Transcripts For CNBC Closing Bell 20131206

We have a team of people at headquarters helping us out. 18,005. 81. Dow back to 16,000, thanks to that jobs report this morning. That sent the stock market soaring, 205,000 jobs netnet created and Interest Rate goes back to fiveyear low at 7 . Well talk about all of that coming up. Well get reaction to all of this from the chief Financial Officer of deloit, frank friedman. Hell give us a view on the ground of whats really happening and when the fed will ease up on the gas plgdz and what it means. Do you know how many people deloitte hires every year . 18,000 to 20,000 every year. Is that unbelievable . We should have a good sense of what theyre looking for and what job conditions are like. Remember last summer, Dominos Pizza floated the idea of drone delivery for pizza. They even did a video. It was sloughed off as a publicity stunt. It was actually this time around when jeff bezos at amazon did the very same thing this is week on 60 minutes that was taken seriously 100 . So why the different treatment, i wonder . Dominos versus amazon. We have dominos ceo Patrick Doyle coming up exclusively and he is ticked off. That will be a fascinating discussion. Take one more look at markets here as we head into the final hour of trading session. A couple of levels were keeping an eye on. The dow just over that 16,000 mark. Up 1. 16 . The strongest gain in about a month. Possibly the strongest gain in a couple months. Strong numbers across the board for the s p and nasdaq as well. Lets talk about it. Big market day here as we close out the week. The dow teetering above 16,000. The s p back above 1800. The nasdaq comfortably above 4,000. Lets bring in our market pros for closing bell exchange. Abigail doolittle, robert luna, and kenny pocari, and rick santelli. Ken kenny, whats this message . Clearly a relief rally, right . They essentially pushed the taper until well into next year, march anyway. The market is no longer really concerned about it at all. The idea you think we december is not happening at all and i think the market is celebrating that. It likes the jobs are getting stronger but not Strong Enough to force the december taper, which is why i think youre absolutely seeing this rally today. I wonder whether you agree with him, abigail. Is this about the timing of the taper or after we saw that report this morning, maybe people getting optimistic about 2014 generally. I think, kelly, were going to see investors starting to be a little nervous about 2014 as they go into the end of this year. Maybe lighten up, take profits. If we think about early 2014, there are three events coming up. First, we have earning season. What will the event of the Government Shutdown about on those numbers and the outlook . Second, we have a changing of the guard at the fed from bernanke to yellen. That could cause volatility. Most importantly, third, we have death con match, i dont know, 25 around the debt ceiling debate down in d. C. In february. I think thats the one thing in the past that has stopped this fed rally back in 2011. I think when you look at the combination of nothose factors, yes, today we might have a relief rally. When investors consider those factors, they might want to trim going into the next year. Lets go to rick santelli. I want to talk about the response on the long end of the yield curve. 288 right now on the tenyear. I think we did hit 290 today. Do you think theyre putting off a tapering or embracing it sooner rather than later . No, you know, i think the treasury market i cant try to explain stocks, but in the treasury market, lets look at the facts. Earlier today, kneejerk reaction, we trade the 293 in the tens. High water mark since 1. 83 low yield historic mark is 2. 99. Even as we sit here at 2. 88, were only 11 basis points away from the high yield close since the low yields. What does that mean . I think the treasury market is still looking at the idea that the feds going to have to taper. If not, the long ends going to keep pricing it in. Maybe more importantly, i think the reason we didnt see 3 today is because theres been a lot of buybacks this week. There was a big one today. And all the big bond funds and all the big investors have these steepeners on. They unwound some on the number, which meant they were selling 5s and buying 10s. That was the shock absorber. I still think were on track to see better jobs, mostly better data. Certainly not crisis data, and hire rates. Robert luna, when kobe bryant and whoever these athlete super clients come to you and say, what are you dwoog my money in 2014, what are you telling them . Right now were looking at some of the things that havent participated in this rally. And were looking to go against consensus. Some of the things were looking at are stocks like john deere. A stock that just issued 8 billion buyback, only a 32 billion company. Its been shunned all year long. Its actually down 2 year to date. Were moving into some underperformers. One thing were looking at is emerging markets and foreign markets who havent participated for the last year, year and a half. I think the pessimism surrounding them is unwarranted. So, were looking to go to some of those underperformers right now. All right. Going to try to play catchup. Rich peterson, youre the numbers guy as well. Put this in perspective after this almost a fourday fiveday decline. We started the month out pretty rough on what is traditionally a pretty strong month for the stock market and now todays rally. What do you make of this . As led zeppelin said, the song remains the same. What were seeing is that its still a positive outlook for equities. Why is that . Three of the last four months for nonfarm payroll over 200,000. Were still seeing a combination by the fed. Even though tapering may come in early 2014 as we expect, tapering is not tightening. Tapering is not a zero sum game. They may go from 85 billion a month to maybe 75. But well still have low Interest Rates. I think the markets will be adjusting to a 3 tenyear sometime in the first half of 2014. The Movement High with earnings, were seeing expectations for 124 earnings per share on the s p 500. At 15 plus times multiple. Youre looking at 1850 or so target for next year. All in all, looks good. But, you know, there are some red flags. Why isnt a 3 tenyear crimping the style of the stock market. Why isnt that bad news for stocks . I think its going to become bad news for stocks but i think its going to be later reaction, right . I think people are euphoric today because like abigail said, there are two or three headwinds in front of us. The fed knows that. The market is now comfortable with the fact the feds not going to change policy in front of those headwinds, right . In front of the fact that jobs, even though theyre going in the right direction, theyre not going there fast enough. Still some underlying weakness in the market. Now people know that. I think once we get to 3 on the tenyears, then i think it will be a little problem for the economy, unless they can prove that the economy has strengthened enough to handle it. I dont think its there yet. Weve had one small preview of this move and it was called this summer. We saw the tenyear move back up to 3 . We know it took some momentum out of the housing market. If im the fed and looking at whats happening with housing, with autos, is the evidence Strong Enough that that did enough damage that the same will happen again . I think theyre worried about that. I think theyre absolutely worried about that, which is why theyre not why theyre not going to taper. Especially why not theyre going to taper into the end of the year. Right . There are two many other issues in front of them. As abigail said, the changing of the fed, debt ceiling in front of us. Today theres that rumor well come to this budget agreement before washington goes on vacation in two weeks. If that happens, that just opens the way further, i think, for a little morally. You sound like youre taking some profits here, abigail. Are you . Yes. I think it i think that smart investors at this point want to take some off at this point. Too many uncertainties. If we look at the russell 2000 over the last two months, its up nearly 50 . What investor is not going to take some off the table considering we have this d. C. Debacle in just another month and a half . It just makes sense to take some off the table, trim a little. It doesnt mean well have a significant correction, although i do think that that is ahead at some point. The disconnection between fedfueled rally over the last five years and sub 2 Economic Growth connects at some point. I think its going to create, you know, an ugly bubble. Robert lun nashgs you mentioned you want to rotate into underperforming markets, like emerging markets, for example. Its hard to see a scenario where they do well if what abe gale is talking about maybe the u. S. Market loses momentum especially if they start tapering. I think the argument there, kelly, thats pretty much consensus. Everybody out there is saying as Interest Rates rise, emerging markets will get hurt. Thats not necessarily true. A lot of these emerging markets are down 25, 30 . The question is, like todays rally in the market, has that already been priced in . You know, consensus was today, if we had a print in the market of over 200,000 jobs that the market was going to sell off. Things moved in anticipation of that. The idea is if rates start to go up, that means our economy is going better and the emerging markets could actually start exporting more to the u. S. I dont think guys what, rick . Everybodys talking about a debacle. You know, i remember when all the politicians were on tv, especially the president saying, oh, my god, if we shut down, its the end of the world, the end of the world. Were using this word debacle. I dont know. Didnt see it really show up in the data. I dont think it was a debacle. And i think the markets understand, you can call it a debacle, scream the sky is falling but it seems to work out in the end. I dont see those headwinds. Rick, youre right. In fact f you look at the month of october, which included almost an unprecedented Government Shutdown, relatively narrow subset of workers, but still the question what the multiplying impact of that would be. October turns out to be one of the strongest months that weve seen. I rest my case. Thank you, kel. As far as the budget agreement, i think thats an underreported story right now. Even if it is sort of a watered down twoyear agreement. It means we dont get the angst out of d. C. Weve had to deal with. Exactly. Couldnt that be part of the rally today as well . I think that is part of that. I think that whole rumor, that discussion, is also part of whats also part of lifteding the market today. All right. Thank you, all. Have a good weekend. Thanks, guys. Thanks for your thoughts today. Heading to the close, 50 minutes left in the trading session. The dow was up 200 points at the peak. Were off that. Were sitting right on 16,000. Something to keep an eye on as we head to the close. Again, the last hour is going to be very telling today. And a couple points on the s p will make the difference between a recordbreaking week and string of weeks or not. Or the first down week in almost ten. That strong jobs report has spurred todays market. Up next, cfo of accounting giant deloitte. Another championship rematch why am i talking like this between our two market brugsers, seema mody and dominic chu. They will duke it out on whether or not the market is too expensive or too cheap. Thats coming up. And after the bell, Dominos Pizza has seen more expansion than any Fast Food Company globally in the last five years. Could its next move, though, be into the air . Dominos ceo Patrick Doyle weighs in. Tdd 18003452550 trading inspires your life. