Transcripts For CNBC Closing Bell 20141231

Yearend edition of the closing bell. We are finishing the sixth year in a row of gains for the dow. By my math of the last six years, this year will only come in number five. It will rank the fifth best performance. The only one that was number six is 2011. The others outperformed what we did this year with the gain on the dow thereabouts. Here we are. The dow down 82 though. Just off the lows aft session. S p down 13 and the nasdaq is down half a percent today down 25 points. Lets wrap up what we saw today in the markets and in 2014 overall with the closing bell exchange. Keith fitzgerald and david sourbee. Everyone happy new year to you. Absolutely. Thank you for joining us. Monica hindsight is always 20 20 but if we have rewound to january of this year people were saying okay the markets going to cool down for equities. We are going to see yields start to rise. 10year around 3 where we started and oil stable and almost none of that proved to be the consensus by now. What say you entering the final hour . Yes. The experts dont know much more than the average joe it turns out. And going into this next year i dont think anyone was expecting the volatility that we have seen. Both geopolitical and oil and oil remains a big concern. Mixed bag. Great for the consumer. I dont think we have seen the consumer come out of the shell yet. Consumers dont trust charts but experiences. Theyre cynical. They have been on the receiving end of the bad economy for years so i think youre going to see a lot more consumer activity in the First Quarter of 2015 and thats icing on the cake and same token, oil is very big part of the economy now over the last six years. 50 of new jobs have come from oil so the other side of this Lower Oil Price scenario is layoffs and the impact thats going to have to the economy so 2015s going to be an interesting year. Maybe more volatility like we have seen in the past year. A year ago today brent north sea crude at 110 a barrel keith. And it is virtually cut in half at the end of 2014 here. Is that and then that has been calling the shots for equities lately. Do you think that will be the case going into the new year . You know i think theres some linkage there but i think i said well see consolidation in the industry. Theres no question the prices come back but the question is when . But that having been said i think the markets in general rise into the new year. A january surprise just like we did last year and i think 8 to 10 on 257tap for 2015. Jack when you think about how strong a year we have seen for equities consumer in a better position. Gdp of 5 at the last print, i mean it does look pretty incredible and make the u. S. Look very strong on a relative basis to europe to japan, to china. But as we have learned, you can never count out the Central Banks in the countries. What would you say for the Global Economy is in store next week . I would say that i dont think were up here because of the Central Banks. Look, if the central bank and the global Central Banks the reason that they were rallying we would be at a much higher multiple. We are trading at a 16 or 17 multiple. Thats the norm for a market and quite frankly, you know one of the thing this iss happening, keith was hitting on it the price of oil going down is going to actually do something that people dont expect. I think its going to pop the multiple up a little bit on top of that 8 to 10 Earnings Growth were expecting so next year kayla, could be one of the big surprise years. Maybe a 20 or 25 move in equity prices primarily because of the equity prices feeding off of the low Energy Prices. Every time we have seen Energy Prices spike down the way they have, it is followed by a phenomenal year in equities. And i dont think next years going to be any david. David, netnet for you, are you more hopeful or concerned going into the new year . Positive. For this reason. We have talked about oil already. Four episodes in the last 30 years where oil prices dropped 50 . If you bought stocks when oil was down 50 , four out of four times the stock market higher by double digit returns. Amen, amen. Well said. Well said. Quickly, bill wall street and we hear it again today. Whats the return for the next calendar year . 8 to 10 . Guess what. In 60 years of Stock Marketing investing, you know how many the stock market returns between 8 or 10 . Bet the over or under. Less than 6 or better than 13 and at least what i watch today investor behavior not too bullish, Corporate Capital discipline or use of cash quite positive. The low oil price. You have a good chance to be another bet the over in 2015. Yeah. The last time we had fourplus years of over 10 market moves, david, i believe 95 to 99 and we saw how that turned out. Thiss the worry and seeing valuations are more compelling today. They are. But two leading indicators for the market high yield and russell, led the market up and pulling back. And now were seeing a diver intelligence. Which do you go with right now . I think you go with the fact that valuations on stocks to bonds