First breaking news on how the tax plan will impact you ylan mui is live on capitol hill. Reporter treasury secretary Steven Mnuchin spoke moments ago about the administrations first step in turning the tax law into reality. Treasury department and the irs have just issued new guidance it to employers, telling them how much money to withhold from their paycheck under the new tax law. The irs will be releasing a new withholding calculator that will be vail on irs. Gov by the end of february. This will help provide individuals with certainty, so that they are neither overwithheld or underwithheld and can plan financial decisions. Reporter democrats have criticized the rollout of this process, saying that many people could actually end up paying too little in taxes. Secretary mnuchin said that claim is ridiculous, and that this process has not been politicized. Now, the white house is celebrating todays guidance as a win that will put more money in it workers paychecks but the same time they are facing the deadline of january 19th to keep funding the government and the white house just said they have not reached a deal on Immigration Reform yet thats over deferred action for childhood arrivals has been a Sticking Point in those discussions and there is no deal on that issue yet, kelly ylan, thank you ylan mui tracking this all for us. All right. Lets turn to the markets now. The stocks as weve established rallying to new highs. The banks now are gearing up for their earnings this will be key to starting off the earnings reporting season. Blackrock, jp morgan, wells fargo, pnc all reporting tomorrow morning and the impact of tax reform will certainly be top of mind. Wilfred frost is with us at post 9 with a look at what to expect. Hey, bill the key focus this quarter will be on the earnings call, themselves, in particular, how it relates to tax reform as you said, including guidance on future effective tax rates, the likelihood that potential benefits get competed away or reinvested and impact of some of the more obscure parts of the bill management would like to address the sudden spike in yields that weve seen in the last few weeks. Both tax reform and rising rates should be bullish for forwardlooking commentary from management morgan stanley, for example, estimating that lower tax rates should boost the eps in 2018 by 16 . But when itle comes to the earnings, themselves, some concerns to watch out for. Tax reform is bad for this quarter, due to the oneoff writedowns, although those have been well telegraphed in recent weeks. Second, trading will be down again, while consensus forecasts is for about 16 yearonyear decline, Deutsche Bank guided down 22 just last week. And third, loan growth has slowed, driven by commercial and industrial overall, despite some tough comps for the quarter, optimism about the future has supported Bank Share Prices so far this year the kbw banks index up nearly 5 , having another decent day after a great day yesterday as yields were rising. Were going to talk about this in just a moment. Stay right there. We just have a market flash on pitney bose whose shares are popping. Reporter shares of pitney bose were initially halted but resumed trading. A report from bloomberg that the firm has attracted buyout interests from blackstone to private equity firms the report cites that pitney bowes held preliminary talks with suito erors about a sale l month and the ceo is looking to sell the company again, youre looking at the stock up more than 13 here. Back to you, kelly all right seema, thank you. Wow. Keep an eye on that one now lets get back to talking about the banks. With those earnings coming in the morning, are they a good bet . Ken leon joins us from cfra. Ken, like many, youre expecting this to be a messy quarter, arent you theres going be lots of movements and adjustments but i think investors need to focus on two things one, with all these tax adjustments in 2017, looking forward, what impact does that have in terms of cash flow or return of capital . We think jp morgan will especially talk about how its going to improve their ability to return capital and dividends and buybacks next year as the other banks. I think the core earnings ken, let me just jump in on that point before you move on, because this morning, the ge journ journal or other analysts raised the prospect goldman may have to diminish share buybacks because of the oneoff hit its going to take from this. Do you have those concerns it sounds like you think the opposite may happen with an increase in capital return. So its really going to be played on two factors. One, would be the tax effect, and secondly, were going to have terrific earnings in 2018 thats going to flow down to capital. So i think when you look at dividend increases typically happen in the Third Quarter of 2018 thats after the Federal Reserve stress test. Theres still going to be pretty good so i would stay on the optimi optimistic side. Leon, in terms of those writedowns that, of course, we heard a lot about, to what extent do you think because those writedowns will be included in this quarters earnings that some of the banks will try to flesh out other bad news and get one quarter away where they all miss and, therefore, might have miss tomorrow more than people expect so they can blame it on the oneoff writedown because of tax reform and start 2018 afresh no, thats a great point, and its also year end, and youre also 2017 is higher tax rates. So a great chance to put in more liabilities, charges, into the Fourth Quarter again, that gives momentum for a clean up 2018. So, hows the individual investor to interpret all of this, if the analysts are having trouble trying to figure out what to pick apart with all of this, looking ahead, should we just look past this report and look to the rest of the year, or what do you think . I think you stay focused on the core business, and for banks, they have the ability to grow loan growth has been modest. We think its very much better for consumer than industrial the yield spread has been at a record low or narrow thats going to widen through 18 with multiple increases from the fed. That creates more opportunity for higher earnings for these banks, and also theyre putting a lot of effort on cost controls were going to hear about that from both the banks tomorrow as well ken, just kicklquickly, who e your favorites in the space, what would you earn into the earnings season . Sure. Tomorrow jp morgan is a buy, wells fargo is a hold. Our top pick which we think they have all cylinders on fire is bank of america. They report next tuesday we have a strong buy all right ken, thanks for joining us ken leon. And wilfred frost, the base erosion i thought you pushed me on that, the base erosion antiabuse tax. Eigantiabuse tax. How companies can push money around into Different International entities thats been removed. We dont yet know how big of an effect it has on banks thats one of the factors. Clearly in the past banks paidless than the Corporate Tax rate its it co its come down to 21 . Clearly, net net, tax reform is good for them. Thanks, frost. Thank you. I know, my apologies to ken i was just in the leon, thats a cool name. It is we have a busy day, wilf, thank you. Beyond the banks what are investors expecting for the rest of earnings season we turn to bob pisani for that. Hello, kelly. Earnings season is upon us theres a lot at stake in this one. Heres the good news first, this is going to be one of the best quarters in a long time look at this earnings expected to grow nearly 12 . Most importantly, revenue back is finally back. Expectations of a gain of about 7 , all 11 sectors in the s p are going to see gains on revenues and on earnings this hasnt happened since 2011. Second, Profit Margins are strong were still near a record 10 . Theres been fears that margins would begin eroding due to higher costs or lower prices that does not appear to be materializing. Finally, an lialysts are raising earnings estimates for the First Quarter. Thats the one were in. Not because of tax cuts. Analysts almost doubled expected earnings gains for financials on higher Interest Rates but also for Energy Stocks as oil hits mult year highs. Look at this almost doubling. There are concerns out there t the immediate risk to the stock rally is guidance d disappointmentes companies will announce theyre taking onetime charges. They may be reluctant to give the broad guidance the Trading Community is now expecting concerns over the fed raising rates aggressively, thats still out there. Thats very real its not an immediate concern. And finally the risk of a recession, this is the main killer of stock market rallies, historically, that appears fairly remote at the moment. But remember, guys, record earnings, Global Economic expansion, tax cuts, theres reasons the stock markets at new highs. Thats it. Guys, back to you. All right, bob, thank you see you in a little bit on the close. In the meantime we have 50 minutes left in the trading session here and everybody is off to the races we got pretty good gains for the dow, the s p, the nasdaq, the russell and especially the dow transports which are up 2 1 3 right now. We have much more ahead today on the closing bell. Ahead today, walmarts big move on pay. What other Corporate Giants are doing it and which arent whats it going to mean for the stocks but next, the flu strikes hard taking the 50 states out one at a time when we come back, where its heading next, and what you can do to protect yourself this could save you a trip to the doctors office. The closing bell with kelly evans and Bill Griffeth is back in two minutes r. James r. And associates. Anna speaking. James r. And associates. Anna. [phone ringing] baker architects. This is anna baker. This is what our version of Financial Planning looks like. Tomorrow is important, but youre ready to bet on yourself today. Spend your life living. Find an advisor at northwesternmutual. Com. [ phone rings ] hows the College Visit . Does it make the short list . Yeah, im afraid so. Its okay. This is what weve been planning for. Knowing whats important to you is why 7 million investors work with edward jones. Another big rally day for wall street. The dow up 155 points right now. S p, nasdaq, russell, transports it were like a broken record here so far in 2018 but that is the story. The strength continues for the stock market rates have been up, royoil, w about oil today . Yeah. More on that. The string today, retails very strong, airlines are very strong and energy is very strong. Today. So kind of a weird Cross Section there. Even the temperatures high seriously, its nearly 60 degrees in new york city this week it may feel like winter is starting to lose its grip but flu season is in high gear as you may be well aware. There are reports of crowded Emergency Rooms and treatment shortages all over the country