the waters finally safe, it often gets rough on wall street. I do think momentum might keep this going higher for a while, but i think were setting ourselves up for a significant correction sometime this year, and what one number we do need, i think, more than anything, kehlicall icall kelly, to change that momentum, a nomination or inflation number, a big surge in oil if that happens, i think we might see the downside for a period well, brent is at 68 a barrel wti at almost 62. Thats where it settled, as a matter of fact, today. Were getting there. Rick santelli, are you sensing that the markets that you follow will start to respond in a more traditional way to some of the economic date tha weve been geg lately as the fed begins the tapering process are we seeing that yet at all . Only in the short end i do think that the curve is going to have one heck of a hard time trying to steepen just take today, for example, all maturities, knee networkjerg e saw the 25,000 adp at 8 15 eastern. After everything settled up, twos are up two, 30s are down one. 10s are unchanged. Sliced through 25,000 like a hot knife through butter i think the dynamic stands i think theres going to continue to be a pretty good channel of buying in the treasury markets and i dont see that changing on the long end. As far as the Foreign Exchange side, i think the euro is going to be the darling for the first half of the year but i do think that something, a couple of things happened today that make me raise some flags. The 250,000 adp and jobless claims being 250,000, even though its higher than its been, its only about 25,000 higher than the lowest level since the 70s at a time we have holidays, usually it spikes up a l bit. I personally think it calls into question this notion of full employment and we have 95 million people, i think, that are largely going to have a potential, at least some of them, to draw back into the workforce which means that the feds going to have jay powell is going to have a really tough job if all these dynamics stay if place. Especially for the back half of this year and in terms of how many rates and how quickly he raises because i think that were going to continue to add more jobs than the population growth, and if that occurs, its really going to question this notion of how tight the labor market is. Yep jim paulson, the inflation number at some point well see. John paulson, mikechael block, rick santelli, thank you as always see you later. Dow up 153 at 25,076. Rallies across the board and i think pretty much alltime highs. Yes. Across the board as we close at these levels. We got much more on how to play todays market milestone 25,000. And a blistering storm barreling up the east coast right now, cnbcs Contessa Brewer is live in boston. Is that you, contessa reporter guys, i just want to show you how rough it is, as soon as you step outside and this wind smacks you across the face and you get the snow in your eyeballs. How does boston get back to business coming up right tethafr is at fidelity, trades are now just 4. 95. 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. Ive been waiting all day to say this, snow is been falling. Stock prices have been rising all day. The dow at 25,000 now. The hats are being handed out on the floor of the New York Stock Exchange and it joins other milestones weve already seen set this year, alone. With the s p at 2,700 for the first time the nasdaq above 7,000 for the first time there must be a bomb cyclone analogy in here somewhere. I thought about that. I didnt want to use the bomb word in there too heavily. Were on weather watch, the winter storm that is the bomb cyclone blasts the east coast threatening to drop more than a foot of snow in some states and looks like it already has in places wtvj meteorologist andy lassman is back at headquarters, has the latest on the storms path and how much worse it could get. Hi, angie. You mentioned that bomb cyclone, really what its doing is intensifying and why we call it a bomb. It continues to do that. Very historical. With it comes really strong wind gusts. Youll notice some of those peak wind gusts into the 80 mile per hour range. Ing in from nantucket, massachusetts. If you remember, this actually makes it into the hurricaneforce wind criteria, of course, totally different system than a tropical system. Nonetheless, giving us some tough conditions up and down the east coast if we take a look at some of those conditions, your snowfall, of course, where that radar is right now, youll notice we are talking about additional snowfall here as we go through at least the overnight, late night, rather, lours and once we start to go into the overnight hours we start to taper off. As of right now, were talking an inch of so more more new york city as you go up the coast, still maybe 3 to 5 inches foring at u of a foot already in some spots. Again, conditions are very tough especially when you add in breezy conditions where we are dealing with 30 and 40 mile per hour winds at this time. So blowing snow, decreased visibilities, of course, that is the culmination of what a blizzard is. I want to show you, however, once those conditions change, once we get the snow out of the picture which, again, happens as we head into the late evening lour hours we start to see cold temperatures move in arctic air spills in see where youre looking at really light pink colors which is parts of the upper midwest, out toward the northeast, we are going to be talking about temperatures into the teens. This is going to be frigid air you know weve been dealing with breezy, gusty conditions really for most of our day and dealt with the snow, the ice that means we are dealing with Power Outages Power Outages, rather, and that, of course, is a big problem. Power outages and frigid temperatures going to make it really bad for folks as we head into tomorrow. That possibly recordbreaking cold is here to stay for the weekend. Hopefully some better conditions on the backside of that, but in the meantime, definitely something to keep a watch for, guys back over to you angie, thank you very much. She mentioned how the how much snow theyre going to get in boston today. Contessa brewer, bless her heart, raised her hand before everybody else so she could be up there and witness this firsthand. By the way, youre rocking that outfit today, by the way reporter thank you so much thats exactly what i had on my mind you know, its keeping me warm i have to say. Its one of the best winter live shots ive ever done, ever this is my safety glasses. I got them at cvs. Theyre actually reading glasses which i dont need so they make me feel woozy. They protect my eyes from this blowing ice. Its hard to tell how much snows on the ground because its all blowing the visibility is so bad, the roads are so bad, tonight the penguins Florida Panthers hockey game has been postponed. Just to give you a sense of how bad the roads are, youre seeing the snow plows, the lines of them over here, in the center of this intersection, the plows have been pushing all this snow. I want to show you the video wu saw earlier of the guy who just ran into the big mountain of snow he said i couldnt help it it was right in the middle of the street it took five guys and borrowed snow shovels in order to get this guy out look, theres people whove had to work in this as well. Theres people whove been out today, construction workers, we saw the fedex workers. Heres the guy whos its an uphill battle. Trying to keep this sidewalk outside of the hotel cleared whew that wind really blowing okay flights. 