are compelling. What i mentioned, the corporations today i think are very judicious use of cash and there are always red flags that the stock markets up about 14 including dividends in year. Highyield bonds up about 4 getting that spread very often the highyield bond market is more correct than the stock market and always a red flag and thats one today. Monica go ahead, keith. This points out Something Else too. The easy money is made. To me 2015 is all about quality because when you get the spreads, what you really want to look for is companies with growing earnings and cash flow. Those are the things that ultimately drive share Prices Higher and cant just invest indiscriminately in 2015. Pointing out to everybody, what i was going to mention to Monica Monica late this year as we know, the small caps started to come back to the forefront. The russells back in record territory. Mid cap in record territory again. What does that tell you about where the money may go in the new year . Is this a more defensiveminded market or a more growthoriented market, do you think monica . Its hard to say. Theres so much volatility and involatile times, theres definitely a flight to quality. Small caps dont necessarily represent that school of thinking. Right. So, you know people are searching for yield and i think, you know now that investing in russia is not as safe theres a lot of geopolitical tension and seeing with small caps is just chasing yield. But in general, the volatility is going to force people to go into safer, safer opportunities and i dont necessarily think its a big year for small caps. Jack to say whether the market was defensive this year or not, you have to look no further than the sectors that outperform the rest of the market and talking utilities and health care. Normally very defensive sectors with very strong dividend incomes so if you were invested in the defensive sectors, you did far better than the average investor. Utilities, 25 gains this Year Health Care 24 . Do you expect that tide to change in the new year . I do. One of the reasons those sectors have been going up if you think about it because this is one of the most disrespected rallies that we have ever witnessed in our lifetime. When that happens, usually people get into defensive modes. Thats one of the reasons we see the bond market doing what it is doing and one of the reasons investors have been confused throughout the rally. One of the things that i hope happens next year i think it is going to happen is that were going to start to see converts and a lot of these nonbelievers start to believe what theyre seeing and start to believe in corporate growth believe in the strength of the Balance Sheet and all of that is going to lead them back into equities. Out of these defensive stocks. Out of defensive utilityies and out of bonds and more than likely whatnot only leads the market higher, but leads the entire Global Economy higher. The u. S. Economy is the Global Growth engine. And as long as its firing on all cylinders, Everything Else will be fine. Arent you describing the final stage of a bull market though, jack . You know what . It is. Investors get too bullish. Id say that if we were trading at a 20 multiple. If we were trading at a 20 multiple, bill, you would be right. We are not. We are at a reasonable multiple. And that should we are also healthier on the corporate side than ever before. Way healthier than in 99. Keith . Well im with jack with one caveat. I think that the other thing you got to look at is theres a lot of institutional money behind the ball game coming into fall and made that up and what they needed to do is window dressing for certain names into the portfolio to prove the stability and the brand cache for the investigation or the. The rotation is aggressive and not sure to small caps but i think back into the global forefront. The reason is because the ecb will engage in stimulus and japan and so that the band is playing on. Ultimately theres heck to pay but i dont think its in 2015. Last thought to david sowerby. The last couple of days light volume, a holiday week. But do you give any significance to the weakness here in the market in the final few days . No. Not really bill. What ill get nervous about is when individual investors get too bullish and in the spirit of new Years Companies spend like theyre overserved in champagne, on Capital Spending im nervous, too. We are not there yet. Yep. So far looking good for 15. Were nervous if everybody zress up as jack for halloween next year. Then we might have a problem. There you go. Hey, listen everybody. We always appreciate your thoughts. Happy new year to you. See you in the new year. To you, too. My pleasure. Take care. Kayla, the markets, you know we have had a couple of days of minus signs here and the dow down about 90 points. Were down 86 right now. We are very near the lows of the session, bill. People wondering if there are profits being taken heading into the end of a positive year for equities and now the question is will 2015 be the year of the consumer . Two wall street pros