meg tirrell is here with a look at how much worse this flu season could get, meg. Reporter hey, kelly, it is shaping up to be potentially be a worst one than weve seen in several years. We spoke to an e. R. Doctor at stanford yesterday who said theyre getting clobbered. He says this feels like the worst flu season since the 2009 swine flu. If there theres a couple reasons why its appearing so bad this year. First, the strain of the flu a more severe one, h3n2. The flu vaccine isnt looking as effect ive as in recent years we talked to a doctor from the nih said its looking 30 effective. In better years its 60 effective at protecting people from the flu Public Health officials recommend everybody who can get a flu shot, right now adults about 43 last year of American Adults got their flu shot. 59 of kids. And so that is pretty big business for the pharmaceutical companies that manufacture the flu shot of those, sanafee is the largest maker of the flu shot delivering 70 million doses to the u. S. For this flu season. See csl, australian Biotech Company with 50 million and glaxosmithkline with 50 million. Another thing people are talking about the flu season is the shortage in iv saline bags driven by the manufacturing slowdowns in puerto rico after hurricane maria. Now, there are already was a shortage in some of the products being manufactured there but that exacerbated these doctors were speaking with say they are finding workarounds but this is causing a stress to the Hospital System at a time, of course, during flu season when they really dont need it, guys. So, a lot of factors happening right now. Yeah, and stay with us, meg, if you would lets talk more about why the flu season is so bad this year and why the shot isnt really doing the trick. Yeah, joining us right now at post 9, dr. Tom freedan. Hes now president and ceo of resolve to change lives, part of a nonprofit Global Health Organization Called vital strategies good to see you. Great to be here. Will we ever get past i mean, we hear that this years vaccines only been 10 effect if will we ever get past this annual guessing game that the companies have to do where we have a more effective vaccine every year three things to understand, first, every year we track how flu changes around the world to try to predict whats going to happen here. Australia had a 10 effectiveness. We think we may see a 30 effectiveness. Thats still a whole lot better than 0 effectiveness which is what you get if you dont get the vaccine. Second, there are lots of things you can do besides or in addition to evacuativaccinationn help wash your hands, cover your cough. If you sick, dont go out and make other people sick if youre sick, go to the hospital or your cdoctor, see about getting tamiflu, that could reduce your illness or get you out of the hospital or make you not get as sick as you would be otherwise. Ive been watching my hans like crazy and i got the flu vaccine. Now that we know how bad this particular strand is, is there anything else people can do, are there followup vaccines or anything like that again, as you know, well know about new york city, its kind of hard to avoid contact with a lot of other potentially sick people. It is every year, thats why flu causes tens of millions of illnesses and hundreds of thousands of hospitalizations. Its why its important that everyone get a flu shot. But there are limited things that we can do as individuals. There are things we can do as a society. Some of the things, really insisting people not go to work sick, covering your mouth when you cough, do make a difference. If you do get sick, important to consider getting medication because that can keep you out of the hospital or make you less sick. Meg doctor, its meg tirrell out in San Francisco of course, flu is a huge problem but were also hearing about perhaps the u. S. And the worlds lack of preparedness for other huge pandemics and if we get something that we really have no way of addressing, pharmaceutical Companies May not be incentivized based on past experiences to really step up there and put aside their more profitmaking work to work there. What solutions do you see, if any, on the horizon for fixing that problem in ebola, the companies did come forward and come up with new products, they worked hard, put their own money into it so there was a lot of good governance, good citizenship during ebola we need that kind of approach even when theres not a global epidem epidemic that Means Congress needs to come up with the money to fund the centers for Disease Control and prevention, to be able to strengthen the systems around the world to find, stop and prevent Health Threats where they emerge so we can fight them there and dont have to fight them there. The iv bag thing is freaking me out when you read about this, how a basic thing can be in short supply i understand the puerto rico storms hit the articles raised concerns about the quality of these bags, period, over the last couple of years. What can be done there to quickly get more iv bags up and running and make sure that theyre not defective . Its important that we recognize that if you have a justintime delivery system, youre going to have a problem when you have a surge. You have to anticipate surges like flu and build up your stock before then and come up with redundant systems. In an emergency you dont want to be breaking the glass and trying something new you want to have a robust system you can scale up when needed. By the way, is it my imagination or are we heari ini more about fatalities this year than past years . Its likely that we may, tragically, see more fatalities this year. This strain of flu is usually tougher on the elderly, as well as on kids so that just speaks to your suggestion that if you get sick, you know, seek care immediately. Right . Absolutely. Dont wait. Dont get in bed and wait for it to go away. Particularly if you have an Underlying Health condition, a lung problem or heart problem or youre older, these are the people who are more likely to get into Serious Problems or women who are pregnant can get very sick from flu. Dr. Tom freidan, former direct r of the cdc, thanks for stopping by. Thank you. Meg, great to see you see you later. 40 minutes to go until the close. The dow up 163 points today. Remember yesterday the s p broke a sixday win streak the nasdaq is up 49. The russell is up 26. Coming up, walmart, americas largest private employer is announcing plans today to give bonuses and pay hikes to hundreds of thousands of employees were going to speak with a former exec about the move and the broader economic impact. And a little bit later, somethings going on in the commodities world that hasnt happened in if six decades and it all has to do with natural gas. Google that, kids. Well explain what it is when closing bell returns help you reach your goals. Its having the confidence to create the future thats most meaningful to you. Its protection for generations of families, and 150 years of strength and stability. And when youre able to harness all of that, thats the power of pacific. Ask a Financial Advisor about pacific life. 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. Fidelity. But through goodt times and bad at t. Rowe price weve helped our investors stay confident for over 80 years. Call us or your advisor. T. Rowe price. Invest with confidence. Two new appointme. Welcome back on this broad rally day, lets take a look at the sectors of the s p 500. Energy leading the way with a nearly 2 gain as we watch wti crude flirting with the 65 a barrel level brent almost at 70. Energy followed by Consumer Discretionary, industrials, and materials. All up more than 1 . Although we do have three sectors in the red if you know what Interest Rates have been doing lately, you can probably guess. Yep. Utilities are one of them, real estate the worst performer. Consumer staples also weak. Very interesting. Let me, a personal note from those of us on closing bell for the last almost two weeks, all of us here at cnbc have been holding our collective breath waiting for the birth of a child to our executive producer here on closing bell. Finally, 11 days late, she arrived. Yesterday. She waited until after the show was over. Yes, because shes already a keen observer. We welcome to the family of cnbc, alexis Helen Robertson the daughter of our beloved executive producer, lisa, and her husband, nick. Came in poun8 pounds not surprising given how she was late a big baby. Mom and baby doing great. We think dads doing great, too. I think so, yes. Might be a little shell shocked. Probably a little shell shocked. Anyway, congratulations. Thrilled for everybody. Welcome to the world, alexis. Thats great. So we move on. 36 minutes left in the trading session. If anything, the markets getting Even Stronger as we head toward the close. The dow up 163 points in record territory. Just as all the other major averages are. Up next, walmart sharing the wealth from its tax bill windfall announcing today more than 11 milli million employeesl cash in with bonuses and wage increases. Well talk to an economist about the larger impact and whether other megaemployers will jump onboard. Later as we mentioned crude oil is hitting its highest level. Thats many more than three y r years today as the Energy Sector leads the market higher. Well tell you whats behind this latest runup and how high prices could rise, after this. Welcome back here are shares of rh, restoration hardware, trading higher about 4 today. Got an upgrade to buy from hold at luke capital markets. The firm saying the Home Furnishings company will differentiate itself from competitors with its new design gallery. I meant to bring it in. Did you get one i got the catalog yesterday. Yes. I thought they had stopped it. No. Its still like ten pounds. Why would we get one . Ive never bought something there in my life, how do they even know . Poor mail carrier having to carry that thing. It weighed i wish we weighed it probably weighed six pounds. Easily. Easily. I felt bad. Enough already. You heard of the internet . We dont need paper anymore. I mean, i actually do like paper catalogs ill be honest not so many of them. It doesnt have to be so big. Quite so big. Crazy. Time for a cnbc news update. Here is sue herera hi, sue. I got a catalog, too, im e using it as a doorstep. Easy. We start out with secretary of state Rex Tillerson welcoming his norwegian counterpart to the state department topping their agenda their work in the Nato Alliance to counter security threats in response to a shouted question, tillerson said he would meet with President Trump later today regarding the iran sanctions decision. A Key State Department diplomat telling Senate Lawmakers that while isis has lost 98 of its territory in the mideast, the fight is far from over we have made significant progress since 2014 when isis