Transcripts For CNBC Closing Bell 20180119

Schumer just arrived at the white house. Reporter i caught up with chuck rounds, a republican from north dakota, who last night was a no vote and this morning changed to yes after promises from Mitch Mcconnell i asked him what was going on. He said leadership has them in a Holding Pattern for the next couple of hours as they figure out what theyre going to vote on, whether it will be the bill the house passed last night, that 30day shortterm funding bill, whether it will be Something Like four to five days which democrats and some republicans have proposed to ramp up the pressure to get a deal done on immigration whether it will be something in between. He says republicans in the rank and file dont know yet. Senator schumer and Democratic Caucus are surely meeting this afternoon to figure out next steps from their approach after that 90minute meeting with the president. As i said, when he came back to the capitol, he had little to say about the meeting, but just that it was productive listen we had a long and detailed meeting. We discussed all of the major outstanding issues we made some progress, but we still have a good number of disagreements. The discussions will continue. Thank you. Reporter whether those discussions will continue beyond this ninehour time frame that both capitol hill and the white house are now staring down, it remains to be seen, but those are questions that are being hashed out behind the scenes right now. Kelly . Kayla, just real quickly, you mentioned theyre not sure which bill it might be if they were to vote on just a four or fiveday stopgap bill, does the house have to vote on that, too . Reporter they would. The house was somewhat frustrated this morning. Some of the some of the members of leadership were saying, look, weve already done our votes. Weve done our job we need to leave for the weekend. Theyre actually out next week thats one of the other complicating factors of this equation, is that its not something they could necessarily push off until monday or tuesday. But then around midday today, the whips office said, wait a second, we need you to be flexible, we need you to stick around that was the first sign that potentially there was a deal that was happening that could result in a different piece of legislation than the one the house voted on last night. Kayla, thank you. Well let you get your ear back to the ground, see whats going on there lets get to the white house now for reaction to that meeting with eamon javers. Eamon . Reporter yeah, bill, it was an unusual meeting in the Oval Office Just four men were in the room, we are told. It was the president , Chuck Schumer, Chuck Schumers chief of staff and the president s chief of staff, john kelly those are the only participants in the meeting thats unusual usually this would involve more leadership across the board, democrats and republicans, possibly this late stage of the game clearly the president had something he wanted to hash out directly with Chuck Schumer. He was able to do that im told by a white house official that it was a good meeting, but here at the white house, theyre not offering any more details at all about what specifically was discussed you can imagine that whatever it was will start to leak out on capitol hill schumer will presumably have to socialize it among his colleagues if there was any offer made here at the white house. We should get some wind of what that might have been for right now, we dont know what the four people in the room discussed, but we do know there were only four of them thats a little unusual here at the white house. Eamon, thank you. Well let you get back to work as well. Let us know what you hear. Eamon javers at the white house. Lets bring in terry haynes and larry kudlow, cnbcs senior contributor. Good to see you both larry, whats your best guess about what happens right now well, the most sensible thing ive heard is majority leader Mitch Mcconnell said, were going to stay here all weekend and keep voting. The senate is, but they need 60 votes. The house is not going to be a big problem, i dont think the house got something through with the Childrens Health care program. The only thing the senate could do without the house being around would be to approve their house bill, right . Not necessarily you could have kind of a tax reformlike informal conference. These things can be done and then just knock them through but they have to keep voting they have to otherwise theyll leave for a week just want to put some perspective on this. I went back and looked cnbc had a great chart on the website of Budget Shutdown days. And i worked in reagans Budget Office in his first term i lived through seven budget day shutdowns which meant nothing to the overall economy. This is where the rub is in my day it was 17, 16, 18 essential. Today actually given government expansion, its almost up to 50 essential. Now, what that means is, a lot of people, including the military, will not get paid. Theyll get it back later, but theyre going to be working for free, so will a lot of the cops and firefighters and First Responders i think thats very unfair and i think this whole story makes the public angrier at congress, government and the swamp. Thats where this leads. Terry, what do you think happens . When we consider that in the senate right now its not just democrats against republicans, you have some republicans, the leadership especially, that wants a shortterm bill. There are some republicans that dont want to kick the can anymore. They want a bill thats going to solve this whole thing then you get the democrats that want daca included in this wheres the middle ground, do you think . The middle ground, i think, is easily seen its not so easily gotten to, but its easily seen firstly, let me say about the meeting that just happened within the last hour in washington, only serious meetings are not leaked. So, you know, so that was a serious meeting. And a good one you didnt have you dont have the white house you dont have senator schumer trying to overcharacterize the meeting or to politicize it. Theyre actually trying to make some progress, so that ought to be heartening for those that care about this. Secondly, to larrys point is exactly right. The impact of this, the Government Shutdowns used to be seen as catastrophic now theyre not seen that way anymore. You can see the journal and the Washington Post both published things this morning illustrating larrys point about all the functions that will still continue regardless. The other thing i would point out is there is really no disagreement on the fundamental issues, on the spending issues weve all known for months that a deal was there to be done on spending that would continue what i always call the 50year fiscal stability that deals still there to be done the question is, you know, how are they going to coalesce around the daca, the d. R. E. A. M. Ers issue, how are they going to but, terry, let me everybody wants it done. Let me put this on the table, though i think one of the subthemes of this is the argument between defense and nondefense spending. The Trump Administration wants to beef up defense spending principally. Its not troops, mostly equipment, including nuclear weapons. The democrats are arguing any increase in defense has to be matched by nondefense. Now, i was told earlier that mick numulvaney was in this meeting. The president s budget took down the baseline for a lot of domestic spending not entitlements but other stuff, and raised the defense spend line this goes back to the sequester of 2013. So, i think thats a big issue behind the scenes. And i also i dont see how the daca thing gets resolved here i might be wrong, goodness knows, but this thing really germinated when the president broke with Lindsey Graham and durbin on daca and said i want the daca the d. R. E. A. M. Ers to stay, but we have to have a wideranging Immigration Reform billpy dont see that getting done this weekend. This is the time the democrats know they have some leverage to get the public to Pay Attention to that. Listen, lef vaj a funny word. Heres trump riding apple, walmart, tax cuts, higher minimum wages from walmart, the economy looks good, the stock market looks good. Trumps got some leverage himself here the democrats, to some extent, are trying to go like bigtime ankle biting. Theyre wrestless and they want to get to november 2018. I think trump has a fair amount of leverage on this, too. Thank you i hear youve been kind enough to say youll stick around in case something happens, so well see you maybe here in the next hour or two. Terry haynes, larry kudlow, thank you. How have stocks fared during past Government Shutdowns . Something larry was just stalking about bob pisani has been combing through those stats. He joins us with details. Stocks have been off to the races so far in 2018, but the threat of a possible Government Shutdown might throw the rally for a loop, but it depends we already saw the markets loose steam yesterday. The dow closed fractionally lower. What does a shutdown really entail the government would stop spending and mostly applies to discretionary spending, entitlements, medicaid wouldnt be affected, neither would military spending really the u. S. Government has shut down a total of 12 times since 1980 stocks have shrugged it off. The s p has traded up an average of 0. 2 during a shutdown. The bigger move comes after the government reopens, two weeks after the government is back in business, both the dow and s p have logged average gains of more than 3 the dow trading positively 100 of the time, 100 of the time in that period. So any impact on the economy, it seems to be modest Goldman Sachs estimates each week of shutdown would reduce First Quarter gdp growth by 0. 