explain why they think so and tell us how theyre planning to make money from the amped up spending theyre expecting. Thats up next. Also still ahead, index funds have been trouncing actively managed mutual funds more than you might imagine and its been happening year after year during this bull market. So should you just follow the advice of vanguard and go all index all the time . Which way should you go right now . Index or active . Go to cnbc. Com vote. Cast your vote and talk about it coming up when kayla and i come back. Welcome back. Consumer confidence on the rise. Its been climbing steadily throughout 2014. We are wondering whether 2015 is the year the u. S. Consumer finally busts out. Lets bring in Richard Steinberg and derrick kinny. Gentlemen, happy new year to you both and thank you for joining us. My pleasure. Thank you. Lets start with the consumer, of course. The Consumer Spending has been strengthening throughout the year. Now a report today from aaa says finally the consumer has actually saved 14 billion overall in gas spending this year. Where will we see that tick up elsewhere in the economy, richard . Okay. So, to break that down kayla, for every by our estimates every tencent fall in gasoline prices it puts 1 billion 4 into the consumers pockets. Going into next year between that and Lower Oil Prices adding to about half a percent to gdp growth you have the ability to have more confidence and maybe wages come up employment continues to get better and that should start to flow through to the consumer. The real question is whether or not they save it or pay down debt or spend it. I think thats a showme story that well be seeing how it unfolds in the first three months of next year. Derrick, what is your version of why the consumer will do better next year . Bill, keep in mind, this is a long time coming. Consumers beaten down battered but they have survived all the turmoil last year. They no longer have just a reservation, they have a seat at the end of the table. The consumer speaks out with the dollars and pocketbook. First of all, consumers spending is likely to rise higher. Purchases they put off in terms of their house, but also saving for their future are likely to take place this year. Weve seen quite a bit of savings and consumers face a fork in the road. Will they save it . But more importantly, if they spend it is it going to be helping the National Economy or really pushing the personal economy forward . I think consumers have to be careful and they face a critical junction. Are they going to attract the money and stand out from the fray and deepen the Consumer Loyalty so they want to spend money there and not just anywhere else to choose to do right now . Derrick, the question though becomes, is the consumers six years of deleveraging over . I mean i think everybody pretty much at this point agrees that spending will come back but is that spending coming from their savings or are they going to start to borrow and exhibit that confidence in different ways now . Yeah. Here kayla, big concern i have right now. First of all, if consumers choose to spend this savings, will they increase their lifestyle and when the savings goes away now theyre living back in debt. I think the savvy consumer will take advantage of the savings but lets look at it from the investment standpoint. I think savvy investors want to to look at where they spend their money. All of those areas stand to gain next year. But i think consumers gradually realize this recovery is for real and the fear begins to subside and investors see that trend and begin to follow their investment dollars and consumers spend their dollars. Rich, i see from the notes you say that you feel the wealth effect will kick in next year and very interested in that comment because, you know typically, the wealth effect kicks in when stocks are moving higher. They have been going higher for five years now. We havent seen the wealth effect. The Housing Market is still not anywhere near where it was five six years ago. Whats going to bring the wealth effect back as a factor here . Well lets bifurcate society for a second. So the top 1 youre right, bill. The stock market really drives consumer behavior. Im talking a little bit of joe six pack. The gasoline prices in particular are a regressive tax. So as people have more money coming in that are lower income that dont have the savings in the markets and dont feel that wealth effect, their wealth effect is going to come from extra dollars being in their pocket. So retail earls that will focus on that niche in the market we think will start to do better. The big problem, though is on an index basis, if you look at the Consumer Discretionary space, it is trading at 18 times earnings. So you have to take a very very focused approach of where to make money into next year not taking a kind of a broad approach in Consumer Staples or Consumer Discretionary. Could the wealth effect youre describing be fleeting if Oil Prices Start to rise again as some people feel it will . So if oil starts to level out or starts to come back up bill