first emerged, swept across iraq and syria that summer, inflicted suffering on thousands of civilians in the region, with impact far beyond. However, despite the advances made, our job is not yet done. And musician eric clapton says he is losing his hearing. He told bbc radio that hes struggling with tenitis, a ringing in the ear caused by noiseinduced hearing loss he says hes quite anxious about being able to perform due to his illness. We wish him the best. Absolutely. That is the news update this hour back to you. Im surprised we dont hear more rock stars with that problem. Oh, i think its a growing problem, really is unfortunate. Absolutely. Thank you, sue. You got it, guys, see you next hour. Yep. Walmart is joining a growing list of companies today who are sharing their tax windfall with employees. The retailer announced it in addition to awarding up to 1,000 in bonus. Its also going to raise its minimum wage to 11 bucks an hour starting in february so will americas other megaemployers be following suit . Eric chemi is back at headquarters with more eric thats right, guys. So what makes walmart unique here, its the only company in americas top ten largest employers, you can see those companies behind me, its the only company in the top ten thats announced a specific plan to raise wages for its employees. All these employers each have over 300,000 workers globally. That means not all of those workers are in the United States, but walmart is so big with 2 million employees its multiple times bigger than any other company in this top ten. Many of these top ten firms issued statements about the new tax law. Generally those are filled with overall comments and not a concrete plan to raise wages like walmart has but some other Large Companies that have fallen just outside of this top ten, they have announced significant wage hikes. For example, take a look at at t, theyre one of many larger companies. At t announced it would give a special 1 is,000 bonus to 200,000 u. S. Employees wells fargo said it would wage its minimum wage to 15 an hour. See them right behind me along with lot of other brand names. Boeing announced 300 million in investments for Corporate Giving and workplace improvements some analysts think with earnings season coming up you might see more big firms announce new plans to increase compensation because they get through earnings, get the positive bump from there and then get a pr bump from doing the announcements on this after that back to you guys thats what i wonder about, but then im cynical, is how much of it is a pr bump . No, we all thats why it will be interesting during earnings season for some of the companies that arent as high profile, if theyre doing the same thing or not. Can i jump in there kelly and bill go ahead. Please do. Its interesting if you notice a lot of those companies that were behind me, a lot of them were banks and telecom companies. A lot of people think this is to curry favor with the white house. Pnc, zions bank, regions bank, washington federal, bankcorp thats the biggest industry that we see thats been doing these hikes. Telecom, too, with m a deals if you want to watch two seconders that will keep doing this before, nose are tthose ar to watch. Eric chemi at headquarters. Thank you. Thank you. Will walmarts bonuses and wage hikes offer a quick jolt to the market or leave a longterm impact joining us to talk about it, bill simon, former president and ceo of walmart usa joe, chief economist for the americas at nat texas. Good to see you both bill, what did you make about the announcement today are we being cynical by saying that its a pr bump for a lot of companies . Well, no, i mean, walmart, they should be proud of what theyve done several years ago, actually when i was still there, they launched a program called pathways which started to move wages up, starting wages, particularly, but also started to focus on Development Programs to get more out of the workforce to teach them, to train them, and to don th develop them progression, probably in acceleration of that program its something theyve been serious about for a while. I think the cynicism is probably not warranted here theyre really sincere about moou moving wages forward and moving things forward today was a good step. Joe, from your lens thats one way of figuring out how broad and broadbased the impact is going to be from all of this. Are you looking at, you know, the prospect of higher wages across the economy with stuff like this contributing to it or are these just isolated cases . At this point, kelly, theyre just isolated cases. Its certainly good news for the workers. Everybody anybody gets paid higher wages, its generally a good thing, it should be celebrated however, from a macro perspective, for the wagegains to stick, and this means broadened out beyond just walmart, by the warks the average retail wage rate is around 18 an hour compared to the National Average wage rate of around 26. So its low, but broadly speaking can get faster wage growth, the economy needs faster productivity growth. So if this tax package is to work, it will work because it galvanizes companies to spend on capital, to get capital deepening, give workers the tools to actually get paid more because theyre more productive. Right by the way, speaking of walmart, hang on a minute, everybody, we have a news alert. Courtney reagan, whats happening now . Hi, kelly of course the big news out of walmart was this morning when they gave us that announcement about the increased wages, the bonuses and expanded benefits for employees. At the same time, walmart owns sams club and they have announced that they are closing 63 of their u. S. Sams club stores that represents about 10 of the total stores so of those stores, 53 will be closed permanently somewhere around a dozen will actually be converted to Ecommerce Fulfillment Centers the employees that work there will be given the options to potentially take a job at a nearby store, or stay at that store at the ecommerce fulfillment facility when thats up and running and, kelly, get this, even though theyre losing jobs at kuscurrent stores, sam club employees will be eligible for the onetime bonus that was announced today. When i asked walmart directly about the timing that seems a little interesting on a day when they gave us that big positive announcement about wages, bonuses and expanded benefits, they said, look, this came from two different parts of the business, yes, it is under the same parent company, this was not intended to be sneaky. We addressed it more on a local level when it comes to the sams club Stores Closing directly with the employees, and those local consumers, but we are certainly not hiding from it and we are confirming the closure of 63 of 650 sams club u. S. Stores kelly, back over to you. All right so thats about 10 . Which, i mean, thats a pretty big number. Big number, yep. Courtney, thank you bill, what do you think the significance of that is . Well, i mean, its really interesting to hear. You know, the challenge, i think, that they face, and really this is this is endemic of the transition that retails in, retailers are figure out a sweet spot or something they need to be famous for that theyre famous for have been very, very effective, but those who have just been okay at ek executing their plan havent done well. Walmart stores have done very well executing low price and broad assortment sams club in the arena that theyre operating with against costco hasnt done quite as well and this is a transition, and that really brings up my point about the tax bill, too. You know, walmart probably got the biggest tax break of any company in america one of the biggest ones. They had the highest tax rate and their revenue was so high. They probably could get between 2. 5 trillion and 3 trillion in tax breaks a year. The 300 million, 400 million they gave in wage increases and onetime bonuses is just a tip of the iceberg so they have a lot of powder and a lot of money to invest. And id like to see what theyre going to do with it because they have an opportunity to, you know, to build their business. This move with sams club isnt surprising its allowing them to focus on the hinge things that are worki which is the Walmart Stores and ecommerce business. Joe, it highlights this incredible transformation we have witnessed in retail in the past year with the number of store closures and the migration to online. The investments that have been made there what do you make of that all that and what it says about the economy right now as well . Its not just limited, bill, to retail. We talk about retail because of the socalled amazon effect, but weve Seen Technology impact so many Different Industries particularly Financial Services. I would argue that the disruption that technology has now caused in Many Industries beyond just retail is one of the reasons why wage growth has been soft that you got a lot of worker anxiety and in in those industries where automation, say, for example have been the highest like motor vehicles, youve actually seen, you know, the obviously worker pay not move as much so, to me, the its an extraordinarily unusual backdrop weve got but hopefully in the tax bill works as designed companies such as walmart and others will take that money and give it back to workers. I mean, thats what kevin the White House Council of economic advisers said will happen. This is good news if it continues and broadens out. Gentlemen, thank you, bill simon. Joe. Good to see you both thank you for your thoughts today. Yes, sir. And 20 minutes to go until the close now. Dows hanging on to a gain of over 150 points today. A strong rebound by the s p which was down yesterday first day after sixdaystraight rally. Nasdaq higher. And the russell 2000 small caps up more than 1. 5 today. Next up the rally and the dividend question. Are Companies Going to start hiking those quarterly payments to shareholders . Well get into that. Yeah, barclays projecting disney to be the Top Media Company in terms of revenue in the next five years. Maybe no surprise given the pending deal with fox, but the content play analysts are targeting as number two is raising eyebrows the company that they are. That storys coming up stay tuned had a coach in high school. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at td ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom thats lesson one. Education to take your trading to the next level. Only with td ameritrade. We have a news alert on one of the hot topics in washington today, that would be immigrat n immigration. Ylan mui has details. Reporter a quee group of bipartisan senators say they have reach add deal on the Immigration Program known as daca that Group Includes senators Lindsey Graham and dick durbin as well as senator jeff blake of arizona, a key voice on immigration. They say they have reach add deal that not includes a permanent solution for the undocumented children of illegal immigrants, but that it also would address some of President Trumps key priorities including border security, the visa lottery and what hes calling chain migration. Now, these senators say that they are working to build support for their deal in congress and that means they dont have everybody on board just yet, in fact, we just heard from the white house saying that, in fact, there is no deal on the immigration issue so far and the key holdup here remains in the house where conservatives say they want to see much tighter restrictions on immigration, in exchange for any action on some of these undocumented children. But there does seem to be progress now with this key group of bipartisan senators saying that they have reached a deal, that they hope the rest of congress can accept. Back over to you thank you, ylan ylan mui with the latest on immigration today. Now lets talk about the markets which have been doing very well again today. All the major averages we cover are in record territory. Joining our Closing Bell Exchange today, peter costa from empire executions at post 9. So is tony from blackrocks Equity Dividend fund and Rick Santelli is at the cme group in chicago best start for wall street to a new year in 12 years is this vidence, peter, that the tax reform bill was not priced into the stock market you know, if you asked me that a week ago, i would say, yeah, its already been priced in but the more and more you look at it, it i dont think its even anywhere close to being priced in. And, you know, its its a good sign, obviously, but i think the expectation is more about earnings i think thats where the focus is even though the impact the tax bill will have on earnings, i guess. Absolutely. Youre is not going to see it on the Fourth Quarter earnings because its not going to show up but i think peoples expectation going forward, going into the First Quarter in march and april, thats where i think people are expecting, expecting that increase. Well, tony, im wondering about, you got an Equity Dividend fund, were at a period where Interest Rates are going up, were talking about stock valuations, kind of creeping up and being higher is that putting pressure make bing it harder for people to see dividends as attractive in this environment . Yeah, so its really important the dividend market, to extinguish between high dividend yields and Dividend Growth if you look historically, Growth Stocks outperformed in reflation their periods and done so, this is important, with less volatility, less risk. Were also emphasizing quality. Do you think youre going to get Dividend Growth because of the tax cuts, is that part of it or would it be on top . Its on top weve had good corporate earnings thats going to drive good Dividend Growth. A lot of the tax cut is going to go back to shareholders in the form of buybacks as well as Dividend Growth. Rick, not as much action in the for the treasuries as we saw a day or two ago when there was talk of the chinese not buying treasuries which they call fake news is that what that was about, or are we destined to go even higher from here, still rg do you think . I dont think thats whats it was about granted there may be some traders who traded on that always going to be comments about what large countries and economies are doing relative to their purchases and recycling of the dollars that when they import from the u. S. , those dollars. When they export to the u. S. Those dollars. I think the grand scheme of things, anybody who thinks you can oversimplify down to a chinese headline, or some of the markets moved on a nafta headline out of canada, theres bigger fish to fry whats going on with treasuries is really a culmination of so many things as weve all heard the last couple of weeks end of a longterm bull market that started back in the 80s. Central banking, things that we have never seen, maybe we will never see again. Slowly, very slowly coming to an end and reversing out of the markets. Many experts have been calling for rates to rise for a handful of years those things cant be explained by those headlines i really think that 2018 is going to see higher Interest Rates on virtually all sovereigns, but what we can debate, still, is how much and how aggressive, i think in those two categories many will be disapointed. I think there can be moments of terror but i still think tro treasuries will be surrounded by hours of somewhat trading bored boredom. Didnt have a range of maturi maturities on the long end last year i dont suspect this year is going to be a whole lot different. Tony, circling back to what we were saying about Dividend Growth, where do can you see industries or companies with the greatest potential of that this year 1234. Yeah, i think you want to have a foot in each camp, a foot in the aggressive camp, a foot in the conserve ative camp aggressive side, its the blaze f place for banks to be. Were at an Inflection Point in banks earns a period of sharp regulation so the pendulum swung sharp to the side of regulation thats turning into a tailwind now, right first you put the people in place, then the policy gets implemented. Were going to see great improvements in 2018 and rates continue to rise the value of bank is its depositgathering franchise. When Interest Rates are at zero, it doesnt produce a lot of earnings. Thats your aggressive play what about the more conservative one . Health arcare we have a slide on this. Better not put up a slide utilities staples. Theyre expensivexpensive. Theyre very expensive versus history. Yet, characteristics, quality characteristics arent any Better Health care is totally different, its a growing sector were aging as a society that means were consuming more health care. So its growing. Growing earnings, growing d dividen dividends. Yet the valuations are very attractive. Speak bing of banks, they report tomorrow morning. Some of them do. That should set the tune. Yes. For tomorrow. Not to mention the rest of the earnings season. I think this earnings season for the financials is going to be very, very important. Last quarter, you know, november, december, they had a good very good season i mean, retail, everybody did very, very well. I think youre going to start seeing that in the Bank Earnings, you know, starting tomorrow i dont think youre going to see too Many Companies miss. I think, if anything, theres going be beating expectations which is a good thing. You know, for the First Quarter i think youre probably going to see the same thing, but after that, thats anyones guess, but im looking toward at least the First Quarter being solid. Very good thank you, guys. Peter costa. Tony Rick Santelli. Thanks for joining us. About ten minutes to go 159, how much were higher on the dow. One thing movie ining lower tod, dollar index down nearly half a point. Its been struggling below 92 again see the positive impact on equities today and as oil spikes, natural gas makes history here in the United States. Well tell you what kind of history when closing bell comes back lets get started. Show of hands. Who wants customizable options chains . Ones that make it fast and easy to analyze and take action . How about some of the lowest options fees . Are you raising your hand . Good then its time for power e trade the platform, price and service that gives you the edge you need. Alright one quick game of rock, paper, scissors. 1, 2, 3, go. E trade. The original place to invest online. Energy stocks have been on a roll this year ascommodity prices rise to multiyear highs. Jackie deangelis is back at headquarters with a look another the move in oil and nat gas as well jackie d. . Good afternoon to you, bill well, crude hitting levels not seen since december of 2014. Brent crossing 70 a barrel at one point in the session, and wti finishing at 63. 80. What we have right now is the perfect environment for prices to rise. Geopolitical tensions, the possibility of sanctions on iran being reimposed. Opec cut that members are actually sticking to and expectation that demand is on the rise because of a strong economy, a rising stock market still, with a 10 move in the last month, traders telling me it may be time to take some profits short term here keeping in mind theres still support at 6 61. 50 switching gearin gears but stay the complex. Nat gas. The cold weather last week took us over 3 a near 6 move today also the move that the u. S. Is a net tat gas exporter for the First Time Since 1957. Thats adding support to the market even though supply is plentiful the notion of serving Global Customers could lead to a tighter nat gas market, guys is jackie, thank you very much well talk about that more coming up here because we are coming back with the dow now up 182 points. Now art cashin did mention it was about 250 million to buy on the bell. Which he called a nonevent. Yeah. So yet were ramping s p is up 18 nasdaq up 55 the russell is up 26 right now. We have the closing countdown coming up momentarily here. After the bell, bill ackman taking a page out of walmarts discount playbook. The unexpected move by his Pershing Square hedge fund coming up. Youre watching cnbc, first in sissorwibune wldde 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. 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 as we head to the close im just here chatting with some of the traders as during commercial break, we were just joking about, you know, there are no dips to buy anymore you had a minor move down yesterday. Was that enough of a dip to buy . Apparently it was. In record territory as you see for all the major averages the dow, highs for the day up 189 points now. The s p 2,766. The transports, biggest gainer of the day percentage wise, more than 2 for the transports as the airlines and shippers and all the others continue their strength here. Let me bring in bob pisani on the rest you look at the breadth of the strength here today. Yep. Pretty much across the board. So transports, i think we were going to look at that and show you the ailtime hilltime highs. Not just tax cuts delta made a specific comment that Business Travel is the best theyve seen in the last three years so there is part of this what we call the reflation trade, the economic expansion thats playing in here retailers are back. The xrt. That retail etf hitting a 52week high today thats a gain of 2. 