2 thats not good at all, but that would be reversed over the next quarter. So, most of the notable shutdowns over the last few decades have coincided with debt limit deadlines. Thats different the next debt limit deadline wont be here until march so stocks wont react much to a shutdown but if the debt ceiling heats up, that could be a real problem for the markets. Back to you. Isnt that interesting . Thank you well see you later on. Joining us now to discuss a shutdown on stocks is neil you dont think its going to happen i dont think its going to happen. I think thats what the market is telling us the s p is up 8 and 10 the dow is fluctuating some people might point to bobs thing, because it doesnt matter. I think thats exactly the truth. A Government Shutdown is not in the long term going to value stocks, right . It might create some angst, but i dont think well get that angst. If the market were worried or if investors were worried well get this shutdown, the market would be more skiddish than it is today. If the headlines come out in the next half hour, schumer meeting with or trump tweets, it fell apart, theres no deal, do you think we tank into i dont think we tank i think we might give a little back but i think thats odd because schumer just came out and told everybody, we had this great meeting, were going to stay here all night and vote on it if theyre out next week, they dont want it to go in the next week because then the market may get skiddish if it goes a week with nothing i think theyll stay there and get it done. This week we have seen a rise in the yields of the treasuries. Weve highlighted its gone back to yields that we havent seen in over a year is that making a comment of some kind here . All thats making a comment is its buying into this renewed Global Economic growth whats going to happen with rates in this country . Whats going to happen with rates in europe. Whats going to happen with global growth. I think thats positive. This is what weve wanted to happen for a decade ever since the fed cut rates to zero. It seems different because we dont have that debt ceiling where it doesnt feel as dangerous or political fear. Political fear is not necessarily in the long term going to change stocks the market is even ignoring it. Ken, thanks. Thank you weve got 47 minutes left. Well watch. Well see what happens here. The dow and the major averages not worried too much in fact, were positive across the board here the nasdaq was just at, i think, record intraday high, same with the s p. Russle is up more than 1 and the closing bell is just getting started. Announcer next up, the flu this is shaping up to be one bad season how do you prevent it from infecting your workforce and how do you tell coworkers to stay home plus, how do you play this market near record highs going into the heat of earning season . The closing bell with kelly evananbi gffh bk s d llrietisac in two minutes ainst time. And keeping it in the right conditions is the best way to get that fish to your plate safely. dane chauvel sometimes the product arrives, and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. tom villa we took our world class network, and we developed devices to track environmental conditions. This device allows people to understand whats happening with the location, but also if its too hot, if its too cold, if its been dropped. Its completely unique. dennis woloshuck if you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. Who knew a tiny sensor could help keep the food chain safe . Major averages as we close out another positive week for the dow. Another week where we saw millennial level fall. The dow above 26,000 for the first time ever. And the s p above 28 were all, of course, watching whats going on in washington as the negotiations apparently continue to try and avert a Government Shutdown at midnight tonight. Meantime, chipotle shares rallying as they upgraded the Mexican Restaurant chain from underperform to perform following menu price increases this week. The stock up 1. 8 . And flu season is in full swing. The cdc now reporting in a not so terrible year the flu will kill 12,000 in this year a bad year could see a death toll around 56,000. Dr. William shafner is with vanderbilt doctor, ive read this is a moderately severe year so far. We may be near the peak of the flu season how do you assess it right now oh, its moderately too really severe. Were clearly having a severe influenza season weve got a dominant virus out there that causes more severe disease, causes more complications, particularly among Older Persons and the very young. So, tighten your belts were still in the middle of flu. Doctor, weve had colleagues leave work early today if they even suspected they might have the flu. When does somebody know if theyre okay to come back . And do you recommend people go home, even if theyre not sure absolutely. Go on home if you think you have the flu because you dont want to spread it to your colleagues, obviously. After you have started to get better, two, three days after the onset of disease, if youre an adult, you can come on back to work because youre pretty much stopping spreading the virus at that point. Andy, lots of schools have closed to keep from spreading, but how do you do that with businesses you cant just close because you dont want the virus to spread so, whats a manager or an owner to do here yeah, its tougher in the workplace. Its so important as a manager to make sure you tell your employees, its okay to go home when youre sick your job is not going to be in jeopardy in fact, its better for everybody. Its better for you as an employee, you get to recover, better for your coworkers and better for an entire department doesnt fall ill and cost the company a lot of money over the flu season andy, do you have any idea of reckoning the productivity loss or what the Economic Loss might be from people staying home . Were predicting about 11 million americans will fall ill over the flu season. Thats going to cost employers over 9 billion in wages being paid to employees that are staying homesick doctor, i had a conversation we did with the former head of the cdc. I asked him this question. Ill ask you will we ever get to a day you know, developing a vaccine is like a guessing game youre trying to guess which trains of the virus will be most prevalent when they get here and develop a vaccine along those lines. Will we ever get to a day when the guessing game ends and Technology Allows for a more effective vaccine year to year yeah, you know, were getting closer and closer to developing whats called the universal flu vaccine. One that could protect against a whole variety of strains and maybe we only then need to get vaccinated every five or ten years. Were not there yet, but we need to keep supporting that research because, boy, that would make a huge difference. Not only in the developed but the developing world in mitigating this annual epidemic that runs around the world that would be fantastic doctor, in the meantime, im starting to wonder i mean, we talk about workers who might be sick going home. What about people concerned about getting sick who might be especially vulnerable to it or otherwise, what about them staying home, can they go to their boss, should they go to their boss and say, i dont feel comfortable coming in . For people who have underlying illnesses like that, nows the time certainly to rent a movie rather than to go to a movie and removing yourself as much as possible from people who are coughing and sneezing, trying to avoid crowds maybe you can get an accommodation at work if youre particularly vulnerable. Try to stay away from those folks who are coughing and sneezing. How does that work, andy, if there are some employees who are, lets say, in a delicate condition and are worried about being exposed to the flu, how do you justify that to your boss if youre feeling okay right now . You can always go to your boss and just say, hey, im worried about getting sick, i have an underlying condition maybe i could telecommute from home today or if there are any offices or meetings happening in the office, maybe i could call in from my desk instead of being in that close room with a bunch of other sick people sounds like a plan. Tough to do, though. Doctor, last question are people wearing the masks, are you supposed to wear the mask if you are sick or if you dont want to get sick actually, the masks have never been shown really to be terribly effective get vaccinated if you havent been vaccinated yet, run and do it and make a new years resolution to get vaccinated again this fall and bring the whole family with you. And wash your hands, thats the big thing there. Thank you, both. Thank you for your insights today on that. Heading to the close, 38 minutes left in the trading session now. As we watch whats happening in washington, the dow and all the other major averages are modestly positive right now. Coming up, a possible canary in the coal mine for this rally. Investors much start to watch closely. Well have that coming up. Plus Security Company adt is an ipo but its a rough day on nduthas hi ts fi o wtbendhi weakness when we come back [ 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. Talk to one today and see why were bullish on the future. 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. Welcome back dow is climbing 21 points. Were looking at more records with strong performances today by the nasdaq and russell in particular the s p is up a third of 1 . Consumer straples is leading the way, up 1 today discretionary right behind there. Weve had a bunch of upgrades are consumer stocks that may be contributing to it. Staples were the biggest gainer this week wow you dont see that a lot. No, you dont. Meantime, adt shares under a lot of pressure after going public today at 14 a share. That was below the original ipo target price of between 17 and 19. Investors apparently kerpd about the Security Companys ability to keep customers and add new ones with competitive market with upstarts like ring. Whos going to come in and there keep things working, whos going to understand the devices in the home, make sure it stays working with you at the adt side, service is what we do. We tad care of our customers, 24 7, 365 days a year. They were private twoey years ago. They have a lot of debt. They have 10 million in debt with the ipo price they only took in about 1. 5 billion. You see the competition everywhere by the way, you still have to have a phone line if you want an adt system at your house seems like you have headwinds working against them. The ring, where you can watch and answer your door bells. Those can be unreliable, too. Basically, everyone will offer Something Like that. Thats the problem. 33 minutes to go dow is up 27 weve climbed a little higher here s p hanging on to a nice gain of ten, and financials have been one of the best performing sectors this year. Ahead well hear from a top analyst on why he thinks a specific group within those financials is about to break out. Meantime, netflix is set to report earnings on monday. Well find out whether its latest price increase will take a toll on subscriber growth, which is what we all watch for find out how you should trade that stockhe othe results later on the closing bell. 