Transcripts For CNBC Closing Bell 20180118

Thank you very much, ivanka. She worked hard. Shes a hard worker. All of our kids work hard. We love to see it. Theyre doing a terrific job for our country. Ive come to the great city of pittsburgh to stand with people, and those people are incredible workers. And to show the world that america is back and that we are coming back bigger and better and stronger than ever before. And were making our own product again. And t and were opening up our factories again. I mean, you take a look at whats going on where toyotas coming in and the other day you just saw chrysler announce theyre moving from mexico back to michigan. You dont hear that too often. With a monster factory theyre going to spend a lot of money. At the center of americas resurgence are the massive tax cuts that i just signed into law. And its also reform i usually just say tax cuts. They dont want to hear about the reform believe me, the reform is very important. We dont have to get into it but the tax cuts are the most significant tax cut, most significant reform in American History with tremendous tax relief for working families, for small businesses, for big businesses that produce jobs, for just about everybody tremendous jbz and youre already seeing whats happening. Youre seeing whats going on. The signs of americas comeback can be seen at Companies Like this one, which just had its most successful year in its 35year history. Congratulations. Good job and i just learned from the powers that be that h k equipment will soon be making a 2. 7 million Capital Investment thanks to the new tax ut i appreciate that. And the workers appreciate that. Youre doing great great equipment. That means more growth and ultimately it means more jobs. So, congratulations. We have created nearly 2. 2 million jobs since the election. [ applause ] the Unemployment Rate is at now an 18year low i would say 17 years now it just lifted to 18 years the number of americans applying for Unemployment Benefits just hit a 45year low. Something im really proud of because ive been saying it, what do you have to lose africanamerican unemployment is at its lowest level ever recorded female unemployment is at the lowest level in 17 years hispanicamerican unemployment has hit its alltime lows. Lowest ever. Pensions and retirement accounts are surging in value as the stock market smashes one record high after another how many people have 401 k s here youre brilliant investors ive had people come up, sir, my wife thinks im the most brilliant investor because i made 42 in the last ten months. And thats pretty good but people are happy anybody unhappy with the 401 k . I dont think so, right . We can keep it like this, were going to win a lot of elections, that i can tell you. Its something no, its something its the economy, stupid did you ever hear that one its the economy it is, indeed. As soon as really weeks from now, millions of American Workers will be seeing the signs of americas comeback in their paychecks in february. Very simply your paychecks will be much bigger because under our tax cuts, you will be keeping more of your hardearned money we are doubling the child tax credit, increasing the refundable credit by 40 not 14, 40 and we are making the child credit available to more families than ever before. Not even close when we began our push for tax cuts, i promised our bill would result in more jobs, higher wages and tremendous relief for middle class families. And that is exactly what we have delivered. There is only one thing. Even i never knew how big it would be its much bigger than anybody anticipated. We kept our promise. In pennsylvania alone, families will see a tax cut of about 11 billion just this year alone thats pretty good a typical family of four earning 75,000 will see an income tax cut of more than 2,000 a year its like a 2,000 a year raise. Slashing their income tax bill in half. Many will save much more than that ken wilson is a great example. Where is ken ken wilson, the legendary ken wilson hi, ken. Come on over here where we see you, ken youve got to be happy with this is ken doing a good job . Kens doing Everybody Knows ken. Come on over here. Come on up here, ken come on. If you can make it hell figure out how to get that thing open if he cant do it, nobody can, right . Thats what he does, he works on machinery all the time ken joined h k 14 years ago as a mechanic and worked his way up to become a project foreman. Because of our tax cuts, ken will save almost 2,200 in next taxes. Ken, you just got a 2,200 raise. [ cheers and applause and if i had a head of hair like that, i really would have been i would have been president years ago, ken years ago. But weve nearly doubled the amount of income tax at the rate of zero. Ken, youve seen a big difference absolutely. Thank you, man. He said just the right thing you never know Say Something to your workers. Say something to your coworkers. Its not just me, its everybody as a whole this company is an incredible company. We work with a bunch of great people everybody pulled together this week and pulled this off it was a sight to see. Its something to always remember thank you, everybody thank you, mr. Trump [ cheers and applause thank you, ken. He did good. He didnt know about that. He didnt know at all about that, right, ken good job and because we substantially reduced tax rates on american companies, economists estimate that annual Household Income will rise by an average of 4,000 think of that. More than 2 million American Workers have already received a tax cut bonus from their employers, pay raises, more money for retirement checks as high as 2,000 or more all because of our tax cuts and it hasnt even been a month since i signed the bill. Its turned out to be much bigger than we all thought even the people that did it, right, gary, right all of the can congressmen that voted for us and fought so hard . Nobody had any idea one thing we didnt project in a positive way, nobody thought that the companies were going to step up and pay all of these great bonuses to people. At t started it, but they came up and they paid all of these bonuses. A florida Software Company Just Announced 1,000 tax cut bonus for its workforces apple Just Announced they are giving their employees tax cut bonuses worth 2,500 each. And because of our business tax reforms, apple has Just Announced that they are bringing 350 billion and putting it into investment into our country. 350 billion 350. [ cheers and applause thats a lot. When i heard the news yesterday, and tim cook is a great guy, the head of apple, and when i heard the news, i heard 350 billion, i said, you mean 350 million . Thats going to be a beautiful plant. They said, no, its 350 billion. And i just called tim cook and i thanked him. But i dont imagine theres ever been an investment that big in this country by a company. And just think of what that means. Theyre going to build plants. I remember what i said, i will not consider our Economic Situation complete until we start getting apple to Start Building some of those massive plants in the united states. Theyre going to build plants. Theyre going to build a big campus theyre really going to town we want to thank apple 350 billion here in the great commonwealth of pennsylvania, thousands of workers have already received tax cut bonuses thanks to employers like comcast, nextier bank, american airlines, png financial. One of those names im familiar with one of those hard working pennsylvanian is kevin, a marine corps veteran who received a purple heart for his Courageous Service during three tours in iraq where is kevin where is kevin kevin . [ cheers and applause he kept that hand out he didnt want to come up and speak. Thank you, kevin he started working for comcast in 2016 and last week he received 1,000 bonus check thanks to our tax cuts right out of comcast, right into his bank. Now he has taken his family on a welldeserved vacation, kevin, to visit his grandparents in florida, right thank you, kevin see ya in florida. I want to thank you for your service, for your patriotism and the congratulations for the bonus. Its really great. Millions of people not only are we already seeing the benefits of higher wages and bigger salaries, much bigger salaries, but were also seeing the creation very importantly to me of new jobs pito conner owns a Personnel Company called carol harris staffing right here in pittsburgh he says businesses of all kinds are seeing increased demand just recently and theyre hiring more and more workers thats only really great news, not only for pete, its great news for all of the people in pittsburgh, for the citizens of pennsylvania and americans all across our country wheres pete thank you, pete. Youve seen a big difference, right . Big difference big difference were putting america back to work and were ensuring the forgotten men and women of our country are never, ever forgotten again. Remember the deplorables the deplorables. Were all deplorables. Who would have thought that was going to turn into a landslide, right . Who would have thought that was going to turn in that was not a good phrase that she used. Oh, some things youd like to have back. And the good news keeps pouring in americans monthly utility bills are going down because major Utility Companies have announced they will pass their savings onto customers tremendous reductions in Peoples Energy costs. That means were not only seeing higher wages and lower energy bills. Thats because of the tax cuts its also because of the regulation cuts. When i spoke to the folks in the plant, they said the biggest thing is whats happened is regulations. Cutting of the regulations we have regulations, but theyre fair and theyre reasonable. And