5 . Xle, the energy, we highlighted that jackie was just on brent hit 70 a barrel today for the first time in a while. And we have seen earnings estimates for the First Quarter practically double in october, we had analysts estimates that were very conservative as we got closer to the end of the quarter and oil started moving over 60, the estimate, this is for the first quart e one were in, started going way, way up thats one reason oil stocks are back in a big way. Now it either continues tomorrow, or it stops by hitting a brick wall it depends on how the banks report and those are the big guys that report first thing tomorrow morning. So we know that loan growth is fair. Not great. But they are being pushed up by the higher Interest Rate scenario id be curious to hear if maybe theyll change their tone from mediocre long growth to better long growth. I want to hear about it. The historymaking rally continues on wall street and we get ready for the big earnings starting tomorrow well get you set up for that coming up on the second hour of the closing bell can kelly evans and company. A 200point gain on the dow, kelly. Hello, ethan thank you, bill welcome to the closing bell, everybody, im kelly evans a huge pop in markets just on the bell here. The dow up 205 points. The first time all day weve been over 200 points its been a big rally and broadbased one on wall street thats a gain to put the dow over 25,500 for the first time, at 25,573. Gain of. 8 . S p 500 up to 2,767. Nasdaq composite up. 8 to 7,211 today. The russell 2000 small caps having a huge session up 1. 7 . 27 points. Closing at 1,586 that means were seeing records pretty much across the board here for everybody im just double checking here. Yep, the russell a record. The nasdaq a record. S p a record and the dow, lets see, yeah, a record close record close for everybody quadfecta well call it. Joining me today cnbc senior markets commentator, michael san tole l santoli. Contributor stephanie link from tiaa investments we have records with the s p also having its best month since february of last year. So far and here are the leaders and laggards in the dow. Chevron up 3 . Energy and oil had a huge day. American express lagged. It was down about half of 1 michael, what do you make of it . Obviously an impressive run really seen an acceleration into this very young year, both an acceleration in the markets, apparently the economy and corporate earnings and investor optimism thats what im hear really to show you sem essentially attitudes followed stock prices higher. This is a crowd sensemetiment follofollopoll, going on for decades right here, this is is right now, record high, alltime record high, close to 80, essentially 80 of everybody in the market right now what does it mean . First of all, its understandable by the actual behavior of the market, people are reacting to the strength however, when its been above this top line, historically, it offer means the market is going to flatten out, going to pause maybe, kell, were seeing a little bit of a shortterm buying crescendo that has to settle out a little bit if nothing else. You look very comfortable over there. Can i come back, though you can come back i think that its fun to see it in big does it make you worry, stephanie . Oh, sure, of course, it makes me worry im more of a contrarian to begin with so what happens in the beginning of the year because we wait for earnings for a couple weeks, you have this dynamic people between wanting to buy what worked last year, or theyre looking at the reversion trades so far this year weve seen both last week it was tech and growth that actually outperformed for the week now this week weve got more value sick sickcyclicals driven bond market. Right . As soon as yields started to creep up much higher, saw more of the energies, financials and te materials to tonight whthose sectors in the last two months of the year outperformed i understand why thats happening. Yeah. Now we got to wait for earnings earnings start tomorrow. Thats really when the proof is in the pudding can these companies deliver . Totally. Absolutely. Thats where youre going to start to make your money on the pullbacks where you want to place your bets. Ian, i imagine were giving you fodder for your weekly note on bubble watch and all of that. Theres certainly a lot to point to each week but doesnt seem to matter very much as far as the stock market going up i mean, i think everybody rethis depend on rates and direction of rates and if rates start to move back up toward 3 i think youll see a dramatic change in the way people are thinking about risk assets theyre positive or negative . Positive. I mean, i think people are just going to continue to pour into risk assets until they see the rates go dramatically higher because right now there still is no alternative and taken the handcuffs off everybody as far as regulation. So its a perfect storm to bet into risk assets. And mike, a couple of things that arele looing tor looming tw Bank Earnings well talk about in a second. Cpi, Consumer Price index coming i mean, yes, we have oil going up, some of these things feed into it. The real question seems to be are we ever going to really get inflation coming are we going to see it in wages . Is it going to be sustainable . You know, that feels like it could kind of spoil the whole narrative here, but until or unless we see it ven theory it could. The markets collective will i are suggesting that financial conditions are way too loose, given where the economy is and given all these other d dynam dynamics inflation is the one piece that hasnt fallen into place to maybe get a genuine tightening going on where the fed actually has to do more so, yes, that is the piece now, these Companies Giving out bonuses, Walmart Raising minimum wage, because basically its a tight labor market maybe that filters through i think the market is going to almost wait to see evidence that its actually taking you know what im starting to wonder, should the fed come out and raise Interest Rates right now, just, surprise, you know, late night, just completely put everybody back on their heels and go, you know what, we get that inflation is not there, we also get that sentiment, that this is starting to get a little carried away. Sure. Would it be craze ity to do Something Like that . This context it would essentially be crazy when you have a brandnew fed chair, whos not even actually there. But it used to happen that way february of 1994, thats exactly what happened. Between meetings, they jacked rates. And the bond market crashed and had a stealth bear market in stocks. Yeah. And had to kind of rebuild Economic Confidence after that. We dont want that. We do not want that i am surprised, though, that if you look at the expectations for a fed hike in march, its only, like, 75 , 80 , which is crazy to me. The fed officials, themselves, keep talking about, you know what, we havent seen the inflation, we dont want to be too quick i just wonder, who cares at some point. Theyre never going to see it go ahead, ian. Let me spare the suspense for the fed officials. Jeff bezos and amazon made it pretty clear this whole temporary inflation miss could be a lot more secular. I dont understand why the fed is waiting to see something that probably wont happen, as opposed to changing their goal post and actually raising rates so people who are trying to save money can actually save some yeah, i just wonder at this point, you know, i know were not at 2 exactly. Were pretty close and it feels like Everything Else is kind of in place lets talk about the Bank Earnings, though tomorrow morning blackrock, jpm, wells fargo, pnc, all reporting before the bell. This is a tricky one you know, i dont know how much we can infer about the markets overall from what they report given all the cross currents that are going to be dumped on investors in these reports, stephanie. Right i think the headlines are also going to be messy because of the whole tax, right headlines messy. Were going to be waiting for Conference Calls and guidance and that sort of thing, about how much they are going to benefit from tax, how much are they going to invest, about deregulation, about loan growth, about net interest margin, for sure i think of all of the companies that are reporting tomorrow, wells fargo is clearly the one that everyones waiting for to see if, in fact, they have turned the corner from last years problems. Right . Are they going to be able to see Revenue Growth as much as expected i dont know i think theyve given a little bit of Revenue Growth away to get that customer or retain that customer at the same time i think expenses while they might come down, i think theres a long way to go. That could be the bull case you think, oh, theres a lot they can do on the expense front. Right. Id be careful, the stock is up 12 since december 1st. Beat the bank index by 7. 5 . Expectations are certainly lofty. So thats the one im watching, though. What are you going to be watching for, mike just whether we are, in fact, going to be in for another one of these sort of sell the news instincts that hits when earnings come. I think the bull case for banks is so well known and almost so universally embraced i dont think the valuations reflects crazy expectations really for the long term but seems like mostly a Financial Engineering story. Lower tax rates, lower compliance costs, more share buybacks and dividends its all about kind of the financial numbers moving around. Its not about the core business is it doing better, are you making more loans, is the economy asking for more credit is all those things maybe well find more about. The interesting wrinkle in all of this no matter how much they rallied since the election, whatnot, is the fact the loan growth isnt there id love to hear more about that tomorrow if they can fig wrure why. Ian, what do you think about the banks . I think the market is has gone from an underweight position a year and a half ago to almost an overweight position i want to hear what they have to say about trading. I think thats a big deal. And obviously the positioning. I mean, if the stocks sell off tomorrow which i expect them to a little bit on the sell the news, if they dont come back over the next couple days you can make a compelling argument its in the stocks at this point, all the tax stuff. All right fair enough. Lets talk about the markets a little bit more today. Taking a page out of mikes note today talking about sector leadership and the profile remains risk seeking the leaders today, transports up more than 2 , industrials, Consumer Discretionary, materials all up better than 1 . So, you know, talk us through that for a second. Youre talking about the secret note that circulates internally here that we dont usually talk about on the air. Email him. Obviously, no, i mean, look, the market is kind of swimming toward the most cyclical groups leveraged to growth, the kinds that you actually want to see lead the market if theres something sustainable going on below it the transports in point terms more than the dow today and the dow is up 200. By the way, the dow transports up 254 points, over 11,000 right now. One example, within the s p financials Consumer Discretionary because of the retailers got excited about money in consumers pockets. So as long