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. We are on the half hour. Time for a cnbc news update with sue herera the Supreme Court announcing it will consider a challenge to President Trumps latest effort to limit travel from countries said to pose a threat to the nations security. The decision to hear the travel ban case, the president s third, comes almost a year after his first. Las vegas investigators say they still have not discovered what motivated Stephen Paddock to embark on the worst mass shooting in u. S. History but they did say he investigated other possible targets, including the famed san sta monica beach in california. Scientists are getting closer to a blood test to detect as many as eight different types of cancer. The test from Johns Hopkins researchers is called cancer seek its not quite ready for public use yet, but Scientists Say if it does and it comes to market, the test would cost about 500 bucks. And legendary Soccer Player pele collapsed and was forced to cancel a trip to london this weekend. He was due to attend a dinner in his honor. The 77yearold has suffered from kidney and prostate problems we wish him a speedy recovery. That is the news update at this hour. Kelly, bill, back downtown to you. Thank you, sue. Well see you next hour. Sue herera. Quickly, the dow is up 39 points as weve checked, keeps moving higher. Not dramatically, but we only just turned positive s p, russell, nasdaq all substantially higher once again, not exactly a pullback from the kinds of gains weve seen this week or this year, as a matter of fact. Lets see what our Closing Bell Exchange thinks about it and the looming shutdown potentially. We have cnbc contributor peter costa and our own Rick Santelli at the cme in chicago. Peter, what do you think the message of the markets is here the message of the market is it just doesnt want to give up. You know, investors are continuing to put money into etfs, mutual funds, wherever their money is going, its coming right here or going into the equity markets there doesnt seem to be any letup. What about the shutdown that well potentially face weve seen this before. This has been a story weve had over the past four or five years that i can remember. Theres been three or four potential shutdowns. I mean, you have a government that i dont want to sound like a libertarian, but maybe thats not a bad thing to have them shut down for a little bit. What do they get accomplished anyway thats being sarcastic i think it is on investors minds but not forefront. I think its earnings, whats the First Quarter going to continue to do as well as weve done so far . Realistically, this will get fixed. It will get solved and middle of february well be talking about the same thing all over again. Rick, i read a headline it was not on cnbc, im happy to say. But the first thing after Chuck Schumer came out of the white house saying that they still had disagreements, the headline said, and the dollar index held steady as a result do you think the dollar is responding to whats going on in washington right now its been going down no, im glad that wasnt im glad that wasnt on a cnbc website. No, i dont think it has anything to do with it as a matter of fact, i dont think any news is going to really change the dollar any time soon. I really think the dollar index in particular, i believe its 57 weighted by the Euro Currency i really think this is a euro europe story. I think its a legitimate one. Forget what mario draghe needs to do to get growth in europe investors want to see, but in europe its a nice underpinning for economies, even though there may be an uglier epilogue thats the catalyst to that growth. I think the story is threefold. I think the first issue continues to be that the markets have one of the greatest filters for 2017 and early 2018 ive seen they seem to be able to focus on the issues that are Economic Issues and cut through all the stuff that really doesnt matter, like the shutdown. Like the political sdmrags of the shutdown the second issue is Interest Rates. I think theyre going up and i think any rational person whos paid attention to whats going on with the underlying economy would expect they go up. But theyre doing it moderately. Were only up eight, nine basis points on the week in a tenyear were sitting at a critical level. Its a critical level weve seen before and the stock market seems to see through that. We dont want to see it instantly move up to 3 . And i think the third issue i find really interesting here is that, you know, next friday if the government doesnt shut down, well see threequarters of 3 gdp growth i think thats a wonderful thing. I think many of the policies of this administration are good poefrlz. Policies we can argue about all the other issues that arent pretty, but as i said, its all about the right fit fer youre an investor. Kevin, do you think the markets are positive right now because they dont think a shutdown is going to happen or they dont care if one does . I think the markets riding a lot on momentum. This has been something that really got a boost around the passage of the tax cuts. That momentum has carried on into the new year. At the same time, though, we would have to be cautious about valuations over a longer term period of time because youve got a market worth 32 trillion. Thats a lot relative to a 19 trillion economy at some point we would expect to see some volatility. But the economy is looking better, the growth rate is looking better and the earnings are up from 123 bucks at the beginning of 2016, forwardlooking numbers and that same forwardlooking number is 155 or so. A lot of the market move has been justified by higher earning expectation. Im not trying to be snarky, you know i love you. There was a time this kind of rally would you have heading for the exits because we were overbought or yes ill tell you what are you waiting for . Honestly, i think were getting close to that point again. Youre looking at the earnings ill wait until the earnings season is done once were past that period, i think the market will level off because thats the natural flow, but you have to take a look at it then and say, you know what, are we looking at First Quarter earnings when they come out at the end of march and april s there going to be that continued growth im not so sure. So, im going to get a little more nervous and a little mo more maybe a little antsy and want to pull the trigger but ill wait because i think theres more room on the upside. Durable goods, gdp, a few Government Economic reports headed our way next week if we dont get them, maybe we have the earnings and so the market will have Something Else to focus on anyway does it matter if they dont know those figures right away . Yeah, the if youre talkingabout the durable goods things like that, its very important we see good numbers there when they do come out because this is a growth story if that growth doesnt materialize, then the thing you have underneath that is and you have rising shortterm Interest Rates underneath that, higher valuations, fading growth and rising shortterm Interest Rates would be a cocktail you wouldnt want to see develop as the year progresses. We do want to see a followthrough with good growth numbers, especially durable goods and investment numbers buried in the capital numbers. Hopefully well see one way or the other. Exactly. Questions will be answered. Guys, thank you appreciate your time kevin, peter costa and Rick Santelli thank you. 22 minutes left in the trading session. The dow up 29 points all the other major averages are positive as we head to the close. And still ahead, shares of netflix up about 60 in the past year and if history is any guide, that stock could see a big swing when earnings are revealed on monday well get the fast money take on how to trade that coming up. Plus, the perfect storm Housing Conditions that could lead buyers out in the cold this spring we have a very special report next take a deeeep breath in. And. Exhale. Aflac and a gentle wavelike motion. Liberate your spine. Not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. So he had your back . Yup in just one day, we process, approve and pay. One day pay. Only from aflac you or joints. Something for your heart. But do you take something for your brain. 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Major averages are generally positive we should point out, were talking if we closed right now, we would have record closes for the s p, the nasdaq and the russell. Wow. The dow is not there. But we are back above 26,000 with that 18point gain. Spice maker mckcormick is oe of the worst performers after deutsche downgraded that from sell to hold and cut it to 103 citing volume pressure in the u. S. Business. Trading at 99. 50, down 33. 3 . Spring Housing Market is weeks away but finding a new home may be difficult. Diana olick is in washington with more. Reporter its all about Mortgage Rates it feels like theyve been sitting near record lows for about a year, but they are actually now, as we know, finally breaking out because of those higher bond yields the average rate on the 30year fixed is up a quarter point just from the beginning of this year to 4. 