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. Impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. 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We said there was a recall for davinci surgical robots but it was a recall on a portion of the system, specifically the robotic arm. They say 70 of the affected parts have been inspected and Patient Safety is not an issue. Google is up about 50 year to date. A huge move for google. Also intel to the plus side. Citigroup is upgrading the chip maker to a buy from neutral rating. Pointing to stabilization and corporate demand for personal computers. Then phillips 66 gaining ground on news it was announcing a new 2 billion stock buyback program. Well end with the gap, which is actually falling. Despite reporting a 2 increase in same store sales for november, investors are concerned that recent gains may soon slow. Again, kelly, bill, gap, good story but still a downside stock today. Back over to you. Thanks very much. Todays jobs reported lit a fire under the stock market after it was in a fiveday slide. Is it enough to light a fire in corporations and economy confidence . Deloitte thinks Business Confidence is lacking, which well talk about it. But joining us to talk about what his company is seeing in the jobs market and overall economy, die loeloitte chief Financial Officer. You are expected to hire 18,000 people. I ask you if thats normal . Its been normal the last couple, three years. I think its the new normal for us. I think its going to be every bit 18,000 and maybe moving up to 19,000, 20,000, if business continues to be robust. With the numbers today, you know, pretty positive. Thats amazing. Thats astounding. What does it for your turnover . Are you largely replacing employees who leave or you were laying off . No, were growing. Were up net 10 this year already. Every business has turnover. We have turnover. It does imply, if the economy gets better and jobs become more available, there will be some tick and turnover, i expect, but by and large our turnover has never been better, actually. Its as low as its ever been. Wow. Okay. Is this government work . I mean, what where are you seeing growth thats going to lyle you to hire that many people right now . We have two businesses. One is the attest audit trust business, dealing with the markets, dealing with public. The other is consulting solutions. Its mostly its a little skewed toward consulting, for sure, in technology, strategy, in operations and in human capital. And the other side of the businesses, were hiring in audit and tax space as well. Wow. Obviously, this is going to continue to be a source of growth. The complexity today for any company. They almost have to have someone whos a specialist to deal with these kind of operations. I wonder, for the people youre hiring, we hear sometimes about this bifurcation of the labor market. Do you find theres a surplus of workers . I hear for years well have trouble finding people and for years were still hiring people. I think people have learned that noting and consulting are good professions. They go to school, even in the job reports its amazing the differential in employment if you have a College Degree versus not a College Degree. So, they know theres Jobs Available right now in those industries. Were we seem to we seem to be doing very well hiring. The other key is developing them. So from your perspective, based on what youre seeing with your clients, how do you assess the economy and the jobs market right now . First, most ceos cfos are hesitant. Their confidence waned in the Third Quarter but i think that might have been a matter of the Government Shutdown. Confidence, i tell people, is as completing as a headline. I think todays report, the last three out of four months have been positive. I think theres momentum. Most of our companies i think will gain momentum. I think were poised for a good 2014. Most of our clients, i think, are getting there as well. And yet two major pieces of legislation affecting two of the biggest sectors of the economy. Finance financials and health care. Weve got dodd frank coming up. We have, obviously, obama care. Is that going to possibly be a hindrance to growth and expansion next year or is it just going to be a stimulus for your line of work . You know, i dont know if it will be a stimulus for our line of work. But for the companies we work with, aca hasnt impacted them that much. They have more administrative costs, slightly, but it really hasnt impacted them that much because they all have 200 or more employees. Dodd frank, its been a work in process for a long time. I dont know if theres anything necessarily today thats going to affect it. I think the one thing, the headwind is, potential more regulation as well. Thats always going to be the case. Always. When have you ever said, theres not enough regulation out there . What is your biggest headwind . Our biggest headwind, i think, is the Government Shutdown potential, the debt ceiling issue. Frankly, we need comprehensive tax legislation. And if we got that, i think it would make us all more competitive. Certainly help our business, im sure. But those two or three things, i think, are our headwinds right now. Immigration reform, is that something important to you as well . Very important. It is very important to us. We do bring in people. We need talented people. We need skilled workers regardless of where they come from. So getting some sort of Immigration Reform is important to us. Frank freetdman, great to see you. Thank you for joining us. Appreciate it. My pleasure. Thank you very much. We have about 40 minutes left to go before the closing bell. The dow now up about 174 points. 18 points or so on the s p. It is sitting below the 1805 level that would put us back in the black for the week. While shoppers are hunting for holiday gifts, some retailers are shopping for a present that could last a whole year and a lot longer. A new ceo. We have that story coming up. And one retailer not looking for new boss, the gap, but after some analyst downgrades may be looking for new sales strategy. Thats why you take charge of your future. Your retirement. Ameriprise advisors can help you like theyve helped millions of others. Listening, planning, working one on one. To help you retire your way. With confidence. Thats what Ameriprise Financial does. Thats what they can do with you. Ameriprise financial. More within reach. So ally bank has acan do that wont trap me in a rate. Thats correct. Cause im really nervous about getting trapped. Whys that . Uh, mark . Go get help i have my reasons. Look, you dont have to feel trapped with our raise your rate cd. If our rate on this cd goes up, yours can too. Oh that sounds nice. Dont feel trapped with the ally raise your rate cd. Ally bank. Your money needs an ally. I love having a free checked bag with my united mileageplus explorer card. Ive saved 75 in checked bag fees. [ delavane ] priority boarding is really important to us. You can just get on the plane and relax. [ julian ] having a card that doesnt charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u. S. When i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. Welcome back. In Holiday Season some retailers are looking for a big ticket item. Theyre looking for new ceos to pull their stores back from the brink. Courtney reagan has a rundown of santa wishes this season. Some retailers asking santa for more than just a strong Holiday Season. Theyre asking for a new ceo for christmas. Industry insiders add milt theres not a lot of ideal ceo candidate. Lululemon said she would retire once a replacer is found. None found. Jcpenney looking for a ceo. Board members have changed but the retailer says the ceo search is ongoing. Abercrombie fitch may not be looking to replace michael jeffries, even though some think it should. Sources ive spoke to list andrew jennings, someone whos desirable, saks former president , also available, but some question whether hes ceo material. On the wish list, highly desirable but available, ken hicks, brendan hoffman, glenn murphy, and jeff gennette. Bloomingdales ceo is stepping down in february to move into education or philanthropy he says. If hed be willing, he would be a really big get for someone. Kelly . I had no idea inventory is high, inventory of ceo candidates. Courtney reagan back at headquarters. Thank you. While gap isnt looking for a new ceo, they might want to look for a new strategy. Several wall street firms downgrading the stock. Lets talk about it. Adrian, thinks this room has run to run while ann thinks gap will go nowhere from here. Ladies, thank you for joining us. Adrian, make the case for gap right now. The case for gap really is about Global Growth. In the near term, absolutely we agree that its very promotional. There is a lot of pressure on march margins. We actually think in the near term, that is something to be the status quo. But we like the Global Growth prospects. The company has yet to really expand globally. Opened its First Old Navy store in japan in 2012. Theres a lot of runway for this company longer term. At the same time, even coming out with a better than expected november sales number, pam, weve got the shares down again today. I mean, what is it here that keeps dogging this stock . Sure. Well, gap is a predominantly mallbased retailer. Its not really forward fashion thinking. Its more in line with the current fashion trends. Its competing on price point in an environment where the mall is incredibly promotional. Theres not a lot of newness out there in the marketplace. And i think that their Customer Base is already used to these promotions and wants more out there. Then you take into account as well the inventory of the sales spread is widening. Comps are becoming more difficult. Theyre making numbers but based on Share Buyback and more aggressive cost cutting. We think at current levels theres