4,000 Flights Canceled all those people will be trying to get back on planes tomorrow well be keeping an eye on it here, guys. There is nobody better. Such a nobody better take those glasses off then you can see where youre going thank you, contessa. Get the inside. See you later warm up holy cow. 12 minutes left in the trading session here the dow Holding Steady now we had a gain of 184 at the peak today. Now up 151 as you can see, yes, above 25,000 for the first time. Meantime the Trump Administration is drafting a proposal to open nearly all waters in the atlantic and pacific for offshore drilling. Well have that. Plus much more on dow hitting the 25,000 mark when closing bell comes right back. 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. Art cashin stopped by a moment ago and said they added up all the market on close orders and the imbalance was to the sell side by 850 million. And that has taken a toll here. Thats a decent sized number. As we mentioned, the dow was up 184 at the peak. If youre just joining us, yes, th that put us above 25,000 for the First Time Ever on the industrial average were pulling back were comfortably above the average, but a gain of 144 as we head toward the close here. The Trump Administration aiming to open federal waters to offshore drilling now. Lets get over to jackie dean r deangelis. Proponents of the draft proposal says its a game changer because it will encourage economic growth, spur manufacturing and create thousands of additional u. S. Jobs all while strengthening national security. Opponents raise concerns about safety and the environment think deepwater horizon. Now the areas that were talking about drilling here, the coast of alaska, the eastern gulf of mexico, and the pacific, and the atlantic, which those regions havent seen drilling activity since the early 1980s states like virginia already saying a commitment to preserving the health of virginias coastline has fueled the growth of the new virginia economy. Todays announcement puts the progress that weve made at risk. Florida, governor rick scott and senator marco rubio, both expressing concerns over this draft as well. Cnbc spoke with the alaskan Governors Office who tells us that the governor applauds the decision to allow increased development, but that the governor urges the federal government to work with alaskans to resolve concerns about offshore oil and gas production. Meantime, john mcnabb, vice chair of the American Leadership council and former chairman own ceo of wilbrus tells cnbc while drilling makes sense because alaska has existing Pipeline Infrastructure in place, drilling off the east coast does not because it doesnt have that infrastructure and that is expensive to build also remember, this is a draft, that draft needs to be approved. A fiveyear plan needs to be put in place and leases need to be then sold. The infrastructure needs to be built. All of this is going to take time, guys big move. Nonetheless, jackie, thank you all right. A recordbreaking day on wall street we will have the closing count down for you in just a moment. After the bell, more coverage of dow 25,000 including word on high options traders on how high were going to give you word on how high options traders think this rally wilgol were back in two. Toy boat, toy boat, toy boat. Its time now for your business of the week when the founders of l. A. Based fashion brand distilled needed to raise money, they looked to the crowd. They were the first in their industry to launch an Equity Crowdfunding Campaign raising nearly 2 million and adding 1,700 new owners to the business for more, watch your business weekend mornings at 7 30 on msnbc. Sponsored by American Express open helping you get business done. There he is. Your new brotherinlaw. You like him. Hes one of those guys who always smells good. His 5 oclock shadow is always at 5 oclock. You like him. Your mom says hes done really well for himself. He has stocks and bonds. Your dad wants to go fishing with him. Your dad doesnt even like fishing. You like your brotherinlaw. But youd like him better if you made more money than he does. Dont get mad at your brotherinlaw. Get e trade. About 2 1 2 minutes left i just have a random trader here doing his job with this hat. Thats very nice lot of energy on the floor, in fact, you can usually tell when we got milestones on the trading floor. The photographers come out theyre out shooting the traders right now. So youll be seeing these photographs tomorrow in your favorite newspaper or on your favorite business website. Yes, weve got records today across the board the dow now above 25,000 for the first time already this week, we had the s p above the 2,700 level. And nasdaq going above 7,000 for the first time lets show you the dow this week so far i mean, its been pretty strong out of the gate, to begin the new year just a steady stairstep move higher new money, new year, new strategies and analysts come back from vacation to try and refigure what the tax bills implications are going to be for a lot of the companies that they follow and its been bullish so far what was not bullish today was the retail sector. I mentioned that earlier the xrt down on the day as we hear from, you know, some of the numbers were pretty good for the holidays from some of the individual retailers but the damper on it by some like macys announcing an acceleration of their store closures, Sears Holdings did the same thing and Neiman Marcus ceo stepped aside to make way for another ceo there. And the vix, bob pisani, we mentioned this earlier, john was with me on the floor a little while ago, and we dipped below nine again for a time today. For only the seventh time in history. Its important to remind everyone that the vix is not what it was ten years ago. That there are many, many ways to buy protection today in the Options Market right. There are weekly options, there are individual options, there are monthly options. Ten years ago all you could do was buy these quarterly options that is what the vix is based on thats not the market anymore. So theres many ways to buy protection and its not clear how much the vix truly represents concerns about people and the market overall very busy a lot of activity today im very impressed with this i keep mentioning, i know, but weve seen a lot of energy today and the traders are really part of this process that we see taking it above 25,000. Weve talked about this, my concern here is i do smell a little euphoria. Now, remember, the fact that this has been the most hated rally in history, cliche now, but its one of the things thats really sustained the market a lot of people dont belief it. If suddenly a lot of people do start believing it, things are really going to get better on the economic front, theyre really going to get better on the earnings front, that removes that cynicism that i was so fond of about the market. It worries me a little the other thing that worries me is a very, very High Expectations we now have on the chicken front. That adf report. The other numbers, you know t t that, of course youve been reporting that the economic numbers have been beating expectations and tomorrow the jobs report, well, bill, you take a guess suppose its were expecting 180. Adp came in at 250 when the expectations were lower than that well see. If we get a 240, thats a big bet we got down here, we get 240, will the market go up or concerns that the fed might be aggressive raising rates thank you, bob. More records fall again on wall street but write them down in pencil because you can bet there will be more to come. Stay tuned now for the second hour of the closing bell o this dow 25,000 day with kelly evans and company. Ill see you tomorrow, kell. Thank you, bill, and welcome to the closing bell, everybody, im kelly evans for the First Time Ever the Dow Jones Industrial average has closed above 25,000. Its the fifth thousandpoint mark weve crossed in just the last year or so. 150point gain on the bell thats just about 2 3 of 1 . Dow closing at a record. So did all the other major averages today the s p up about 11 points to 2,723. The nasdaq, actually, the laggard today, just about. 