the other side of the equation is that corporate confidence is getting much better and that well start see some wage increase. And again, at the margin the lower earning consumer with a bump in pay, usually spends their paycheck. Yeah. There are two sides to every coin, though guys. As much as we talk about the consumer benefits of low oil prices and Interest Rates staying low, we now have people like the minnesota fed head saying watch out for the deflationary pressures and things we have been talking around but maybe not directly about. Derrick, any reason to believe that inflation could be the thorn in the side next year . It could be one issue, kayla, but one thing for consumers to think about, dont just base decisions on how flush you feel today. Those changes or those economic benefits could go away. You want to look in your personal situation to figure out if these savings went away could i still be saving money . And ultimately, we dont want to have a cyclical situation and the consumer goes down if the economy goes down but plan on if Interest Rates rise if inflation does come back dont put themselves in a leveraged situation where now theyre worse off a year from now than they were today. The onus is on the consumers back to tread lightly almost through the minefield. Dont think because gas prices are lower on easy street right now. Think about what could go wrong and plan so youre better off a year from now. Expect the worst and be glad when it doesnt happen. Well put. Exactly. An Insurance Agent there, derrick. Happy new year to you both. My pleasure. Happy and healthy new year guys. We have minus signs. Its been a down day and a quiet day as you can imagine on this last trading day of the year. The dow down 45 points. Dominic chu will be running through the movers when we come back. Wall street wiseman Dennis Gartman with the biggest takeaway of the year and the best investment idea for 2015. All of that when closing bell comes back. Welcome back. Clock winding down on the last trading day of the year. Heres dominic chu with some of the movers right now. Dom . Bill one of the few ratings moves of the day to drive grubhub higher. Its an upgraded to an outperform rating saying the company could become a possible acquisition target in the future so those shares on the rise here. Next used to the Energy Stocks making those big moves and mostly down as oil prices have fallen. Today theyre holding the top spots on the winners and losers list. Exploration firm qep leads with a 3 gain and drilling contractor Diamond Offshore down more than 3 on the day. Looking at the oneyear Stock Performance they are a lot more similar both are down about 35 so far in 2014. So overall, a big, big deal especially in that sector kayla. Back over to you. 35 drop dom. Thats still better than the drop in the price of oil itself holistically down 46 this year. Yep. Astonishing drop there. Our thanks to dom. Dennis gartman joining us with his takeaway of 2014 and best ideas for the new investing year, as we approach it. Dennis, happy new year to you. Happy new year to you, kayla. Thank you very much. What did we learn in 2014 . We learned a number of things. Markets can go further than anybody wants to anticipate can possibly believe theyll get to. I was very bearish on crude oil but quite honestly i never thought wed get down this low this quickly. Everybody you knew was bearish of the bond market and going up higher and higher and nobody was this bullish on stock prices and yet theyre making not new highs but very near the highs so the extraordinary thing to learn is markets move further than anybody wants to anticipate they can be and once trends get going, it is hard to believe how far they will go. Your big trade this year dennis, was gold in other currency terms, like the yen or the euro. Youre betting on the dollar and the dollar is higher. Do you see that continuing in the new year . Bill first of all, you an i go back to f n days. We have seen the bull markets, right . No question. I think that the bull market and dollar is only really just begun. You can see par relative to the euro over the course of the next year. I think you will see 150 yen to the dollar if not higher for the dollar over the course of the next year. The only currencies i think to hold well against the u. S. Dollar will be other dollars. Canadian dollar the aussie new zealand may do well and the big ones weaken and if dollar strengthens and owning gold theres no reason to own it in dollar terms and every reason of yen denominated or euro denominated terms. Theyll weaken as the Central Banks expand the monetary basis in both instances. Dennis you expect a three handle this year in oil . Well, i dont know if i expect a three handle kayla. I think a three handle is certainly quite possibly. The term structure continues to go out to contango. Crude in storage facilities. The saudis continue to supply crude oil aggressively. We wont curtail production here in the United States. We may slow the increase in production but not decrease production here. So were going to have an