not a lot of levers to pull. We dont disagree with adrian about the longterm opportunity but right here, right now, the way the whole group is looking into the Holiday Season, why get involved . Why take the risk today . What do you think, adrian . We have a 12month view of this stock. I would say few retailers, everyone is under promotional pressure. Merchandise margins are down. If you can pull other levers, buy back stock of which they bought back 4 of their shares in the Third Quarter, very committed to shareholder value. And touch the st a lever, to us in the near term while the environment remains very soft, if you can make your numbers, and generate, you know, Earnings Growth in the out year, that, too, is actually a net relative outperformer. The shares here about 39. Where do you think they are a year from today . What do you think the fundamental value is for the company here . Interestingly enough, we dont necessarily agree with adrian longer term. We do have a mid40s price target when we look out 12 to 18month time period. We do recognize the international opportunity, a lot of initiatives they have in place and going forward. As we look through the next several quarters, obviously its not enough to make the numbers. We saw that with a 2 comp, which was ar goou guably very good in this environment. Q3 number was solid yet the stock isnt do anything. We think the story is fairly well known and investors are looking for more and need more. Adrian, did you have a price target sdm. 12month fair value is 48. That is 15 times the out year. And thats basically 15 Earnings Growth. They buy back about 1 billion generally in a normal year. And that generates about 6 Earnings Growth just by itself. So, our bull and our bear are 3 apart on their price target. Wide gap there. Thank you, ladies. Have a good weekend. Thank you. Now were losing a little momentum as we head into the final stretch. The dow is now up 117 points or 107. It lost the 16,000 threshold. S p 500 similarly sitting now at about 1802. It may not be enough despite todays rally for us to end the week positive. Again, its been the last hour of the day each day this week that has been a very telling bit of the trade. Huge volume. Keep an eye on that as we head toward the close here. Its not exactly rocky versus clubber lang, whoever that is, but it is a heavyweight bout that could deliver a knockout punch for your portfolio. Seema mody taking on dom chu coming up. 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The nasdaq, interestingly enough today, is a little laggard. Only about 0. 7 of 1 , 29 points. Heres a look at the s p 500. It is up in the range of 18 points, about 1 . 1803. We need 1805. 81 to be positive for the week. Thats right. It would be the ninth straight positive week. First time thats happened since january. All up there. Todays strong jobs report is a rare example of where good news was actually good news for the markets. As far as its concerned, as far as fed policy goes, right . Well see. Our jeff cox says this is essentially the stock market giving the fed permission to start tapering. We brought him here to talk about that. Also with us is matthew slaughter, economics professor and associate dean at dartmouths tuck school of business. Thank you for being here. Good afternoon. Jeff, permission to taper, what do you mean by that . Look, kelly, for a long time weve watched the tail wag the dog as far as the markets go. The markets the tail. The fed is the dog. As you alluded to, weve gone through so much of bad news being good news and good news being bad news. For once the market looked at this report today and said, you know what, this is good news. Its the sign of a stronger economy. And instead of recoiling at the possibility that the fed may take away the punch bowl, the fed the market actually did the mature thing and went ahead and said, okay, you know, were going to buy on this. We realize things are getting okay now. Even if you taper,i its going o be okay. I think this puts pressure on fed, probably taper in january ahead of that march schedule. What do you think, professor, base on the metrics the fed has publicly set for itself, is the economy in the territory right now where they would think about starting to taper . Jeff is right. The economy is definitely healing. This is a bit of an early christmas present, jobs report. Payroll job gains of 200,000 a month for many months now. Earnings up a little lit, average work week up a little bit. It wasnt everything on the christmas list. One thing in particular is the Unemployment Rate is ticking down. Mainly because people are exiting the labor force. Not because so many of them are finding jobs. So, i think many leaders at the fed will be happy with this jobs report. But theyd like to see continued improvement like this before tapering. I would beg to differ with that. We actually saw the Labor Force Participation rate increase. It was only about 0. 2 increase but it did go up. I think it was a rare month where we could say the Unemployment Rate didnt come down for the wrong reasons. I think the big question here is, if the fed stays in the game, what more can it really do . How long are we going to keep pushing on the same string and hope that, you know, miracles are going to happen . I understand that were not at the feds metric of 6. 5 unemployment, which incidentally i think is going to fall all the way to 6. 0 . Thats for rates. And were talking about two totally different things. Talking about ending the socalled money printing versus raising rates. We know rate increases are a long way off but i think tapering can happen soon. Professor slaughter, i would love to know whether you think weve kind of is further improvement in the labor market possible, sick lickically speaking . Are we running into some structural problems here that go back to what youve written at great length about, whats happening with globalization, technological change, et cetera . Great question, kelly. I think the fed when it looks around at broad marketplace, they see how strong it can be. There are also other parts where Unemployment Rate is below 1 . Theres some counties in and around the back bakken formatio north dakota where they see growth the fed would like to see. Driven by technological change, entrepreneurship that doesnt have anything to do with the feds balance sheet. We need fraccing in every 50 states, is that what youre saying . We need change like that in all 50 states. Thats what the fed would love to see. They know theres only so much they can do to try to generate that sustainable growth. Its interesting to me. I talked to a couple job placement people heading into todays report. Im still hearing the same song from them about the skills gap and inability of folks out there trying to find jobs but not being able to be matched up because of skills problems they cant employers cant find the people with the right qualifications for the jobs they want to fill. So, the fed cant do anything about that. We just heard from the cfo of deloitte. Frank friedman was saying, they dont have a problem finding skilled employees. And they hire 18,000 people a year. Interesting. For their business, i did hear that. Accountants are in pretty big demand right now. In those particular fields. I think as far as High Technology fields, those kind of things, we still have problems there. So, its very uneven. Again, it just goes back to the original question we talked about. What can the fed do . Its time for them to start to normalize and take their foot off the pedal. I have to ask you, in a word, raising the minimum wage, good or bad idea . Good but not a silver bullet. All right. Thank you for keeping that short. Good answer. Well bring you back to explore that theme. I would love to be involved in that conversation. I know you would, jeff. See you later. 20 minutes left in the trading session here. We continue to lose altitude off the highs. The dow at the peak was up 200 points. Now up 159. And back below 16,000. Were at 15,980. Coming up, todays main event. Seema mody, dom chu spating over todays market. Seema saying its too expensive, dom saying its too cheap. 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[ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year [ ding ] at the lexus december to remember sales event. This is the pursuit of perfection. Our dynamic duo in opposite corners of the ring. Seema noticedy says she has the facts to say the market is too expensive and dominic chu says we have a lot more room to run even with the rally. Over to you guys. The first reason experts say this market is too expensive. A widening divergence between stock prices and underlying Earnings Growth. S p 500 average Earnings Growth from 2011 to present date has been decreasing while forward priced to earnings ratio is how much investors are willing to pay per dollar of earnings has been increasing dramatically from 10. 4 in august of 2011 to 15. 5 in 2013. In essence valuations are increasing without strong underlying growth. Thats a signal, guys, we have overvalued stocks. I would say overvalued stocks, yes, you may want to think of it that way. Lets put it in historical perspective. When things were really overvalued, they were really overvalued. Take a look at this chart. This shows you the price to earnings ratio, what seema said, how much per stock price dollar you pay. Back during the peak in 2000 you were trading at 30 times earnings, paying 30 of stock price for every 1 of s p profits. Today thats more like 16 or 17. Even with record highs, valuations are still relatively within historical norms. And certainly far away from the peaks we saw back during the tech bubble. Maybe valuations not near as bubblicious as people think. How many stocks in the s p do you think are up double digits . I would say at least 400 of them maybe. Okay. Youre right. Its 400. 