Transcripts For CNBC Closing Bell 20180105

Blown through nasdaq 7,000, were talking about s p 3,000 by the end of the year. Look how much we already moved we got a lot of milestones falling by the wayside lets get to bob pisani with some of the latest on todays action bob . This is quite an unusual week not just in the intensity and how much the s p is up, but the fact that everything seems to be working. Let me show you the winners this week and just the dow so, whatwere the two biggest losers of 2017 it was ge and ibm. Whats the two biggest movers up this week . Ge and ibm okay often get a little reversion to the mean, but two of the biggest movers in the dow last year was boeing and ibm so they had absolutely outstanding years and they, too, are up big. You get my point everything seems to be working this week. Its a little eery. Look at the major sectors today. S p up over 2 for the week. Small caps are pretty well, too. Growth is up, and value is up at the same time. Doing well thats kind of odd and even all the cyclical names, your industrials and termaterials are doing well only things that are not participating are Interest Rate sensitive stocks i think its particularly noteworthy we have a nice expansion of new highs in the industrial space so caterpillars and the railroads are doing well and textron, lockheed, i can go on and on. The whole group of them are doing well materials are hitting new highs as well. Finally on the s p 500, two observations for the week. Number one, we gap up notably every single day that tells me that retail buyers are putting in orders, market on close orders at the close that are being executed at the open every day, a nice pop up, that was the biggest gain on the day. Secondly, you notice today, the numbers for the nonfarm payrolls, markets still up, a lot of relief about the fact it wasnt too hot it was a good number, but below expectations and everyone is now concerned about the economy overheating a little bit and the fed getting too aggressive that could kill the rally. Little bit below par, it was absolutely perfect as far as the market was concerned guys, back to you. Yeah, like we like to say, goldd goldilocks. Thanks, bob. Lets ask kevin oleary from o shares etfs and chad morganlander from Washington Crossing advisers. What did you think of this week . Did you see all the stats that bob ran through . Everything working this week with the exception of the interestsensitive groups. I mean, its really been incredible what does this portend for the rest of the year, if anything . I think theres two interesting forces at work i think americas discovering midcap and smallcap stocks for the first time in a long time because theyre going to be the major beneficiary of tax reform. You take a company, a Health Care Company no one has ever heard of, pays 39 tax, now paying 21 thats a 17 increase to its cash flow. I never heard of it before i discovered it. I own it now because its going to be a benefit. On the other hand, this is the most intriguing that im looking at, i think others in the same way, how much money is going to be repatriated 1 trillion, 2 trillion, 3 central . How much is going to go back into buybacks in s p 500 companies . Lets call it a 1 trillion. Now theyre competing for Institutional Investors for their own shares i think thats one of the reasons the market continues to gap up is theres a whole ton of competition for stock in a way that weve never had before. I just have to keep thanking the president for this regardless of your politics. This tax reform thing is wonderful. All right and chad, you know, there is that school of thought this week that analysts have come back from vacation, theyve gotten out the pencil and paper and are refiguring their estimates based on whatever impact they see tax reform having but this cant last forever you know, you make, place your bet then you wait to see if the impact does work out that way. So how much longer does this have to run, do you think . So, we think in the short run, everything is positive. On the economy, as well, not only domestic, but more on a global basis Earnings Growth is quite strong and ebb ebulent. This isnt a u. S. Based rally. This is global rally its happening here in the United States, within the developed overseas as well, if particular, in emerging markets which is a critical driver to Global Growth. As well the third component of this is Monetary Policy. Not only domestic, but also o r overseas its still quite dovish. Keep in mind we still are overweight equities but expecting a lower return environment for the next several years going forward. Another caution that you have to keep your focus on is as the fed raises Interest Rates three to four times in 2018, thats our expectation, then that asset class, two year, as well as the three year, becomes a little more competitive to risk assets. Kevin, how worried are you about the fed . I mean, we hear it all the time, what kills a rally, a recession or an overaggressive fed an overaggressive fed can really clip equities and i thin the market has built in three hikes, this, now, i should say 2018, for sure i dont think its there at four im very kind of looking at the fed not worried about them being a major factor im more concerned now that if we get two rate hikes that the asset class of fixed income, which is shyer on the Balance Sheet credit, corporate credit, starts to become interesting, its not inexpensive right now, but for the first time in four years, ive actually been talking to managers all over the street about allocating to them in the highyield market for the first time because if we do get a 50 basis point increase, that asset class will start to look interesting at lets, say, a 5 to 6 return in 2018 versus the risk of volatility in the back end of the year. And i still say small cap stocks will beat the s p in 2018. The head shark is heading into high yields swimming in deep waters. Guys, dont move. We walk to talk more about financials the stocks continue to push to record highs whats the next big catalyst for the market cnbcs dominic chu has a look at events next week that could determine the next direction. We talk about this idea, kevin oleary brought up the Interest Rate picture, that could be a big driver especially for financial stocks take a look at the way these stocks have performed, s p 500 financials have been decent performers, call them market perfo performers they performed in line with the rest of the s p 500 far below what the s p 500 tech sector has done but a lot better than some lagging sectors like energy or telecom which is at some point going away, anyway take a look at this, according to the folks at Thompson Reuters ibis, if all s p 500 financial stocks report as analysts expect, we actually could see about 13 Earnings Growth. Thats if all of them come in as expected Revenue Growth a little bit more on the temperate side of things, 2. 5 remember, it is important because financials make up about 15 of the s p 500 the second biggest sector, next to just the 24 weighting for tech technology, and remember, big earnings coming. Up next week pnc financial, wells fargo and Jpmorgan Chase blackrock, well throw in as an asset manager. Bill, michelle, as we talk asht financials this could set the tone for the earnings season especially early on with these big banks. Back over to you. Dom, thank you. Kevin, what do you think . Broadly speak bing the logic is as the fed raises rates that improves the Balance Sheets for the banks is they can make money the oldfashioned way on the spread so you should buy them now. What do you think . I dont think thats whats driven the financials in the last six months. I think the concept of deregulating and loosening their Balance Sheets, allowing them to lend again in a way they did ten years ago is whats really driving the expansion in p es. Ill add something else, the region banks which have really been hurt by the overbearing regulations in the last regime are starting to feel a lot more frisky i was recently out in seattle as washington federals general meetings with their quliclients. They are just killing it, loaning money in a way they havent before particularly in the real estate space and high net worth, family offices. Small Regional Banks feel they can get back in the game theyre not feeling the regulator is going to squeeze their head like a teenage pimple anymore. Thats what we had in the obama years. Its changing. The tone is changing of the regulator even throe the regulation s havent actually gone into law yet. Thats what i mind so fascinating. The tone is better uhhuh. Chad, what do you think of the financials were hearing less regulation, more deregulation. And as bill pointed out, higher Interest Rates should help their Balance Sheet. Does that make you positive on the banks . Yeah, we are positive on the banks. We also think the shape of the yield curve does matter in the future if you see a steepening of the yield curve, then you can see an outperformance within the financials overall relative to the s p 500. But kevins right, deregulation is a critical driver as well as Economic Activity on the developed side here in the United States, as well as on a global basis bode well for the financials kevin, could you see a resurgence of consolidation among the regionals as things improve for those banks . What do you think . I think that will be the next thing. The Regional Banks, out of favor with Institutional Investors as being too risky, too constrained in their lending, thats why you saw this amazing new category of hedge funds lending to Small Businesses with all these lending trees and Everything Else that were out there thats going to be pressured again as these banks get back in the game you have to pay 14 for even 14 to 18 for a loan now you can Start Talking at 7 to a Regional Bank so i like this i like it for small cap. I like it for consolidation. This is an amazing time. I cant find a fault in the market right now i dont know where its going to come from, but it sure is great to be investor right now all right very good. Kevin, good to see you as always chad, thanks for joining us. Have a good weekend. Were heading to the close here we got 50 minutes left in the trading session, and this is something we said every day this week, markets are continuing higher and were in record territory now. Records. For all four of those major averages and weve got much more ahead today on the closing bell. Straight ahead, the tale of two media stocks going in very Different Directions today it involves letterman, planet of the apes and star wars. Plus the big and sudden turnaround for nat gas. Next, Steve Liesmans exclusive interview with the president and ceo of the Federal Reserve bank of cleveland. Email us, find us on twitter and facebook the csilong bell is back in two minutes. Alerts wouldnt you like one from the market 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. Welcome back another day of records Dow Jones Industrial average higher by another 156 points today. 