abundance of crude all over the world. Demand may pick a bit and not keep up with supply and expanding and the carrying charges continue crude oil will deteriorate and yes it is very possible we may get a three handle before the year is out. 40 a share is where analysts say you start to see cracks in the credit market seeing defaults in the highyield market from the corporates. Do you stay out of credit if we see oil slip anymore . Did do you see that turmoil have a ripple e snekt. It will have a Ripple Effect and no question of bankruptcies. No question that were going to see closures of some Oil Facilities in the middle east. Well see closures in venezuela. Well see closures in the permean and the bakken. Thats not going to curtail production dramatically or slow the production. The saudis explained that abundantly and made it very clear and the bakken may slow. The expansion may slow but the amount of production will not decline. Thats the problem. All i know is i look forward to the day when i get to pay a one handle on gasoline. I hope like our friends in oklahoma and texas are paying these days. Bill is driving to missouri today. Yes. Heading to the midwest. Bill we have been around long ago when we didnt have a one handle on gasoline and a 40cent and 30cent on gasoline. I drove past the local statement in california 61 cents and refused to pay that much for gasoline in those days. Thank you. Happy new year. You, too, my friend. Be well. Cheers. Down in Virginia Beach there. All right. A lot more still to come on the closing bell. Before that bell sounds see the dow coming off the lows and down 85 points and now 55. Still on pace. The dow for its sixth Straight Year of ganls. S p, nasdaq holding into the red by half a percent, as well. One of the great debates of this year index funds and actively managed, index funds far outperformed again this year. Is it time to give up on Fund Managers and just and their fees and go with the index fees . Both sides of that rather heated debate coming up. Meanwhile, a live shot of times square, new york city, getting ready for tonight, you can take part in our live poll. Which type of investing do you think will be better next year . Actively managed funds or index funds . Start casting your vote and come back in a moment with that. It is no secret that many active Fund Managers underperformed the market this year and may be worse than we thought. According to s p capital iq only about 25 of actively managed funds outperformed their index benchmarks. So is our friend jack fore of vogel right and says index it and forget it . Joining us with their respective takes, Todd Rosenbluth saying indexes are the way to go and ross gerber Still Believes that active managed funds are the way to go. We want to hear from you on this issue, as well. Go to our web side go to cnbc. Com vote and let us know whether you think active managed funds or index funds outperform in the new year. Todd, tell us what you found in terms of performance. Yeah. This years actually been worse than we saw last year and so now its about in the large cap space more than one or fewer than one in five active managed large cap funds ahead of the s p 500 index through yesterday and see how we close today and just as bad in the small caps space. Many people think small caps are a good way to go with active management. You can find hidden gems. Unfortunately, active managers are underperforming and did so in last five years in the large cap space. I have to imagine you disagree with that mabel not the statistics but the generalization. The idea that every active manager should beat the index is foolish. In school a top 25 of the class got a b or everybody. I dont understand why everybodys supposed to beat it. Some beat it. Some do not. 20 do beat it. Thats a huge amount of people and just like the playoffs in football. Its easy to pick the teams that constantly beat the s p. So why not use the best Money Managers in the world with access to it . Come on ross. Youre a smart guy. Youre all about making money. Thats true. Im paying lots in the ways of fees to get that smart money to make money for me. When i could go to an index fund and the marktd continues to go up and jack vogels point of view is longterm is going to be higher anyway so why not ride that longterm wave and pay a lot less in the way of fees . Theres two reasons. One is that s p went down 40 twice in the last 15 years. I dont know any investor that rides a 40 decline comfortably. One of the things active managers can do is help blunt declines with hedge funds and active management so cutting losses is a strategy that indexes dont use that can really help investors improve returns. My investors improve returns because we cut losses. Period. And then secondly concentration in your best ideas helps you outperform an index so if youre overweight apple this year, you outperform the index. Buying s p 500 and a 10 weighting to apple, i killed the index. Overweighting and cuts losses are two strategies that will help an active manager outperform an index almost all the time. But puts