400 out of the 500 stocks on the s p, so effectively, 80 , guys, are up double digits this year of which 90 are up 50 or more. Bottom line, this market is sitting on monstrous gains. Its only a matter of time when Money Managers book their profits and say, happy holidays, im out. High fliers, stocks up triple digits. Netflix, best buy, delta airlines, celgene. One trader put it to me, imagine this, if you missed out on this rally of 2013, are you willing to pay top dollar for these stocks, especially the fact that stocks are trading at price valuations. Is it really top dollar, though, if we were just to say priced to earnings ratio are where they were, and i will say this, but people might pay more for every dollar of earnings. Adam parker at Morgan Stanley, who a couple years ago was the most bearish strategist on wall street, is the most raging bull. The reason why, he says multiple expansion can happen. People will want to pay more for every dollar of earnings because of major thing. Belief the fed can distinguish between tapering, which is just withdrawing some stimulus, versus actually raising Interest Rates. If people can get their arms around that, thats a good sign. Also a lack of credible bear case against any kind of an Earnings Growth scenario. There isnt one right now. Companies are still trying to boost their profits and they can still do so, credibly speaking. Lets not forget, were not the only economy thats growing. Think about china, japan. Its a global sinkization of economic expansion. Thats why a lot of investors with cash still on the sidelines, a lot of cash on the sidelines, will go back and buy stocks. Ive got to say on your note when you were talking about corporate earnings, yes, we had better than expected earnings in q3, kelly and bill, a lot was due to cost cutting. Not because revenue was growing. That in itself is a warning sign. Still, its profits, guys. Its profits. Its reengineering. You know, you guys remind us when were sitting in the makeup chair downstairs. We have this conversation all the time. Good job. Thank you. Were coming back. Down about 180 points right now. So, were sitting right around 16,000. The s p right around 1802. Well see what we do here as we head toward the close in 14 minutes. Regardless, it seems as though well break a fiveday losing stretch. Coming up, former fed chair, paul volcker, new financial regulations bearing his naming. Now regulators pushing a tougher rule that could hit Bank Executives pretty hard. That story coming up. Tdd 18003452550 trading inspires your life. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. [ male announcer ] how could a luminous protein in jellyfish, impact Life Expectancy in the u. S. , real estate in hong kong, and the optics industry in germany . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. About ten minutes left. Weve had a pretty good rally day. Market going sideways and we wonder if we can finish above 16,000 on the dow. Just below that now, s p holding just above 180 and the nasdaq is up actually, the weakest of the major averages today, 4,059. Joining us, david darst from Morgan Stanley wealth management. You have become among the bulls for next year. Thats right. Were expecting a multiple of 16. 4 times. One expansion point in the multiple times 122. 90. That leaves 2,014 at the end of 2014. How clever. How clever. That would be 11. 4 up from here, from here. In price terms only. Not the dividend. I got it. Today, very good jobs report any way you looked at it. If that keeps happening, the fed is likely to taper sooner rather than later. Does that change your scenario to some degree . A sign of health. You want to see normalization of Interest Rates to show that the patient is leaving the hospital under its own power. So, we see this as a good development. It would be wonderful if they could start the tapering in december. December 17th, 18th. Or january 28th, 29th meeting, bill. Its a good sign to us. It would also likely mean a rise in longterm Interest Rates. I mean, today we got to 29 2. 93 or something on the tenyear. That doesnt seem to bother the stock market. Why not . Its up 100 basis points, thats hurt bonds and caused some individual investors to throw their money into stocks, as you know. The tenyear bond a move like that, bill s down 11 in price this year. The 30year bond is down even more. Maybe 16 , 17 in price. You then add back the coupon to get a total return. So, thats thats been one of the drivers of people into stocks. What do you stay with the stocks . We want to focus on health care, which has done so well this year. Were staying with health care. We basically now start to pick up technology, okay . Which weve been under, underplaying that. One thing that weve liked a lot, we talked about many times, Consumer Discretionary and consumer staples. Both coming here we would begin to underweight those. Really . We would take money off the table in the consumer and go towards more of the industrials, the technology and the health care, which has been so good. We still like japan, too, bill. Third quarter gdp looks like its going to be 3. 6 . You see that strengthening down the road . I mean, is that is that the kind of expansion youre seeing here . Fourth quarter number. Our economists say, real final sales were up only 1. 9 . A lot was inventory, which will take away from the Fourth Quarter. Weve seen all day long people around the street, Morgan Stanley and others, lowering Fourth Quarter numbers. People ought to be prepared. If theres any pullback on that, then you want to add money to the market. And were up 190 points. Were back above 16,000 at that point. God be with you, nelson mandela. What an amazing life. Thanks very much. See you later. Well come back with the closing countdown for this friday. And after the bell, look up in the sky. Its a bird, a plane. No, its actually something better. Its a pizza. Forget amazons drones delivering books. Theres pizza from dominos coming through the air. The ceo of dominos will join us and tell us if more drones like this, tested in europe, by the way, are in his companys future here in the u. S. Or was this just a publicity stunt. You decide. 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A Research Tool on thinkorswim. From td ameritrade. About 3 30 left. When the unemployment number came, stronger than expected job growth, off to the races first thing this morning. Up 150 on the open. Went sideways for a while. At the peak today, we were up 200 points. Came back a bit. Now heading higher again. Gain of 1. 2 as we head toward the close. For the week, remember we had seen down days to this point, but for the week, were going to be negative by half a percent here unless we see a little spurt come in at the close. Well keep an eye on that and on the s p, which is close to being unchanged for the week. The tenyear, huge move on the open this morning. Look at the spike after the unemployment number came out. Got to 2. 93 then pulled back. Were at 2. 86 right now. Warn myers, a lot of people were surprise we had saw a rally in stocks on that unemployment number. Not a selloff. Exactly. A lot of people were surprised. You know, its been bad news is good news and good news is bad news lately. This is one good news appears to be good news. I think what basically happened was, theres been so much talk by the feds out there, tapering is tapering, its not tightening. And preparing us for that. The Economic Data we got today, the jobs in particular, which is a key number, key data theyre looking at, is pretty solid. Weve had a couple good months in a row. I think people are finally realizing, the economy may be a little better than they thought it was and maybe we can withstand a little of this. Weve been keeping an eye on the last hour of trade this week. Sometimes it was a selloff at the close. Not now. Were up 200 points again. Were back to the high here as we head toward the close. Do we read anything into this . I was getting concerned that the imbalance at the end of the day, continually buy side for many months, converted and switched to sell side for the last week. Today was a little to the sell side but looks like people are ignoring that and buying right into the close here today. I think thats a good sign. Maybe alleviate the selling we saw this past week at the end of the day and maybe well keep that from coming back. After all is said and done, we may finish neutral for the week, for both the dow and s p after all that. Everyone came in this morning, felt like we were down a ton. Yet the tenyear yield is up big for the week. And it looks like it wants to continue higher here. I keep asking, why isnt that a problem for the stock market . Its a very good question. Again, i think were not quite at a level yet its going to convert money out of the equity market to bond market but i think were getting closer. So, what are you doing here . Did you buy this dip . Are you i think we hit a couple key levels on the way back up today, particularly on the s p. 1802. I think that gives a pretty decent signal that momentum upward is back again. And well see what monday brings. But i would be a buyer here. So, you guys who are watching the charts for those resistance levels, if we can get above a certain levels, you think momentum can push it higher. And keep buying. Correct. Thanks, warren. Well go out near the highs of the session again. This last hour has been very important to watch. And today its taking us back to the highs of the session after that much better than expected jobs report this morning. So, the dows going to finish up about 200 points. Unchanged for the week, essentially. And the same thing for the s p 500, up 20 points right now. Thats the first hour of the closing bell. Stay tuned. Kelly evans and an allstar wait until you see whos on the panel this time. Coming up on the second hour of the closing bell. Have a good weekend. And welcome to the closing bell at this hour. Im kelly evans. Stocks just snapped a fiveday losing streak in pretty glorious fashion. Lets take a look at the numbers and see how were finishing up the session. Dow jones just shy of 200 points, percentage and a half, thats the best day in a couple months. The nasdaq is a bit of a laggard, up 0. 75 of 1 . Dow up above 16,000 so it reclaimed that round number today. The s p 500 im watching this very carefully because its going to be the decimal points that matter here. Closing, it looks, right on the nose, 1805, but might be shy of 1805. 