25 , thanks to the selloff in the bond market rates loosely follow the yield on the tenyear treasury now, that move could weigh heavily on this upcoming Spring Market namely because of the supply crisis there is so much demand and so little supply already that home prices are rising far too fast faster than incomes and inflation. If rates continue to rise, sellers will have less incentive to put their house for sale because theyll miss out on the rock bottom rate they have now for buyers, it could have firsttime buyers and those on the margins to get in fast before rates rise further and price them out of the market, so more demand. The best hope for new supply is in the newly built home market those Properties Come at a price premium. Higher rates will mean fewer buyers who can afford that guys i mean, rates will go up and that could put a crimp on some styles but its all about affordability. How is that index right now as we head into the Spring Season right now . Reporter its not good because prices continue to go up and usually historically when Interest Rates go up, prices ease off a little bit, but thats not going to happen this time around because of the supply crisis. If theres this much demand and people are fighting for the houses on the market and theyre good, theyll keep pushing those prices up. I was even wondering, in our neck of the woods, you know, new jersey, connecticut, those areas that might be hit hard by not taking that s. A. L. T. Deduction, could that be a catalyst for people leaving their homes, increasing turnover and easing the supply a little bit . Reporter not necessarily because youre in a high priced area if people are already grandfathered into the mortgage interest deduction, which is going lower now, they would probably not want to move, just slik they wouldnt want to get out of the Interest Rate they currently have on their loan if youre talking about property taxes, i dont think anyone will move right now because of the taxes, but it will hit that affordability factor if youre looking at paying higher property taxes and not getting the deduction. Combine that with rising Mortgage Rates, and it will get harder and harder to afford a home. Yeah, theres a oneyear delay. We dont get that bill until next year. This year its status quo. Next year when we get that tax bill im using smpbl. A. L. T. As a blanket term for all taxes state and local taxes are another issue. Thank you for keeping tabs on it, diana olick. Er with moments away from what could be a record close despite shutdown concerns or lack thereof. Its been quiet from washington and maybe thats why the dow is up 23, nasdaq up 33, russell up 18. Up next, a money manager who says pour it on. lsewhn. Y has room to ru wel e y he is so confident next on closing bell. Lets begin. Yes or n 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 its that time a couple minutes left in the trading session on this friday joining us with his market ak cr acronym is david darst drum roll, please. I wish it could be d. E. A. L. But it doesnt appear we have a deal. Your producers love five letters. We used to go six or seven but maybe five is easier to handle the s p was up the first five days of the year when its up, the month of january is up 72 of the time. When januarys up, the market is up 86 of the time and its a normal 65 of the time you increase the odds of it being an up year the acronym for the week is c. L. I. M. B. Youve had oil prices, youve had interst rates climbing and the stock market climbing. So, everybodys been climbing. The c is confidence. Its not only corporate confidence, investor confidence, consumer confidence, but its earnings confidence. Again, i think thats going to be the driver, yes or no for this year. Youre going to get starting in february the beginning of the earnings season for the Fourth Quarter. And thats looking pretty good most importantly is the outlook for 2018 given the new tax regime the l is lawmakers showdown. Lawmakers shutdown looming you remember the word loom means to move slowly on the horizon like a nasty pirate ship it comes from the dutch origin you have the shutdown looming. I is Interest Rates. The tenyear treasury is 2. 64 it started this year at 2. 40 you remember the day after brexit, june 23, 2016, the tenyear was 1. 36. Wow. Its already up 130 basis points weve got a little bit of competition for stocks its hurt Real Estate Investment trusts, its hurt utility stocks the m is meltup if you look at investopedia its defined when they go rushing into the market stampede, the spanish word meaning stampeda meaning uproar they buy stocks not for fundamental reasons but because theyre up. Are you saying the individual investor is running with the bulls there . Theres a did you see what i did there . Spanish running with the bulls going on, no question. The b request the is the banks, the transportation stocks and the the banks, the transportation stocks are doing very, very well. And the oil stocks, all of them with oil up 6 , but the Biggest Surprise to me this year is the transportation stocks, which have been on fire. Thats your airlines, railroads, trucking, Package Delivery companies. That means the economy is moving people are moving. The economys moving goods are moving so, you basically want to were at base camp two of mt. Everest. You can go to the peak but every step is more dangerous and you have to watch where your foot is thats the theme. Are you along for the climb i am along for the climb. You have to be very, very careful. Get more defensive maybe more europe. Maybe more japan maybe more emerging markets. Start to trim a little bit build some cash. If there is a selloff in the market weve had so long since weve had a meaningful correction, as you both know. Next week you get housing, new home prices, existing ome prices, durable goods orders, you get the leading Economic Indicators and the first look at Fourth Quarter gdp. If theres not a shutdown what do you think is going to happen there just curious, finger in the wind you know, weve only got a few hours to go. Do you think theyll come up with something or one of these where it goes quiet for a while, come back in a week good point. On the Stock Exchange steps, when it used to broadcast in the summertime outside, august 5th of 011, the government had a shutdown and people thought that was nothing. The following monday tuesday the market fell 8 gold hit 1911, its alltime high Ronald Reagan and jerry ford used to fight with tip oneill all the time and they jerry ford and tip oneill had a standing golf date at Chevy Chase Country Club every wednesday if the weather was permitting you want to see the market roar . Show me some day mr. X, im not going to say his name, the leader of the senate and the democratic leader of the senate, sitting in a hot tub and the market will go it will double from here. We need cooperation. Not if theres mcconnell and schumer in a hot tub . Not if there was a photo of that, there wouldnt be a meltup. Youre a reminder every week i wish i would have taken latin. Me, too. Thank you. Thank you. Happy new year. Yes, to you as well up 20 points on the dow, but everybody else is in record territory. We have the closing countdown coming your way in just a moment. After the bell, you may want to think twice before flying with your doggy, with little fido, or nina and nora well tell you why delta is changing its rules about pets on anes youre watching cnbc, first in business worldwide s 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 be ideas. We help all types of businesses with money, tools and knowhow to get business done. American express open. To get business done. Where can investors seek pin an uncertain world . Pgim sees alpha in real assets. Like agriculture to feed the world. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. Partner with pgim. The Global Investment management businesses of prudential. slow jazz music fly me to the moon and let me play bell ring s. Hi, there. Were just getting ready for the close. Three minutes left in the trading session and were watching to see i mean, were watching washington, waiting to see if were going to get a deal weve been getting little hints here and there dont know whats going on the dow has been rising a little bit here were at 26,053. The old high is 26,115 dont think well get that one bob pisani is here with me as well everybody else is in record territory, nasdaq, s p and russell. As san to weve been having big moves in the market the last couple of years, we would only have minor moves for the major averages, but now were getting big swings here. And i think the issue here is, its looking a little toppy. This is the first time for a while that the momentum has slowed down. Remember, cyclicals like industrials and materials have been monsters but theyre down this week, big names its not just ge thats down weve seen Interest Rates move up i think thats the most important development. We start at 205, 263 now thats got a lot of people ill show you that. United health was the big gainer in the dow this week general electric, of course, had a horrible week, closing just above 16. Its like a sixyear low for that consumer staples, the best performing sector this week, interestingly enough interestsensitives like the energies, the utilities and the real estate were the big losers for the s p this week. Yeah. So besides cyclicals, energy and that group looking a little toppy. Oil met resistance as it was in the mid60s. And oil stocks had a great start. This week most of them are down. And, as a matter of fact, for wti, this was the first down week weve seen for wti oil in five weeks as we settle around 63. 50 here. Weve had the biggest ipo in a long, long time, abt, name very well known to most americans, home security, business security. A tough day for them they priced in the midpoint at 18. The price was 17 to 19 they were trying to price it there. They priced it at 14. It opened at 12 and change. As you can see, really has never peeked its head up very high this morning the important thing is, tough start for the biggest ipo of the year. The tenyear Rick Santelli kept pointing to 263 is resistance anything above that is breakout to the upside. Here we are 265 late on a friday. They talk about a Government Shutdown, but the main talk on the floor was the tenyear rise. Could we get a deal stick around members of congress have to. We might as well as well heres the second hour of the closing bell with kelly evans and company. Have a good weekend, kelly closing bell, im kelly evans. Turnaround at the end of the session on wall street the dow closing higher by 53 points but not in record territory. Were about 40 points shy of that level it was the laggard today the s p 500 up nearly half percent on the bell, 12 points higher at 2810, record close the nasdaq closed up half a point, hitting intradays to hit 7336 for a record on the bell as well the russell 2000, look how strong the small caps are today, adding 1. 