2 gain 7,077. The russell 200 adding three points up to 1, 555. Dont forget the transports. Well talk more about this shortly. Theyre up today to 10,854 so the records keep dropping on wall street. And that round number, the dow 25,000, finally notched. Join ing me today cnbc senior markets commentator michael santoli. Bill smead from Smead Capital Management and michael, welcome to everybody. A historic day on wall street. The dow closing above 25,000 for the first time s p, nasdaq, russell also at records. Leading the day on the dow, the worst performer of 2017, General Electric on top once again while intel was todays big laggard for the second straight day. Intel down nearly 2 over in the s p, advanced microdevices a big winner, again, continuing a theme of whats been happening with intel. Stair cycle today, up nearly 5 . L brands down 12 . Retail might have been the only weak spot in the market, not the only one utilities lower, real estate lower today. What do you make of dow 25,000 the defensive stuff lower look, its a time to assess how far youve come. Thats the key thing the dow in this case has been a leader versus the broad market in the run from 20,000 to 25,000 its up 5 Percentage Points in the last 12 months more than the s p is. Wow. You have global blue chip mostly industrials, but really broadly based consumer industrials, tech companies, that have been doing well. I do think you had a little more energy coming into the kind of the velocity of the buying in the first three days of the trading day. You cant extrapolate trading year cant extrapolate that into the whole year today was a familiar feel, right . 60 of all volume to the upside. You had a nice run in the morning, and then flat all day that was last year that was the kind of wellbehavedtype rally that got us to where we got to at the end of 2017. Bill, when people ask you, they say, man, you know, 25,000, here we are, the markets keep going, have i missed the whole thing or should i get in now what do you tell them . Well, we stay pretty fully invested all the time because you dont know whats going to happen, but i will say this, that in a short history of financial euphoria, its explained when you get a period of financial euphoria, theres the people that get completely caught up in it, kind of a mindless way youre seeing that with the bitcoin and somebody announces theyre part of the blockchain, the stock goes nuts, et cetera then youve got what i call the super smart crowd, the admired crowd, you know, the tepper, gran grantham, buffett crowd. Its starting to bother me historically the most sensible people say it looks like were going to go crazy the next six months grantham true to his character is saying its going to happen six months before the crash. Well, yes, Warren Buffett, david tepper might be a little more bullish. You still got some highprofile skeptics out there. The sentiment right now, the sentiment among both professionals and now the American Association of individual investors argues that were closer to august of 1987 than we are to another 30 leg up like grantham says. I dont know where you take the sentiment to do that yeah. Michael, let me ask you, are we in the middle of a market meltup . Well, i think whats actually happening, to put it in perspective, the market, i think, was a bit overpriced before tax cuts. Now with tax cuts, kelly, i think youre going to see companies that are going to deliver pretty solid earnings, basically because why . Because theyre going to have a much, much lower tax rate. So i think theres a case to be made as tepper said earlier that the market is, at the least, the same valuation that it was a year ago because of what the expectations will be and what i believe will be corporate earnings Going Forward we actually have that statement from david tepper, which he spoke with our scott wapner earlier today david tapper of Appaloosa Management talking on the halfti Halftime Report with scott he said explain to me where the market is rich with earnings forecasts going up and Interest Rates where they are, how is this market expensive . I dont see the overvaluation. World growth is higher theres no inflation the market coming into this year doesnt look rich. In fact, it looks almost as cheap as coming into last year. Tepper also said, the market cant go down until the bond market gets hit. Adding its amazing where Interest Rates are. Mike, what would you add to that hes basically a credit guy by heritage and expertise. Credit is not giving you any reason to really worry about the underpinnings here i do think, though, he articulates very well what now the prevailing story line is, which is that cosmetically, tax cuts are going to bolster Earnings Growth enough that the arithmetic is going it teto tel when you do the algebra, the p e is going to look fine. Its not the reason stocks and businesses are worth more in an ongoing basis. I dont think its going to be as simple as look at the stocks that are direct beneficiaries of lower rates. Ge was the worst stock in the dow last year and had nothing but a low tax rate forever. Now its the best performer the last couple days yeah, you know, i think if you look at ge, thats a story, ge has issues that are much, much deeper than whatever their tax rate happens to be, as you no doubt have seen investors have no doubt noticed in the headlines. But i think i think that mikes exactly right, i think that really is the story so is this going to be a market that can drop . Is this a market that can drop of course. Any time it could be 10 , 15 , in a heartbeat. Thats a normal correction but in terms of valuation, with Interest Rates as low as they are, as long as we dont get some surprise spike in inflation, which is possible, given whats happened with tax cuts, i think the market still is at least fairly valued, maybe not crazily overvalued, but i think fairly valued. Lets bring in bob pisani hes on the floor. Bill, well come book to you in one second we want bob to give us a look at the biggest market movers. We already mentioned ge, bob. E yyeah, i want to point outo remarkable the rally has been. The dow hit 20,000 almost exactly one year ago, in fact, it was january 17th, and we have hit 1,000point rallies fairly regularly including march 1st we hit 21,000 august 1st, october 12st, november 20th. This is a pretty regular clockwork kind of thing. Its true, we hit 25,000, lower numbers, low eer percentage gai, its still remarkable. Its a broad