81. The significance is that would put it in the black for the week, ninth straight week but looks like were finishing slightly lower. Joining me now is private investor and former wall street journal columnist, evan newmark, j. Burns, and cnbc contributor greg ip, and joining us is fast money contributor, tim seymour. Welcome to all of you. Tim, your thoughts here. Is this enough you know, i was going to ask about buying the dip but im not sure we had a dip if were talking about a move of less than 1 earlier this week. There was a lot of anxiety. If you look at where the heaviness was in the market, it was in interestrate sensitive sectors. Same data knocking us down, is the same that were rising today effectively. If you want to take away the big thing today is ultimately looking forward s the fed going to regain credibility . I hope they do. Thats my christmas wish. I expect a taper in december and i think thats very good for the markets. Markets are trading good on good news. Thats what we want to see. J. J. , i wonder, to some extent is this people coming out of the woodwork to buy after the losing streak . Is it about the jobs number this morning . Whats driving things right now . Whats happening right now is that investors feel like low Interest Rates are going to be in for the move and people will continue to buy in. What do you mean in for the move . In for the move the fed is going to keep rates relatively low. The real important thing is theres never been, in six decades, ever a period where the markets been up more than 20 in a given year with a following year it hasnt been up some positive number. Youre still bullish . Gdp is continuing to rise. Im bullish but to a point to get back to Strategic Planning to your Asset Allocation mix. Its important investors and the regular retail guy stick to knitting on the Portfolio Management skills. You look at the market, what jumps out at you, michele . Every single cycle theres a moment where the market turns. Where good news starts out bad news because you worry about the fed, right, et cetera. The fed will get easier whether its taper or raising rates. And then good news becomes good point. Feels like we hit that point. The underlying economy is what drives the stock market. Are we having a moment here, evan . There is a moment. Its not just between the two of us. I think the big story is, we are looking im going to call it the official end of the 31year run of a bull market in bonds. Wait a minute. I heard that before. You just said 31. I think its 31. I think its 31. People have been saying 30. Theyve been wrong. I think its 31. I think its important because whats going to happen in the next few months, it seems very unlikely, given the employment report and whats going on with some of the numbers, gdp numbers, that the tenyear yield will ever move down below 2. 50 again. To what, snow. Hold that thought. Its interesting. We asked bill gross about this the other day. I said would the tenyear go below 2. 50. He said no. Greg, what say you . First of all, i want to congratulate evan on that gutsy call on the end of the bull market in bonds. My goshgs that has been a widowmaker of a call for so many years. But my heart is with him. I want this to be the end of bull market in bonds. The only reason yields have been so bad is because its so low. Not just nonfarm payroll. Hours were up, earnings were up, strong consumer confidence, good consumption making Fourth Quarter look like its going to be a good number. What the market is starting to tell us is this feels like an inflexion point on the economy. Thats what the ism told us the other day. When you feel some inflexion point on the economy, you dont feel the fed wont be your friend any longer because fundamentals are falling into place. Tim seymour,fy like this narrative, if i think were at an inflectioinfliction point . Some of us are somewhat cautious but ill say this, theres a spring under emerging markets. If you look at the spread of the s p to eem this year, its down 32 . Today you had emerging outperform the s p on this data. Which tells you that people are getting comfortable with both the ism growth against prices. In other words, there is no inflation. This is very positive for the rest of the world. As talked about by other panelists, weve seen pmis around the world excaccelerate the last three months. Thats a good trade. Mexico over u. S. I also like the diversified miners, bhp, rio tinto. I see you nodding. Emerging markets, i still think, though, theres a section that you have to worry about 37 those countries with current account like india, indonesia the fragile thrive. Exactly. They are ones you got arguments on both sides of that trade. Oh, its never going to be that bad. They have more cash reserves than in the past, et cetera, et cetera. Still, have you to stop thinking of emerging markets as a whole group cant blindly jump in. Pmis have come in so positive, suggest 5 , which lead to a gdp globally of 3 , 3. 5 . Emerging markets is poised to grow. They typically fall way behind where u. S. Stocks are. Theyre going to be playing catchup. I think that started back in june. Evan, you hear all this upbeat talk. Doesnt make you a little nervous . No. Come on. Im the ultimate contrarian. Its too exuberant right now. I think the most interesting thing about all these reports which have generally come in very positive is just how low our expectations have become, how mediocre the recovery is, so with numbers that are halfway decent come in, everybodys like, oh, yeah, the skys the limit. Let me tell you, a couple years into a recovery, this is where we are. I mean, theyre good numbers but theyre not great. This is the point, right . Its taken us 4 1 2 years to learn maybe we arent going to get to that point so we have to sort of trade with this new world. In fact, this is a broader debate right now. Is it the Larry Summers kind of secular stagnation, you know, the fed needs to make sure it doesnt do anything too soon to trip up the apple cart, or is it what we were just talking about, that maybe actually there is powerful momentum heading into 2014 . The fed needs to regain credibility. First of all, have you to ask yourself which Larry Summers are we talking about . You know whats interesting is last april he gave us talk to a conference. He talked about he said, he thoit the economy was going to surprise on the upside and growth would be stronger. And the fed would be dialing back stimulus sooner than most people thought. And now here you are like in october, hes actually telling the opposite story. I kind of like the Larry Summers of april a little more. That seems to be the story unfolding here. Look, to evans point, you know, its a tyranny of low expectations. If youre bullish, youre looking at real gdp next year of 3 . Nomal gdp of 4. 5 . If that translates to Revenue Growth of 4. 5 , its hard to justify what weve seen with stock valuations at this level. So, the fact the economy is turning around doesnt necessarily mean its a safe place to be in the market right now. Okay. Hang on one second, j. J. I want to bring in Larry Mcdonald from new edge usa for his reaction to some of the data today. Larry, i wanted to ask you specifically about gold, because i couldnt quite get my head around it this morning. We were down before the jobs report. It hit. We spiked down. Then we were moving positive. Is it you know, how do you read gold here . What do you do with it . Well, i sense a massive underperformance of minors versus gold. Thats very clear. I think overall tremendous tax law selling, tremendous capitulation. We saw this at the end of the Second Quarter with gold. Just an absolute rush to the exits, quarter end rebalancing is a phenomenal time for investors to take advantage of capitulation. And thats what were seeing with gold. Okay. So, what youre saying, in other words, they take one of the few underperforming assets of the year. Its kind of its own idiosyncratic story, but is that it for gold . Are we going to fall below 1200 here . No. I think this is a classic capitulation, a fear moment, where you have a lot of quarterend rebalancing. A lot of pms have to you have risk manager tapping yourself on the shoulder. Anyone whos taken professional risk, ive been there, the risk manager comes in, taps you on the shoulder, you have to cut the position in half. So i think in the first quarter, i think after january 1st theres going to be nobody left to sell gold and, say, coal names and gold names. Both of those sectors are completely decimated. Often theres a relationship between whats happening there between the emerging market trade to some extent. I want to ask you if you have a view it and what happens to the precious metal here . I think gold has trouble down to 1100. I slightly disagree with larry only because i think there are some crowded longs in this trade. I think gold ultimately has a place, the same reason people were buying it, central bank diversification, is alive and well. I think thats something they have to adhere to. When you look at where we are with global disinflation, i wont say deflation, but prices are a big problem. Look whats going on with commodities. Look at the oil glut in the world. I think thats negative for gold. I actually would be in other parts of the commodity chain. I agree gold is oversold. I agree iron ore is oversold. I would own copper. A lot of people are talking about how commodities are clearly not the place to be right now. J. J. , anything to be said from a portfolio point of view for all the people who were told, look, youve got to diversify, youve got to have a little exposure to this sector. Theyve been hammered by that exposur exposure. Is now time to look at it for opportunity or do you sell and walk away . I think you brought up an interesting diversion between gold gid and mining stock. Those who own gid have gone down but not as much as the mining companies. Theres value there and gold is considered an asset class and miners are considered stocks of that asset class. Ift does have a place in the portfolio if youre a longterm, diversified investor but gold you have to take a look at things undervalued and look to pick them up on the cheap and no one wants to talk about them. Real quick, what are a couple of those, j. J. . Other than gold, are there any other candidates you would mention right there . I would look at the etfs of mining companies. And i would also i would also take a look at in the bond side as far as your equivalent for baby boomers going out looking at etfs so you can bullet point out in preferred or going into financial areas im going to call my parents afterwards and let them know what to do. Tim, did you want to know wh t in here . Not the majors but mid caps and a couple majors, they took their hedges off 37 its about Balance Sheets. If theyre stock to price gold, still have balance issues. Have you to be careful who you are buying in the gold mining space. Just because it looks cheap on last years numbers, thats not next years numbers. Larry mcdonald, final world to you. Tim, they said the same thing about the financials in the Fourth Quarter of 2011. Balance sheets were a mess. You had all kinds of exposure to europe. In 2012 the financials were up, you know apples and oranges. Financials to gold miners, its totally different. The financials have had decent Balance Sheets for a long time. I wouldnt agree they had bad Balance Sheets. The street everybody on the street wanted to sell them in the Fourth Quarter of 2011. Every single analyst. Bank of america, no nobody wanted to buy the stock at 7. Now Everybody Loves it, up 150 from that level. Larry, do you like the financials here today . No. I dont like i dont like any asset class is that has you dont like anything. No, no, any asset class that has where the entire street likes the name. I like does that include the u. S. Economy . No. The coal names ill tell you what i look at, kelly, year end, when i see credit default swaps in certain names like peabody, havnanian outperforming the equity, those are names im positive on. Its a good sign going into year end. Larry, thanks so much. Thanks, everybody. Well keep the panel around. Tim seymour has to run. Can you catch him on fast money at 5 p. M. Much more today on the