3 , closing at 1597, a 20point gain. Thats also a record high. Joining me now, cnbc mike santoli, cnbc contributor evan numark welcome. The big winner on the dow for the week was unitedhealth while ge was the big laggard and for the session, nike had a nice rally lamb research, big earnings in the semiequipment space. Ge also the laggard on the s p this was down 13 , mike. Ge seems to be the antibellwether. Its remarkable that the market is going vertical to the upside. And ge is essentially in liquidation mode right now by investors. Evan, what are you thinking about the markets overall here that day this week where we shot higher and then reversed, then shot even higher today the shutdown concerns we have eight hours to go and theres not a lot of anxiety about that. I think a lot of this is based on funds flows i think early i want to say, january 19th, its been a great year in the stock market everybody can go home now. Whats the s p up so far, 6 almost 6 . The s p f it compounded at this rate for the whole year it would be up 124 . Totally normal. Its been a great year. I think whats interesting to me about the market is this question of where does it go from here . Youve seen so much strength kind of across different sectors. Doesnt leave a lot youve got to move into like nosebleed territory. We talk less about where boeing was trading in terms of multiples. Things that were historically good, solid stocks is that when they trade in the 20 times forward earnings you were nervous. Now theyre trading over 30 times and nobodys blinking. Real quickly because you brought up a good point here bammel has a flow report showing the fourweek inflows into equities, 58 billion is the largest on record. Largest in absolute dollars you have the rising appetite by the public for high levels, thats accelerating the market to the upside. Almost as important is the sense amongst everybody else that other people are buying in you have the psychology attached to, oh, why am i going to sell right now . Because someone is on the way in wanting the stock from you. The interesting thing about this, it reminds me how it was to trade fang for a while. Everyone owns it, everyones going to own it. You follow the money now does it feel that way for the whole market i think its a little less about the couple stocks in the market as a whole and more about the liquidity situation. Theres so much money out there. People are talking about, where is all the inflation the inflation is in Financial Assets people didnt buy more houses and assets and gym shoes and cars they bought more stocks and bitcoin and art and whatever else whats happened is, when the market goes up, everyone says, im going to buy on the dip. We dip a little bit and all that fund flow, all that money comes back in the market and pushes the market back up until we exhaust that liquidity, and the way that will happen is with higher rates people are talking about the tenyear treasury higher rates will cause cash to go up. People put money in bonds instead of stocks, that takes the safety net away and you get more volatility. Then people see losses in bonds. We talked this week, even when we were rallying, the volatility index was going up we receded back a little bit you were saying maybe thats, again, theres more activity in this market. Weve had wider swings than all of last year and maybe people are just hedging. Its related to a little more public enthusiasm. The market is operating with a higher metabolism. Its not really different in total character versus last year its more of the same but more so its happening at a higher velocity thats really the wider daily swings, really explains the increase in the vix. Its not people are more anxious. Its the math of when the market is jumping around more day to day. Its going to calculate its going to translate into a higher vix. Are you still comfortable with your european yeah, im still overweight europe, still overweight energy. I will tell you something im doing right now, which may be of interest, talking about the bond market so, after 15 years of having a jumbo mortgage, its a big mortgage i thought you were going to bring up the tpt no, thats another whole hour show, another time i have a jumbo mortgage. I am right now paying two its five or six years old im paying 2. 25 on it, 2. 30 and im going to pay off the mortgage right now because to refinance right now doesnt make sense. The money is no longer but the jumbo rate wont reset. No, it is its a five year you will float someone with Interest Rates going up is a floating snoernlg. Its a fixed interest product. Theres no principle pay down. Its a principleonly product. After five years, its basically done to make money off it basically. Its not a real financing tool. I dont know how relevant thats going to be to a lot of people but it is interesting it is i dont know what it sayses about the psyche. Archer daniel midlands, lets get to seema. Reporter they have made a takeover approach to bunge they were approached by glencore and they agreed to a standstill that expires in a couple of weeks. Bunge has a market cap around 10 billion, and specializes in sugar, bioenergy and seeds were looking at the stock slightly higher after hours but gained 11 in the regular session. Back to you. Thats an interesting move. Thank you. Maybe we are going to start seeing some deals heat up. Its an interesting angle you dont talk about this space very much, but by definition commodity products, scale is what you want. The agriculture commodities have not been rallying as much as the industrial metals. Maybe its opt opportunistic. Were in a Revenue Growth market you start to see more m a activity youre generating tons of cash and you need to put it somewhere, they put it in their own industry and i think c consolidation is a trend that continues. Bunge shares up 11 after hours in that adm report. Lets get to kayla on capitol hill with the very latest about the Government Shutdown. Reporter lawmakers are in a Holding Pattern as they await next steps from the leaders of each of the partys caucuses throughout the day theyve been emboldened, digging heels into various stances but perhaps that meeting between Chuck Schumer and President Trump broke the ice a little bit i mentioned my conversation with south Dakota Republican mike rounds he got a readout of that meeting and he says he expects leadership to brief republicans around sundown on what theyll be voting on tonight his expectation is that it will be somewhere in the middle of a fourday to a 30day continuing resolution for the government. But he says its still anyones guess at this point. Heres what he said when i asked him about whos going to broker the deal, whether the white house will be involved or whether it will be here on capitol hill heres what he said. My understanding is that they discussed the background, they discussed the guidelines, but there was no deal arranged or met. Apparently both sides have that understanding, which is good, so i think it comes back down to where it should be in the first place, which is senator schumer visiting with Mitch Mcconnell. Reporter its going to be the top leaders here on capitol hill theyre going to be brokering that deal potentially in the eleventh hour. One additional sign that, perhaps, the levy is about to break here is the fact that we did get a second memo from Steve Scalise who said that members of the house need to stay in town remember, the house was going to be breaking next week. His office sent a memo earlier today saying, be flexible. But this says definitively, members are to remain in town and be possible for additional procedural votes there could be ground being broken as the two sides work to broker a deal. Of course, kelly, eight hours is seemingly an eternity for a town that works on deadline back to you. What youre saying makes it sound like a deal is more likely than we thought even an hour or two ago. Reporter i will say that in the conversations weve been having, people seem more optimistic and more hopeful than they were possibly earlier this morning or last night. Senator rounds said of that white house meeting, he said he thought it was important that senator schumer and the president could get their priorities off their chest and potentially talk about this process if they didnt come to a deal specifically. So, well see where that leads thank you well check back in with you as this progresses. Now lets check in on religion Regional Banks. Anton is here. You love the Regional Banks. I mean, you have to be specific, but everybody beat this morning pretty much, didnt they for the most part all the numbers were just good enough i think thats all everybodys looking for because the Forward Guidance with taxes are just meaningful Many Companies are reporting double digits in earnings. The average Regional Bank paid 32 in federal taxes last year. Thats going to come down low 20s. 19 , 20 . Yeah. They have loan growth people are concerned about . Loan growth comes with a hot economy. If we can get a 4 gdp, maybe that shows up. Theres going to be a push pull because some people are using that extra income to pay off debt it bears watching. It also im sorry, it also bears watching about the reinvestment of that bank of new york yesterday in its release talked about reinvesting the savings. Stock did not react well to that. I was going to get on that point. From an investors perspective, you would want most of the windfalls to go back into dividends and buybacks if you think about investing for Regional Bank, its making new loans at worst terms for you. Thats the challenge here is are people going to start lowering credit spreads to take advantage of that . Is this going to be competed away i think on the regional side you have less risk on the big institutional stuff, you have much more of an opportunity for that to happen, more commoditized type product. Youre saying the big banks if anything, they might have too loose of credit standards they should im not saying their standards are loose now, but i think theyll spreads will require less because cost of capital has gone down. Talk about the mortgage business, broadly speaking everyone is looking at the tenyear over 2. 