theyre actually just as stringent. But you go to one group for an okay you dont have to get it 19 different times or seven times or go to different agencies. Its within the realm of reasonable thats why people are opening up, theyre expanding and hiring more people. Our tax bill also took an historic step to restore Health Care Freedom no longer will the federal government punish you for fines if you cant afford an obamacare mandated health plan, because we repealed obamacares cruel it was cruel individual mandate. Where you were supposed to go out and you pay in order not to have to buy health care. Think about it it should have been rejected a long time ago by a lot of different people, including the courts, surprisingly, but we were able to repeal it we got rid of the individual mandate. Youll see what that means it is such a big factor for so many people. It was so unfair its gone. Weve also opened up anwar in alaska for energy exploration. Creating even more jobs and more and more energy savings, but thats the biggest one theyve been trying to do that since ronald reagan. For over 40 years theyve been trying to open anwar we got it open theres never been a better time to hire in america to invest in america and to believe in the American Dream than right now [ cheers and applause there is no limit to what we can achieve when we set free the dreams of our incredible people. Youre incredible people americans crossed oceans, tamed the wilderness, dug out the panama canal and launched a man onto the face of moon. American hands and grit poured the concrete in our highways and forged the steel in our sky scrapers americans built the hoover dam the magnificent hoover dam, if youve ever seen it. The empire state building, they built it in one year nobody knows that. One year it was actually less than one year the empire state building. We won two world wars. Americans do anything, build anything and create anything as long as we have pride in our country, confidence in our values and respect for our Great American flag. [ applause ] right because america doesnt belong to the washington power brokers. It belongs to you. And i think weve taught them that doesnt mean its easy doesnt mean its easy its nasty in washington but step by step by step, just keep going, right going. It is a nasty place. But were getting it nobody thought we were going to have this kind of success so quickly. Thank you, darling it belongs to the American People with our destiny in your hands, america will once again be a nation that thinks big, dreams bigger and always reaches for the stars. Nothing will keep this incredible nation of ours down nothing will stop us from reaching the highest peaks because nothing is stronger than the strength and will and spirit of the American People you are the ones who will shape americas destiny, especially all of these beautiful young people in the front. You are the ones who will restore our prosperity and you are the ones who are making America Great again. So as many of you know, thats what i talked about. Make America Great again America First. We put America First now were doing trade deals. Were doing a lot of things that i said were going to be doing its not easy. These other countries have become very, very spoiled with taking advantage of us but take advantage of us no longer because now we want our country for them it should be their country first. But for us, its America First thats the way it is so, i want to thank the people of the great, great, great state of pennsylvania. You remember that big night on november 8th donald trump has won the state of pennsylvania. Right . [ applause ] you are my friends you are truly great, great people and you are making america tick. You are really very special. Thank you all for being here god bless you all. Thank you very much. Thank you. I saw you today at the reception President Trump in coraopolis at h k equipment, they make forklifts and other heavy equipment. Sort of a vick story lap on the tax plan. On the tax plan he called gary cohn the tax man. Said he did a good job a line that struck me said he has husbands coming up to him saying my wife thinks im brilliant because i made 42 in the stock market last year a reference to yesterdays continued milestone. The dow at 26,000. Front cover of the New York Post today and continuing to pick up more coverage. The president also said he called tim cook, the ceo of apple, and thanked him for the plan apple announced yesterday Huge Investment program and a lot of hirings. Eamon javers is back at the white house where the president will head shortly. As i said, a victory lap here even as the voting well get to that in a little bit. The voting for the shortterm funding bill is under way in the house right now, at least the debate is. Thats right, bill. The president , as you say, said he talked to tim cook, the ceo of apple, to thank him for apples Investment News which they put out yesterday this was a very companycentric victory lap speech by my count, there were eight Companies Mentioned specifically by the president , including toyota, chrysler, at t, apple, comcast, the parent of this network, and a couple of banks and local companies as well. The president taking this victory lap because the white house feels it needs to get out on the stump in a campaignstyle way, as we just saw, and really sell the tax bill they passed at the end of last year they feel like they cant just let that bill passively do its work they want to go out and hammer home the point that it is putting more money in americans pockets. You can see the president do that by pulling the factory worker up on stage with him to make an impromptu speech he seemed stunned to be brought up on the stage to make national remarks. But he said its people like that in pennsylvania who are going to see the benefit of the tax bill at the white house they think this is very important going into midterm elections that voters know what the president has been doing and know its benefiting them. Thats the point of this whole jaunt. Well see more of that over the coming months as the president gets out on the campaign trail a little more ahead of the midterm elections, bill. Thank you well see you a little later by the way, we officially welcome you to closing bell, better late than never weve seen a wild ride for the dow as we count you down to the close. The industrial average which had that monster rally of more than 300 points yesterday, down 55. We were down more than 100 points at one time today. And weve been positive, too, back and forth. In fact, the nasdaq is still positive and thats enough for a record high right there. Yields are also moving higher. We put the tenyear up there. Its over 2. 6 we havent seen it up there in quite some time. A lot of psychological thresholds there people look to see if it can keep climbing towards 3 heres an impact its having across the sectors real estate is down 1 energy is down 0. 5 . Crude is weaker on the session tech holding onto a third of a percent gain we are closing in on that deadline to shudder the federal government certainly to look more likely. A day, eight hours, 35 minutes to go until friday at midnight is there a lastminute deal that will keep the deal open . Reporter theyre working on it behind the scenes i was texting with a couple of senior gop aides who said they dont have the votes yet but are moving in that direction there was a procedure vote on the house floor where they did get enough votes to move forward with that vote thats supposed to be happening at 7 00 tonight. We didnt hear the president mention the shutdown, but it was his comments earlier today that sent the market downward that appeared in tandem with the politico story, the first referencing an email Mitch Mcconnell sent out to gop senators where he was basically saying this will be the democrats fault if the government shuts down. Theyre prepared to stay throughout the weekend in case of a shutdown. That was really the first mention of any possibility real possibility real contingency plan here on capitol Hill Mcconnell saying, i hope none of you, meaning none of you republicans, are thinking of joining in on this effort. So far there are three republican senators planning to vote no, those being senator paul, graham and rounds. Clearly, this needs to be a bipartisan effort, despite all the fingerpointing. Leadership hopes theres enough sweeteners for both sides to come down. This is coming down to the wire. Well see what happens later today and tomorrow as well politico saying Senate Democrats are confident they have enough to block the spending bill and increasing the odds republicans need to get a couple of democratic votes for this to pass before tomorrow night reporter not just a couple, they need at least 12 democrats to vote in favor of this bill. The fact they are saying that 60 votes. Yeah. Oh, wow. And it doesnt look good in the house with the Freedom Caucus pulling out on that one as well. Kayla, thank you well let you get back to work work the phones there. See you later. Meantime, well look at the yield, once again the tenyear treasury, 26. 25 quarter percent. Steve liesman has more on what this is all saying about the market steve . Thanks. The tenyear 262 takes out the march 2017 high. The next milestone, 3 , the high of 2014. The question is if were going there. Fixed income traders say its within range of possible if the economy grows 3 and if the fed pushes short rates to the 2 level as expected. You might need a little inflation to get to such a lofty level. The bigger question is, why hasnt this happened already the markets pricing in three rate hikes which will bring the fed fund rates to 2 by the year end and twoyear is already there. 