rally we talked about the banks. All the banks with the exception of goldman, all the big regioal. Cyclicals moving up as well at the same time. Many industrials hit 52week highs today. Dovers, norfolk southern, fedex, deere, textron hit highs at least on an intraday basis the material rally which we saw, commodity price, many at multiyear highs, continue. This was a big theme in 2017 playing out in 2018 as well one of the things thats not on the list today that wasnt a big new highs were where tech names. We did have cisco, big dow component. That did hit a 52week high. The other thing is, i would point out, this is the broad rally theme, earlier in the week we saw tech names move up, generally called growth names. Today if you look at growth versus value, value notably outperformed so smaller names, oil stocks, for example, or consumer staple names, tend to do better today this is part of that great rotation that keeps the market at new highs something falls back, something moves in to take its place thats one of the reasons the markets been so strong. Kelly, back to you. All right, bob, thank you bill smead, what were you going to say im just reminded, i think of my history of my time of appearing with you folks on cnbc, i started out in 09 on Larry Kudlows show and they put me and three other people in a little box on the screen and they had me on there, we were a small nobody official, bi was a token bull they couldnt find anybody to be bullish in 09 they had this guy from seattle come on the show and be bullish. And we were very bullish and we were very lonely and we were on in h 10 and on in 11 and on in 12, on in 13 and we were the token bull for five years and now you bring people on and theyre crawling all over each other to be the most bullish the people that how does that make you feel does that someone whos always pretty much fully invested like you said first of all, so what were doing to do with our portfolio, were going to tack toward as much as we possibly can with as little turnover as possible to the companies we would want to sit through a bear market with and i dont agree with the logic about the 10 to 15 correction. I can tell you, with Financial Assets as a percentage of Household Net Worth this high in the past, those declines arent 10 or 15 we like our stocks. Youre comfortable, bill your point is whether its a 10 , 15 , whether its much more than that, the stock market ultimately drops, youre not getting out of it, youre not going to cash, not buying b bitco bitcoin. Youre picking companiies youre comfortable owning throughout that period . We lost 50 in the first 14 months of the 08, we have made each 10,000 is now 24,000. So i was the first buyer we got Terrible Market timing. Im not a market timer all i can tell you is when i started in this business in 1981, Interest Rates were bob can Interest Rates were sky high stocks were 6 1 2 times earnings and no one wanted them everybody was bearish. Everybody that would have been on tv i hear you. If there was such a thing. Its just the exact opposite extreme. I know David Teppers a great money manager, i know Jeremy Grantham is a brilliant guy, willi warp Warren Buffett is a brilliant guy. Theyre apologizing, pay 25 time earnings for a Staple Company growing 5 or i will pay 150 times earnings for the most interesting Revenue Growth story in the history of mankind, amazon. Yeah. While thats going on, the 35r7 apartments are going down in value in new york, going down in value in seattle the coastal cities are at risk. All right. If amazon or any of those guys stumble, kadybar the door. I love the history lesson, by the way. There was tv in 1981, just not financial tv networks. Lets talk about amazon for a second mentioned tech was not a big part of the rally. Earlier this week, luke ventures gene munster making a bold amazon call, saying the tech giant is going to buy target this year he was on squawk box yesterday to explain why take a listen. Part of it is what they were doing with whole foods, that was a big tip of the hand that amazon really voalues two things which is a highend customer, and second and surprisingly, which lines up nicely target, and second and surprisingly, is they value offline and i think this is the part that is a little bit of a step in a different direction than most people think. Well, we have another thought. James is here. Thank you for waiting here patiently. Youre saying that target isnt necessarily the best fit for amazon, which you cover. You do have interesting other alternatives who are they i mean, before i get to that, i just wanted to say, the reason we wrote the note, all these companies are being floated out and 13ekspeculated on like rite and target we talk to amazon, read annual investment letters jeff bezos writes if you read those, understand whats happening, its not just about the footprint, its about the ability to flex the muscles on the pricing side and about improving selection. Okay. Why whole foods was a good thing. Exactly when you look at target, its not necessarily there. Think about oacategories, bbeau, threw out ulta as an example beauty is one thats an antiquated experience and the pricing is still relatively high lyft is one thats private the same time youre looking at lastmile logistics and also capitalizing on their selfdr e selfdriving efforts. You have not uber, you have lyft, ulta as two possible acquisition targets by amazon. Whats the third costco. The reason im saying it is because of the current private label which is a solid name. But i just want more than solid. No, its a very good name by the way, amazon emulated the costco model theyve done the membership, they capped margins, made sure they keep prices low it would be a weirdly synergistic fit. One thing i think is worth keeping in mind is the whole foods deal, first of all, you didnt have a lot of people saying whole foods, target of amazon next month. It was very opportunistic on a lot of levels. Lot of things going on at whole foods made them a seller its not necessarily the case, i guess, that jeff bezos and team are there cooking up this list of companies they have in their sights at this very moment right . Right i dont think so its all about being absolutely opportunistic and all about also having the global reach because its not just about the u. S. For example, with whole foods opportunities no the to expand domestically but mainly to expand overseas so all those things need to come together i just think theres so many names being thrown out there and its really important to look at it through the right lens. And thats what im trying to do today. I want to get your two cents on this. Quickly. Yeah, i completely agree. I dont think that amazon is out there with a big Shopping List even if they are, again, an incredible growth story. I think it is going to be opportunistic. The whole foods deal made a lot of sense to me the target one doesnt make so much sense to me. Kelly smead, well give you the final word close it out here. Were in seattle, amazon opened their amazon fresh and amazon go locations in seattle i drove by there every day back and forth from work. Virtually no one was there they bought whole foods because the amazon fresh and amazon go is a disaster. Okay they bought that because they feel they have to succeed in groceries to be a much larger company. So do you think they should buy target or someone kroger, et