60 by historically measures these are still extremely low rates. To use my example, for some reason i had trouble explaining to kelly, people with very low fixed rate mortgages, who can pay down their mortgage, like i did, im not taking out a mortgage at 4 the margin, which is profitability to the banks, is not worth giving it to them. I would rather pay down my mortgage how do you see the Mortgage Market developing as rates go higher i think its going to be tricky because not only do we have limited deductibility, youll have moves in prices in different states it will be tricky in terms of how that all takes place less houses have been built and have needed to be built over the last few years and i think the Housing Market will continue to boom in places that have low taxes. Places like texas, places like florida, tennessee and i think that market will do well regionally. I like what youre saying i hope its true theres been so much money put into Small Cap Value over the last couple of decades, based on research, and thats what people are touting, the Retail Investor theyve gotten killed on a relative basis because its been dominated by small Regional Banks. Finally with higher Interest Rates and better Regulatory Environment they might make some money. We might get a rally in small value. I know thats what Retail Investors have been looking for the last five, six years. Sure. Youve had a chance to make money from consolidation, from stock picking the last few years, but i think from a general perspective, small banks are going to have, you know, wind in their sails. Everything is right. Less regulation, feds raising rates. Hopefully greater loan demand, economic prosperity. And i think m a will also kick off here because as rates go higher, youll have banks with great deposit basis worth a lot more and banks that dont have great deposit basis, need to buy those or raise their hand and sell. Who do you like i like bank of texas, independent bank, ibtx, i like a bank in tennessee, first bank fpk. Those two states have zero income tax and theyre both booming for different reasons, but both doing incredibly well those are great management teams. Theyre capitalists. They could buy or turn around and sell in a few years. Last question, who are the banks with the best deposit basis . They have great deposit basis. I can give you examples of many small banks that are rural, like a first bank of North Carolina theyve got a lot of rural deposits a lot less price sensitive if youre an ally, which doesnt have branches, youve got to really be very much conscious about what the rates are on those deposits because everyone is trolling online for better rates. Thats a great point. Great stuff as always. Have a great weekend. Thanks for joining us on a friday. We have a news alert on Facebook Julia has details on facebook. Kelly, facebook announcing another change to its news feed. Mark zuckerberg taking to facebook to announce it will make another big change by prioritizing news that is trustworthy, informative and local. This is part of an ongoing effort to reduce click bait and make sure time spent on facebook is valuable. The company saying it will poll the community and begin tests to prioritize news from publications that the community rates as trustworthy so, zuckerberg also making one note here, saying that this follows the change to make it the news feed more of a communication between friends than about content saying that news will make up about 4 of news feed down from about 5 today but its the community that will decide what is meaningful news back over to you, kelly. Im not sure if theres a lot more clarity on this, but this is a big deal if youre talking about facebook ranking news and that being influenced byand here they break down in this blog post on facebook how theyre going to be focusing on informative content, ranking and making improvements to news feed relying on the values including whether the stories in your feed are informative. They talk about local news they want people to find more local news on facebook and then they explain what this will mean for publishers, saying they really want to make sure that publishers are deemed trustworthy by the people using facebook so, it will be really interesting to see how this all plays out. But it was also interesting to see that zuckerberg said that content, the amount of news in your news feed is only going to go down from 5 to 4 . They want to make sure that you as a consumer like what youre reading. Unclear exactly how its all going to play out but will be fascinating to watch. Thank you we have to go. A quick word on this is this going to work yes or no . I will say eventually after different iterations. Yes or no i would say youre talking to the wrong guy. I dont use facebook i wouldnt i wouldnt know youre smart enough to refi your mortgage i selfselect the news sources i believe in. I do, too. But im want a young millennial. Theres a lot more ahead on closing bell. Announcer straight ahead the big threat to this stock rally may be in your pocket right now. Thats next. Plus, new York Governor Andrew Cuomo may be about to disrupt the investing industry and youre not immune if you live outside the empire state. Your governor may be about to do the same thing the closing bell is back in two minutes with kelly evans live from the neyo sckw rkto exchange we took safe and made it daring. We took intelligent, and made it utterly irresistible. We took the most advanced eclass ever and made the most exciting eclass ever. The 2018 eclass coupe and sedan. Lease the e300 sedan for 569 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Welcome back we have a news alert on l. A. Times editor. Los Angeles Times editor Ross Levinson will go on an unpaid leave of absence for allegations of misconduct first reported by npr, according to dow jones. They say they have hired an outside law firm to investigate allegations of Sexual Misconduct he was a Media Industry veteran before taking on this role as publisher of the los Angeles Times. So, hes taking a leave of absence during the probe, got it thank you. Yeah. No, go ahead. Weve just reached out to them for confirmation and any Additional Information about these allegations and his ongoing role at the organization got it. Thank you, julia meantime, the dollar is down 10. 5 in the past year, versus the dows 31 climb. Our next guest says this is a canary in the coal mine. Cnbc contributor ron joins us now. You think theyre flipsides of the coin why dont you think this looks so good . I think thats been true for many times under different circumstances where a weaker u. S. Dollar promotes multinational corporations, Product Sales overseas, exports grow with the weaker u. S. Dollar its somewhat conducive to higher inflation, which the Federal Reserve wants, but by the same token a currency is a referendum on where a country stands much more than the stock market with the way the rest of the world looks at the United States now while the dollar has declined 10. 5 , and its not necessarily a catastrophe, i do worry its sending a message about where the u. S. Is politically, geopolitically and maybe even economically at the moment relative to the rest of the world. Youre telling me that even though the economy is strong, stocks are booming, that the weak dollar is telling us that the u. S. Is in a dangerous place . Its a thing im watching more and more closely as we move through the year if the dollar were to decline, accelerate and suggest we get awe trade war with china, for instance, or nafta dissolves or we start to see the chinese selling u. S. Treasuries, that thats the type of thing that would further weaken the dollar, lead to an Interest Rate spike, something weve been concerned about on and off for years but its interesting to see the dollar this week against an economic background that is as strong as what weve seen in the u. S. Over the last many months i guess the question is, ron, i mean, you know, its sort of like a little bit of a chess game in terms of steps ahead when you try to decipher what it means. The u. S. Dollar index at 90, its smack in the middle of a fouryear range. And i think ive heard the case made that the markets collectively are saying, okay, where are Central Banks closer to the beginning of the process of tightening or the end of the process . Well, i guess the feds a little closer to the end. It sounds like kind of twisted pretzel logic but there are all sorts of ways to explain. Weve seen articles suggesting the rest of the world is likely to grow faster other Central Banks are beginning to raise Interest Rates, narrowing the rate differentials between the United States and overseas markets and economies. So, capital will go towards those markets rather than come to the u. S but there is a point or an inflexion point on the which i think if it were to accelerate the dollar on the downside, you have to start asking other questions about why it would be falling so precipitously right now its in the middle of the range. You know, its intriguing to me that the dollar isnt morsteady against a backdrop of accelerating growth, full employment the fed raising rates maybe more aggressively than people currently anticipate ron, its evan. For most of the investors out there who are watching you right now, wouldnt it well, sorry most of them are most of them are dollarbased investors, right . Sure. So, every time ive seen at least most investors try to outguess the currency market, given the complexity that involves the bond market, the stock market, its a bit of fools errand for people to try to read more into yeartoyear movements in the currency market, isnt it i guess im giving people the conclusion that ive come to, but you can tell me if you think otherwise. If youre trying to hedge your exposure to overseas markets, thats not something i would suggested individuals can do rather easily while there are vehicles out there to allow you to buy emerging markets relative to the currency risk, to me that seems like a difficult game over the long haul. What im looking at is more of a message of the markets type of process here where if the dollar continues to wildly diverge from stocks and rates dont go much on the long end but do go up on the short end, i would worry something is wrong with the dollar. If the feds tightening more quickly and yet the dollar doesnt firm against key foreign currencies, i think the dollar might be sending a message that people are viewing the u. S. In a different way than they have in the past. Its definitely been a headscratcher i dont think anybody thought we would see this weakness, as pronounced maybe we can show a dollar chart going back as ten years. Im watching the 9s 0 level saying, arent we going to break through it werent we in the high 70s not that long ago . It took off from mid80 in 2014 as the market sniffs out the tightening another thing to keep in mind is a weaker dollar is a feature of loose financials, demand for credit around the world. Its one of those things where it doesnt become an immediate negative because it means liquidity is sloshing around people want dollars around the world. When the dollar is rallying, it often means people are panicking theres all these calls of repatriation, bringing all those dollars if demand for dollars is stronger, it should be going up. 250 billion is set to come home thats not necessarily being reflected in the value of the currency we shall see. Ron, im glad you flagged it regardless