power packed rally. Well get the view from the floors of the nasdaq. Dominos ceo weighing in on todays jobs report and how theyre on the hiring front and what he has to say about the minimum wage debated and drones delivering pizza to your doorstep. Before Global Opportunities were part of their investment strategy. Before they funded scholarships to the schools that gave them scholarships. Before they planned for their parents future needs and their sons future. They chose a partner to help manage their wealth, one whose insights, solutions and approach have been relied on for over 200 years. Thats the value of trusted connections. Thats u. S. Trust. Welcome back. Todays rally still wasnt able to erase all the dows losses for this week. Lets get more perspective this week from bob pisani at the new york stoxx stock exchange, bob holding down the for the at the cme, joining me now. Bob, did this rally take people by surprise in terms of its size and scope . Oh, yes it did. A lot of people thought we would get 200,000 jobs. That wasnt the surprise. The surprise was the Market Reaction with the dow up 200 points, ending at high, and bond market almost not reacting . Weve been wondered about tapering being a headwind for stock. Suddenly we get the mother of all rorlgts. Its generally better than expected and the market reacts like, tapering is not a problem. Now everybody is trying to figure out, are they trying to tell us this is not really an issue . I personally dont believe that. I think tapering is going to be a bit of a headwind. It just wasnt very obvious today. Interesting. Sheila, by the way, the nasdaq was underperforming today. Any idea why . You know, it was underperforming today, kelly, but it was the only index out of all the three major ones to close out the week with a gain. Chalk unup for the nasdaq, hitting a fresh 13year high. Today is one of those days the nasdaq its almost ooets easier to talk about the losers because there were so few of them. About 85 of the nasdaq 100 in the green today, semiconductors has been a really good source of strength for the nasdaq all week. We got that intel upgrade today, some positive earnings this week, also positive Industry Data. Biotech continuing to be an outperformer, celgene hitting new 52week highs. We saw the momentum names today not participating in the rally. Tesla, facebook, a lot of those names didnt participate. And how about apple, the one stock you think that would help lift the market actually in the red today. That was a little surprising twist of things at the nasdaq. I want to come back to that in a second. Bob, first to you, what were the big movers at the cm snechlt. There werent a lot of big movers other than s p futures. What bob said, muted reaction of the treasury market. The treasury market is shrugging off the data because theyre expecting the tapering gt. They think the Federal Reserve has tapering schedule set some time next year. We simply dont have the engine in the economy for the data to overperform consistently. However, todays number actually was that. Bob, some people have argued expost facto, it has gone from 2 at the end of october to 2. 9 today to reflect the somewhat stronger economy. Im not sure i completely agree with that. I think the market should have gone up higher, the bond yields, and they didnt. Can you make an argument that weve already adjusted a little bit to the prospect of a taper . Thats exactly what im saying, bob. The treasury market has been expecting the taper, whether the economy strengthened or not. No one down here expects the economy to absolutely explode into a 4 or 4. 5 gdp. But they think the fed is going to taper anyway. Thats why youve seen that orderly move in yield. I would argue this has been orderly versus what happened when ben bernanke announced that sort of faux schedule in may. Earlier this year. I think that was a shock. It was an orderly move i was going to say, it would almost be a relief not to talk about the fed so much at the nasdaq, but is this not the second straight day, sheila, weve seen the social media names taking off . Weve seen some shine taken off. They say its profit taking. Were actually seeing it in old tech as well. Semiconductors have been a perfect example of that this week. We did get positive Industry Data coming up from semiconductor association. Intel, it was all about stabilizing corporate pc demand. You hear things from other chip names. Really good news potentially when it comes to enterprise demand, korment demand. Good headwinds for the economy here. Sheila, the two bobs, thank you all and have a great weekend. Appreciate your time this afternoon. You too, kelly. Bank ceos could be on the hook for bad trader behavior if regulators get their way. Even if they have no knowledge of what those traders did. Up next, the socalled volcker rule racing to the finish line. Well discuss a provision that could subject Bank Executives to serious lawsuits. Capital to make it happen . Without the thinking that makes it real . Whats a vision without the expertise to execute it. And the financing to make it grow . Whatever your goal, it can change more than your business. It can change the future. Thats why, at barclays, our ambition is to always realize yours. I love having a free checked bag with my united mileageplus explorer card. Ive saved 75 in checked bag fees. [ delavane ] priority boarding is really important to us. You can just get on the plane and relax. [ julian ] having a card that doesnt charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u. S. When i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. Welcome back. Financial ceos in the cross hairs as socalled volcker rule could subject Bank Executives themselves to lawsuits if their traders dont comply with new rules. Kayla, walk us through this and just how personally liable are these executives potentially going to be here. You know, its really interesting. Its something, of course, you can imagine a lot of executives dont like. This rule is set to be approved on tuesday. More recent drafts of the rule bandied about and being finalized, they carry new language that says a banks Management Team must attest the company is in full compliance of the rule. We dont know what form this could take, a more informal discussion with the board, a report. We know if the firm breaks the rules, it gives the fed more freedom to go after executives. Money backed by customer deposits, you and me, we put in our account. Every regulator agrees, jpmorgan is losing 6 million on a london whale trade. Regulators wanted a strict rule. The worry here, if you make it too strict on the definition of what is a trade, what is a hedge, then you could potentially hurt liquidity in the market. So putting this ceo language in there, thats how they could make it strict without potentially hurting liquidity. Kayla, do you think it took people by surprise to hear that, again, they might now be on the line, i guess, comes down to a question of legality, does it not . If you are the bank ceo and something happens under your watch, can they go after you personally and are we talking about, in financial terms, or, you know, lawsuits . I think its a surprise insofar as it wasnt in the earlier drafts that weve seen in the volcker rule. The last one we saw was in late 2011 and this wasnt in there. They put out the idea for Public Comment and you can imagine a lot of financial executives were not happy with having this in there. The fact it is now coming back to the fore is a surprise but not the first time executives have had this sort of liability. Theres regulation by the exchanges for broker dealers on certain supervisory controls of trading that puts the executive on the hook and sarbanes oxley, executives have to sign off on all their Financial Statements to say these are well and good. Thats gotten a few executives in trouble since then, but nothing really, you know, all that bad, i would say. Kayla, stay right there. J. J. , is this a good move . Its not a good move. We dont have a definition of exactly what the comprehensive nature of what the ceo and what is the compliance area going to be doing with these laws. The ceo do they have to spell all that out . Its not spelled out and it should be. The ceo cant literally blanket sign everything else. What i feel it should be from my per sicktive is theres a compliance department, a ceo. They get together and collectively come together and sign off on that agreement. Everybody has a level of liability. There is a certain wait a minute. You touched it a little bit, kayla. Guess what, theres something called sarbanes oxley. That was the round of financial legislation under george bush that was going to prevent the next crisis because every ceo was going to have to sign off. You should have seen cnbc the first day that all those s. E. C. S were filed. We photo copied all of those signatures, put them up on huge screens. We even had a handwriting analyst come on and look, which were the honest and dishonest ones. The bottom line . Guess what, we had the financial crisis of 2008. This is a giveaway to attorneys who would like to sue. Nothing more. Is this about preventing another financial crisis or just making sure people is it something more like the london whale situation where if you have wrongdoing under an executive, the executive is held the underlying issue is the following once again, regulators trying to make the world think theyre making the world very, very safe so everyone can go to sleep and think things are going to be fine. Financial crisis will always happen. You need to pay attention. No matter who signs off on what, you youve got so many traders on a desk. You think can you look at every single one of them and know come on. Hang on, evan. Kel y you know, i was when i was at Goldman Sachs and later ubs, i had to sign off on various things that people who worked for me as a supervisor did. And i cant imagine someone being very happy for signing off would you feel comfortable as an executive now under these new rules . It depend. The devils in the detail. We dont know what the details are. Guys who are already worth a lot of money, if you think theyre going to sign off on something and then have some rogue trader do something stupid and have their personal wealth at rivenlg because of that no, no, youll now have a new business for the insurance companies. Theyll put out same way now f youre on a board, have you insurance about getting sued. Theyll have a new round of insurance to get sued. Its all kayla . The banks feel they wont be able to get out of this. One of the things theyre talking about doing is creating tiers of certification. If youre jamie dimon at Jpmorgan Chase you can subcertification, the principle of a trading desk so they have more direct oversight of that united. Its really more about culture, at least it feels that way this time around. The speech earlier this week, jack lew, treasury secretary said, if you set the right tone at the top, you will create a culture of compliance. Its not a perfect strategy but its one way theyre trying to go about it. Places like Goldman Sachs are run by traders so its about creating the right culture. Great point. Last word to you, j. J. A bank should be able to mitigate their risk. If theyre taking on a trade and its to profit versus mitigating risks, it should be clearly defined. Kayla, thank you for the details on that. Well watch and see what happens. Coming up, pizza delivery by drone. Dominos pizza ceo weighing in on how real this service could be. Well also talk to him about minimum wage and much, much more. [ female announcer ] thanks for financing my first car. Thanks for giving me your smile. Thanks for inspiring me. Thanks for showing me my potential. For teaching me not to take life so seriously. Thanks for loving me and being my best friend. Dont forget to thank those who helped you take charge of your future and got you where you are today. The boss of your life. The chief life officer. [ male announcer ] 1. 