25,231 the s p 500 higher by 13 and the nasdaq higher by 43 points 2 3 of 1 . 7,121. Putting 7,000 comfortably behind us. And those mid and small capst kevin oleary. Theyre seeing a resurgence. Record territory for the russell. Cboe, Bitcoin Futures on pace for their best week ever thats since they started trading last month last week was previously the best week ever when they each saw gains of around 4 . The long history of bitcoin trading. The American Economic association is kicking off its annual conference this weekend in philadelphia. And that is where we find krns kr cnbc senior economics reporter Steve Liesman who is joined by the cleveland fed president Loretta Mester in this exclusive sbrir. Steve, its all yours, bud. Hey, bill, thanks very much yeah, just down the train tracks here in philadelphia at the American Economic Association Annual conference, brings together some 13,000 economists, among them Loretta Mester. Thanks for having me, steve. Todays jobs record, 149,000. A little bit less than expected. Did it change at all your outlook on the jobs market i view that as a pretty strong report. Remember, its as70,000, 120,00 in city states thats abovetrend job growth. String of good job numbers over the last year. 166,000 per month. I look at that as very good numbers, and i think the labor market is strong the Unemployment Rates came down even your report this morning pointed out some of the good news and sort of those other Unemployment Rates we look at, the ones that, you know, by race and by jegender and i think it strong report. You were watching our cough ran coverage have to make sure my boss knows that lets talk about, though, is it too worried were past the maximum Employment Level that doesnt mean it triggers necessary action what trying to do with our Monetary Policy is calibrate it to where the economy is relative to our two goals which is maximum unemployment and price stability which were measuring by the pce inflation rate. As you know, right, were not at our 2 goal yet on pce inflation. What were trying to do is keep policies so that the expansion remains sustainable going forward. So were always doing a balancing act, letting the data inform us about where the economy is, where we are relative to our goals. Were going to set policy appropriately. I dont think its a crazy hypothetical to ask you how you would respond to that question if we were printing a 3. 5 Unemployment Rate. Is that something that would be, create more anxiety for inflation and necessity to raise rates more than so certainly, you know, my longterm Unemployment Rate, right now, im having it at, like, 4. 75 . I brought it down over time. As the economy evolves, those kinds of measurements typically change because were always trying to calibrate. I would be concerned if we tended to get an overheating economy, maybe as indicated by a very low Unemployment Rate and, therefore, maybe that would mean wed have to raise rates in a faster pace later on again, thats the kind of policy that i would like to avoid by this sort of gradual increase in Interest Rates well, talk about overheating, i mean, were doing another 156 points on the dow today. How much do market valuations give you concern and secondly, what about these tax cuts that are providing a huge amount of stimulus to an economy that the past two quarters and maybe even this quarter have been at or near 3 . Yeah, so i built in some effect in my own projections of the tax package about a quarter to half a percentage point on gdp growth theres potential there that theres upside risk to my forecast because it could be a bigger effect. Again, well see how it plays out over time, and then were going to adjust our policy accordingly. Monetary policy accordingly. We know it will effect consumer side and investment, perhaps i dont know how much its going to affect investment some of the firms we talk to say it will have some effect basically they have their plans already in place for investment. Again, were going to see as it goes what the effect are and react accordingly. You cant see it, theyre putting up these market boards while youre talking, in fact, its actually going up a little higher i dont wantto say your response what about market valuati valuations, do they cause you concern . Is there a bubble out there in stocks so obviously you cant really predict a bubble which is why they call it a bubble. Again, right, do we care about asset prices, per se no we care about asset prices to the extent they impact the real economy. Im not that concerned that were in a financial instability environment, but i am going to be looking at things and as we go forward, if we werent appropriately raising Interest Rates on a gradual path, then i would have concerns that, perhaps, wed get behind and that means wed have to generate some bigger changes later on in the Interest Rate. So, again, this is all that calibrating. I do balance sort of the fact that weve been at very low Interest Rates for a long time perhaps theres financial instability risks building versus we havent seen inflation pick up yet, were still below our goal so thats kind of the balancing that i do when i set policy. Your fellow opera buff, Michelle Caruso carrera, has a question for you on the fed, michelle. Yes, dont worry, im not going to ask about toska. Okay. You were talking about the issue of whether or not there are bubbles, et cetera a lot of people have looked at the situation with bitcoin and wondered if that kind of weird euphoria we saw when it went to 20,000, those are the kibds nd things some people think happen at the enend of a cycle, at the end of something what are your thoughts of bitcoin as we see statements coming out of the s. E. C. , et cetera, being concerned about whether or not theres fraud within the industry, and what it means. How do you think about bitcoin so the technology is obviously something thats as of interest we know those kind of technologies actually can be good bitcoin, per se, i dont think about it in terms of Monetary Policy issue yes, there are arguments you dont see people going into bitcoin at this point in the cycle, maybe thats a signal of risk appetites getting overly ambitious. But, you know, i take all that in, but its not something that i worry about in terms of the fallout from that into the markets. You know, markets could go up and down its really about is there going to be contagion to the real side of the economy thats what i would worry about in terms of setting Monetary Policy. One more area, if we dont mind, the median forecast is for three rate hikes this year the markets not quite there yet, but theyre thinking about it is that a good way to think about where fed policy should end up this year and where do you see the terminal rate in terms of where the Federal Reserve should stop in this cycle . Right so as you know, part of the sep is we have to write down sep is the forecast you do. Right, we write down our you can look at that and the median in that last well, 2. 8 i think is the long run. Pardon me essentially right . So, again, i think some people misinterpret what the sep is, you know, like, so weve had years where weve had more rate increases than we ended up doing. We had last year where we actually did what we said a the beginning of the year. We put that at the beginning of the year what we think an appropriate path of policy is given where we think the economy is going as the economy evolves, shocks hit, maybe things dont work out the way we think, last year growth was higher than we anticipated in the beginning unemployment was lower inflation was a bit lower. We will change the policy appropriately. I get that, nobodys going to hold you to account for getting that wrong because its been wrong in the past. It was right last year just trying to get your general feel for where markets should expect given what we know right now about the economy and its expected trajectory. So i would look at the meeting path of the fomc projections and say thats a pretty good estimate of where the committee is im a little bit stronger on growth, perhaps, than probably a little bit stronger on the path, but 3, 4, im happy with that. I think the basic point is were in an environment where were balancing the risks and a gradual increase in the fed funds rate seems to me to be the appropriate path at this point if the economy evolves differently than we expect, were going to adjust that path to be consistent with trying to lit o hit our goals. Thanks very having me today. Thanks for having me. Back to you, bill, and michelle thank you, steve, very much well see you later. Clearly wanting to wait and see what happens to the tax plan, what it does for gdp. And waiting for the new chairman, too. Obviously, yes. Jay powell needs to be confirmed by the senate at this point. But, you know, this has been a very incremental fed that goes without saying theyre waiting to see what the data show as we progress especially with the complication of tax reform. I was just going to say, this huge event that happened in the last month, which potentially changes what happens with gdp. Wall streets repricing. Sure. Have to believe the fed is goingto do the same thing. That came up in the fed minutes from the last meeting as well. All right. We got 36 minutes before the bell the Dow Jones Industrial average is higher by 171 oints the s p is higher by almost 14 the nasdaq is up 43 and the russell is higher by i cant see that far its kind of flattened out here, huh . Coming off the highs. It has flattened off. Its right at its alltime high levels were close. All right. Sports apparel stocks like nike and dicks are kicking off the year in winning facts. Today another name in the space got an upgrade are these stocks finally rounding the corner . Look at this. Im helping you see stuff now. What is that about plus tech surging as the nasdaq has its best start of the year since 26. Totenogynvtor will tell us best start of the year since 2006. 