cetera . We own target i prefer they dont because i do not want to own the time warner in the aol transaction well leave it right there. Guys, thank you all. A lot of good stuff today. Especially on this key milestone day for the markets. Bill smead, michael, and james. A lot more ahead on this special edition of the closing bell, dow 25,000. Options traders see the markets from a very different angle. Coming up, John Najarian, mr. Options, on what they think about where the big three, the dow, s p, and nasdaq, will head now. Plus, another indicator for the big caps the transports where the transports lead, the dow often follows. This special edition of the closing bell dow 25,000, is back in two minutes. Howd that go . He kept spelling my name with an i but its bryan with a y. yeah, since birth. That drives me crazy. Yes. Its on all your email. Yes. They should know this . Yeah. The guy was my brotherinlaw. Thats ridiculous. Well, i happen to know some people. Do they listen . What . Theyre amazing listeners. Nice. Guidance from professionals who take their time to get to know you. You know whats not awesome . Gigspeed internet. When only certain people can get it. Lets fix that. Lets give this guy gig really . And these kids, and these guys, him, ah. Oh hello. That lady, these houses yes, yes and yes. And dont forget about them. Uh huh, sure. Still yes xfinity delivers gig speed to more homes than anyone. Now you can get it, too. Welcome to the party. The Dow Jones Industrial average today closed above 25,000 for the first time. Joining us to discuss where options traders think the markets heading is John Najarian from the najarian family office. Welcome, sir. Great to be here with you both. Youre reading the tea leafs for us, what do they say they say people are still very bullish they were cashing in a lot of bets earlier, michael then they came in and basically rolled them up to a higher strike price. So what that tells you is somebody whos been right and riding a nice, long into the beginning of the year, cashed out of the lower strike as the strike went deeper into the money and said, you know, what i still want in. And they bought a ton of upside calls in the s p 500, in the nasdaq, the qqq, and what they avoided for the most part, guys, was they avoided the iwm they avoided the russells, the small caps. It was way under normal volume. The russells havent been doing as well the last couple sex bleach sessions lets take the s p 500, for example. Where do they think its going 123. Buying the 275 calls in the spdr, spy, which, of course, is why, a smaller version of the spx, buying those aggressively at the 275 strike. Thats 27. 50 equivalent. Just two weeks from now theyre betting on bigger numbers out in february and march. 3,000 or are we yeah, let me see 130 of normal Trading Volume on a big up day where we added up big day th they added to it same thing in the qqqs bank of america was heavy, 250 of normal volume in the banks. I mean which is one of the best performing sectors today. Yep and also, let me see, the hyg. So that is high yield debt. Yeah. High yield you wouldnt expect that, mike, to see a high yield getting that kind of goose, but youre getting it. Its almost like people are buying upside Risk Insurance right . They want to get thats good i like that. That theyre with perhaps something to hold on to if, in fact, markets run away to the upside. John, thank you well come back to you in a bit. It took six weeks from the dow to surge from 24,000 to 25,000 up next a market historian weighs in with what we expects to see when we hit dow 26,000. And take a look at how the dow 30 finished today. The big winner was ge. Ibm was up there, too. Intel having another tough session. Closing bell will be right back whats Critical Thinking like . 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 welcome back to closing bell, im josh lipton some news just here crossing from apple apple saying that the app store kicked off 2018 with a recordbreaking Holiday Season culminating in 300 million in purchases made on new years day. During the week starting on christmas eve, a Record Number of customers spending over 890 million in that sevenday period in 2017, alone, apple saying ios developers earned 26. 5 billion, thats more than 30 increase over 2016. Investors care about the app store because its such a big part of that fastergrowing highermargin Services Business. In its last reported quarter apple said the Services Business jumped 34 to 8. 5 billion kelly, back to you all right, josh, thank you. Apple shares moving a little bit higher, but the dow moving a lot higher today closed above 25,000. President trump said earlier he doesnt believe it could stop there. We broke a very, very big barrier, 25,000. And there were those that say we wouldnt break 25,000 for the end of the eighth year we did, in fact, break 25,000. Very substantially break it. Very easily. So i guess our new numbers 30,000, but what it means is every time you see that number go up on wall street, it means jobs, means success, it means 401 k s that are flourishing. So how much credit souhould h president get for the rally . Joining us for their take, cnbc contributor ron insauinsana and hersh. Jack, well begin with you, how much of this is because of the president and his policies he serves some credit market up 34. 5 since he was elected. Trimmed and curtailed regulations. Got the tax cut through. You know, theres some credit due there. I would say. Ron, is it a lot about deregulation because we heard not just the president but a lot of market watchers say, look, it might not get the headlines every day but theres been a lot beneath the surface twhahats been moving a easie ining on that front. Adds to a series of a companys bottom lines and, listen, its on the president s watch. If the market had gone south, he would have gotten the blame. He does get some of the credit granted this is an expansion of a market that started a bull run on march 9th of 2009 and had bigger years, we should point out, than what we lad had in 20. Again, not to get too political. What happens on your watch, you get the credit for, what happens on your watch, you game the blame for. This is a bull market thats approaching 9 1 2 years old. Yeah, one of the longest, mike, weve ever had what about tax reform . You talked about how in some ways the best thing that could happen for the market it would always happen tomorrow. It did happen. How much of a factor is that . I think its a significant one. It sort of gives you another chapter for the story of why the market should keep going higher. Because you were going to run out you kind of run through a lot of these stories, right . It was for a long time it was qe, the fed is the only thing keeping this market. Then it was buybacks then it was, well, dividend yields are better than bond yields you keep having to replenish the bullish narrative. Tax cuts have a realworld effe effect 1 trillion in government debt, hand it to the private sector, its going to be good for people who own stock and run businesses and people who employed by them. All that stuff is going to be reflected in the stock market. President s get too much credit and blame most times but the market incorporates everything thats going on in the world which, of course, inkpluds wcluo happens to be president at the given moment is big part of that jeff, what will you be watching as we enter 2018 i guess what im trying to say is how much are you watching the white house . And congress and what happens there . As we look for maybe those next catalysts. First things were watching is our january barometer, santa claus rally. First five days a january indicator trifecta. If they all come in bullish, its a very bullish indication of the market for the rest of the year even though its a midterm year when you get those three things positive, the doisr up, like, 17. 