21 gigawatts. Today, thats easy. Ge is revolutionizing power. Supercharging turbines with advanced hardware and innovative software. Using data predictively to help power entire cities. So the turbines of today. Will power us all. Into the future. [ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. Welcome back. Dominos pizza is looking to International Markets now for its future. In fact, this is the global dominos week where customers in 42 countries can get half off their pizza. The stock, by the way, has been tasty to investors. Its up 60 this year. The company now looking at major expansion across several markets. Joining us now to talk about that, Dominos Pizza ceo Patrick Doyle. Patrick, good afternoon. Thank you for being here. Thanks, kelly. Appreciate it. And youre just speaking of international expansion, we were supposed to talk to you a couple days ago. You were in india, though, and you had gotten ill, we understand. Yeah. How much time are you spending overseas . Tell us about that. That was actually my second trip to asia this month. I was in china, korea and japan earlier in the month. And then india for five or six days. And i it clearly is where a lot of our growth is coming from. India has been a booming market for us. I think were the largest restaurant chain now in india. Its grown very fast. Im very excited about whats happening there. I think it is runway there is a long way out. Were sxited about what were going to accomplish in that market. Certainly when you think about how saturated the u. S. Is for pizza delivery, if can you take anything like that level of growth overseas, it has to mean huge expansion. I wonder, though, whats the breakdown in terms of revenue for your company today overseas versus domestic and where do you expect to see, i should say, in the next five or so years . Yeah. So, were actually now bigger in terms of retail sales outside the u. S. Than inside the u. S. Were in about 75 markets today. What i think youll see is by the end of the decade, you know, well be 50 to double the size in international that we are domestically. Clearly, its where the majority of our growth is going to be coming from. Does that suggest as well you dont see growth in the u. S. . No, we absolutely can grow in the u. S. Its just you know, at this point were just under 5,000 restaurants in the u. S. I think i can see another 1,000. Wow. Certainly a lot of same store sales growth that can come. But, you know, 95 of the worlds population is outside of the u. S. Clearly over time thats thats where the majority of the growth has to come from. Im amazed can you grow by 20 in item of the restaurant count here. Speaking of growth and just staying profitable as you do so, theres a huge debate right now over raising the minimum wage in this country. How does that affect dominos, if it happens . If the minimum wage is 15 an hour, what does that mean for your business . Certainly it would affect us. I think the biggest problem with it is that it hurts the people its designed to help. You know, weve seen it in the past. When you increase the minimum wage, its going to slow job growth or reverse it. And you look at the numbers that came out today. They were good. You know, not great yet at 200,000 plus. You know, we really need to see morrow bust job growth to get this economy where it needs to be. Id be very concerned that a minimum wage increase would reverse that. What is the impact on your own i mean, how many employees at dominos are making minimum wage . A number of them . Yeah. Majority of our people, straight wage may be minimum or a little above but with tips, and the majority of them are delivery drivers, weve got a very different model. So, theyre bringing in tips. Theyre actually making more than that. But, you know, at the end of the day, frankly, im more concerned about the overall effect on the economy than a direct effect on us. Its just going to slow things down. One more question. I want to bring our panel in here on that point, but i can just speak from personal experience. Everyone seems to order Dominos Pizza online and they use the tracker to watch and see how long the pizza gets to them. That move to online, move to mobile, how fast are you seeing adoption . How important is that . Its now 40 of our business. Domestically and almost that same number globally. Were one of the Largest Ecommerce Companies in the u. S. You know, customers are telling us experience is better, they have the whole menu in front of them, they can access it through mobile devices, online, on their tablets. Its clearly where our customers are going. Its something were going to continue to push. Want to bring the panel in just for some of their thoughts here, patrick f youll stay with us on this topic. Of course. Greg, first, i just wonder again, not to go back into something weve discussed at length already, but you know, when you hear dominos say its not going to affect them directly but worried more broadly about raising minimum wage in this country, what do you think . This is an important question. Economists are deeply divided. If you raise the minimum wage, does it have a big effect on unemployment. Patrick, do you think you would have to cut some jobs because of the higher cost . If not, how do you pass the higher cost of minimum wage on . Does it ripple up through the entire Wage Structure of your restaurants . Yeah, i mean, you know, certainly you would see some of that. First of all, economists arent divided on this. 80 to 90 of the studies that have been done out there have said its going to hurt job growth, affect jobs. So there really is no division. I mean, its you know, the vast majority of economists are saying it will hurt job growth. If you look at what has happened in the past when there have been big moves, 2007, 08, 09, Economic Growth clearly after that has not been good. The last time they went after minimum awage aggressively was in the late 60s and you had the 70s after that. You cant argue with the fact, if you drive up the cost of labor, people will figure out ways to be more efficient. Mr. Doyle, i have a question. In terms of your costs, labor costs, this move to online, i noticed you have an ad campaign about promoting the online site. What has happened to your labor costs as youve gone more automated . Have they gone down steadily . Are you making incremental profits because your labor costs are dropping from moving to online . Its not a big effected but we definitely see some leverage kind of on the labor line. Youll see some reduction in the labor line. Not a big effect but certainly some there. Its part of why those orders are ultimately more profitable for us. The biggest driver on that, though, is customer satisfaction. Talking about automation, what about drones . Youve done some experimentation, but amazon got all the buzz. Yeah, we got some company. I mean, how real could this be . You know, i first of all, i think our drone was much cooler than amazons. It was, for sure. I looked at it. We had better music in the background, you know. Look, were going to look at it. You know, i think thats a long ways out. But, you know, were definitely pushing on technology. So, i dont know whether or not that one is going to be one thats that we can really drive, but patrick, i just wonder if seeing what amazon is doing makes you think we need to be more serious about this right now . Yeah, you know, certainly well look at it. But its still going to be a few years before i think thats going to be practical. Well, we do have some pizzas here. I dont think you have to worry about the drones in new york city. Patrick doyle, the ceo of Dominos Pizza. Thank you for joining us. Have a great weekend. Absolutely. As long as they dont deliver big sodas. Theyre not allowed. Red hot and icy cold. Find out whats topping the cnbc hot list next. Plus, you cant say whoa didnt warn you. Winter is coming. Well have the latest forecast on a terrible storm across the belly of the nation. Will it have an impact on retail sales . 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Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Welcome back. Its not exactly a game of thrones but winter is coming. Across much of the country its already here. A new storm will have a big impact on an important Holiday Shopping weekend. We want to check in with meteorologist jim cantore from dallas. It looks pretty frigid where you are. Probably colder than here, in fact. Reporter were sit ageting 5 degrees. Youre right. It is cold. The problem is were going down to 19 tonight. Even though the roads have improved swimmingly since our ice event this morning, well refreeze all of this tonight. My hats off to the Texas Department of transportation. So, here we go. Let me just set the stage for you. We get a quarter to half inch of ice. Then we get 3 to 4 inches of sleet on top of that. Theyre salting, they did all the prework yesterday with the preemergence and pretty much kept these areas clear. Especially the high overpasses. Even though the cars are moving slowly, they seem to be moving along a little faster, certainly, than they were this morning when it was just absolutely glare ice through here. The real problems have been at the airports. I mean, weve had 1300 flights cancel today in and out of dallas ft. Worth. A normal day with traffic out of dfw is about 1700 aircraft. So, threequarters of the flights at dfw canceled today. Tomorrow, i just looked at the log, weve only had 100 cancellations. They expect a dramatic improvement at dfw tomorrow. Of course, everybody now is trying to get out. Its going to be a log jam. Theyre saying, hey, look, if youre getting out tomorrow, there will be long lines, we need you to get there three hours early. Take