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. We are powering into the close. The dow and the s p at session highs right now. Dow higher by 177 points the s p higher by 14 1 2 the show started, the high had been a gain of 111 points for the dow. So, chugging right into the close. Russell stumbling a little bit there, but holding on to it. Enough of a gain to be in record territory right now. Meantime, foot locker got an upgrade today to buy from neutral at Buckingham Research thats a valueoriented firm firm also raised its price target on that stock to 57 from 44. Tl trading at 46 calling it a best in class franchise. As you saw there, the stock is up 1 . Two other stocks that got upgrades today, this week, from wall street, include nike and Dicks Sporting Goods and my fellow sports enthusiast and stock guy, mike santoli, is with us right now you know, the beaten up companies that we were highlighting last quarter, theyre getting their day right now. They are. So like a lot of retailers the athleticoriented Retail Stocks were really just a abandoned in the middle and Third Quarter of last year. They bounced since then. I think these calls represent i think the theme of stabilization. The idea that for this year, Something Like dicks and foot locker have essentially lowered expectations enough. The stocks look cheap based on lowered expectations of 11 to 12 times earnings for current year. You can sort of bet theyre going to be the last ones standing in their category i think the category winner is what youre looking at. There have been several times in this very bad downward cycle for the retailers where you could have made a quick 20 if you timed it right because there had been such negative sentiment. Ultimately they keep going down. Yes. This sounds like people think theres been a real turning of the corner. I think theres a camp that says that for these stocks like a dicks, like a foot locker that really are the leading survivors in their group, yes, that they can have a decent turn under armour, to pick one thats come from the dead up 12 , 13 , this week, because it was so beaten down in selling at the end of last year that is the call, but l brands yesterday had one of those nice rallies and got smoked with enthey missed expectations. Specifically in the sports Retail Sector theres been a tremendous shakeout. Some others, highprofile retailers that have gone out of business. Sports authority. That hurt under armour to a great degree maybe that shakeout is coming to an end. Hopes of a basketball shoe cycle coming back. I think a lot of the nike fans are saying that. That would help out foot locker, too. All right. Last man standing when it comes to places like dicks. Time now for a cnbc news update with sue herera hello, guys, heres whats happening at this hour, everyone Michael Wolffs bombshell book about the president called fire and fury going on sale today. The president calling it full of lies and today top officials refuting some accounts in that book secretary of state Rex Tillerson says he never questioned President Trumps Mental Fitness and economic adviser gary cohn says he never called trump dumb blank. Fcc chairman ajeet pie canceling his scheduled appearance at the Consumer Electronics show reportedly received death threats. The fcc says it doesnt comment on Security Issues pai has been a target on social media by those unhappy with his vote to repeal Net Neutrality rules. 100 million bucks for a football coach yep, thats what the oakland, soon to be las vegas raiders, are reportedly going to pay jon gruden over ten years. Gruden coached the raiders previously from 1998 to 2001 he spent the last nine years in the broadcast booth for monday night football. And take a look, take a look at the top of this car a driver in wisconsin happy to be pulled over that officer pulled over the minivan because the driver left her coffee on the roof he retrieved the cup, handed it to the driver and walked away. But when you see those blue lights in your Rearview Mirror i was going to say. Should be what did i do exactly i think she might have needed a little bit more than coffee at the end of that. Back to you guys. Thats amazing how that cup stayed there. I know. Must not have been driving very fast confused about why shes being pulled over. Especially in wisconsin where its slippery and icy up there thats a Public Service thank you, sue. You got it, guys. Lets talk the markets joining our Closing Bell Exchange today, jeff powell. Steve grasso from stuart frankel. Our own Rick Santelli at the cme group. Jeff, let me start with you. What do you think of the major milestones were hitting this week, what does it portend for the rest of the year well, its real reasly an am, amazing situation were dealing with last year we had 12 straight months of up markets j january is off to a great start, setting up for a really strong First Quarter earnings season. Looks pretty exciting to be an investor right now. Steve, we had good Economic Data out this week, had soft Economic Data out this week. You couldnt tell it by the market it feels like its back on automatic pilot again, doesnt it it does the most overused phrase, synchronized growth scheme, across the global markets. But to jeffs point, when you look into the earnings cycle right now, even if it were bad, what are people going to say theyre going to say, you know what, we dont know how theyre going to spend money, dont know how these companies are going to buy back stock we do know one thing, theyre going to pay less in h corporate tax. Thats a tailwind, why the market will continue to ratchet higher yes, you con have a oneoff event, threeday event, fiveday event. Were 4 above the 50 Day Moving Average in the s p you could see a selloff. The selloffs have been more shallow, shorter in duration, which means the bulls are still in control and the market can still move higher from here, bill. The dow is up 190 right now. Unbelievable. Powering right into the close like we said earlier Rick Santelli, lets talk about what happened with Interest Rates this week. Stocks been powering higher. Nobody seems to be concerned about a, Interest Rates going up too much, or the absolute reverse, which is the flattening yield curve that some people worry might signal were going to get an inverted yield curve and maybe a recession. Well, the problem with the inverted curve is that perception is reality. I believe as the fed has stated, i have agreement there, janet yellen, is that the inverted curve probably doesnt mean what it used to but that doesnt matter what it really means or thumbs on scale around the globe on longend rates making this distortion in part what matters is what investors think and how they respond in changes of strategy to what may transpire. And it isnt only the big parts of the curve inverting there could be little inversions sooner rather than later 7s, 10s, 5s, 7s. Its going to be interesting to watch. As far as the market, you know, march was of 2017 we traded above 260. Think about where the dow was then think about where the dollar index was then look, here we are basically the long end, nowhere near the 260 market short end, of course, raised with the fed notion. I find it very fascinating you talk about almost an illconceived goldilocks tale. The long end is benefiting from policies i think were long overdue to come off,but the residual is were building such a good cushion and the price of equities that when eventually rates do start to respond, next week we get inflation data, certainly we could get a Market Correction a Market Correction from 25,000 or 26,000 is a lot better than Market Correction from 18,000 or 19,000 where it was before the november 8th election. Jeff, you know, weve been talking about the financials were getting ready for the bank stocks next week to be reporting. You like them right now. How much do you like them . Is it predicated, though, on the fed raising rates this year. Well, i think the financials are really you can look at it from a couple different vantage points number one, is theyre very, you know, on a relative basis theyre a value play on top of it, as rates continue to rise, so do ways that they make money, things like money markets where theyve not been making money for a long time are now areas of the market that they can start making money. So the financials, in particular, are one of the areas were looking at as having a very strong 2018 all right, guys good to see you. Thank you. Steve, is it true it keeps your face warm when youre growing the beard . How does it look, bill . Is it true it keeps your face warm thanks, guys, have a good weekend. See ya. We are heading to the close here 25 minutes left in the trading session. Holding on to gains and even the russells coming back a little bit here but its enough for everybody to finish the week with alltime highs. What do you think, were going to get 200 points here if this continues although the last couple of days weve speeen the market on clos orders bias to the downside. Well see. Up next the nasdaq is having its best start to the year in more than a decade but is the run in tech stocks coming to an end, he asked . Well discuss that after the break. Later, australian Surfboard Company has only turned a profit in one of the last five years. E and new owner be able to turn thbraround and avoid another wipeout . Stick around see what you did there. You always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Welcome back lets send it over to leslie picker, she has a quick market flash. Hey, michelle, thats right large cap stocks are having a stellar first week of the year thats a bit unusual since its typically small cap stocks that outperform in late december and well into january. The large cap s p 100 index is up more than 2. 5 this week. While the small cap russell 2000 is up just 1. 4 . Leading this week among the large caps is schlumberger up nearly 9 . Cvs health up 8 biogen and General Motors both up more than 7 . Back over to you cool stuff. Thank you very much, leslie. But in the meantime, nat gas is down 3 today. Even though we still have these frigid temperatures. In many parts of the country Jackie Deangelis at the energy desk to reconcile this for us. Jackie good afternoon, to you, bill. The worst of the bomb cyclone seems to be over, leaving in its wake frigid temperatures, yes, but those are going to dissipate within a week or so and thats why nat gas is selling off today. Traders looking at the tenday forecast, and it will still be cold but nothing like the last few days we had a big runup in the price leading to this storm, taking prices back above 3 today were trading well under the 3 level whats interesting here, take a look at big names in the nat gas space. Theyre selling off today, yes, but theyre lower for the last month and threemonth periods as well why . Well, its because resources are pretty abundant in the United States over 3 trillion cubic feet of nat gas in storage, thats a lot. Even if its a bad winter, even if we go through all it, we know theres more in the ground and we know through fracking we can get it out so look back to 2014 february nat gas spiked to over 6. We might go higher again this winter, but that high probably not, guys. No, that would be a long way away all right. Thanks very much, jackie the s p Energy Sectors the weakest sector today if not for that, wed be even higher. Yes, exactly. When it comes to the markets. Yep. Quick silvers parent company, board riders, is buying australian Surfboard Company billabong. Were going to talk about the details of the deal, what it means for the retailer coming up next. What are you going to call the combined company billabong, surf rider . Well talk, well ask somebody that. Later the nfl has seen a decline in ratings average audience for a game falling 9 this past year compared to the previous season. Well discuss if theres a cultural shift away from that sport and haif tt spells trouble for the business of the nfl when michelle and i come back hows . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. At ally, we offer lowcost trades and highyield savings. But if thats not enough, we offer innovative investing tools to prepare you for the future. Looks like you hooked it. And if thats not enough, well help your kid prepare for the future. Dont hook it kid. And if thats still not enough, well help your kids kid prepare for the future. Looks like he hooked it. Well do anything. Takes after his grandad. Seriously anything, to help you invest for the future. Ally. Do it right. Well, we wondered if the dow would be rising by about 200 points up 180 points at this moment just riding a wave that weve seen all year. Riding a wave, exactly. Isnt it . Exactly exactly. Sherwin williams is one of the strongest performers today higher by about 2 . All right. Apparel and Lifestyle Company board riders is catching the next wave in Action Sports and products the Company Buying australian surf brand billabong for 155 million. And joining us in an exclusive interview is board riders incoming ceo chief turnaround officer dave tanner dave, thanks for joining us. Happy new year. Happy new year to you guys as well. I mean, obviously, a distressed asset that youre buying here. The board at billabong acknowledged this theyre the best chance to kind of help turn things around. What are you going to do that they couldnt be doing the last few years to help turn this company around listen, the team over at billabong has made a lot of progress in their turn yamparoud we have a lot of great things to say about what theyve done there and for the brands at the end of the day these two businesses have redundant back end platforms and systems that could be brought together to build a stronger back end of the business to allow the brands to get more investment behind them, more autonomy for the brands, more creativity for the brands to free them up to grow in the markets that theyre growing already in around the world. So, this is a scale play, a reinvestment play. Its positive for the brands its positive for the industry its positivecustomers were excited about taking things forward billabong hasnt been profitable since 2011. How quickly do you think you can actually see profitability and what is a very tough sector . We see profitability immediately with what were going to do operationally in the new capital structure that well bring to bear here it is a tough sector but you got to peel it apart, look at it more granular basis. You know, these brands are broad, theyre global. Less than 35 of our revenues will be in the u. S we have significant presence in a lot of developing and emerging markets that have significantly different growth profiles and consumers there that are coming up the curve on the ability to spend and buy into brands. So were excited about the growth in those markets and, you know, our retail comps, across both companies in this fiscal year, are up our forward order books are up so, you know, i think this industry has gone through a retrenchment from the overexpansion that occurred in the late 90s and the early 2000s but now were at a more normalized base where we think we could see more normalized growth especially around the world. You call your niche Action Sports so i guess what youre saying is we shouldnt equate you with the athleisure business that has seen a cycle up and down no. No i mean, im from southern california, i got a lot i saw that. A lot of frebiends that sr still at this point. I know how theyre devoted to certain brands youre playing to a certain audience out there that is not going to be part of that athleisure category thats been suffering the last couple years. Is that the idea youre spoton, bill, youre spoton. We have an athliesure line here and there but over 50 years old, founders of the brand are still involved in the business and on a daytoday basis active cull chers and communities that surround these brands that are supported by events and surf competitions and different types of skate competitions you know, we amplify this stuff digitally. We have tens of millions of social followers across these brands so this is not a standard athleisure play, not standard Apparel Brands theres much more of a cult and following behind them that makes them much stickier and really draws in and holds the consumers. Im hip. You have friends who surfboard, youre definitely hip. I dont surf, but they do it theyre the hip ones, thats for sure. Hard to surf there right now giving given the weather you have thats for sure dave tanner joining us from los angeles where they surf. We got 12 minutes left in the trading session here look at that. Look. The dow is up more than 200 points right flnow as this unbelievable rally continues as we head toward the ninth anniversary in march of this bull market. Showing no signs of letting up right now. And as we say, its been a big week for stocks. The dow surging past a major milestone. So did the s p, so did the nasdaq were going to talk to two fast money traders about the tone this week sets maybe for the rest of the year. Netflix getting a big boost today, thats after David Letterman announced a special guest for the premiere of his new show on the streaming service. The identity of the mystery guest when closing bell returns. And wait until you hear the market on close orders after the break as well. Mmissions for sto, 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. Listen to this, even with this rally under way to cap off the week, art cashin told us the market on close orders show an imbalance to the buy side, you ready, of 2 billion that is huge and i think weve already seen part of the impact there with the dow up more than 200 point that seemed to be what pushed it from 180 to 220 in almost a nanosecond clear will i in tly the last dae first week of the year meantime, netflix is trading is trading at an alltime high dating back to its ipo in may of 2002 Julia Boorstin has a look at whats driving that surge and why disney is down today julia . Bill, netflix shares are up 2 this as it announces more premium content coming to the platform netflix announcing David Lettermans new series called my next guest needs no introduction will debut january 12th with an interview with president barack obama other guests on the list include jayz and George Clooney netflix also announcing this morning that filmmaker matt reeves, hes known for directing two of the planet of the apes movies as well as cloverfield is signing an exclusive multiyear deal with netflix. This as the streaming giant heads into the Golden Globes weekend with a record 12 nominations between tv and film for the studio meanwhile, disney shares are down just a fraction of a percent down about half a percent right now. Today the last jedi is opening in china, so far coming in second place with less than a third of chinese ticket sales. Star wars film raked in 1. 1 billion worldwide. Its the biggest release of 2017 and a giant in the u. S. , but the Star Wars Franchise is historically not so strong in china. Still, disneys got to be pretty happy to see that fox studios, which s, of course, set to buy part of that fox deal, brought in a total of 27 Golden Globes nominations dwarfing all the other players. Guys, back over to you you seen star wars . I have not. Julia loved. It. Have you seen it i thought it was good not as good as the last three way back in. Im assuming, julia, not as popular in china because it doesnt have the long history there, right it doesnt have the long history. When star wars first came out, they were still wearing their blue collars. Around the world there are people who were fans of the original star wars and the Chinese Market isnt as familiar with it and the characters theres another movies thats been released right now, thats, you know, beating star wars to the box office but that doesnt mean star wars couldnt continue to bring in revenue from china for weeks or months to come. So disney right now is really building its audience in china whereas it already has established star wars fan base over the rest of the world is chewbacca in the new movie . Yes. Wonder how they translate what he says. Bill, of course i was just asking thank you, julia see you later. All right. Were going to count you down to the closing bell after this break of this historymaking week for the stock market. And whyar lry kudlow beliefs the battle with steve bannon is such a big win for President Trump. You might take something for your heart. Or joints. But do you take something for your brain. With an ingredient originally found in jellyfish, prevagen is the number one selling brainHealth Supplement in drug stores nationwide. Prevagen. The name to remember. 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 slow jazz music fly me to the moon and let me play bell ring inside two minutes to close out this recordbreaking week for all the major averages i can show you that board weve been showing you all week here the dow, the s p, the nasdaq, the russell, everybodys been positive and in record tro territory. The oneweek chart of the dow. Bob pisani, 2 billion to buy on the close here so nobody wants to retreat and take profits this early. This is a critical point. Weve had these big market on close orders all week. If youre wondering why have been gapped up every single day, the s ps gapped up six, seven, eight points, thats why you get these market on close orders and you get orders coming in in the morning on top of that this is a new retail order flow. Best performing sector this week, good oldfashioned Technology Leading the charge again and the utilities, the most intrasensitive of the sectors, the biggest loser this week. Yeah, of course, there you said it, Interest Rate sensitive, markets going up on, you know, perceptions that rates are stronger but not too strong. Amd, a huge winner this week and big loser was intel. That intel chip flaw, you know, were seeing a little profit taking today on amd im waiting for the apple upgrade. I dont know how much hysteria is justified how much of this is unjustified hysteria. Ill be doing the upgrade along with everyone else biggest loser of the year, General Electric biggest winner this year General Electric second biggest winner this week, ibm. Well wrap things up and look ahead to next week when we start getting big earnings reports on the second hour of the closing bell. Stay tuned welcome back to the closing bell, im Michelle Carusocabrera bills headed back to the set. What happened with the markets, we are finishing the day, the week, the first week of the year, with a bang. Dow jones industrial average higher by more than closer at the highs of the session up almost 214 points. 