2. 6 on the tenyear is light compared to the to the bigger story has been the fail youre of the tenyear yield to rise. Its fallen by 75 basis points, down to as low as 50, now back to 58. The reason, lack of inflation, lack of Strong Demand at home and abroad and maybe belief in markets that Economic Growth wont continue quite as strong as its been if it does, higher rates shouldnt keep you know what well look at is not just the tenyear but the real rates in the real economy and those remain relatively low. At this point they do steve, thanks very much. Well see you later. Steve tliesman. How should investors trade in this environment . Joining us is victoria fernandez, cnbc market analyst steve grasso and Rick Santelli at the cme in chicago. Im going to start with you, rick this is your area. And youve talked about 2. 63 being huge resistance for the tenyear do you think we go through that or not at this point i think ultimately in 2018 we will, but i dont think well be going through it on a closing basis. The first time we knock at the door, were at 2. 62 now, intraday, thats the highest weve been it will be interesting to see where it closes. What i find most interesting is that question that Steve Liesman just brought up. How is that goes to affect the markets . Actually, bill, i think i have an easy way to attack that look at it this way. The last time we were at 2. 63 on a closing basis was the 13th of march of 2017. So, where were the dow, the s p and the nasdaq on that particular day everybodys worried. Whats going to happen to the stock market the last time we were there in march was 5173 points lower. The dow was around 20,880. The s p was around 2373 which means were about 428 points higher today and the nasdaq, 73. 08 is where it is now. Thats about 1430 points higher. So, in my opinion, if we could live with a 263 at those levels, i think that were actually dealing with close to 2. 63 rather well. The 3. 03 the last time we had a close above 3 was last day of 2013 you have to go back a number of years to find more than one day. That is going to be the next big resistance i think were getting a little ahead of the game. I want to look at the dow down about 77 points right now we talked the last couple of days about how the president does look to the stock market for his cues sometimes what is the market saying about a shutdown is this nervousness, we dont want it to happen or what do you think . Whenever you trade off a shutdown, whenever you sell the market off a shutdown, its a poor sale because its always a temporary event and anything that needs to get funded, gets funded everyone who worries about a shutdown is probably worrying needlessly. You dont think the reason were down 82 is because this looks more likely . No. I think the reason were down is because weve had an aggressive run. People thought we were going to sell off a couple of days ago. Were at record highs. People are just saying, maybe i have to take some chips off the table. Not worried about the shutdown victoria, what do you do with this market . What do you think is going on right now . I think theres a lot of support for yields in the market where they are if you look at the 2. 62 level, rick is right, that 2. 63 level is a good psychological level that we need to close above that and theres some support for that whether it comes from the earnings were seeing, whether it comes from possible inflation measures and i think the bond market is underestimating the effects of this tax reform. If you look back in 2003 when we had tax cuts, it wasnt until people saw the money hit their paychecks. The yield made a stronger move higher were looking at that at the end of february, the end of next month. I think we could be range bound right now in this 2. 50 to 2. 70 range on the tenyear. At the end of next month i would look for things to go higher financials is where were focusing. I dont know if our producers got it built, but you send them a chart a longterm chart of the tenyear yield. If you go way back rick and i look at the same charts. If you go way back and look at whats way back i went back to 1981 you cancel out those spikes we saw during that period of time. Thats the beginning of this great bull market. Exactly now when you look, we are bouncing up against that longterm trend line its right here, 2. 62. This would be a major event to break through this when you look at financials, everyone says, higher rates, financials when you look at financials, its tax policy. Weve had effective tax rates cut by 30 on the majors you cant invest around that you cant sell those stocks with that type of a tailwind. Fair enough rick, i want to ask you, any reason yields would be kicking up if a shutdown is looming . Any concern about the treasury paying its bills or have we gotten over that since weve been through this before we might encounter some volatility because of all the reasons that make sense. Maybe you want to take profits the media will hit the story really hard. I totally agree with steve we all know its going to be temporary. We know its politically motivated and i dont see any lasting effects that should make an Equity Investor worry about that in particular. Great stuff thanks, everybody. Victoria, steve grasso and Rick Santelli. Thank you we are heading to the close. 27 minutes left in the trading session. The dow now heading lower. Now down more than 100. Were heading sort of back to the lows of the day, down 109 points in fact, its picking up pace right now. That has now pushed the nasdaq into negative territory as well. Well have that and much more ahead on the closing bell after this. Announcer ahead. Now that apples made the big move, what Corporate Giant will be the next one to make a big investment in the usa . There are large parts of this that are a result of the tax reform and large parts of this we would have done in any situation. Announcer thats next. Plus, a big shakeup in the health care space. As hospitals look to bypass the pharmaceutical industry. The closing bell with kelly evans and Bill Griffeth is back in two minutes stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. Minus signs. Technology is hanging on, though, today but the nasdaq has turned lower its just been one of those days where were truly seeing a bit of a pullback, profittaking after yesterdays big gains in the market it pushed the dow above 26,000 on a closing basis for the First Time Technology is the big gainer. The only one. And the intrasensitive sectors like utilities and real estate are the big losers with the yield on the tenyear at 2. 62. Were keep an eye on the dow. It has spiked lower by over 100 points with less than a little more than 20 minutes to go. A multibillion dollar deal in the Hotel Business to tell you about. Wyndham worldwide, one of the best performers in the s p, after it announced its buying the Hotel Business of la quinta for 2 billion in cash and they plan to sell off Real Estate Investment in separate companies. Apple getting a pop after announcing it will bring back billions in cash, give Stock Options and build a new campus tim cook was asked, what was behind the big move . Let me be clear there are large parts of this that are a result of the tax reform and large parts that we would have done in any situation. So, it sounds like President Trumps tax bill has been a windfall there are two sides of the tax bill there is the corporate piece and individual piece i do believe the corporate side will result in job creation and a faster growing economy so which company could follow apples lead and bring that cash look, they have to pay taxes on it. What are they going to do with the money . Josh lipton is live in San Francisco with more. Kelly, apple will pay a onetime tax of 38 billion on overseas cash. President trump speaking just moments ago saying he thanked tim cook personally for this commitment to job creation and domestic investment. Tim cook is a great guy, the head of apple. When i heard the news, i heard 350 billion, i said, you mean, 350 million, thats going to be a beautiful plant. They said, no, its 350 billion. I just called tim cook and i thanked him. I dont imagine theres ever been an investment is that big in this country by a company the iphone maker is not saying how much of its 252 billion held overseas will be repatriated exactly but analysts believe it could be 15 billion which they believe will go bhak to shareholders in buybacks. What companies could follow in apples foot steps youll notice theyre all Tech Companies including microsoft, cisco, alphabet and oracle investors waiting to see how they respond to tax reform also repatriating billions of dollars and making the same kind of commitments tim cook did. Those companies declined comment or didnt answer to requests for comment from cnbc. Analysts say they make these commitments mostly because of economic reasons but theres a Strong Political element as well back to you. Im a little confused but i know thats not unusual. Theyre talking about putting 350 billion into the economy, but youre mentioning now of the 215 billion they bring back, Analysts Expect them to use much of that for stock buybacks, so how does that help the economy necessarily . Well, the three i guess its different here. The 350 billion contribution, thats important, thats what apple is calling it, contribution breaks down a few different ways its going to be, for example, 55 billion theyll spend on domestic supplies and manufacturers in 2018 alone. I guess if you extrapolate that over five years, also add in this 38 billion check going right to the government, of course, that would be separate now, they paid that tax so now the question is, what do they do with the 215 billion. Some think that could