your money in an index it ends up making the end investor being the active manager. They can pull their money fairly easily from an etf without a gate up at a mutual fund or another type of vehicle. Todd im wondering if it sounds too good to be true. You dont always make money when you put your money into an index or an etf at the wrong time. So how can you be sure that you will outperform all Things Considered . So what we would suggest to consider doing is using lowcost index etf to be shifting towards large cap growth one year large value value the next year. Who does that tactical shifting . The client . We think you should work with an advise tore do that. Maybe you can do that. I am the one. So give me a call. S p capital iq has an advisory arm too. Thats pretty good and other advisers out there. If you dont think you can, lowcost etf sz a good way to go or a Due Diligence and make sure you can do that homework yourself and dont just buy an average fund and hope it outperforms next year. The viewers are speaking right now, as well. 60 of them in the unscientific poll woulgd go for the index fund at this point, ross. Im going to sort of im not really stepping on the premise here and were making it seem like a zero sum game. I use indexes. I use. With active managers too. You know . Where does it make more sense for active versus index . I think the most sense with active is actually in the bond side of the market. I like active Bond Management over bond index funds which i think are poor ways to invest in bonds. And the second area i think i do think in stocks in general, especially more concentrated funds where we have the ability to really pick some great managers who are very good at what they do in certain sectors. All right. Good the see you both. Todd, thank you for your research. Ross, always glad to have you on the show. Good to see you. Happy new year. Heading toward the close here with minus signs as we close out a year of decent gains. As i mentioned earlier, we have had what . Sixth year in a row of ganls for the u. S. Market for the dow, but this year ranks number five of those six years so its not been the best of those gearyears, kayla. We lost 40 points on the dow in the last ten minutes so well keep an eye on the markets into the close today. All right. We are nearing some of the new years eve celebrations across the world and right now you are looking at times square in new york city. Those are hardcore partiers braving the cold near the big ball gearing up for tonights ultimate new Years Eve Party and wall street winds down the trading. Well tell you how the stock market usually does in the cold of january and whether investors should get ready to celebrate, as well. All of that is coming up in a minute on the closing bell. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. We are just about to send out 2014 in the record books with many records, indeed for our major averages. Double digit percentage gains for the s p and nasdaq. The dow up over 8 so far this year. About 8 . Yes. We got that. What should we expect for january . I dont know how he has time but dominic chu is combing through charts of januaries gone by. What did you find . I cant take all the credit because i went and asked data part nerls about whapsz typically in the month of january and they went back and looked at 20 years worth of data and looking at the s p 500 and dow industrials it is very much a mixed bag in terms of what january holds unlike december which is seasonably strong. As you can see there, according to kencho over 20 years the s p 500 gained an average of little less than half a percent for the month and positive 60 of the time. Meanwhile, the dow is marginally lower and still positive 60 of the time as well. Now, where it comes on a granular level, health care is one of the better performers. Xlv is up an average of nearly 1. 5 over the past 16 years. Thats about how long the etfs existed. Worst performer is cyclical materials. Xlb tracks that one. Down 1. 7 . Overall whether or not theres meaning to whether this particular january will hold true for that particular trend, we dont know. We dont have a crystal ball. Remember, the folks at the Stock Traders almanac say about the january barometer, how goes january, so goes the rest of the year they do say about 77 of the time as january goes so goes the rest of the year. Although recently guys in the past few years since the financial crisis its not held that true. Back over to you guys. Thanks. Ill point out, down more than 110 points right now. So the selloff continues into the close here. Wall street saw record inflows final month of the year. Jeff cox, that usually means that things could be getting toppy. You dont see that this time huh . Thanks bill. It is the classic contrarian scenario and the time to get out. Warren buffett tells us when others get greedy be fearful. Consider this a contrarian contrarian case. The latest numbers do show a record level of cash poured into u. S. Equity funds, both over the past week and the past three months. Now, some market watchers