25,288 we just hit 25,000 what, two days ago day ago. It was crazy s p 500, 2,742 nasdaq higher by above 7,000 again, 7,136 the russell 2000 finishing at 1,559. Joining us today, cnbc senior markets commentator mike santoli. Tony dwyer and ian winter is from webbush securities good to have is you here. Hey, michelle. Let me start with you what do you make of this incredible week . Is this tax reform, what is propelling the markets so sharply higher this week thanks. As my buddy, pete najarian, from fast money would say say, giddyup. Only the ninth time since 1960, michelle, the year started out the year with four straight up dates. Of those eight prior occurrences, 12 7 of them were doubledigit gains. And the one that wasnt was a 2 gain it was 1987. It went up 39 in the first half of the year. So no matter how, whether you use fundaments, whether you use political with a tax cut, you know, fiscal policy, Monetary Policy, or history, you know, were going to get pullbacks mikes done a great job of highlighting that in the past. Were going to get pullbacks theyre to be bought with that backdrop. Pretty amazing week, mike it has. Much telling us here. The chase is on you saw signs this week that it was an acceleration of the trends we saw last year. Last year was kind of a quarter of a point per day, a lot of stocks down, others up you had a lot of rotation. Some of thats been going on this week. Right. I do think you see it a little bit at a higher metaboli metabolism i dont know if thats something thats an early year flush people wanting to allocate money into this market before we get out of the first week. It seems like that was the dynamic. But i do think a lot is working well you simply havent had the headlines that would prompt overly bullish investors to pull back its been just too good. Even down to the jobs number today which was a disappointment still fit the narrative of good trend. It youre right last year it was all about hitting singles, it seemed like, but now were hitting a few 2. 5 in four days. Yeah. Yeah. The average annual return on the market is 7 or 8 keep that in mind. Ian, is that euphoria, is that what were seeing here . I dont know if its euphoria, its just the wild west thats where were at right now. Theres no laws. No regulations and youve got unlimited ammunition with the fed basically not doing too much too aggressively the rest of the Central Banks around the world basically being very supportive. Still accommodative. So i dont know if its euphoria, but i certainly dont see whats going to get in the way of it as long as rates stay where they are bill, youre asking if thats euphoria, like the negative way, right . When people talk about contrary wise, sure thats when you think, oh my gosh, were at the end of a cycle. And you dont think thats whats going on, ian i dont think its whats going on i think youre seeing it in other asset classes, but i dont think youre seeing it necessarily in stocks. To me, its just a logical reaction to the fact that the world is completely changed. And its the most businessfriendly environment you could possibly imagine you just gifted corporations this massive tax cut so that they can buy back stock. And so im not really sure what gets in the way. Now, is it good for the American People that i dont know about. But its great for the stock market and its not just here in the u. S. , International Indexes have also had a banner week the german dax up 3 its best week since last april the nikkei in japan up more than 4 had its best week since july of 2016 so, clearly, were not the only game in town. Not at all. Its been a global move. That nikkei, i was joke bing earlier, its going to hit 25,000 maybe soon after the dow does of course, its been way above that many years ago. Many years ago. However, i think its part of the story. The dollar being relatively weak on a longterm chart the dollar isnt that weak. Compared to a year ago, it has come down a bit. That means global liquidity, that means its a good thing for Capital Market returns, means people are borrowing in dollars across the world and all the rest of it as long as that treadmill keeps moving, i do think it makes sense that you see all these equity markets. Tony, what would you do here, where would you put money . Keep it here domestically because of the tax cut, because of the deregulation or put it overseas where were talking about global synchronized growth to tony can you hear me . I dont think tony can hear us anymore. How about ian . Ian . How about that question to you, did you hear it . I heard it. I heard it loud and clear. Yes, stay in the United States the weak dollar for sure is a boone. Remember, the massive corporate buybacks in Financial Engineering thats going to take place now to me is such a difference between the rest of the world that i think the u. S. Is where you want to be this year tony, you still there all right. I dont know where he went, but we lost him there. He went to go this is a Global Industry recovery yes. What were you going to say, ian . He went to go buy some bitcoin. Right right. All right. On we go were going to talk a little bit about how the small investor might be responding to all these things even as markets continue to hit new highs some individual investors seem to be sitting out the rally. The wall street journal finding 1 trillion has been pulled from Retail Investor mutual funds since 2012. She wrote this story, shes at post 9 with us to talk a little bit about the findings nice to see you. Thanks for having me. So i kind of can go both ways with with this obviously there has been this big kind of cumulative outflow from domestic mutual funds what did you find in discussing these things with some actual wouldbe investors well, we found a variety of reasons for why people arent investing. When you talk to younger folks, you know, you have some of the obvious answers, lot of people have student debt, theyre not in the position to be putting in the other, you know, the money that they are able to save into the stock market and then we also have people who were on the younger end who were saying, you know what, if im going to invest in something, its going to be crypto, which is sort of funny because you think of people who think of the stock market as being too risky to invest in, you dont necessarily think they would go all in on bitcoin, but right. There you have it. That does point to a generational divide. I also wonder, throe, if the demographics of who already own those mutual funds now that theyre in retirement years is kind of skewing the numbers on how much money is being pulled out because if you look inaggregate, people are well exposed, who own whatever portfolio, theyre pretty well exposed to the markets. I think the feds survey of Consumer Finance has found we have more than half of american who are exposed to stocks in some form. So its certainly not, you know were not saying nobody is investing in stocks anymore but what i think is interesting is just the culture reluctance, skepticism, that has persisted even among people who are invested in stocks im sure all of you talk to people who every day are like, oh, its another record. And its interesting to see why, you know, how even with the economy continuing to grow, relatively steady jobs numbers, lets forget about todays a lot of people just do not want to be in stocks. Heres the thing, isnt that bullish . I mean, the moment the Retail Investor dives in, thats when Institutional Investors say the thing is over, right yeah. So what youre telling me, if you think its you know, all these this is accurate, is that theres still room to run that would be what historically you would find, right . I mean, i think thats why people are freaking out about bitcoin. You talk about the freeze of the 90s, lets say, people remembering you go to the barbershop and people were swapping tips on what tech stocks to buy. Right, right. They say thats not the case this day with stocks that might be the case with bitcoin where you get into an uber and your driver is talking about what cryptocurrency im curious where that money with they took it out of the stock market do you have any idea where it went passive index funds and etfs. Id be curious thats still the stock market, though but thats my point my point is youre saying that individual investors are no longer in the market because theres money coming out of mutual funds my point is that theres probably been over 2 trillion put into etfs in the last five years. You still got good point. 15 Million People out there with 401 k s, 10 million in ira bs. I dont buy that individuals arent in this market. I dont buy it. Does that mean were late in the sector, late in the cycle, therefore, you should be worried . Do you buy the premise earlry, talked about when the Retail Investor dives in, its over. Typically, thats what you want to see. Clearly the composition of the Retail Investors change dramatically it isnt the taxi driver and pets. Com you know, theres been dramatic income inequality and most of the people that own stocks are in a very small group at the top. All im saying is i wouldnt go by the fact that theres been this move out of active managed mutual funds as to say that the individual investors not in the market i dont think thats the case. I would just point out, michelle, that as somebody who in 2007 wrote a cover story that said wheres the little guy in july of 2007, three months before the market topped, i think we shouldnt anchor ourselves on the idea that the shoe shine boy has to be in before it all ends on the other hand, you have a Public Participation phase you should expect at some point in the bull market. Maybe part of thats still ahead of us. Im happy tone in i dwyer is back with us again tony, youve been thank you my kids dont listen to me, either, so yes, where do can you think we are in the cycle, article in the journal about the small investor and the role theyre playing in this market right now . Theres two things. I think mikes right, i dont think you can gauge it on what the the shoe shine guy right now is talk bing about bitcoin lets put that aside what i would disagree with was the prior statement that the stock market is only helping the guys at the very top theres no question about that the wealthiest people are benefiting from the stock market gain however, most bluecollar workers, most of the country, has pension funds, is in 401 k funds, has iras. Most of which are tied to stocks so i would take a different tact that the little guys not the little guys involved in an incredible way the economy is getting better. Jobs are going up. The stock markets rallying. While that sounds too good, it sounds kind of like yeuphoric, kind of think back to 1995, a time when we werent doing these interviews, bill, and michelle, back then, netscape came public, doubled, and then doubled again. And that was considered the euphoria in the marketplace. It took a little while longer. So i think it took several years more. Have to be very careful about how quickly we say add a median p e or given the inflation environment that its over. Got it. Good point, tony thank you. Well end it there tony dwyer, ian. Thanks for being here. Thanks for having me. The second hour of the closing bell is just Getting Started on this recordbreaking week for the markets ahead, why larry kudlow thinks the bitter and very public battle with steve bannon is the best thing that could happen for President Trumps agenda plus, how marijuana states will fight back against the feds who are trying to snuff out the budding industry and three big nfl money stories. Raiders changing the economics of coaching. And the Battle Royale in new e csid. Thlong bell is back in two minutes. 