be brought back here. We dont know yet. Certainly one expectation is it could be buybacks and dividends. Some believe it could be m a but apples track record on m a, they usually do smaller acquisitio acquisitions josh, thank you 20 minutes to go dows down 82. By the way, the s p down four, dow down large part by boeing, one of the best performers going back to the start of last year big laggard. Now how a group of hospitals is trying to bypass the pharmaceutical industry. I love that story. Two dow components getting y to report earnings after the bell well have those numbers coming up any object. Any surface. If youve got a life you gotta swiffer what are the ingredients is it the places you go . The things you own . Or the people that fill it with meaning . For 150 years, generations of families have chosen pacific life for retirement and Life Insurance solutions. Protecting whats most important to you. Thats the power of pacific. Ask a Financial Advisor about pacific life. Pretty much a down day on wall street. The dow down 90 points right now. The s p, the nasdaq, the rugal, all down a little bit right now. A headline in the New York Times today caught our eye. Reads, fed up with drug companies, hospitals decide to start their own. Hospitals like patients have been complaining about drug prices and shortages for some time now a consortium of about 300 hospitals plans to create a not for profit generic drug company. Joining us is dr. Mayor harrison, ceo of Intermountain Health care, which is the lead hospital on this project doctor, its great to see you. Thank you. This story fascinates me why now . What sparked this . Was it the valiant story recently or what was the straw that broke the camels back here for you . Really, its all about our patients all the time. What were hearing from them is at times they cant get ahold of drugs or theyre way too expensive. Were experiencing that in the hospital as well and weve been thinking about this for a couple of years now we worked hard to come up with a coherent plan, good partners and now is the time to get to work what do you mean youre going to make your own we will work as a team and i will identify different ways of manufacturing drugs. Its possible well make our own drugs. Its quite likely well use contract manufacturers as well. How is that any different from buying generic drugs today . Are you basically not able to choose different suppliers or drug manufacturers, you need to go out there and partner with somebody to get more supply into the market one of the big problems today is individuals and groups have gone be ahead and gotten sole control over a given drug. They create shortages and drive the prices up and our patients cant get ahold of the drugs we need we as a team will do the opposite well make sure drugs are available in good quantities and reasonable prices. Whos financing this . And how much money are we talking here the organizations involved will all go ahead and we will make a, quote, donation pipts not really a donation. Over time the Business Plan says well get our money back well capitalize the organization that way. Were certainly hoping we may get the attention of impactful philanthropists who are sick of this activity as well and will help support us as we get started. I was looking to see if shares of vaillant have sold off. Theyre down about 2. 5 . How long before you think you kl bring generic version of drugs like that to market . Were not talking about which drugs exactly were going to bring to market. There are about 20 on our list well hold those close to our vest we think it will be early 19 before our first drugs come to market. Now, does this mean youre no longer going to buy drugs from the drugmakers if you start making them . Have you heard from the drug manufacturers themselves whats been the response we expect that the vast majority of drugs we buy will come in the same channels weve always gotten them we think most pharmacies are doing a great job and drug manufacturers are doing a great job. Were only interested in those organizations that are creating shortages and driving drug prices up in an irrational fashion. The majority of our business will stay exactly the same what about those who say theres plenty of incentive in the pharma marketplace for other generic makers to do what youre doing . Why not focus and use your own capital on lowering the cost of care at hospitals, you know, costly mris, being overcharged for supplies, the kind of complaints weve heard for years . This is not an either or. This is an and i think we recognize health care is just too expensive. Were doing everything we can to change our operating model more importantly, to drive costs to sxurmz down but we also think a big component of the pain people feel is their drug cost. This is another way were going to get at that. Dr. Harrison, thank you for your time. Well be watching. Good luck with this. Thank you. My pleasure thank you for the opportunity. Dr. Marc harrison, president and ceo of Intermountain Health care, the lead on the consortium where they want to build this network. Fascinating. Fascinating. The free market at work there. About ten minutes left as we head to the close. Dow down 86 points still ahead, ibm and American Express report after the bell we have a team of reporters and analysts ready to break down those results as soon as they hit the tape. The one retailer Goldman Sachs is saying you mu bstuy well tell you which one that is when the closing bell is back in to. Your friend just marea. You like her. Shes really good at social media. She buys stocks in companies that stand for something. You like her. Shes always up on the latest trends. She got in early on the whole goat yoga thing. And her sunsets are always nofilter. You like her. But youd like her better if you made more money than she does. Dont get mad at just marea. Get eatrade. 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. Breaking news on a potential Government Shutdown. Whats the lateest i just heard back from two senate aides who confirm the democrats have enough to block votes of the passage of the shortterm government funding bill at present. Thats important i ran this information by a senior gop aide who noted the senate can take this up a number of times between now and the deadline friday so they can keep whipping votes, keep trying as many times as they have. They believe they have a little more than 24 hours to get this done at present, democrats have enough votes to block this from proceeding back to you. What do the democrats want . They want daca whats the quid pro quo here you named it, bill. It is daca they believe that this is the most powerful point of leverage they have between now and the march a 5th deadline they believe negotiations have been going on for so long at this point, they should be close to a deal. Theyre having meetings on capitol hill with bipartisan members trying to hash this out, but when one was asked by reporters a couple moments ago, if they can get a deal within the next 36 hours, they said flat out no. Despite the fact this is what democrats are pushing for. The gop wouldnt put it in, kayla, do you think . They want to do this separately they believe they need more time to figure this out and they want this to be a relatively simple shortterm funding bill at it has sweeteners for both sides. All right well see what happens thanks, kayla. Keep us posted heading to the close with the dow down 87 points we have the closing countdown coming up momentarily. Youre watching cnbc, first in business worldwide. Ine up in. 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. 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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. 2 30 left as we head to the close on a down day. Ive got a chart here of this week only three days of trading because of the Martin Luther king holiday on monday, but, of course, wednesday was off to the races with yesterday with that 300point rally for the dow putting us above 26,000 on the closing basis for the first time today a bit of a pullback. A little consolidation there meanwhile, the tenyear yield moves to a multiyear high we go back to highs we saw last year around march, around 2. 62 as you heard, Rick Santelli is looking for 2. 