9 . One of the things that pushed us to be bullish recently, way we had the low point in february 16. The math from there, the dow t puts us up, dow 29,000 bestcase r scenario for our this year did you say dow 29,000 is. I did say 29,000 as our bestcase scenario maybe 47 , 50 pockssibility if you read our forecast from last month. End of last month. All right. With the elections, even if the dems take over, not much is going to happen. Theyre not going to have the twothirds majority to turn over anything i think things have gone as they have been until potentially 2021, january, the next inauguration date is all right ron, also, if we are turning our attention to infrastructure which you hear people talk about here, is that going to kind of consume the oxygen for the market for the next little while . Im not sure how much the market, kelly, is going to be consumed by that obviously theres been some reaction in stocks that would benefit from an infrastructure buildout or rebuild. I think other thing that needs watching is if, indeed, the economy accelerates further and corporate Profit Growth moves higher, the fed comes back into play and possibly accelerates its rate hiking schedule i thing thats going to be a key variable this year i think the market looks fine for the next several months but if the fed, we saw this in the minutes last week, starts talking about having to raise rates more than three times, four times, five times, six times, that changes the calculous a little bit with respect to valuations in the stock market think thats underdiscussed at the moment all right i would just add, were in a period where the market has the luxury of not needing anything in particular from washington right now. The world is growing things look very good. I also cant point to previous bull and bear markets really that started or ended because of some specific action by the president or congress. So it tends to be kind of running in parallel to the market, not the causal there were drops like in 1962 when president kennedy wanted to impose steel price caps. Weve seen interruptions but not bear markets launched from the white house. More often than not from the fed. Guys, thank you both ent. Thank you ron insana i was a year old. And already watching the market. Time for a cnbc news update with sue herera. Heres whats happening ate at this hour, everyone, near whiteout conditions on the east coast. Hurricaneforce winds batter the area flight aware reports thousands of flights have been canceled in the u. S. Due to that storm jfk is closed until 8 00 p. M laguardia 6 00 p. M and bostons Logan Airport 5 30 p. M. Eastern time. A drone capturing peaceful video along the carolina coast just hours after the monster snowstorm blew through the issue now becomes the cold las blast. Its expected to drop to 18 degrees there. Weather apparently not a factor in a deadly multivehicle crash in texas Authorities Say five semitrucks were involved. Four of them were stocked when a fifth truck rammed into them two people were killed that crash is currently under investigation. And now to the metropolitan museum of art which will begin charging a mandatory 25 fee to visitors who dont live in new york the museums pay what you wish admissions policy will now only apply to state residents its enacting the new policy to put the museum back in the green. It starts on march 1st that is the news update this hour, kelly, ill send it back downtown to you. I was half expecting the met to cite tax reform with the s. A. L. T. Deduction, getting rid of it, we got to keep it affordable for new yorkers anyway, theyre not politicizing it, thank you, sue. You got it. Sue herera. Dow closing above 25,000 for the first time today next, fast money trader guy hotoi is going to tell us w pl ithis special edition of the closing bell is back in two. James r. And associates. Anna speaking. Yes, i understand. Well, well whats your guess . thanks. James r. And associates. Anna here. Its ridiculous, pour into the hudsons a. James r. And associates. Anna. No. No, no, no, no. What i really wanted to do. [phone ringing] baker architects. This is anna baker. Hi, thank you so much for getting back to me. This is what our version of Financial Planning looks like. I am so excited to be working with you. Tomorrow is important, but youre ready to bet on yourself today. Spend your life living. Todays the day. Find an advisor at northwesternmutual. Com. Welcome back records falling again on wall street take a look at the dow up 152 points today to close above 25,000 25,075 is the level there. The s p 500 up 11 to 2,723 the nasdaq up 12, 7,077. Thats records for all the major averages today. Heres a recap of the day in our rapid recap. There it is dow 25,000 halfway between 20k and 30k. The markets had a kind of change of attitude you know, last week, we were thinking we were going to have to put santa claus face on a milk carton and the year was not going to be bright new money for the new year kept pouring in, seems to continue to pour in today. That puts us in reasonably good stride. The dogs are doing well exxon outperforming chevron. I think thats remarkable. Ge obviously was down more than 40 . Its kind of inching back up i spoke exclusively to appaloosas david tepper today who told me the following. With earnings forecasts going up and Interest Rates where they are, how is this market expensive, he said, i dont see the overvaluation. We broke a very, very big barrier, 25,000. Those were there who said we wouldnt break 25,000 by the end of the eighth year and were in the 11th month. So i guess our new numbers 30,000 but what it means is every time you see that number go up on wall street, it means jobs, means success, it means 401 k s that are flourishing. I am so bullish, i cant i have to sit down and calm down for the First Time Ever, the Dow Jones Industrial average closed above 25,000. Its the fifth thousandpoint mark we crossed in just the last year or so and joining us now with how to play dow 25,000, now that its up there, fast money traders tim seymour, guy adami thanks for joining us. Good to see you both tim, lets start with you, first of all, what do you think about the move today look . You think about the data weve had in reinforced overnight, tremendous pmi, composite pmis, manufacturing and services out of japan, europe is at the highs of their cycles. When you think about where the world is, it doesnt surprise me the industrials and what weve seen on followthrough is right there. The question ult patly is, where are valuations and if you look at a lot of the names weve talked about within the dow that underperformed, you can make b an argument that some of these names especially those who would be seeing upgrades in terms of eps from tax actually look pretty interesting including the pharma sector, including some of the demographic core domestic plays and then okay. Look at a fedex which