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. A feud between President Trump and his former chief strategist highlighting another very busy week in washington busy, thats one way to describe it eamon joavers is live at the white house. Eamon . Reporter there are a lot of ways to describe this week in washington but it was a tough political week the Trump White House here loping to turn the page now. The president left the building, he is off to camp david where hes going to be spending the weekend with Republican Leaders there you see his departure from marine one gary cohn, white house economic adviser, was on the helicopter with the president so much speculation about whether or not gary cohn would be staying or going from this administration he told me this morning he is going to stay. Hes going to be at camp david for the weekend with the president , top advisers. On the agenda there is pretty much the entire 2018 political agenda economic growth, national security, immigration reform, the military, infrastructure, the budget, welfare, the opioid crisis, health care, the 2018 election, and the president s nominees so that is the official list of subjects to be discussed at camp david over the weekend and gary cohn told me today that one of the things theyre going to try to figure out this weekend is whether or not they do welfare reform first, or infrastructure thats a big question strategically because they think that infrastructure needs a long series of Committee Meetings up on capitol hill, welfare reform could probably move more quickly, but they need budget reconciliation to do that. That raises a number of other strategic concerns so theres a lot to discuss there this weekend. Im sure very few of the officials will be discussing the new Michael Wolff book with the president after the flak this week the white house very much hoping to turn the page, so to speak, on sththat and get into the legislative rebadebate next weed move on. A lot of people will be turning the page in the book since it came out today. Reporter no pun intended. Thanks, eamon. Reporter you bet. Thanks, eamon, see you later. Lets talk more about whats happening in washington a joining us is larry kudlow, cnbc contributor thank you for being here youre in the book price. I didnt read the book yet. What did they say . Mentioned theres a battle, steve bannon wants you to be head of the National Council of economic advisers. Jared kushner gary cohn. Im for gary cohn. We know how that turned out. He did a great job on taxes im terrifically happy to come down here every friday. You tweeted out today you think its a good thing, bannon, your supportive, previously. Good thing hes gone. Steve ban ennnon and i are friends. Treated me great his policies always troubled me. He wanted to raise tax rates on the most successful people in fact, h e wanted the top rate to go from 39. 6 to 44 . Steve moore and i on several occasions tried to talk him out of that. He has this notion that we want to hurt the upper end in order to help the middle thats just economic nonsense. Its economic illiteracy you want everyone, in fact, the basic definition of populism is prosperity for all thats the most populist thing any administration can possibly do and Steve Bannons economics, you know, would have ruled that out. Hes also antitrade. Fierce protectionist, wanted tariffs everywhere, wanted no deal the anywhere. He was for the b. A. T. Tax, imports and so forth. Border assessment tax. Populism, okay, populism is so ordinary folks, mainstream folks, run the country, not the government okay im for that populism is also against crony capitalism. Right. And the swamp im for that the elites but, but, but, populism means prosperity. I get that. Bannon didnt have prosperity policies im glad hes out of commission for a while. Im glad youre bringing that all up with all due respect, my dear friend, were not here to talk about populism we want to talk about the book you think this will have a positive impact on the president down the road. Who why . Steve bannon stabbed the nth the back caused this goofy meeting, traitors, nonsense. Treasonous. Nonsense. What steve bannon did to his benefactor donald trump is to commit political treachery. How is this positive for the president president . Ing much at all. Steve bannon was bad for the president . Steve bannon was great for the president in a sense that bannons political standing is now zero he has selfimolated his pac has no money may lose his breitbart as Rebecca Mercer hinted. This idea that bannon is going to run a counterrevolution against the senate and the house, thats all out the window look, again, its not personal, but on economic grounds alone, bannons selfemulation is good for the president , our country, good for the rest of the world by the way, bannons ultranationalism would have been very damaging on Foreign Policy and by the way, the president moved away from most of it, moderated on most of those issues and the president publ publicly rebuked bannon on a 44 tax rate but steve bannon is going to be gone for a while what we need to do is focus on a lot of good things that are happening. Okay in the stock market and the economy and regulations and so forth and so on. Trump has achieved enormous progress despite all the media criticism. Steve bannon has cooked himself. He finished in politics basically. Does that mean to go to a live issue forward going, on trade, thereat tat the presiden have less zerosum thinking on trade deficits ive done my best on that to. Be honest. As have others theres a battle in the white house. Gary cohn more of a free trader, Steve Mnuchin more of a free trader, wilbur ross more of a protectionist. Well see. I would say for the first year, mike, trump has moderated his views. The campaign bark is bigger so far than the actual government bite but theres some crucial issues which we are all watching and if the president pulls out of nafta, not renegotiates, but pulls out, i think that will be very damaging. I think youd see a stock market blowup on that, alone. Because theres a big thing coming up, the election in mexico in july a crazy leftist that would also like to be out of nafta so we could really see some damage. You couldnt separate the economies of mexico, United States, and canada you cant just say thats illegal. It is. Is the reality thats why i think the president will negotiate bannon wouldnt want that. I think for the good of the economy and the country and World Economy and President Trump, let steve bannon cool his heels, maybe produce some hollywood movies i dont know what you do out there. On policy grounds, he was antithetical to my views, even though, by the way, hes a good guy. I want to say that hes a good guy and a friend. And its go read the book. Youre in it very exciting thanks, larry have a good weekend. You, too. Stocks rallying despite that weaker than expected december jobs report we got this morning. Is there any stopping this stellar start to the year for stocks plus nfl tv ratings dropping while a coach gets a 100 million deal closing bell is back in two minutes. That youre idling in your car, youre sending about half a gallon of gasoline up in the air. That amounts to about 10 pounds of Carbon Dioxide every week. malo hutson growth is good, but when it starts impacting our quality of air and quality of life, thats a problem. So forwardthinking cities like sacramento are investing in streets that are smarter and greener. The solution was right under our feet. Asphalt. Or to be more precise, intelligent asphalt. By embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic. Then that data runs across our network, and we use it to optimize the timing of lights, so that travel times are shorter. Who knew asphalt could help save the environment . Nfl ratings declined for the 2017 season. Down nearly so versus 2016. Is this aviewers shifting away from football . Joining us, executive director of the sports and Society Program at the aspen institute. His book is called game on the allamerican race to make champions of our children. Tom, welcome what do you think . I mean, as it stands now, in the nielsen ratings, Football Games are still plamaybe eight out ofe top ten shows viewed each week we all know Television Ratings overall are going down is this just an nfl problem or tv problem, do you think yeah, lets frame this. The nfl is still a very successful product on tv, but there are a number of factors in play here. I mean, you know, people are watching less tv, you got all the cord cutting, you have the nfl red zone where, you know, viewers can shift from game to game you have the concussion issue which has caused some people to turn away. There are a lot of factors in play and what happens next, do you think . Are they going to try to fix some of those things another complaint i hear frequently is that its boring there are so many penalties, the thing takes so long, and its just too slow. Yeah. Well, look, i mean, you know, soccer its really interesting, soccer is rising in this country a lot of people are now watching, you know, that game. Its 45 minutes of action. You take a break for 15 minutes, come back and watch another 45 and youre done. You dont have to consume as many commercials as you do with an nfl product or otherwise. So, i mean, they have a number of different challenges, but, i mean, look, i think the one that hasnt been really talked about has been the is the pipeline. You know, fewer kids are playing sports playing sports in general these days but football, in particular. You know, kids between the ages of 6 and 12, we track all this stuff at the aspen institute, project play effort, you know, is down, you know, 500,000 kids since 2009 its down about 500,000 kids a year in the 13 to 17 category as well thats a million kids a year so if ratings are down by 1. 