63 to be the big resistance level if we could break through that, that would be mow men to us. The dollar index continues lower, as we now flirt with 90 on the dollar index. And then tonight we get earnings coming out, ibm, American Express and Canadian Pacific will be reporting as we continue the earning season this year bob pisani is with me here i wanted to talk about a ruling by the fcc that has implications for both the New York Stock Exchange and the nasdaq. We sit here every day you see behind me traders standing around. Theyre conducting a closing auction where people are determining final price of the stocks everybody gets that final price at the end of the day. Its set right here. We talk about on market with close orders with art cashin thats what that is about, that final closing price. S. E. C. Ruled yesterday that a competitor, thats the ax exchange has the right to conduct a competing auction. Now, theyre not actually doing an auction theyre just piggybacking off the nasdaq auction, which does a similar one and the New York Stock Exchange the rationale was, nyse charges fees, nasdaq charges fees to do that, and having a competitor out there that might charge lower fees a lot of people object saying nasdaq and nyse do a lot of work doing this, but there will be more competition coming. I dont think it will make a big difference for the trader butter it could change the trading ecosphere. Well keep an eye on it. Thank you, bob. Minus signs across the board today as the vix flirts with 12. Stay tuned well get earnings and ibm, American Express and Canadian Pacific on the second hour of the closing bell with kelly evans and company. See you tomorrow thank you, bill. Welcome to the closing bell. Im kelly evans. Dow sold off nearly 100 points on the bell. Dropped 93 to give back some of yesterdays big gains that put us over 26,000 for the first time we held on above that level, for whatever thats worth. We were declining a third of 1 . Boeing weighing on that, especially at the end of the session. S p down 2,798 the nasdaq down to 7,296 and russell small caps retracing to 1,576. We have big reports headed our way. Deidre is standing by for ibm and kate will bring us results from American Express and morgan will covernumbers from canadia express railways joining me now, mark santoli and nancy tangler from heartland financial. Welcome, everybody in the dow, United Health was the big winner while ge lagged, especially if you look at the percentage declines. On the s p it was Utility Company aes leading the day. I think there was value activism albemarle, down lithium names, down about 7 in the market. It was a choppy session. Do you think we sold off late day because of the Government Shutdown its hard to pinpoint to be honest honestly, the losses on a net basis are pretty trivial after the run weve had. Just a pause the broad equalweighted market was flat all day, nasdaq flat. I dont think you want to make too much of the headlines. Theres a broader oint weve run so far in such an energetic way that the market can just kind of back off because its up so much. Honestly, i think thats what we saw this week. On tuesday we talked about this, up 280 in the morning, down, up 300 on the next day. Not on newsdriven moves it was on flows, momentum and sentiment. How concerned are you or should investors be in a day, whatever that countdown clock says, a day and a few hours if theres a shutdown it could cause volatility, for sure, a good use to take some gains but i think you have to focus on the fundamentals and the fundamentals so far very early on are pretty good the banks, bottom line was good. You mentioned United Health care it deserves to be up again today. Whats the deal there what a great quarter. Still kind of riding that you know what it is it was a great quarter fundamentals are strong. Theyre doing wonderfully well in their optum business and they get tax benefit. You cant have just tax. You might have thought United Health, a company that went up like it did during the obama administration, you think the narrative has changed completely and, no, i mean, its at an alltime high. The fundamentals are strong the valuation, its not cheap but the company is growing earnings are growing up 15 after tax and after fundamentals i really i know were all obsessed with the tax discussion and that really has been the driver the Conference Calls so far, particularly the banks, but when you have that fromle banks, and then the kicker with tax, i think thats nice. I expect all of the hmos to do quite well where do you like in this market do you agree with what mike was saying, at some point you want healthy pullbacks, especially as more people look at the wall street journal, the way it was talk willing about yesterdays news it was talking about fear turning to greed on wall street. It was the front page of the New York Post. Dow over 26,000. Thats the first time i can see that much attention drawn to whats happening in this market. Whats your thought . Thank you i think that was a tremendous overreach. Those of us who were around in the 90s, that was euphoria. That was fear turning into greed. This is a bull market rally that and and i use the word energetic as well, mike. I think its surprised me with its energy i think were a little bit ahead of ourselves but we still like some of the same kind of companies that stephanie was describing, nimble mgts teams that are able to adapt, like walmart, that are able to benefit from tax, benefit from the consumer and theyve adapted. So were overweight technology we still like it were still finding places to put money. And were overweight in health care thats been you know, i think we thought of it as not being a good place to be but we had a great year with health care names. We continue to like both those sectors and stocks like walmart. And goldman agrees with you on walmart, upgrading it on tax reform, talking about a boost to the Household Income there lets pause for a moment Canadian Pacific rails earnings are out. How do they look pretty much in line we have a one penny beat on the bottom line. 322 adjusted, thats in Canadian Dollars, versus the 321 expected by the street. Revenue, 7. 1 billion, Canadian Dollars again. Operating ratio did improve, though it looks like its weaker than expected 56. 1 . Thats a key railroad metric heres where we get it gets interesting. 2018 fullyear guidance, a statement from ceo that says with a 2018 plan, the railroad expects increase in and epa growth in the low double digits. That seems light versus what the street had been anticipating also worth noting, tax reform for u. S. Operations, were going to see the tax rate for those u. S. Operations drop from 35 down to 21 . Taking a look at shares of Canadian Pacific in after hours, theyre up fractionally. Back over to you morgan, thank you stocks have been up 25 or so over the past year interestingly, it has not reclaimed the spring2014 highs a good look, transports today a little higher. A good barometer for the economy. It is its lagged some of the u. S. Rails so it hasnt been the absolute leader. I would say roughly on target. I dont know if theres much to are drawn out of this. We talked about you have to have favorable fundamentals. The rails have favorable fundamental. They have volume theyre about to get better pricing. I think the pricing is on the low side on 4q but i expect pricing to get better throughout 2018 those two things in addition to the operating ratio coming down, that gives you positive operating leverage you can see all these stocks have had a nice run. I think it continues valuations are 17, 18 times forward. I prefer the u. S. Rails over the canadian you have nafta worries on the canadian and i think theres more operating ratio leverage for the u. S. Companies theyre more bloated, theyre fatter. Theyre trying to do now at csx what Hunter Harrison did at ct i thought there might be more on nafta. Not seeing too much right away on it. Could be like many companies, they feel like, were not going to know until we know. Exactly. Theres kansas city southern, of course, very naftasensitive in the u. S how about American Express, those results are out. Looking like a Strong Quarter for American Express with a beat on top and bottom line eps adjusted coming in at 1. 58. That is excluding the impact of tax reform the street was looking for 1. 54 on revenues coming in at 8. 84 billion. Theyre also saying they are expecting a tax rate of 22 in 2018 the stock initially got a pop. Now its down by just around a little over 1 back over to you. Thank you, ate. Nancy, what do you think about amex we own it we owned it at considerab blid lower levels i think the company has gotten their mojo back. Theyre turning the corner the marketing has been much mortar getted and sophisticated and the product is superior. If consumers i will confess, ive never had a Platinum Card in my life i got a solicitation i used it on this on my most recent trip to tokyo and the services i received paid for themselves, the fee in the first week i used it i think that as people have more money in their pocket and theyre spending, i think youll see the company is working off the comps from costco so Earnings Growth is going to improve, but the top line is whats impressive to me. Real quickly because shares are dropping 2. 5 , i wonder if its because the ceo is saying because of the tax act, theyre actually going to suspend their Share Buyback Program First half of next year to rebuild capital. Goldman didnt say the same thing but they have a little capital issue as well. I think they were going to trim there. Do you think thats i think thats exactly why the stock is down. You lower guidance or guidance coming in below where people are expecting, obviously the stock will react, kneejerk down let the dust settle. This is a good quarter a new ceo. Branded partnerships happening theyre doing a lot of good things consumers and businesses are spending theres a lot of good stuff. That said the stock is up 34 last year alone. Its not nearly as cheap as it was last year at this time which it was a dog of the dow last year it worked. It was up 34 . Ive been taking some gains because i felt the expectations were high and maybe there would be this misunderstanding about the buyback program. This is a capital situation. Its like goldman. Theyll come back to the market in a buyback stock as a temporary thing. If it pulls back, maybe you get an opportunity to buy. 2. 6 billion charge in the quarter, too. This is the accounting noise that is resulting from the tax law and i think its a pretty good indicator of what youll see in some sectors. A little silly because its kind of this noncash accounting thing that was bolstering book value and they have to play the game and rebuild it fine i think its a good reminder a year ago we couldnt find people who had a good thing to say about amex it was the arms race and they could never win it and they looked cheap now everything everyone thinks all the tailwinds are in their favor. Thats the story for amex, down less than 2 after hours. Ibm, their results are out an exciting quarter for ibm because its broken its 22quarter streak of declining revenue. Revenue for the Fourth Quarter coming in at 22. 