your time, get there about three hours early. Power outages, we were up to 300,000 in the melt rmetroplex. Now down to 200,000. Not all this spot. All this ice and snow goes up into ohio. Its just beginning to taper off now. Another storm expected on sunday. Deep freeze in december. Back to you. Incredible. Here it feels almost like dallas at this time of year. Jim cantore, thank you very much. Reporter whats going on . Crazy stuff. Stuff that has retailers worried, by the way. Well see if online commerce benefits again. In the meantime, even as temperatures getting colder outside, things are heating up the website. Allen oning through it now for us. Right now the big point of interest for our readers is the tale of stockton, california. They still have a problem. Theyre about to emerge out of bankruptcy but theyre trying not to mess with their public pension funds. Unlike detroit, which is messing with their public pension funds. So, this is sort of a test case of whether or not you can do it. Public Pension Funding and the whole fight going on between municipalities and Public Service unions has been a big point of interest for our readers and were seeing it today. Still gobbling up about 100 readers a minute. Next on the hot list, obama care one more time. Dan who has been following it through the trials and travails, looking at bad storm. Data transfers at 10 rate, last report, plus low enrollment. Only 25 of what they were expecting. Perfect storm, boom, bad things. Finally, our last on the hot list, be if three, a lighter thing. They put 1,000 starbucks cards up for auction today. At 450 bucks apiece. Went like that off gilt. Boom, gone like that in seconds. What was the what was the why what was the premise . Why were these being offered at half off or something . If you read the writeup no, its 450 apiece. More of a prestige type of thing. They call them athlete shoppers going after these things. They were gone just like that. There was only 1,000 of them. I think starbucks sort of puts them out there to sort of up demand. Anyway, our readers were incredibly interested in it. Its already logged 10,000 readers already. I expect it to go higher. Have i to check it out now. Allen, thank you very much. Ill check the mailbox for a gift card as well. Jumping the gun on fracing, new york Energy Company forced into bankruptcy either because of governmental bureaucracy or environmental safety. The problem is no one knows because a key government report is under wraps. New york city isnt talking but well talk to a lawyer representing the failed energy firm. Before their gift helped preserve the point. Before a credit solution was used to expand their business. Before trusts were created for their grandkids educations. They chose a partner to help manage their wealth. One whose insights, solutions, and approach have been relied on for over 200 years. Thats the value of trusted connections. Thats u. S. Trust. [ male announcer ] at optionsxpress, our clients really appreciate our powerful, easytouse platform. No, thank you. We know youre always looking for the best fill price. And walk limit automatically tries to find it for you. Just set your start and end price. And let it do its thing. Wow, more fan mail. My uncle wanted to say thanks for idea hub. He loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. [ male announcer ] open an account and get a 150 amazon. Com gift card. Call 18883303136 now. Optionsxpress by charles schwab. Welcome back. So making a big bet on fracking and losing but not for what you might think. New york governor has yet to release an Environmental Impact report on fracking, without the report, nors energy cannot go forward with its plans and that has driven the company into bankruptcy. My next guest an attorney representing nors energy says if the report isnt issued soon they will sue. We reached out to the commissioner of conservation for a statement. The department told us it does not comment on potential litigation, here to make his case, tom west, an attorney at the west firm. Thanks for being here. Hi, kelly. Thanks for having me on the show. We understand you are giving them two weeks to release this report. And you think this report actually will say its okay to go ahead with fracking, but new york is suppressing it . Thats correct, kelly. We are very certain, that the report will confirm fracking can be done safely, thats a conclusion reached every other place in the country. And around the world. New york has very rigorous standards, Governor Cuomo made this a political issue, there have been real consequences to Companies Like norse energy, landowners in the Southern Tier are going bankrupt. This process has been going on for 5 1 2 years, and its time to bring an end to it. So were going to give them two weeks to give us a definitive timeline. And without that, we will sue to compel a final decision. I mean, tom, its possible this report comes out after all of that, it isnt necessarily a green light. We are confident its a green light, we have heard from behind the scenes its a green light. We think its all just politics for Governor Cuomo to maximize his opportunity for reelection, and thats both illegal and fundamentally unfair to Companies Like norse energy who have gone bankrupt, and landowners who cannot develop their mineral rights. The purpose of the lawsuit will be to have the courts require them to come forward, and issue final standards, if they come forward with more lame excuses, were going to ask for a jury trial, we have a right to that, we will subpoena the commissioners, and let them show cause as to why they need more time. You know, whats interesting, tom, for a lot of people who sympathize with you and say there seems to be massive opportunity here, we can understand you want to go after it, youre frustrated you feel as though they are intentionally getting in the way. But why bet this company on a decision, before knowing if youd actually be able to go forward with it . Well, you know, thats not the case, kelly. Norse energy was around long before new york shut its borders for oil and gas development, they were developing wells in the state for many years. Its bankrupt now. And its bankrupt, because new yorks been shut down for 5 1 2 years. If you cant drill your assets for 5 1 2 years, you lose all your revenue opportunities, they lost the ability to raise capital, they lost the ability to sell their assets, they tried to auction them off as part of their reorganization proceeding, they got no responsible bidders for their assets, thats a direct result of the bankruptcy. You know, 5 1 2 years is too long. Every other state that has addressed this issue has gotten it done in 12 months or less, ohio did it in nine months, they created comprehensive standards, never shut down the industry in the meantime. Great point. Fascinating case. We will stay tuned to see what happens. Thanks for explaining to us whats happening upstate. Tom west with norse. Keep those tweets coming, well highlight the good, bad and ugly next, stay with us here for closing bell. Ive saved 75 in checked bag fees. [ delavane ] priority boarding is really important to us. You can just get on the plane and relax. [ julian ] having a card that doesnt charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u. S. When i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. announcer scottrade knows our clients trade and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. I wanna spread a little love this year i wanna spread a little love and cheer [ male announcer ] this december, remember you can unwrap craftsmanship, inspiring capability, and some of the best offers of the year on our most versatile luxury utility vehicles at the lexus december to remember sales event. This is the pursuit of perfection. Welcome back. You have been tweeting. Here are some of the favorites weve seen today. This is from michelle, it comes from josh boun, if youre rooting for more qe rather than more people working, ill assume youre the indonesian finance minister or a complete lunatic. That nicely sums up the reaction to the jobs report. John harwood an important issue, get why markets applaud but celebrating this likely budgets deal like celebrating 18 yard field goal. High school teams do that. Its an issue. Well follow into the december 13th talks. Tyler tweets millions to be made in these markets right now, wish i had about 50 k to get in on the action. Is that tyler . I dont tweet. We know that. We had that discussion in the past. People tweet at you nevertheless. Yes. They cant help themselves. J. J. , a final thought on speaking of kind of recapping, we reclaimed these round numbers for the markets. We made it through the jobs report, is it smooth sailing . Its never smooth sailing. One thing i can guarantee to almost everyone, the markets will be volatile, no matter what happens. Come on. Where did you get that one . Volatility is at an all time low. I think it was from your blog. But i think what investors need to do, the regular guy on the street looking at his portfolio, think of beginning to sell the beloved and look at buying some of the loathed. Or look at buying a ginger bread estate perhaps. This by the way is the gift for everyone who appeared on the show today. First of all, this is an actual Williams Sonoma ginger bread estate goes for 249, can you personalize it with your kids name, we thought it would be nice to personalize well send you one of them. I dont know if you saw that. I hope so. Im hungry. Can i give one last thought . Please do. With all the optimism in the markets, i feel someone has to throw rain on the parade. Couple reasons why the numbers arent too great. Number one, nonfarm payrolls are growing much faster than employment, when measured by the household survey, i dont know why theres this divergence, if you want to worry, then you would think employment is the real story. Maybe the fed looks at it and thinks dont taper yet. The scrooge that stole christmas, he couldnt resist getting that in. Thanks so much for being here. It was a pleasure. Speaking of which, fast money coming up in just a couple seconds, melissa lee, you may be talking to john. To tell us whether deck taper is on the table. He wrote in the wall street journal, well get his full take and analysis tonight on fast. Well see if he can tell us about christmas, past, present and future. Thanks, kelly. Fast money starts now. Live from the nasdaq markets in new york citys times square, im melissa lee. Heres the lineup. Taper trades, great jobs report. Huge reaction in the markets. So with taper clearly on the table, should you stick with whats working . Or is it time to look somewhere new . Rally rejects, not every stock getting a pop today. Is it time to buy the momentum sitting out todays rally. Watch out for cleon, one commodity to a six month high today. We have the trade comin