is behaving almost like a tech stock for reasons that are specific to this company and the economy. So i think fedexs while its had a move is a name you can stay with. All right guy, i noticed your financials did pretty well today. Yeah, they did. Listen to the montage, tim and i were just listening, one guy said he was so bullish he couldnt stand up or sit down or something, makes me want to go sti sell everything. Because the unanimity with people who are bullish, people are tripping over themselves to say how much more bullish can i be than the next guy you know what, sometimes the crowd is right i think thats a situation that we find ourselves in so i still think the financials work i think based on price to book value, they still have runway to the upside i think these defense stocks, which have just been on fire, ever since thencandidate obama, president obama, was elected, those things have quadrupled in some cases i think they still work. Industrials, i mean, i throw fedex in from to a certain extent names like honeywell, roper, boeing to a certain extent, the industrials are still relatively inexpensive. Theres still some tremendous tailwinds for them as well i think all those sectors work. Tim, who else you mentioned fedex. What are other things you think are interesting here if i think about the broader economy, first of all, lets get into the tech space because a lo the of people thought the end of the year tech was finally giving ground so the rotation were seeing i think goes back into the growth tech. But also value tech. So look at a cisco, which for many years was really underperforming the peer group now i think at a discount. So eight times roughly eb to Free Cash Flow for a company thats seeing a major play from infratech buildout. This comes with the capx thats being spent. I like a cisco, some of the Auto Companies still. Got the great numbers yesterday. If you think about the domestic play, Consumption Trends and disposable income trends, a year ago everyone was writing off autos though valuations were cheaper. People are reassessing a lot of this is positioning and perception. Infratech buildup. I love it. Kell, 2itim and i decided to dress alike today. Look, we both have the blue, red ties, jeans and boots. We did it for you. Snow day. Everyones on the same side of the boat. You know, thats another animal spirit. A metaphor for something scary i think. Different bottoms kind of styling, though. Well. Guys, thank you very much. More than i wanted to show. Yeah. Ill leave it right there. Sorry about that, everybody. Catch more of the fast money gang at 5 00, one wall street analyst will make his case for why the cryptocurrency world is worth 10 trillion. The russell 2000 and dow transports did also rally to new highs today but they underperformed in 2017 will 2018 be the year they catch up thats next. And youre looking at all 11 sectors of the s p 500 see how they finished on this record day financials as we mentioned were the best performer up nearly 1 . Real estate down 1. 7 on the bell youreatincn, rsin wchg bcfit business worldwide welcome back it wasnt just the dow hitting 25,000 today, the small caps and the dow transports hit record highs of their own but they still lagged the three major averages John Najarian is sbback to weig in on whats next. They lagged last year a little bit. Yep. Are they going to catch up in 2018 yes. That was fast. All right, thank you, john. Im out of lehere yeah, they will. I believe they will. Tl theyre such a big beneficiary of the tax cut, kelly. Why isnt the russell doing better with all that being the case as best as i can figure right now, people are making their bets on the big caps because they, without moving them too much, can put a lot more money to work. They put, you know, the billions of dollars, almost trillions of dollars, into the small caps right now, theyre going to run them i mean, when youre looking at a half a percent or. 75 move for the s p 500, youre not so worried about that, but in the small cap if they put anywhere near the money theyre putting into the s p or dow stocks right now, i think theyd move that thing 3 or more in a day then youre worried about its just your market, youre pushing it and all of a sudden it can pull back really fast, too. What do you think i think theres a global character to this move, to the rally, in general, which is not going to necessarily be centered on the small caps. The other thing i come back to, i really dont have a strong position as to whether theyll outperform in the short term or not. When you had Credit Conditions so easy and strong a favorite group, good performer for a long time, still they have not been able to catch up. To me, those are a couple dogs that arent barking here it sort of makes you ask why they havent performed until now. What do you make of the transports meantime . Stratransports is much more interesting, global cyclical play i understand the strength there. Obviously its very dominated be i fedex and the shippers at his this point its okay. Its a bellwether group. What point do we Start Talking about amazon in the same breath you mentioned fedex the way we do apple, when i say apple is a e rretailer 500plus Retail Stores there and amount of retail that goes through those stores same thing with amazon as far as a bellwhether for transimportpo. Thats whats happening in the background of the transports. True. Volume, dow theory and so forth, they wanted to see confirmation, volume confirmations and things like that. Youre seeing that in the s p 500 in spades. I described at the top of the show yeah. You know, 200 , 250 of normal volumes in some of those classes. Where youre not seeing it, where its only 45 , i think, of normal volume, again, back to those small caps the iwms so theyre not getting the love yet, kelly. Yeah. That means, in my mind, theyll play catchup later on. John, thank you again for joining us John Najarian on this recordsetting day. While the dow soars past 25,000, tesla isnt participating today. Were going it tell you why it was down, next to their breeding grounds. Except for these two fellows. This time next year, were gonna be sitting on an egg. I think were getting close make a uturn. Uturn . Recalculating. Man, we are never gonna breed. Just give it a second. You will arrive in 92 days. Nah, nuhuh. Nope, nope, nope. You know who im gonna follow . My instincts. As long as gps can still get you lost, you can count on geico saving folks money. Im breeding, man. Fifteen minutes could save you fifteen percent or more on car insurance. Big day for the dow and all markets, but tesla falling nearly 1 after shifting model 3 production guidance, again phil lebeau has those details. Phil and kelly, its that guidance, thats what worries a number of investors today. In one reason why we saw tesla shares under pressure the entire session. Did come back a little bit from where it was this morning. Heres the guidance that tesla laid out yesterday in terms of model 3 production previous guidance was by the end of the First Quarter theyd build 5,000 per week the new guidance is by the end of the First Quarter it will just be 2,500 per week and then 5,000 per week by the end of the Second Quarter they have essentially stretched it out over another quarter. What was the impact of changing that guidance . Well, on wall street, while there were many analysts who put out notes