5 billion, that is up 4 surpassing expectations by quite a bit. 22. 1 was expected. Eps beating by 5. 18 5. 17 was expected ibm is saying it expects to have Revenue Growth for all of fiscal year 2018. That may alleviate some concerns among many analysts that this could be a onetime cyclical lift versus a secular inflexion point for the business comparatives says it will be driving the growth, making up 46 of total of ibms total revenue. It was up 17 in the Fourth Quarter. Thats about as high as its been in a while. The stock is down 2 in after hours. The full year eps coming in at 13. 80 that is one cent below the streets expectations. Well continue to dig through this number. I want to mention theres a 5. 5 billion charge not included in adjusted eps thats a charge for tax reform well look well be looking through this some analysts raised concern that tax reform would be a negative for the company well be on the Conference Call where the new ceo will be leading that but also be on the call with former cfo Martin Schroeder who became asvp of global markets. Martin schroeter will be on mad money tonight. They did it. They did it they had a lot of mules pulling in their direction because of the dollar being so weak world gdp up 7 or Something Like that. Obviously, its kind of a little turn right here. Also the stock year to date, which is 12 days, is up 10 . It was one of those laggards and i think you had people building up for this. Therefore, roughly, somewhere in expectations yesterday we talked about expectations being high. I didnt realize it was already up 10 nancy, what do you think again, we own this stock. Its not one of our Largest Holdings its hard when youve been burned for 22 quarters, right, to step in and say, yeah, i want this to be my largest holding. In the 90s this stock did nothing for ten years. It takes a long time to turn this ship. We made be beginning to see it i think its too soon to jump in with both feet were jumping in with the 2 position in the stock. The tailwinds, the empire report yesterday, the spending numbers are positive for technology. Thats usually bodes well for technology and ibm will be a beneficiary of those spending dollars. I think its interesting but im not ready to jump up and down. Last word shares are down 3 after hours. To mikes point, up 10 year to date. It was a dog of the dow so people are doing the reversion in trade strategic up 17 , very impressive other parts of the business, well see. Maybe you get a quarter of two bump lift, but then im not sure what you have, quite frankly well have to hear what they say. The guidance is coming out on the call so well see what they say about that by the way, these guys are not a tax beneficiary. Their tax rate will go up. I would just say the guidance, i think i heard they were Something Like 13 for the initial guidance there were whispers north of 14. Well get the details and that sort of thing. I dont think its a disaster but im like nancy, i dont think you want to jump in here, especially after the movement its had. We have more on Texas Instruments with josh lipton. Texas instruments saying its board of directors has selected Brian Crutcher to become the next president and ceo effective june 1st 22year veteran of the company promoted to c. O. O. Last year hes succeeding current president and ceo Rich Templeton who will remain as companys chairman Texas Instruments pointing out under templeton the companys operating profit more than doubled, stock price more than quadrupled, up more than 10 this year, up more than 55 in the past 12 months kelly, back to you another stock up 10 this year we talked yesterday about a lot of these names had good numbers. As ceos switch over, departing ceo must feel good about that. Not much more to say about his tenure. And the transition, in keeping with Texas Instruments, a low drama company, well managed, go with an insider. I always think about phil fisher in common stocks and uncommon profits. He talked about in the 60s how much he loved Texas Instruments. And then the story of the first pocket calculator and how much rejects you had per initial production run they couldnt perfect it for years. Is that right yes that ti82, we played some graphing games on that calculator. I knew phil fisher, so i find that impressive that you read his book. Its a great read, i have to tell you i learned a lot about the fisher family, too. Ken fisher we have to go. Thank you for joining us nancy, stephanie link. A lot more ahead on ibm and more on the closing bell. Announcer next, the big debate on big bloom. Do you want to buy this stock . Both sides of the coin straight ahead. Plus, the one mega retailer Goldman Sachs says you should buy right now. The closing bell is back the closing bell is back in two minutes i think we should do that meeting tomorrow. The closing bell is back in two minutes well wait. What did you think about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . 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Welcome back ibm trading lower, now down 3 after reporting earnings moments ago and broke its streak of revenue declines jim cramer spoke with martin schroeter, the former cfo. The first half to second half which we described back in july, play that as we said, and that puts us in a good base when we think about the transformation of ibm, id say that, yes, now the portfolio is transformed and weve got some momentum going into 2018. Joining us are david bonson and ivan, talking more about the stock. Thank you for joining us david, you just took a position in ibm what are you thinking about the quarter and the reaction obviously, we want to digest a little more thoroughly the results but our position is to be more strategic and long term. From a topdown standpoint it plays into our theme of rotation from growth into value i think bottomup there is an incredibly compelling story here were big Dividend Growth folks. They have a 43 dividend rich yoe right now going into growing revenues theyve kind of stopped the bleeding of those shrinking revenues and going into growing Free Cash Flow to me you have Incredible Opportunity for Dividend Growth starting on of a base of 3. 6 yield. We like the financial metrics of this company strategically, it depends on execution. But that story of what theyre doing in ai, block chain cloud, youre not paying for it youre buying the stock on their main frame business and you have this kind of call option on some of the more exciting growth opportunities. Whats not to like ivan, whats not to like . Actually, ive been neutral on ibm for some time this is their first positive quarter. They had yearoveryear growth for the first time in 22 quarters and theyre key business drivers, Cognitive Solutions and Cloud Services, are growing significantly. I think Cognitive Solutions was up 24 yearoveryear and Cloud Services up almost 30 these are their future Growth Drivers . Are you getting off your neutral . Im becoming more positive. I think they are turning a corner and they also are announced a big stock buyback at the end of last year and they will continue to consistently increase their dividend. David, wondering just the right way to think about how the stock ultimately could be valued if people get persuaded that maybe you have some a path toward organic growth. Ive always thought simplistically that somewhere within ibm is a business that looks like accenture they trade at 24 times earnings. Maybe im wrong about that, but im not saying that ibm as a whole gets there, but whats the path to getting the stock revalued, do you think i think its two things youre sitting at about 14 times right now, so you have significant undervaluation to similar peer groups. Its not about analogy stephanie said earlier theyre not a big beneficiary of tax reform i dont totally agree but i agree directly indirectly, i think you get multiple expansion is they get expensing and ibm benefits from that i think there are Technology Expenditures pause of the tax portfolio that ibm is a beneficiary of that drives pe expansion. Ivan, what about this concern theyre actually one of the companies that will see their tax rate go up this year i agree with what david just said their effective tax rate has been like 13 , but the companies that are their customers will see a significant drop in their effective tax rate, giving them more cash flow to invest in technology this is going to be positive for ibm. Theres a little pressure in profit margins, too. Is that an area youre focused on as a potential concern . What about their guidance which we talked about is 1380, a slight miss. Some thought maybe 14, the street was looking a little over that number. I dont care about the gross margin on sales. The margin i look at is economic profit margin, spread of return on capital versus cost of capital. As long as thats starting to increase, that will have much greater impact on the stock Going Forward and guidance starts off the year. Hopefully things continue to ramp up, they see future growth in two key Growth Drivers and i think that will accelerate. David, as long as the core plank of the argument isnt block chain, you know, and what didnt we theyre in the block chain oh, yeah. One of the block chain etfs, alongside citigroup. Definitely not the core of the argument, yeah thank you, guys, for joining us ibm shares down a little less than 3. 