thanks for joining us. Thanks. Tax reform may be about to usher in a new golden age of mergers. Well talk about potential targets right after this before the break, the record break for the nasdaq, the russell. The dow was a few points shy of that level nobodys putting their money into equities. Theyre not investing in commodities or fixed income. What people are really putting their money into is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. Because when you approach investing with a tireless desire to beat the status quo, Something Wonderful can happen. Those people might just get what they wanted out of life. Or maybe even more. Mikboth served in the navy. S, i do outrank my husband, not just being in the military, but at home. She thinks shes the boss. She only had me by one grade. We bought our first home together in 2010. His family had used another insurance product but i was like well ive had usaa for a while, why dont we call and check the rates . It was an instant savings and i shouldve changed a long time ago. Theres no point in looking elsewhere really. Were the tenneys and were usaa members for life. Usaa. Get your insurance quote today. [ 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 quite a close today on wall street perhaps people a little less concerned by the shutdown in the final minutes. The dow flipped up 54 points the s p was up 12. The nasdaq was up 40 the russell 2000 up better than 1 for those are record closes. Its time for cnbc news update lets check back in with sue herera. Hello heres whats happening at this hour the march for life rally drew tens of thousands of antiabortion activists to the Nations Capital as well as support from the white house in a rose garden speech, President Trump says he is honored to be the first sitting president to address the 45th annual rally under my administration, we will always defend the very first right in the declaration of independence, and that is the right to life. The government telling a federal judge in new jersey it will seek a retrial of senator robert menendez, whose 11week corruption trial ended in a hung jury back in november. The filing seeks the retrial of the new jersey democrat at the earliest possible date. And one of the stars of the jersey shore Reality Tv Show has pleaded guilty to cheating on his taxes michael sorrentino, known as the situation appeared in federal court in newark with his brotherwho also pleaded guilty they will be sentenced in april. You are up to date thats the news update this hour have a great weekend. Thank you, sue. You too. Sue herera. Its midjanuary and tax cuts are just beginning do show up in peoples paychecks we dont know how the whole package will shake out joining us now to figure that out is founder, chairman and ceo of mollis co welcome back. Great to be here. We just had this news, adm might be buying bunge. Do you expect a deal wave with tax reform weve been in an interesting m a market even before tax reform companies trying to position themselves to win. And the Way Technology in the market is changing so rapidly, i think companies are having to go out and buy things they cant wait to develop them from scratch so, i believe the tax reform will just add fuel to that but how big a boom so i mean, weve seen, you know, some pick up in dealmaking certainly in media but are we going to have the kind of banner year that typically marks the end of these cycles well, i dont know if it will mark the end i think theres so much interesting opportunities out there for people to position their companies. The one thing i would like to point out is i believe people are underestimating the size and impact of the tax reform its been 30 years not a lot of people in the industry were around for 1986. I hate to say it, i was. But when you fundamentally change the tax law like this, i think weve all gotten used to taxes being sort of a derivative and they move around this was a dramatic increase in cash flow, aftertax cash flow that companies have to invest. And to expand and to do things with our company alone, just to give you a flavor, our company will generate over 20 million excess cash in additional cash as a result of this change. And i was thinking about it the other day. Under our old margin, i would have had to increase revenues by over 150 million to generate that and thats being generated solely because somebody chose to lower our tax rates, which gives me im just picking my company as something what are you doing with the cash were looking to expand rapidly. We have a lot of extra cash flow we didnt see as of october last year we didnt know wed have. We can hire people we can expand. We think there is going to be an m a wave and we think its a good time for us to get additional talent. By the way, i think everybodys going through that process right now. I think the actual addition to this cash flow to peoples future plans is causing people to be on their front foot and think about, what do i want to do what do i want to accomplish no doubt adds to Financial Flexibility across all companies. I do wonder what you think the effects will be as this develops on companies that for eight years or nine years into an expansion have not found Capital Investments worth making now, here we are with an economy thats humming and Corporate America is incentivized now to start creating some kind of domestic boom. What does that mean economically for investors . The recovery we had was a tremendously slow recovery look, just because it was off of a dramatically low base, we had the 09 kritcrisis, which really took us to a low weve been growing i believe its been under 2 a year thats not the United States thats not what we can do. The reason people were holding back is there was regulatory after regular la together threat if you were in the financial industry, you had the cfpb, you had the dodd frank you didnt know how somebody was going to try to attack your investment and make it unprofitable you had this regulatory overlay attacking almost every industry in america so, i think most people now believe, hey, if i make an investment, the Regulatory Environment might get better it definitely wont get worse. It might even get better and i have lower taxes and i have a very probusiness government look, i dont think were at 2 or less gdp growing economy. The quality, the innovation, the law, the consistency of the United States system, we should be a 3 plus grower. Thats a lot of money, by the way. Believe me the difference between 1 on the u. S. Gdp is a lot of money. Ken, its evan. How are you im good. So, we worked together 12 or you used to tell me donald trump stories back then. I have one question for you which is, how come youre not in the Donald Trump White House as soon as he stood im like i was waiting for you to show up at one of the press conferences. Where have you been . Hey, nobody called. I dont know look, im pretty busy these days i have a pretty full day, but, you know, gx4 nobody called i just read about the 1 million coin flip story. That was and you didnt know if he actually saw heads or if he just said he saw heads, right . Well, lets put it this way as somebody said to flip a coin and have it go off the other side of the table and have donald trump pick up the coin wasnt my favorite moment in life it cost me a lot of money, but it was fun good story. Ken, thanks it is a good story. Thanks for joining us today. Thank you call it content math scale plus investment plus extebss ive library should equal money. Whats now a dogs life may be changing on some airlines and some of fidos best friends are not happy. Not happy. That story coming upin high sch. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Just to help you improve your skills. Boom thats lesson one. Education to take your trading to the next level. Only with td ameritrade. 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. Directv has been rated number one in Customer Satisfaction over cable for 17 years running. But some people still like cable. Just like some people like preshaken sodas. Having their seat kicked on an airplane. Being rammed by a shopping cart. Sitting in gum. And walking into a glass door. But for everyone else, theres directv. For 1 rated Customer Satisfaction over cable, switch to directv and get a 200 reward card. Call 1800directv. Volatility made a comeback in the market. Heres a look back at some of the ups and downs. 12 days ago the dow surpassed 25,000 for the first time. The way futures are surging, we could see 26k at the open. I think the Current Situation seems like a rational exuberance. The story of the markets right now is it was one of the most incredible reverses weve had in the past year or two. The dow is now negative, down 12 points it was up as much as 282 points at one time. Futures up sharply as stocks look to rebound from the biggest reversal for the dow since february 2016. Huge day on wall street, dow up 304 points on the bell. The dow traveling an astounding 1500 points over the last four session, hitting a new high earlier today before turning negative. I feel the return of an old friend i missed for so long called volatility. I think this is great. Pensions and retirement accounts are surging in value as the stock market smashes one record high after another. If we keep it like this, well win a lot of elections. Stocks are showing resiliency bearing the possible shutdown of government. If congress cannot reach a deal to fund the government, we are headed for a shutdown at midnight tonight. The turnaround at the end of the session on wall street, the dow closing higher by 53 points, but not in record territory. Thats the week that was. Now we turn to the week that is coming netflix reports earnings after the bell monday. Its up nearly 60 in the past year can it run higher . Fast money traders join us from the nasdaq getting ready for fast. Welcome to you both. David, youre a bull here. You have been a bull youre still a bull on netflix what do you think well see monday i think the numbers are going to be fine this company has done an amazing job to get to scale. Scale will win original content to getting to scale. Its about the international subgrowth, all about the international subguide those are the two numbers ill look at and see if they hit it or come above where the expectations are on the street on the International Side for q4 i think its around 5 million new adds i think the guidance is probably around the same for next year, for next quarter if they exceed that, it should be a home run and the stock should work out. I wouldnt say this stock is goinging to continue to have the runs its had. We put a 240 price target up from 215 you can look and say, theres still room to the upside but not gang busters like weve seen in the past. That oneyear chart you had behind you there showed two 20 vertical surges over the course of four to six weeks one were in ight now and one from last summer there was another one in october 2016 it takes the upside in big bites and often gives it back. The numbers expects them to be fine. I dont know if the numbers can be just fine a condition on a trailing 12 month is 240 pe. Theres a lot of competition in the space. They just raised prices. Actually, i do believe theyll have Margin Expansion in 2018. The street is calling for anywhere from 250 to 300 basis points its all about international, dave i look at disney going on their own. I look at hulu, i look at the space, i look at the lack of a real moat. Right now for this price, i dont need to chase netflix. Frankly, i mean, ive been on the sidelines and missing this one for a long time, so shame on me or youre sitting pretty. Well see what happens yeah. Guys, thank you david and tim, well let you go. Tune into fast money at 5 00 p. M. Big moves big positive moves in the Retail Sector today. Well tell y se ouomnames well tell y se ouomnames getting upgrades next. Lear adva. Fidelity, where smarter investors will always be. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . Not just wealth, but things that matter. Morgan stanley 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. When it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. Welcome back to closing bell. Im eamon javers at the white house where were learning a little more about whats going on behind the scenes here in the wake of that meeting between the president and Democratic Senate leader Chuck Schumer im told that john kelly, the white house chief of staff, has been making calls, calling specifically Mitch Mcconnell, the republican leader in the senate paul ryan, the republican speaker of the house to make sure theyre on the same page with what the president discussed with schumer im also told mark short, the legislative director here, has been making calls to lawmakers up on capitol hill where does that put us as of right now . It seems as if theres the possibility that a deal is in the air here at the white house. They might be able to get something done, perhaps as early as this afternoon or this evening. What would that deal look like one possibility anyway is a very shortterm continuing resolution maybe just a couple of days to keep the government open and keep these negotiations ongoing without having a shutdown going into this weekend, kelly its not clear where were going to land but it seems like theres a Little Movement going on at the white house. Again, i think that maybe even fit into the markets right before the close there eamon, thank you by the way, heres a look at the impact across the different agencies of the government in terms of ranked from most to least. This is a percentage of workers that would be furloughed if the government shut down hud would be the highest, housing and you are urban development, so is commerce with more than 90 of employees that would be furloughed. Flipside of that, homeland security, barely anybody, just 13 would be veterans. Very few affected. 4 would be and a lot of people will not have to show up but theyll get their paychecks. The checks still flow, the Social Security checks not in real time, though. All the checks still flow thats the whole thing about shutting down the government they play catchup. Certainly, a couple of weeks, you can imagine people who need those paychecks for sure. Im talking about the Social Security checks. Those never stop. No, those will keep going there has been a growth i mean, if it went for three weeks, i mean, obviously theres a little bit of a restraint on national growth. Well see if it laps at all with just about seven hours to go time for the takeaway and we begin with new york state picking up where Congress Left off by advancing a plan to close the carried interest loophole. The plan could raise more than 1 billion a year for the state. The bill could impose 17 fairness to fix the loophole smart or selfdefeating . I dont know if it will be as lucrative as they say it will be i think political ploy, even Governor Cuomo does not want to end up like the state of connecticut which all hedge funds with fleeing from. They can move to florida. Do you think if he imposes this, theyre gone i dont think it i dont think blackstone is headed to palm beach. Nike led the dow and the s p until the end. Anyway, led them higher after an upgrade to them higher with an to outperform at wed bush. They upgraded foot locker as well nike is up 5 . Is the sneaker cycle back . I think its stabilized and they are chasing what the market has been saying, that they were priced for basically extinction and now they have come back hard and it seems like shoes are a decent spot again. And the socks are cheap. I never believed in the first sneaker cycle. And i was totally wrong about that. The first one this the 70s, you mean. Yeah, that one. We used to have remember that fellow in york, the kid who collects, i was thinking we should catch up with him one of these days. Could kroger independent would up owning overstock. Com . Thats a suggestion in the new york post. Overstocks stock jumped meanwhile, kroger shares were also higher by more than 2 . My question, would overstocks business make sense for a Grocery Store . I dont know. I think the idea is you are buying technological interface, like walmart and jet. Com but overstock was at 17, its now in the 70s the idea would be selling the Ecommerce Operations not buying the whole company. To me it was a little bit of a slippery rrt it was kind of a notional thing maybe down the road. I also learned about box. Com, the koss cofor millennials, they sell kirankld products. Delta is making a big change thats going to affect everyone who flies. Thats next on the closing bell. Delta is making it a little harder for people to bring therapy animals on planes now. Phil lebeau has more from chicago. If you fly as much as i do, you have noticed there are more and more pets making it into the main cabin where the humans are sitting. In fact its not uncommon to see more of these Service Animals. It used to be you mainly saw them with someone who had a disability, a guide dog for somebody who is blind. Now animals are lying in the aisle, there are Even Services birds. There are approximately 700 of these animals a day carried on delta. And they have seen from time to time other animals, including a turkey, a Service Turkey well, there have been an increase in animal incidents, up 84 since 2016 today delta said thats it we have had enough of people bringing these Service Animals on there are new rules. You need to have proof of vaccination force the animals arc doctors note essentially from the vet saying it is up on all of its shots it can travel. There is a reason it needs to go with this person it is there for comfort or therapy. And finally you need a letter confirming that the animal will behave itself. Thats because there have been a number of reports of dogs barking at other passengers, biting passengers, mauling passengers delta says because of all this they are going to institute these rules. By the way, dont be surprised if we see it from other airlines yes, as cute as this picture is, my favorite picture of the day came to us from one of our editors. She said look what my sister saw on a flight. Now, that is adorable. Im sure for at love people on these flights when that dog is sitting next to you, if you are not comfortable with it it may be giving comfort to its owner but not to the other passengers. The turkey, the bird. I get it but its probably gone tooer if a is a lasthour deal this the works to prevent a Government Shutdown thats next. Thats next. On fast money at 5 00, arenot. What people areally putting their money into is what they hope to get out of life. But helping them get there requires a real refusal rate to beat the status quo, Something Wonderful can happen. Those people might just get what they wanted out of life. Or maybe even more. Be right back. Thanks but i dont need luck, i have skills. I dont have my keys. on intercom all hands. We are looking for the captains keys again. They are on a silver carabiner. Oh, this is bad. As long as people misplace their keys, you can count on geico saving folks money. Fifteen minutes could save you fifteen percent or more on car insurance. Exin the 2018xus lexus es and es hybrid. Lease the 2018 es 350 for 339 month for 36 months. Experience amazing at your lexus dealer. Hey, need fast try cool mint zantac. It releases a cooling sensation in your mouth and throat. Zantac works in as little as 30 minutes. Nexium can take 24 hours. Try cool mint zantac. No pill relieves heartburn faster. [ 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 to closing bell. Seven hours to a Government Shutdown deadline, and talks are still ongoing. The president and House Speaker paul ryan just spoke an aide confirms to me various touch points on either end of pennsylvania avenue in search of a deal that can pass im told senate democrats, the ball is still in their court but there could be some defections ahead of this eesk. Joe donnelly, a democrat who has voted for shortterm funding bills this the past has said he would vote to keep the government open. This is a defection that could lead to more to follow. Are we on the four day version . The 30 day, somewhere in between . Potentially somewhere in between. I think they want anything that will keep the government open beyond tonight. Kayla, thank you. Quit parting word . Hopefully its revolved but it is not a big market issue. Not a market issue. It will be davos something is going to happen that will be so terrific. If the government stays open, he will go thats it for closing bell. Fast money begins right now. Fast money starts right now live from the Nasdaq Market site over looking times square im melissa lee. Tonight on fast, bitcoin for the masses, while the fcc cracks down on efts there is something happening that to redefine the bitcoin boom plus its fords worst week in more than two years but one trader says the stock is about to kick into overdrive. Later, ges nightmare isnt ov,