6 million or so people per year, i mean, thats a million right there and maybe they bring a parent or two along with them. So the nfl has a real pipeline problem. As do some of the other leagues, Major League Baseball and the nba have certainly taken aggressive measures. So how do you reconcile all that with jon grudens new contract that were hearing about with the raiders that is going to pay him roughly 100 million over the next ten years . Hes getting player money here well, look, again, the nfl is still a very Good Business theres going to be plenty of money coming down the pipeline, longterm media contracts. The nfl is an entertainment product. I think is fine. It certainly if you have a good coach whos going to do great things with your program, you know, its worth it, and jon gruden certainly has that type of pedigree. What do we know about this contract does h e get this money no mattr what what if hes two, three seasons into this and hes not doing so well you know, thats a question for an nfl reporter whos a little bit closer to that deal i havent reported that out. The other story were following right flow, the seeming feud going on within the Patriots Organization between the owner, the coach and the quarterback. You know, this has been clearly a dynasty for a number of years, but they dont seem to g b a dynasty for a number of years, but they dont seem to g getting along even though today they came out with a statement denying all that what do you make of that, what do you thinks going on there . Look, you know, i used to cover the nfl and theres a game once a week and in between youve got a you to develop interesting story lines. Living in new england, i dont worry about the patriots, okay were talking about tom brady, bill belichick, and, you know, mr. Kraft. I mean, they have a long track record of history. Issued a statement saying, hey, look, were going to be fine here, we can Work Together im not saying the reporting is bad on this at all its just i kind of have learned to trust that the patriots are going to figure it out. As long as theyre winning. But do you think that if they started to lose, that we would hear a very different story from these guys would they be quicker to find a younger quarterback or different coach, do you think . You know, its been so long since the patriots actually lost, its hard that sao say. Of course, if you lose, you look at whether your systems are right, whether your personnel is right. Sure at some point, this dynasty will end and theyre definitely at the, perhaps, near the end of this run tell that to the new york giants theyve been very patient for a number of years but i digress as a giants fan tom farrey, thanks, good to see you. Thank you. We have a news alert on twitter. Julia boorstin, whats going on . Bill, well, bill, twitter is responding to those questions and requests that twitter block President Trump, raising questions about whether some of his tweets were if violation of the Company Policy the company posting a blog called World Leaders on fwtwitt saying they have no plans to change their policy, saying, blocking world leader from twitter or removing their controversial tweets would hide Important Information people should be able to see and debate it would also not silence that leader but certainly hamper necessary discussion around their words and actions. They go on to say they review tweets by Leaders Within the political context. And will enforce the rules accordingly but no changes to twitter policy for now back over to you huh interesting. All right. Thanks, julia. Time for a cnbc news update with sue herera. Sue . Thank you, michelle heres whats happening at this hour, everyone the white house confirming President Trump spoke to mitt romney by phone yesterday. The president reportedly wishing romney good luck as romney considers running for the senate seat soon to be vacated by the retiring orrin hatch and representative Elijah Cummings of maryland is currently in the hospital. Thats according to politico cummings has had a series of Health Problems though its not yet clear if this latest incident is related. Also today his wife suspended her campaign for governor of maryland the cdc is preparing for a nuclear event. It will put out a briefing on january 16th titled Public Health response to a nuclear december nati detonation. Dont be too alarmed the cdc says a Nuclear Detonation is unlikery a hockey fight ends badry for joe thornton of the San Jose Sharks if you look roughly when the referee separates them, he drops something on the ice not a hockey puck. Its a big chunk of thortons beard. Boys not playing nicely at all. Ow. Ow is an understatement. Ow, ow, ow. You know, back in the day they told us not to grow our hair because that could happen, right . Football game or its really true. I know well, he may be well see if hes clean shaven the next time. These hipsters love that beard look. Exactly sales thank you, sue. Have a good weekend have thanks, you, too see you later. Are the banks about to lift the markets to an ever higher level . That report is coming up plus the white houses new push to stem states rights in the marijuana battle will it really stop the budding xt ocinst nen losing bell. Welcome back if youre just joining us, want to know what happened on wall street today, its pretty much what happened yesterday and the day before that and the day before that. And all last year. Pretty much more records more gains capping off the best week for wall street pretty much since 2006 the first week of the new year and powered all the way into the close. I mean, that 220 number, that was the highest. High of the day. High of the day right at 4 00 so records for the dow, the s p, the nasdaq, and the russell. So clearly an historic week for the markets to kick off this new year todays rapid recap were taking a look back at some of the key moments. Take a look. Kick bing off 2018, the major averages off to a strong start following a recordbreaking 2017 a lot of people were bored with the upside. They were bored. They were yawning that stocks who are they im going to wake every one of them up. Break out the hats. The nasdaq closed above 7,000 today for the First Time Ever. Tech leading todays recordbreak bing charge the s p 500 topping 2,700 for the First Time Ever. There it is dow 25,000 there were those who say we wouldnt break 25,000 by the end of the eighth year and were in the 11th month. So i guess our new number is 30,000 i am so bullish i cant i have to sit down and calm down i just have a random trader here doing his job with this hat. Thats very nice for the First Time Ever the Dow Jones Industrial average is closed above 25,000. December jobs comes in at 148,000. Shy of the 190,000 estimate. Futures are firmly in the green. This is clearly a mega riskon week to start the year off with. We are finishing the day, the week, the first week of the year with a bang. Dow jones industrial average higher by more than closing at the highs of the session up almost 214 points. 25,288 you sounded absolutely euphoric there, michelle. Yes it was a wowza week. Markets closed out the first week of 2018 on a very strong note what happens for the rest of the year, does the momentum continue joining us now to discuss how are fast money traders guy adami and david seaburg. Guy, did you hear that tape . Ralph saying he can barely sit down hes so excited are you as excited as everybody else is . Hes standing, clearly. Im sure theres medicine that can help him with that problem, mcc you hear a tape like that, bill, youve been around for a while, not saying youve been around a long time what are you saying because youre still a very young man. You get nervous, dont you . You do get a little nervous ill say this. I said it yesterday. Sometimes the crowd is right i mean, sometimes you got to go with the crowd thats what we find ourselves in i tell you why, jobs number today wasnt great were in an environment where the dogma is such that bad news is good news and good news is good news. If the job number was great, people would have said look how the economy is doing, look how tight the job market is, were going gangbusters. On the other side of the coin is this job number might take the fed off the table for a while, so we find ourselves in an environment where every piece of news can be construed as bullish for the marketplace. David, you were nodding your head you agree with him or are you being polite i absolutely agree with guy we see eye to eye on that. No question the narrative for this real market rally has been earnings, obviously, and its been fueled by Global Growth if you look at the u. S. Sort of upside surprises to Economic Data over the past quarter several quarters, its really shown a significant upside versus, or rate of change higher than the em or eu. Youve seen u. S. I think benefit. That may shift, however. I think you may start to see that slow down look at today as an example. We see walker sort of data i think that could continue over the next sort of several quarters you could see em and eu maybe show some better data, so money can flow, there my opinion, into those regions and probably see outperformance there versus u. S. Market bs i think you have to stick with the growth mnartive, stick with the u. S. Market in general for the long term. Because the earnings have been really supportive of equity valuations. Guy, looking ahead, weve had this acceleration certainly a grab for risk coming into the new year, globally often in these Earnings Seasons is when the market kind of churns and flattens out. At least the past couple of years. So are we setting ourselves up for one of those things in the next couple weeks where we go into Earnings Seasons in a high and have to backfill thats what the naysayers would like given the last couple days, backfill wouldnt be the worst thing in the world were getting banks next week. I think banks will continue to surprise us to the upside. In terms of earnings, i cant speak to what the stocks will do on the back of that. Weve seen Goldman Sachs the last couple quarters give you great numbers and the stock the move has not been commence ra innocence r commensurate to the numbers. I do think the banks will surprise to the upside im of the belief that the banks are still trading at a discount to where they should be in terms of price to book i dont think we should go back to the levels that the we saw in 2007, 2008 i think somewhere around 1. 7 times, 1. 9 times price to book makes sense for a lot of these names. W when you look at Goldman Sachs, for example, gets you north of a 300 stock not suggesting it goes there next week. I think thats sort of where were moving toward. All right, guys, we got to go love seeing you and having you here well see you at the top of the hour as well. Bye, bill, bye, mike, bye, mcc. See you later dont forget to tune into fast money coming up at the top of the hour right here on cnbc. 10 billion. Thats how much one analyst estimates that Legal Marijuana sales totaled in 2017, but that fledgling industry is now at risk from the Trump Administration well see how angry two men leftlef edn e duryvest ithinst are reacting next on closing bell. Your joints. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. As you probably know by now, attorney general Jeff Sessions announced yesterday his plan to repeal an obamaera policy that gives states the power to decide on the legalization of marijuana. How would repealing that policy impact state economies and the Marijuana Industry joining us to john, john, founder of navy capital, and major Michael Hancock of denver. Gentlemen, good to have you here sean, let me start with you. I want to make sure i understand this under the obama administration, they told federal prosecutors if youre in a state where marijuana is legal, we disincentivize you, discourage you from prosecuting. Hands off. Jeff sessions now says gets rid of that. If you want to prosecute, you can, depending on the severity, depending on if you have the must be to do it, et cetera, right . We dont know how many federal prosecutors are going to get that active, right you hit on the key point, if you have the money to do it. What the Senate Passed is rohrabacher fa Rohrabacher Farr amendment youve already seen all the major legal states, the attorney generals coming out and saying were not going to prosecute, in fact, were very encouraging of this nascent industry. Mayor hancock, im very curious, i mean, first of all, do you think whoever the u. S. Attorney is for your region would be likely to prosecute, and if he or she did, how would the state of colorado respond . Weve already had conversations with our attorney general, as well as our u. S. Acting u. S. Attorney who clearly have said theyre not going to change anything with regards to the industry here in colorado. Let me point out what makes this an irresponsible move by the attorney general is that these states like colorado and washington and now california, these are this is an industry thats moving already. Its a billiondollarplus industry here in colorado. Thousands of jobs and what this move has done is created uncertainty with regards to investors and businessowners and employers, of course that does not help this industry at all how do you respond to that . Go ahead, mike. No, exactly the market response to this, you think it was kind of an overshoot . I think the market response yesterday made no sense. The companies and these etfs are mainly canadian licensed pru ed producers who if anything are beneficiaries of increased uncertainty in the United States because the Canadian Companies now have billions of dollars of market cap to go around the world and grow their product while these etfs are getting shorted by fast money guys who dont realize that the actual net beneficiaries are those outside the United States who can get scale. Mr. Mayor, how much tax revenue are you bringing in as a result of marijuana . On the recreational mariijuaa in 2017 we forecast anywhere from 18 million to 20 million in sales tax revenue. Whats the percentage of your annual budget does that represent . About 3 of our annual budget we program those moneys for the Regulatory Framework that we have implemented with regards to police, fire, inspections. Of course, education around the implementation of marijuana with regards to our young people. So, you know, cities also fall into this uncertain category when you have the attorney general acting as irresponsible as he has acted with regards to the memo. You sound like you dont expect anything to change. We dont, but when we see an industry, again, that is dependent upon investors, people who are putting their hardearned money into the industry, this sort of move does not help whatsoever. Well do everything we can to assure the investors what we would hope our attorney general would do to work with congress, begin the process of working on a banking pathway to banking for this industry. Because, again, this is the trend and all it does is this move demonstrate how out of step the attorney general sessions is and the administration is with the rest o the country. Sean, we have to go thats one critical area that has yet to be reconciled banks are reluctant to do any loaning to those companies. Thats why we as investors are much more excited about whats happening outside the United States. You have these Canadian Companies whose total market cap is roughly one times the sales of what canada is going to do in marijuana sales in 2019. The industry is growing 14ur00 , whats more exciting than that right now . All right, thanks, sean, thanks, mr. Mayor. Thank you chinese president xi jinping could be ready to welcome our robot overlords based on the reading material on his book shelves in his annual new years day address that we see back there. We did a lot of inspection of that bookshelf behind him there. Thats coming up next on closing bell. Tonight st meyonfaon, its time to fade the rally in a surging group of stocks. Thats at the top of the hour so dont move a new report out earlier this week says that china is building a 2 billion Artificial Intelligence park as it looks to succeed, maybe even prevail in the ai race. The report comes on the back of chinese president xi jinpings new years speech he gave on sunday in this video we were told there were two books about ai located on the bookshelf behind him. One of them was called augmented life in the smart lane and the other is the master algorithm. Brett king is founder and ceo of movein. Com and is the author of one of the aforementioned books, augmented life. Welcome. How are your sales in china . Its sold out on amazon, obviously a tacit endorsement by president xi is good for sales youve got people like Stephen Hawking on one side afraid of it, and elon musk is a champion of it how do they view it in china they see it as part of their infrastructure for building smart economic systems that can compete for the future eric schmidt came out this week and said by 2025 he expects that china will be ahead of the u. S. In terms of the ai race. The u. S. Does have an advantage in terms of chip infrastructure, but were not investing enough in education excuse my skepticism, but all over the world i see these governments that build, throughout europe, every company has its startup planet or startup nation and theyre creating a new silicon valley. Enterprise zone governments dont suddenly make a silicon valley. Silicon valley came from something much more organic. You do have baidu, alibaba, these players investing strongly chinas facial recognition systems, within three seconds you can find any one of the 1. 4 billion people in china using facial recognition because its a police state they do have the ability to push through initiatives like that they dont have to worry about civil rights, i guess. Alibaba and baidu are investing heavily. All right the race is on congratulations on the book, selling as well as Michael Wolffs book not quite but theres more people in china, he makes it up in volume. The question i have is whats trumps ratings. Well leave it there, thanks so much. One of the most wide reaching changes to military pay and benefits ithn e last 70 years is now in effect, thats next on closing bell. Mike and i are both veterans, both served in the navy. I do outrank my husband, not just being in the military, but at home. She thinks shes the boss. She only had me by one grade. We bought our first home together in 2010. His family had used another insurance product but i was like well ive had usaa for a while, why dont we call and check the rates . It was an instant savings and i shouldve changed a long time ago. Theres no point in looking elsewhere really. Were the tenneys and were usaa members for life. Usaa. Get your insurance quote today. The new year is bringing sweeping changes to the militarys retirement system the biggest since world war ii its a move that will impact millions of current and future Service Members. Sharon epperson is here with the details. Reporter how are you doing, michelle a new mission aims to ensure more of those who serve are saving for their financial future for many military personnel, the changes represent a critical choice for their retirement. 23yearold zack beckman is a Government Contractor in the private sector and a volunteer in the marine corps. It was my big dream, my dad was a marine, my grandfather is a marine reporter now corporal beckman is being offered a choice for his Financial System they never had the old system, you had to basically stay in 20 years before you get get any type of retirement plan. Reporter under its legacy retirement plan, military members receive a lifetime pension equal to 50 of their base pay to earn it, they must serve at least 20 years many aim to hit that target but only 19 reach it. The majority leave the service with nothing today people move from job to job. And they need a benefit, a retirement benefit that they can take with them the reason that Congress Passed a law reporter starting this year, Service Members entering the military will be part of the new blended retirement system. It combines a pension and another plan like a 401 k , putting more of the responsibility for long term savings on the members shoulders. It starts to cause them to learn how to contribute to their own future, their own retirement reporter those with at least 12 years of service will stay on the Legacy Program but 1. 6 million who joined after 2006, including corporal beckman, have until the end of this year to choose which plan they want. Corporal beckman says his choice is clear getting my civilian job and having my marine corps experience, i know the value of a dollar, and i see its important to save up for the future reporter to help Service Members like corporal beckman, the military is requiring mandatory Education Training as well as at bases and online. 80 of those who have to make the decision are taking the classes. But Financial Advisers worry one course may not be enough thats all we get too exactly but theyre structuring it the way its been structured for the rest of us theyre basically playing catchup they want to attract more millenials and people who may want to try out you tell service but dont intend to stay there for two decades. This way theyre getting the right people, theyre getting great people, to stay, to come, at least for several years, and build up their requirement savings at the same time its going from defined benefits to defined contributions, the nomenclature weve used all these years and theyll still get that pension, it will be less than the legacy system, but theyll have the opportunity for the pension if they indeed stay for 20 years great stuff, that you arnk y sharon, good to see you. Have a good weekend. Kelly is here on monday, presumably that does it for closing bell. Thanks for joining us. Have a great weekend fast money begins right now, which is what melissa is about to say right, bill, fast money starts right now live from the Nasdaq Market site overlooking new york citys times square im melissa lee. Tonight on fast, forget about bitcoin. Its biggest rivals are surging to new highs this week, including ripple if youre not sure what the heck ripple even is, dont worry. Weve got a deep dive and bk will show you how to buy it. Plus netflix is heading to the red carpet with the most golden globe nominations ever for its hit shows. Weve got the