5 . Henry mcveigh of kkr is in agreement with the Rolling Stones he says you can get what you need out of the market hell discuss his 2018 outlook next mom and dad got a new car. With the extra third row of seats. They think its theirs. Look at them, they have no idea its not theirs. Its mine. Mine. Mine. Mine. The new lexus rx 350l with three rows for seven passengers. Are you excited about your baby sister coming . Experience space for the unexpected with the rx l, part of the rx family. Experience amazing at your lexus dealer. Welcome back down day on wall street. The dow is nearly 100 points lower, down 97 on the bell it was the worst performance of major averages that spike came late in the session but at one point we were down 168 the nasdaq down two, the russell down nine as attention turns toward whether there will be a Government Shutdown tomorrow evening. Checking on names moving after hours, how about ibm down more than 4 . As we said, it kicked off the year with a 10 gain American Express down 2. 25 and Canadian Pacific rail is fractionally lower. While there was fear in the market today, stocks continue to hit record levels. Our next guest thinks you can still get what you want. Is it what you want or what you need kkrs Global Driver henry mcveigh. Thanks for having me. You think rate hikes will happen faster . I think on the short end, our thesis is that earnings are going to come in stronger. President trumps tax cut actually leads to more spending. And then in the second half of the year, you end up with the fed having to move a little more quickly. I think what really startles us is when you look at 19, the market is pricing in less than one rate hike. We think by the end of is that so, its less than one rate hike right now in. Yeah. Wow were twice what the market is. Wow and what are the implications of that, i guess, for other asset markets, where we are in the cycle . I think the biggest thing, ill put on my financials cap, is get long central bank normalization, which is how can you lock in lowcost liabilities . We talked about before, were very active in japan you know, things like mortgaging servicing rights, financials where you can enjoy the benefit of the net Interest Rate rising and probably easier regulation and capital ratios coming down. There has been pushback from people saying, look, its not what you think from financials they dont necessarily purely benefit as rates go up, especially as they go up more and more do you agree with that you have to pick your spots there are some companies where the Net Interest Margin is beneficial i also think can you name them probably not. Were much more active right now in europe and in private credit where the banks are starting to sell performing assets a lot of people focused on the nonperforming side were been more active in commercial real estate, mortgages, locomotives, aircraft. For a long time european banks have had to sell off all of the bad stuff they had bad banks, running stuff down since the last crisis, et cetera. Why are they selling off the good stuff finally their book values are high enough where theyre in control of their own destiny where they werent before. Two is they get capital relief if they have high capital charges against these assets and if there is some loan growth that can redeploy in some other areas. Some fronks were left undone when europe went through the crisis in 11 and 12. I would say internationally if you want to play this thesis, if you think about whats going on in japan, you can get less than 2 financing and, you know, i think were seeing lots of conglomerates around the world starting to change their footprint. Japan for us is ground zero. Weve done transactions with hitachi, panasonic, big its not just ge. The article in the journal yesterday, but youre seeing that in europe we did a transaction with unileaver. Youre talking about edible spreads, not yeah, yeah, lets make sure thats such a dirty joke. You laughed. I know. There you go. One quick thing, if youre long central bank normalization, what on a net basis loses favor is it those kind of growthy areas people have piled into to say, hey, in the absence of a normal economy, we need to own that i think weve been most struck by whats going on in the growth part of the market. If you look at the russell growth, its now back to 99s level. If you take the top decile its trading at 18 times book value. Times book value . Yeah. It got to 21 times book value in 99 but if you think about the imputed return on equity, to me market levels are high and you guys have done a great job reporting on that. What were trying to find is where there is complexity or things left behind even today were quite active in those areas where there is some form of complexity or this gap between growth and the value has widened out. It pertains to the Energy Sector as well. Mlps have been left for dead theyre the only instrument that has a yield above average. Weve been active through our Infrastructure Fund and energy franchise, participating there as well. Last thing, let me circle back, because you talked about its not just in the u. S. , its across the globe youre seeing conglomerates breaking up one thing youre starting to hear about post tax reform is will there be a big wave of dealmaking and that usually implies consolidation. Can both of those things be happening at the same time i think there are certain sectors where it does or but were in a secular bull market where companies are divesting noncore assets in the Public Markets we see that through the activists they are pushing companies into the arms of either private equity or spinning things off. So, i believe that what your point is correct, theres a lot of cash with the lower tax rates and thats going to drive dealmaking. That typically happens at the end of the cycle i think thats a cyclical uptick in what is a secular trend towards more refined footprints of global conglomerates. A lot of information, henry thanks henry mcvey from kkr. Time for cnbc news update. Lets get over to sue herera. Heres whats happening at this hour. Democrats are calling gop, quote, amateur hour, end quote nancy pelosi telling reporters republicans dont believe in governance. We could have protected d. R. E. A. M. Ers, which is part of the agreement as we go forward but, instead, the republicans are difficult dillydallying, tr good old time. A bus fire in kazakhstan killing 52 people today, happening near the border with uzbekistan only five of the 54 on board managed to escape the blaze. No word on the cause of that fire. And pope francis stopping his motorcade to help a Police Officer who was thrown from her horse. There you see she fell off the horse there. The horse bucked as the pope mobile passed by on its route in north chile. The pope stopped, got off the vehicle to check on the officer and waited until an ambulance arrived to take her away he probably threw in a blessing as well. If that were me, i would feel a little more consoled if the pope was absolutely, absolutely. Youre up to date, kelly. Scary stuff thank you. Sue herera. Goldman sachs upgrading a bigname retailer and putting the company on its conviction buy list see what stock the analysts say you should buy the closing bell is back in two. The dow traveling an astounding 15 points over the last four sessions, hitting a new high earlier today before turning negative thats where we sit right now. I feel the return of an old friend that i missed for so long called volatility. I think this is great. Because this confirms the market to me. This tells me its real. Morgan stanley better than expected results again, the company did say its taking a onetime charge related to the new tax law. Apple ceo tim cook making a 350 billion pledge to the country. There are large parts to this that are a result of the tax reform and there are large parts of this that we would have done in any situation. Amazon announcing the finalistists for its hq2. Most of the locations fall in the midwest, south and east coast of the country away from amazons current home of seattle the republicans said it would be the fault of democrats if the government shuts down because they would be holding the military hostage meanwhile, democrats have said it would be the fault of republicans. Pensions and retirement accounts are surging in value as the stock market smashes one record high after another. We can keep it like this were going to win a lot of elections, that i can tell you. The dow sold off nearly 100 points on the bell today we dropped 93 to get back some of yesterdays big gains and walmart got a big upgrade to buy Goldman Sachs. Shares are up more than 50 in the past year. But is there more room to join joining us fast money traders, karen and guy. Where are they i want to see you before i say, good to see you both there they are hello karen, all right, youre throwing some rain on the parade here your rain on the your yeah, guess youre raining on my parade. Yeah. Because you like target, right . I like target better. I think its kind of like walmart, theyre trying do a lot of things that walmart has done right thats been helpful for walmarts stock. Theyre working on their Online Business and, you know, theyve acquired shipped and theyre really focusing on some of the things that have caused them some trouble we see it in their projection for their earnings theyre holiday same store sales were good. They talked about i think its about 540 so the pe multiple is not so expensive so its a walmartlike. Walmart is fine. Nothing is bad about walmart except its trading at 16 times and change. Guy, what do you think . Goldman is saying its like a tax reform thing they say there will be a 1 to 2 increase in income for people between 40,000 and 200,000 and a lot of that money will go in walmarts pockets, they think. People will have more money to spend, benefiting Walmart Walmart has done everything right over the last couple of years. I get it if goldman had such convictions to put walmart on the conviction buy list, they raised the projection to me thats not a ringing endorsement. Im with karen on this one not to disparage Walmart Karen has been a walmart holder forever but its getting ahead of itself in terms of valuations if you look at target, go back to july 13th when target that stock has gone straight up many of the target problems were selfinflicted theyre past them. In terms of where they are in the scale, i think theyre nine months behind where walmart is and quickly catching up. In terms of valuation, target at 16. 