as that lasts even if we get some kind of a pullback, the market stalls out, if that leadership profile lasts, its hard to get too bearish on exactly what it means. Some point this year i think great chances for a 7 , 8 pullback who knows from what level. Yeah. As long as this remains the case and breadth of the market seems okay, its kind of insulating you from something really ugly. I would actually say a lot of people are still in a lot of tech and growth. Thats obvious from last week and the reactions that we saw. So what if we start seeing a little bit of selling of the faangs and money coming into some of these cyclicals . I dont think people are selling facebook and buying caterpillar. I just dont. Im starting to hear people talk about what are the risks that tech earnings start to disa i point or the growth rates start to slow . Businesses are maturing, Regulatory Risk is there, theres massive hiring been done to kind of address that. Maybe youre right, i dont know if its happening yet, maybe are we at one of i happen not to think its a direct seesaw with the large cap Growth Stocks. Utilities are getting smashed. Now, its a small market cap growth i think low growth yield stocks are getting hurt bad semis have definitely kind of looked like maybe theyre stalling at the peak perhaps but i just think its hard for a market to stay a bull market and people to look at facebook at 28 times earnings with a 28 growth rate and say, no, i dont want that. Right, right. You know what i mean . I totally agree. Except the late 90s. I have a little bit of both i do have some faang and i do have some growth i do have a lot of the value truly i think there is still value. If you think the economy and the global economies are going to continue to expand, which i think that they will ian, well give you the last word, what do you think is the leadership here . Its got to be kodak, what else is the leadership besides that right now. I didnt give you a hard tim about the airlines today. Which part. I was thinking about it, though. Oh, about getting run over on all my shorts. Yeah guilty as charged. Exactly yeah. Tough way to make a living well leave it right there. Ian, thank you for joining us. Stephanie link as always appreciate it. Thank you, both. Second hour of closing bell is just getting started. Next, where some of the smartest money in finance is going. Were talking to a top mind in the private equity industry. See why one firm says theres almost nothing to buy anymore. Plus, a beehive of bitcoin go inside a factory where theyre making them as fast as the Electric Company will let them the closing bell with kelly evans is back in two minutes most etfs only track a benchmark. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. We know life can be hectic. Thats why, at xfinity, weve been working hard to simplify your experiences with us. Now, with instant text and email updates, youll always be up to date. You can easily add premium channels, so you dont miss your favorite show. And with just a single word, find all the answers youre looking for because getting what you need should be simple, fast, and easy. Download the xfinity my account app or go online today. Welcome back Charlie Munger spoke to becky quick yesterday and called a bubble in venture capital. He said, think of the bubble back in 2000 and that year they put 50 billion into a bushel basket and burned it and gotten the same results. Were joined by venture capitalist alan patrickoff. What a way to start an interview. I think Charlie Munger bought stocks i didnt know he made venture investments. Ive never seen him in my field. Hes an l. A. Guy, where arena investments recently said it was suspending because there was too much capital sloshing around and the valuations were too high so got a couple of people there on the west coast now saying, you know, maybe somethings out of whack here. I dont think this is an east coast west coast situation or point of view, but i cant argue with the fact that valuations have certainly gone up in the last year, two years i dont see ive been there for several previous bubbles, and i dont think this has any similarities to what we saw in 2000 where companies were at least companies i was involved with every week you had at least one or two, couldnt meet the payroll. I dont think we had a company in the last year thats theyve all been well financed i think they prepared for perhaps a time of decline in the market. I wonder, though, when i think about the size of the funds that are being raised and think about softbanks activity and the amount of money i wu wonder what you think about their involvement. It doesnt feel like 2014 where every day were talking about a new unicorn and, you know, some fresh kid on the, you know, scene whos got an amazing idea for it feels more like we keep talk bing about all of the investors putting all of their money into a lot of these investments. What do you think about that well, i mean, the area that so softbanks playing in is also companies that are much further advanced i think youve seen a enormous proliferation of capital coming into the later stage of the markets which involves, you know, investments say it, 15 million and over 15 million and now softbank has set new parameters in the field. But, you know, down in the seed area, theres an enormous entrepreneur wave going on in this country like ive never seen in all the years ive been in this business ive been in pretty long theres an excitement. I was up at Columbia Business School today talk bi inging todo 100 people all cant wait to do something theyve been fervently passionate about i think there is a lot of money at the higher end of the market. At the early stage, were talking about 1 million, 2 million, 3. Milli million investments not talking Charlie Munger levels what particular areas in terms of industry, in terms of approach, what are the new ideas that are exciting you at this point after weve been, you know, in this cycle for a little while . Im personally hopefully get our firm greycrof focused on voice, google home, alexa, opened up a whole new area of a lot of Companies Using voice, what were going to see in the car is going to be a lot of use of voice for things we never anticipated. Cyber security, of course, is the hottest button, Autonomous Vehicles as you know, we just invested yesterday in a major new opportunity in this Company Called yield street. I guess youd say thats our hottest investment, last, most recent investment. Thats Financial Technology. Absolutely, Financial Technology which is democratizing the high yield market. So last thing before we let you go is is there anywhere you do see a bubble in your industry from where you sit i see it on the later stage higher valuations of companies which think theyre preipo which is a common fallacy that ive seen over the years which is theyre investing and they think that within 12 to 18 months this companys going public and they end up with what i call longterm engagements and the marriage doesnt happen. Its going to depend on a fervent ipo market, and it hasnt that hasnt materialized yet and thats what i think people are counting on. Thats a great point. Thank you for joining us today appreciate it very much. Alan patricof. We have a news alert on a Silicon Valley venture capitalist whats happening thats right, kelly, news here just crossing on peter thiel who has apparently made an offer for gawker, the online news site that, of course, mr. Thiel helped to shutter by funding litigation against it. That according to reuters, gawker has been inactive, kelly, for more than a year but is now conducting an auction for the assets that are remaining. Many of those assets like deadspin had, of course, bought in 2016. Thiel not saying exact lly why wants gawker, kelly, and the value of that bid apparently could not be learned but the headline here, peter thiel made an offer to purchase gawker. Kelly, back to you. And well see what his plans are if he does buy it. Josh, thank you. Meanwhile netflix shares rallied more than 66 over the past year and a major bank now thinks its on its way to becoming the second largest Media Company by revenue our fast money traders tell us how high they think the stock could go, next. First, though, the white house taking more steps to make it more difficult for poor borrowers to get loans from banks. Banks. Richvator. If that is, in fact, the case, next right. So who sent you . New guy. What new guy . Watson. My analysis of sensor and Maintenance Data indicates elevator 3 will malfunction in 2 days. There you go. You still need a pass. You or joints. Something for your heart. There you go. 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. Welcome back big rally on wall street today dow was up 205 on the bell pretty much went out at session highs with a little latesession pop. The s p 500 added 19 nasdaq added 58. Russell added 27 all four major averages closed at record highs. Its time thousanow for a ns update lets get back to sue herera. Hi, kelly heres whats happening about this hour, everyone. Ford telling owners of 2,900 ranger small pickup trucks not to drive them after finding out an exploding takata airbag inflater killed a driver in West Virginia ford says it will repair the trucks at the owners homes or tow them to dealerships for the work dont drive them hundreds of rescuers continuing their search for survivors in the wake of the devastating mudslides that hit southern california. The death toll now stands at 17. Santa barbara authorities originally raised the missing person count from 16 to 48 but then said that that was a clerical error and reduced the missing person number, thankfully, to only eight so far. President Trump Holding a Prison Reform roundtable at the white house earlier today. He jokingly answered a question from a report eer about his physical exam tomorrow. How do you think the physical will go tomorrow i think its going to be very well ill be very surprised if it doesnt. It better go well otherwise the stock market will not be happy and that is the news update this hour. Kelly, ill send it back downtown to you. He said it better go well or the stock market wont be happy . Yes yeah. It was a little off camera because that was a pool shoot, but, yes, thats what he said. Stock market would be very unhappy if it didnt go well oh. Well see. Following i did that george w. Bush i got to go along for the physical when i was an intern i didnt go in for the physical. You know what im saying. Glad you clarified. The motorcade we have a news alert on ibm. Deirdre bosa, whats happening hi, kelly, ibm announcing it has a new chief financial officer, James Cavanaugh he will take the position effective today hes currently senior vp of finance and operations the release does not give a reason for the change or specify whether shorter will be staying on at the company. It