saying, look, this was a disappointment, what we did not see were any downgrades. There were no downgrades the analysts were disappointed but not surprised. And the question is also out there, is this going to prompt anybody to potentially cancel their reservation . I dont think it will. I think the reservation level is probably close think where its been for some time, which is well over 400,000. Tesla deliveries overall, last year they did exceed their target by about a thousand vehicles. They said, look, well hit at least 100,000. That was the new guidance they gave late in the year. They delivered over 101,000 vehicles but its not the overall deliveries right now that is the focus for investors, kelly the overall focus is whats going on with the model 3. We should get more clarity on the model 3 and whether or not this rampup in production is accelerating, when the Company Reports earnings, thats likely to be early february, it might be late this month, but more likely early february. All right, phil, thank you. Phil lebeau. Joining us now is chip choudary and gabe hoffman who says tesla is his largest short position chip, do you think they need to get that model 3 production up quickly or no . No, it wasnt a hiccup. Its showing what tesla is all about. Theyre creating the industry and investors are only focused on one Thing Company as a whole having a piece, model 3, is a small piece in the hole puzzle it whole puzzle its model s, model x, and model 3. Everything is on the platform. Gabe, what about you, whats the significance to you . Well, lets keep in mind that tesla missed their q4 model deliveries for model 3 by 80 compared to what they told us just two months ago. The same thing happened in q3. They missed by 80 , the same number that they gave when they reported their earnings until the middle of the quarter. So you have to ask yourself, why would anybody invest in a company where the management seems to just flat out lie to the public all of the time trip . I think my friend is somewhat little on the wrong side teslas stock trades on the order book they have, the order book for their model s, model x, model 3, and tesla semi, and also the emerging model for tesla energy think about the two major disasters that happened, one in australia, other in puerto rico. Theres only one company in the whole world which has come to the rescue, that is tesla, with battery backup look at what happened four days back at Atlanta Airport. Not a single airport has a complete grid backup solution. It is only tesla that could address that issue for example, delta lost 15 to 20 million, just one airline, when Atlanta Airport came down tesla is an industrial gabe, what about that puerto rico is really nice. The reason we invest in companies is for them to make money and get paid i dont think teslas getting paid from puerto rico. And they havent told us if theyve made any money from australia. Im glad our friend brought up tesla semi, because i believe that was essentially fake news here is what i mean. When we think of a prototype, a working prototype like elon musk drove out on the stage at the event when they unveiled it, that means the truck actually does what they claim specifically im talking about this 30minute super charging for 500 miles of range now, independent scientists who are familiar with teslas Battery Technology have been quoted in places like the wall street journal essentially proving that that technology does not exist right now in other words, what tesla is telling us the semi truck can do, it cannot do in teslaspeak, thats called aspirational in real world speak, we call that a lie trip . I think my friend was not at the tesla event. I was there, spent four hours there on 16th of november. Tesla semi is the only product in the world which is antigravity. Not a single one in the market today can accelerate up a gradient it is only tesla this is called grassroots innovation thats what investors are paying for, not for bean counters theyre paying for something who is an exponential thinker, and who can take major risks the rewards will be exponential. Tesla is going into gabe . Were almost out of time gabe will have the final word. Just one simple question. Can the semi truck today charge in 30 minutes, yes or no in two hours in two years from now, it will. Not only that, the technology that tesla is putting in place has made all the naysayers wrong. So its no. No, the tesla semi is coming in 2020. By that time everything that tesla is saying will be coming there. All right remember, tesla is sorry thats fine, very respectful, i appreciate that. Guys, thank you for the debate trip choudary, gabe hoffman. You can see the long and short position in its full glory there when it comes to tesla the dow crossed 25,000 for the first time well get you ready for tomorrows trading right after this and dont miss fast money coming up at the top of the hour duncan just protected his family with a 500,000 Life Insurance policy. How much do you think it cost him . 100 a month . 75 . 50 . Actually, duncan got his 500,000 for under 28 a month. Less than 1 a day his secret . Selectquote. In just minutes a selectquote agent will comparison shop nearly a dozen highly rated Life Insurance companies, and give you a choice of your five best rates. Duncans wife cassie got a 750,000 policy for under 21 per month. Give your family the security it needs, at a price you can afford. Since 1985, selectquote has saved over a million families millions of dollars on Life Insurance. But prevagen helps your brain with an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. At ally, we created a savings account with a great rate. But if thats not enough, our app helps monitor your spending too. And if thats not enough to help you save, we could start a carpool. Look at this traffic. Dont worry. Ok, if thats not enough well start a trainpool. Oh i have a meeting in five minutes. And if thats still not enough. I got it. Well just create a shortcut. Well do anything, seriously anything to help you save. Ally. Do it right. Talking 4th quarter . Yes. There you have it, a third trading day of 2018, and man, what a way to start out the year first we closed above 2,700 on the s p, today above 25,000 on the dow. Guys, quick final thought, especially as we look ahead to tomorrow and well get a big jobs report. We are. The market has been feasting on good Economic News well watch the bond market react to a good jobs year. Well see if we get a good wage number, a blowout Unemployment Rate or Something Like that and see if that jogs the market. John . I mentioned about the high yield bonds, hyg that plays into what michael is saying about bonds that could be playing chicken also, if indeed we get a great number tomorrow. Im thinking about the wage thing just for a second. Even if it comes in strong, i wonder if it spooks people that much i dont know that it has to spook the stock market that much i do wonder if its going to jog the long end of the memory curve. Thank you, that does it for closing bell. Fast money starts right now. Fast money starts right now. Live from the Nasdaq Market site overlooking new york citys times square im melissa lee. Tonight on fast, full steam ahead for the crypto craze has bitcoin takes a break and its rivals surge how much is the crypto world worth . 10 million according to one analyst, hell be here to explain. And a major crypto announcemen