5 times forward looking is closer than walmart at 22. I wonder, walmart guy, what you lay out in terms of the analysts at goldman and not having that aggressive market, its a lot like the consensus favorable blue chips and people are buying into but theyve already run so much and how much can you make a case for further upside i think thats right. Far for me to cast dispersions on the analysts at Goldman Sachs, but if you have that kind of conviction with the argument they laid out, move it from 115, i dont know, move it to 130 or something. Im just spitting out numbers. To me 115 to 117 is not moving the needle i get the whole conviction buy list but there has to be some conviction in the conviction i love it thank you. Thank you. Karen, guy, see you at the top of the hour coming up in 17 minutes. Catch all the fast money action starting at 5 00. Ibm and amex reported a few minutes ago. Well get you caught up. Whole foods is sing aythe shelves are empty and its not because of a run on kale its next in todays take aw away. Lets begin. Yes or no . Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Welcome back ibm out with earnings moments ago. Stock down 4 at they just grew revenues for the First Time Since 2012. A little too much of a buildup, this is the quarter, a little anticlimatic i dont know if anyone is seizing on the numbers it was just up 10 in the last few days lets see how it settles out, the street reacts to it. Its one of these struggles where when youre telling the street to look at kind of a minority piece of the business as the Growth Engine and waiting for it to eclipse the legacy stuff, which other companies have done, the oracles have done it, its not always a linear process. Lets look at American Express. Meantime, that was one of the stocks out of favor last year. So then had a pretty good run. Its trading lower after it announces it will suspend its Share Buyback program as a result of the tax reform its down 2 . Its a little wrinkle the street had to absorb i think in general the stocks that have had this run, its going to be a theme for, you know, this earnings season, where basically the numbers are okay, but who find somebody who didnt think the numbers would be okay in general for these large companies. So, you know, its one of those things, a matter of relative to what we were positioned for. Are they still in the dow, American Express yes. Well see how that shakes out tomorrow. Time for the takeaway, we talk about media mergers wall street journal saying Shari Redstone is behind the move amazon or verizon could be potential bidders for lionsgate. Maybe theres an m a boom but the Media Business is in a boom of its own. Obviously, you have the secular pressures, you have redefining what scale is with the fox disney deal pending right now and at t time warner i think its a hedge as well, especially with cbs viacom you simplify the structure, have aid controlling owner and i think you want to be able to funnel resources to those kind of Survivor Networks and studios that will be able to live in this new world. Do you think were closer to the beginning than the end of this consolidation process i wouldnt say were close to the beginning just because there arent that many players you know, its not as if theres two dozen players that have to be rolled up but i think were right in the thick of it. I think it could be one of these compound type deals. Discove discovery scripps getting together. Wholesale shelves empty. Workers say the problems began before amazon bought the chain and have to do with change in inventory. We can only look at amazon shares kroger was up 1. 5 how big of a problem is this it seems like its a problem for shoppers and at the store level. I recall, though, before amazon was involved, before amazon bought whole foods, the activists pressuring whole foods, one of the elements of their case was that their systems, their inventory systems, their buying, you know, in terms of how they bought produce and how they bought all goods was very inefficient was basically not up to snuff. This is an attempt to kind of get more of a technological discipline behind that but obviously now its amazons problem to figure out. Finally, a rare bright spot for the hardhit toy industry but it may be fading star wars toys dropped last year from being number one. Its not just star wars. Toys related to cars 3 also disappointed shares of hasbro down 1 . Its really kind of mirrored the way the movie industry has focused entirely on franchises the toy industry has really put all their bets on movie franchises. Thats true. Theyre always franchises. True. They are always going to take it a few steps too far there is a saturation of mind share on kids. And i think you have a constant drag on devices encroaching on kids time a lot of people rebelled against the latest star wars movie as introducing new cute species so they could create toys. Employees riding schultz busuttils from google and app apples headquarters were attacked more information than to that next. Wait until you see what is coming next to one of manhattans most expensive apartment buildings. Contesta brewer is there live. Contesta. Reporter im standing right next to it right now, kelly. One of the apartments inside here went for a cool 100 million. They say that rereal estate is all about location, location, location so what will this new neighbor do to the location on Billionaires Row in new york city city were back right after this. 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. Shuttle buses carrying employees from apple and google under attack over the last few days josh lipton has more from San Francisco. Reporter the commute for apple and google employees in San Francisco might have gotten a lot longer at least five of apples shuttles recently had windows damaged while in transit one theory is that sandals could be using pellet guns or rocks. Police officers wouldnt confirm that to cnbc but confirm the attacks are happening on highway 280. The first attack was friday each another four buss were targeted on tuesday apple is rerouting shuttles and working with reinforcement but the rerouting could add 45 minutes to the commute in both directions for employees its not just apple. Other Tech Companies getting hit, too a google bus was hit on the same highway on tuesday going cell apparently rerouting its shuttles for its employees they did not respond to a request for comment. No injuries have been reported tech shuttles have been targets before years back the buses were vandalized with protesters saying they were upset about gentrification in the community. I dont know where the police are, but to reroute them 45 minutes, crazy thank you josh. Now to contesta brewer in new york where the mayor wants to put a homeless shelter right next to one of the citys most expensive buildings. Reporter the new york city mayor wants to open a shelter steps away from this building behind me where a penthousewen for a cool 100 million. On the back entrance here, steps away, the Park Savoy Hotel a budget Conscious Hotel will soon house 150 homeless men and its right next to, shall we call them budge unconscious hote hotels, luxury hotels, the 157 building, one of the most expensive real estates in the city opens up with its back door on the shelter a resident says its ill conceived to place a homeless shelter in so close proximity to luxury residences. We heard from a tenant inside 157 who said when his lease comes up he wont renew. Some of the property in this neighborhood sells for up to 10,000 per square foot. Its being questioned whether this is the most efficient use of taxpayer dollars to the issue of homelessness. But bill deblasio plans to open homeless shelters and Property Values doesnt factor into their decisions. They have been hugely controversial, this whole idea of using hotels in general contesta brewer in manhattan. Coming up, sheila bare will make a shocking call on what she believes would be will be kryptonite for the cryptocurrencies couple of Conference Calls about to get underway for ibm and American Express both Companies Shares reporting lower after reporting earnings earlier this hour. What are people listening for. I think in general this quarter you are listening for projections they have on tax cut impact, mostly i think on the customer side. For American Express obviously their customer sbas going to be more flush if they have spending projection adjustments they are making on that and ibm as well, what they think in terms of demand not just the financial adjustments that are going on. But really end market demand from the tax cut. Great point ibm, too, any clarity on how rapidly the new revenue areas are growing. Exactly. And how much they can sustain Revenue Growth in 2019 what is this year, 2018 that they now anticipate exactly. We have got to go. Thats my water bottle that close it gore closing bell. Fast money starts right now. Fast money starts right now. Live from the nkds market site overlooking new york citys times square im ma list lee. Tonight on fast, check out shares of ibm sinking after hours session despite trapping 22 consecutive quarters of deincloo jim cramer gives us his take on the stock. And bitcoin rebounding after two days of heavy selling. A top investor