says next week web the Company Reports earnings on thursday both men will be on the call just a reminder here, ceo jenny rometti is nearly seven years into her turnaround plan well see if a new cfo helps right that ship. Back over to you. Deirdre, thank you. The white house is reportedly changing decadesold rules, lending to borrowers. Treasury is seeking to make changes this year to a 1977 law that requires deposittaking banks to make Financial Products broadly available where they are chartered. Not just to affluent customers and neighborhoods. In a report the treasury published in june, that recommended broad changes to the law, including how banks are graded, and how such communities are defined. A treasury spokeswoman telling cnbc the Community Reinvestment act is outdated. It was written in the 1970s before the internet and rise of interstate banking the cra requires modernization to align the goals of the statute and ensure that banks investments better support the feeds of their communities. Its a law that treasury secretary Steven Mnuchin and comptroller joseph otting of the occ know intimately, when each of them ran one best bank the bank earned a satisfactory rating from the occ with high marks for lending but low marks for location of branches and hours. Otting was grilled by the fed and occ during the sale of the bank with regulators demanding to know how the larger bank would, in fact, serve its Larger Community once the merger went through. Now treasurys currently soliciting feedback from stakeholders they want to make these changes this year. And they expect to issue guidance once they hear from all of those various stakeholders and you can imagine that there will be many of them kelly . All right kayla, thank you, kayla taush s tausche. Lets bring in the former chairman at wells fargo. Thanks for joining us. E wanted your thoughts on this its good to take look look at cra Community Groups and banking organizations like the America Banker Association and Financial Services roundtable and independent bankers association, getting these groups together, say, how can we make it better and more effective so this concern about redlining which is where banks wouldnt lend money to poor neighborhoods at the heart of the regulations and concerns people would have about rolling them back. How would you describe todays environment, like where does that fall in terms of it being a concern . Are banks going to pull back is that funding going to dry up to those communities i really dont think so i dont think theres much redlining going on anymore i think what can concern communities is as you know, many banks are closing offices, particularly in rural areas. And there just may not be Banking Services there i dont think theres anybody who is any Mainstream Bank who is redlining anymore. We need to do more to help particularly lowincome people get into homes we need to help small businesses, particularly minorities and womenowned businesses, who we can do a better job of that i just think we need to broaden our picture here and see if there are things that the Community Needs that we can improve and go beyond redlining, if you will. Dick, as somebody who ran a large bank subject to this regulation for a long time, just give us an idea of exactly how it came to be incorporated in everything the bank had to do, in other words, the costs and the responsibilities attached to adhering to cra. How did it maybe disrupt your business or did it create any kind of opportunities as well to be in some areas i think if we look i think initially there was a lot of concern. And the concern was that the government wanted us to lend money to people who could never pay it back. And i think that concern has gone away, basically and i think most lets just say that for some reason cra was eliminated, i think most banks would continue to do what theyre doing in the community we think its good for our communities. We cant be successful as a bank if our communities arent successful everyone in the Community Needs to be successful and you do have to do some extra things to make sure because theres, you know, obviously lowincome people have issues that others dont. But you can still lend to those people and so i think that cras been good for the industry and good for america and good for everyone i think it can be better i mean, 1977 is a big lots of changes since then and getting people together, all constituencies, is a good idea dick, one final question i just wanted to ask you about wells fargo, itself. There theyve been underperforming, obviously theyre trying to put the issues, many issues theyve had behind them with tomorrows Earnings Release if they dont, do you think that puts pressure on tim sloan in terms of him staying on top and leading this bank forward . I dont think it should you know, ive been retired now for eight years so i do not know whats going on in internally in the bank tim is a great banker. I think he can help to solve the issues that are there. I dont think what the earnings are in one quarter or any of the valuations should be a basis for his for determining whether he should continue as the leader or not yeah. Well have lot to learn in the morning about how well they did in this quarter then and many others dick, thanks for joining us. Thank you today we begin no were got going there. Yes, we are. Were going to the takeatakea long awaited ipo from dropbox. Filed for a controversial Public Offering at long last. Remember, it was founded 12 years ago. Noteworthy, the first ipo apparently from the portfolio. Also noteworthy publicly traded rival, box, rallied nearly 4 today. Michael, is the first of a 2018 ipo wave it could be obviously, maybe four or six of the big ones, everyone assumes its a when, not if they come public also interesting that box rallied. I think one of the things it will do, dropbox being public, its going to create the other comparable company, give somebody an idea to back into what icloud worked within apple. You know, the game starts when you have one of these dominant players. I also happen to think, though, a certain mystique builds up around thee companies that stayed private a long time. Yes, totally. Once it becomes public the mystique is gone. Thats kind of a funny factor. Box, itself, experienced that. Next, President Trump renewed his call for an Internet Sales tax last night remarks at a signing event, he said the internet, theyre going to have to start paying sales tax because its very unfair whats happening to retailers all across the country being put out of business. They definitely would include amazon, but amazon shares were up nearly 2 today mike, i wonder how much this issue matters to their business anymore. Its hart d to see it matter that much. Generally amazon collects state taxes. Not as much with thirdparty sellers. Its not purely a price driven, allin cost decision to shop at amazon. Not anymore. Who knows amazon might even eat the tax. You never know given the fact theyre giving free delivery and create ed that to be the indust standard, what would happen down the road its not clear to me the reason the corner store is losing out to ecommerce is because of sales tax. Night have started with price. Now its about convenience going ifbe a hard thing to trum shoppers in seattle surprised by higher price of beverages after a surtax on sugary drinks. Costco is not trying to hide much it will cost them a case of gatorade is now 26. 33 how about a case of dr. Pepper, instead of 9. 99, its 17. 55. Costco is reminding shoppers the tax doesnt apply outside of the city i think shows it has their best interest in mind right, exactly. Theyre obviously not trying to gouge anybody. They dont really get the difference it shows the complications of a local tax on a very lowpriced product that theres no impediments to getting it elsewhere. Seems as if it had minor efficacy someplace. Also if youre buying one soda, one drink, youre going to notice it. Especially if youre in a bulk store like costco, its doubling the price. They want to make sure everyone doesnt hold them accountable. I wonder what a gas station would do if they were allowed to show what the taxes were versus thats not a bad idea the price is so similar, one station to the next. What are you going to do where are you going to go netflix up 13 so far this year wou. The fast money guys are going to talk about whether its safe to get in now or is it too late. Plus Hedge Fund Manager bill ackman made a big move on fees, when the closing bell is back in two daniel jacob for every hour that youre idling in your car, youre sending about half a gallon like sacramento are investing in streets that are smarter and greener. Test test 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 . Welcome back in case you missed it heres look back at what happened during trading session today lets begin with the markets, new highs yet again for stocks new records. Energy, industrials once again leading. Less than 20 points now away from dow 25,500. Walmart announcing it will increase its starting wage for hourly work ners the u. S. To 11 an hour beginning next month and pay a with onetime cash bonus to eligible bonus and nancy pelosi said its going be armageddon if this tax bill passes you have more than a 1 million receive more than billion dollars in bonuses on both the top and bottom line bitcoin is under pressure we gave the president an update this morning on trade i think hes very pleased with where tlings are going renegotiating nafta and we expect it will be renegotiated or well pull out. The dow up 205 points thats the first time all day we have been over 200 points a big rally and a big one based on wall street. How about shares of netflix, finished up another 2 after barclays initiated bullish cover of netflix the second biggest Media Company by revenue, next only to disney. Welcome, thank you guys for joining us karen, youre not a big fan of netflix. Of the product, absolutely of the stock, no i love the product for me valuation always comes into play. It seems to be kind of priced in already for big things to happen its coming the other thing in the barclays note, they said if sk subscriber growth is higher it could be one of the best they have the first movers, now youre seeing some of the biggest players in the world trying to eat their lunch. So, amazon getting into business obviously, fox disney, hulu, lot of people out there competing for content. I dont know if theyll be able to recreate with this competition, recreate the kind of success they had. I cant get on board with this stock right here. Steve, make the case. Sure, i can agree with everything that karen said shes a value player its like asking where what kind of fish she likes when she doesnt like fish. Where netflix was in december, should off all the leaders, kelly, it was down 10 , 9 where it is now . 10 above of where it was on the december lows. Still proves theres an apartment tight for growth within this marketplace. Youre not getting that growth anywhere else. But youre making it pretty clear its a trade its an investment. Longer term. Theyre cure rating their own data now International Growth is compensating for domestic growth. All right, guys, thank you. Much more fast money action 5 00 eastern. Dont miss it. News alert on President Trump now. Whats happening if. Kelly, the wall street journal has posted an extensive interview with President Trump that conducted today a wideranging interview a couple of the highlights, the president s comments on north korea, the president here saying he probably has a very Good Relationship with kim jongun the leader of north korea, no known contacts between the president of the United States and kim jongun personally but the president is asked here if he has spoken with kim jongun the president said i dont want to comment on it. The president also touching on steve bannon, his ousted former political adviser here at the white house, after comments he made to the author of michael wolff. The president said he feels betrayed by steve bannon also, the president talks about two fbi agents here who exchanged Text Messages that were critical of the president the president says that amount in his mind to treason lot to look over. I cant keep up i cant. Its like, the list to go through keeps piling up. Thank you very much for bringing the highlights. The Investment Services on sale more of whats happening at Pershing Square, next. 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. I. Prilosec otc 7 years ago,my doctor recommended. 5 years ago, last week. Just 1 pill each morning, 24 hours and zero heartburn. Its been the number 1 doctor recommended brand for 10. Straight years, and its still recommended today. Use as directed. We rbut we are not victims. Ack. We are survivors. We are survivors. We are survivors. And now we take brilinta. For people whove been hospitalized for a heart attack. We take brilinta with a baby aspirin. No more than one hundred milligrams. As it affects how well brilinta works. Brilinta helps keep platelets from sticking together and forming a clot. In a Clinical Study brilinta worked better than plavix®. Brilinta reduced the chance of another heart attack. Or dying from one. Dont stop taking brilinta without talking to your doctor,. Since stopping it too soon increases your risk of clots in your stent,. Heart attack, stroke, and even death. Brilinta may cause bruising or bleeding more easily,. Or serious, sometimes fatal bleeding. Dont take brilinta if you have bleeding, like stomach ulcers,. A history of bleeding in the brain, or severe liver problems. Slow heart rhythm has been reported. Tell your doctor about bleeding,. New or unexpected shortness of breath, any planned surgery, and all medicines you take. If you recently had a heart attack, ask your doctor about brilinta. My heart is worth brilinta. If you cant afford your medication, astrazeneca. May be able to help. So thats the idea. What do you think . I dont like it. Oh. Nuh uh. Yeah. Ahhhhh. Mmmm. Oh. Yeah. Ah. Agh. Ddd. No. Hmmm. Uh. Huh. Yeah. Uh. Huh. In business, there are a lot of ways to say no. Thank you so much. Thank you. So were doing it. Yes. Start saying yes to your companys best ideas. We help all types of businesses with money, tools and knowhow to get business done. American express open. Zblmpkts welcome back. Some breaking news on amd. John ford, whats happening amd out with a more detailed statement on the moves to patch these chips flaws. There are two different categories, theres spector and meltdown with these chip problems meltdown is seeming to affect just intel processors. Amd said it was affected by a couple of variants of spector. On one, it was a near ofzero chance of being exploited. The stock is down about 3 on that change in detail. They also say that the issue with the microsoft update that was causing problems for some older amd chips they expect to be fixed by an update coming next week. Kelly. John, real quickly, are we getting a better sense of the scho schoep. Kelly, its hard to say, because these chip flaws were really discovered in the lab its not clear how how much hackers would be able to exploit them in real life. The Chip Companies initially coming out and saying its not as bad as it looks given certain estimates on how the patches would slow down systems, they have to make adjustments in how theyre affecting systems. Im not sure, if you were skeptical to begin with about how these things roll out not a lot has changed. Still systems that need to be patched. All right, john, thank you. Again, amd still falling 3 after hours. We turn to Hedge Fund Manager bill ackman whos slicing his fees apparently. The fact that bill ackman is slashing his fees should come as no surprise. However, thats because the firm just posted its Third Straight year of losses not exactly what this is about, though, this fee change has to do with a settlement with allergan shareholders that was recently announced that settlement reached 2020 0 million. Pershing square is lowering its managing fees. Its all about Hedge Fund Accounting Pershing Square earned an incentive on that at the time. Now with this large settlement several years later, that profit is actually a lot lower. Closer to 2 billion they essentially overpaid in 2014 ackman decided to lower his Management Fee to 1. 275 for eight quarters the firm is slashing Management Fees instead of Incentive Fees because lps havent been paying Incentive Fees kelly. So, its been a tough couple of years they saved the investors have saved some money on that at least. Thank you very much. One world town in Washington State is experiencing it own bitcoin boom kelly, dozens of bitcoin miners have come here for the hydraulic power. After this break, ill show you behind this door one of the largest Bitcoin Mining operat n operations in the entire United States dont move 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 the markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. By the way, bitcoin and Bitcoin Futures were lower today after news that south korea is considering banning all crypto trading, the latest blow to the currency in that country but its not discouraging bitcoin miners Michelle Carusocabrera is in wenatchee, washington. Reporter jeff, pan the camera you can see this is a huge room full of hundreds of servers. There are 1,800 servers in this one bitcoin mine owned by the salcedo group. They have three facilities like this, mining five to seven bitcoins per day when you add it all up, the current bitcoin price is about 2 million worth of bitcoin every month. Weve put one of the servers here so you can see how small it is most servers you think are really big, when you think of server farms these are very special purpose built servers. They dont have a cpu, no memory, no data storage. Just a very fast chip that calculates all those equations that you need to finally achieve a bitcoin when you solve those equations. Well show you just how many of these there are, on and on why in wenatchee because these servers require tons and tons of power it uses 7 1 2 megawatts of power, enough to power 11,000 homes. Theyre trying to get up to 42 megawatts by this summer all of these things generate a lot of heat. Were going to go back here. This is my favorite room because its really warm and watch this okay back ere, all of the back of these servers feed into this room its so nice and warm in here, kelly. Remember, Washington State is very cold. Thats another reason they come to Washington State and wenatchee, because the cooler temperatures help keep these servers cooler look, another row of exhaust, just showing you to see how vast this facility is remember the pink panther, you see all of this insulation then well go back around. And here we go, i want you to see the last room. Then well send it back to you and here is yet another wide room of hundreds of more servers, kelly this is what it takes to mine bitcoin. The electric bill for this company, more than 100,000 a month. But by july it will be more than 1 million a month. Thats much bigger than i realized i appreciate that walker theyre going to keep mining it all the way down thank you, michelle, great stuff, all day very much appreciate it. Michelle carusocabrera, in wenatchee, washington, not wisconsin, whats wrong with me . Coming up, mike wilson, a wall street strategist, says theres one sector to keep buying in 2018 hell tell us what it is on fast money. Tomorrow, its a day filled with promise and new beginnings, challenges and opportunities. At ameriprise financial, we cant predict what tomorrow will bring. But our comprehensive approach to Financial Planning can help make sure youre prepared for whats expected and even whats not. And that kind of Financial Confidence can help you sleep better at night. With the right Financial Advisor, life can be brilliant. 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 a quick clarification on the Management Changes reported not long ago Martin Schroeter will become ceo. Back over to you guys. Deirdre bosa out west, thank you. Ken griffin in chicago is building a real estate portfolio around the country robert frank is here reporter this is the third real estate price record hes set in just three years. The citadel founder bought four floors or 25,000 square feet of condo tower on the gold coast for 58. 7 million. Now hes going to turn that raw space into a home. Before this he spent 240 million or more for a collection of apartments in a condo in Central Park South in manhattan. He shelled out 200 million just for the land for a home in palm beach hes building. He paid 60 million for a new penthouse in miami, the most expensive ever, although back on the market is this a lot of money yes. But he made 1. 7 billion last year is this what he do in his spare time does citadel just run itself reporter its a level hes never seen before. He would say if you buy the best of the best, it will always hold its value. But weve never seen a real estate binge like this at this level, all at once amazing. Robert, thank you when you have that much money, you have to bring youre allocation up to a certain . Reporter 20 , youve got to work thank you michael santoli, thank you as always that does it for us at closing bell. Fast money starts right fast money starts right now. Live from the Nasdaq Market site overlooking new york citys times square im memblissa lee. Tonight on fast, crypto fallout. Theres one cryptocurrency thats surging well tell you what it is. Plus stocks are at record highs and there is one name thats having an incredible start to the year. It could be just the beginning of an even bigger impacticome b. Well explain. First, a record day for the market, the dow su