think that trend is sending a strong sell signal. But lets keep a couple of things in mind. Much of that money is positioned defensively. After all, two of the six most popular etfs are in the bond market. Two popular sentiment surveys i follow show bulls above 50 and not dangerously so so the bottom line folks, the fed is still in charge of the market in my opinion. I think the market believes in rightfully so that this fed is dovish and stays dovish through 2015. So while the day reckoning is out there and we know correction could come any time probably a good idea for now not to let a little greed get you down. Bill kayla, thanks so much. Great working with you this year and happy new year to both of you. And to you, as well. Thanks, jeff. All right. With just about ten minutes to go before the bell we are seeing the dow slip toward lows of double digit triple digit, rather losses. Down by about. 75 . S p and nasdaq slipping, as well. We had headlines of possible unrest continuing in the middle east, oil continue slipping. Near those fiveyear lows and has been leading the market downward for the last week or so. Yeah. I think oil is contributing to this to some degree there. Theres the dow down 120. To the clez on the final trading day of the year. Bob doll will join us next hour. Find out how hes putting the clients roughly 230 billion in assets to work. Still to come with kayla and me. Have you heard of the new dialing procedure for for the 415 and 628 area codes . No what is it . Starting february 21, 2015 if you have a 415 or 628 number youll need to dial. 1 plus the area code plus the phone number for all calls. Okay, but what if i have a 415 number, and im calling a 415 number . Youll still need to dial. 1 plus the area code plus the phone number. So when in doubt, dial it out about nine minutes to go here. The selloff tonights. Joining me is michael block from Rhino Trading and ben willis of princeton securities. Whens going on . Is oil lower . We heard reports of middle east maybe some unrest there, as well. Or is it just some selling at the end of the year . Its definitely oil affecting the decision to make the sale. What appears to us is a buyers strike. The buyers seem to have taken the day off. I expected some sort of pullback in the market but i thought a day like this a push to the upside and the buyers never showed up. Michael, i enjoy reading your blog every morning. Gets me started. I mean is there significance to lateday selling . We often portray this as the most important hour of the trading day, the last hour here. Will this be a signal of what to expect early in january . When we have a weak close like this bill usually we call it a professional close and thats not a good thing. Meaning theres real selling going on. I think in this case a nice run and guys are happy to take profits. I dont need to be there and reassess next week getting from boca and skiing and reassess. Im looking far pullback. I dont mind the action. I dont think it means a lot but paying attention as you and ben talked about, energy some quirky things happening in event driven type stocks im noticing today. It is a sign and see how it continues. I think it does aenl readnd ready to wait and see. We often say its the smart money playing the last hour here. I think its the money that the decision is made over a few days and the lack of volume prevented most of the action from taking place. I can tell you with my own order flow, there are things we would like to get done having difficulty getting done because of the lack of participants. It is a tough day to try to judge on the bigger picture. I would have hoped to see more participation. We are not seeing that. Im not panicked about it. I think it falls in place following monday. We have to exclude friday as well. Indeed. Stay right there, guys. Well come back with the closing countdown. The dow down about 150 right now. Well see how we close things out. Happy new year indeed. Times square party earls starting to gather for the festivities. They showed up first thing this morning. Well tally the big year after the close, plus those stocks that led the way and the ones that lacked. Well get you caught up for the new year. Ese ally bank ira cds really do sound like a sure thing but im a bit skeptical of sure things. Whys that . Look what daddys got. Ahhhhhhhhhh growth you can count on from the bank where no branches equals great rates. So ally bank really has no hidden fees on savings accounts . Thats right. Its just that im worried about you know hidden things. Ok, whys that . No hidden fees from the bank where no branches equals great rates. Lets show you. The influence oils had on the stock market today as ben willis said i have a chart today comparing the dow and Energy Prices and as energy continued lower, you see the price of the dow going lower, as well. Sort of looks like a crisscrossing at some point. Best performing sector of 2014 one of the most defensive sectors out there, the utilities. This is the dow youutilityies average. Better than 30 gain for the year. I think thats what it says. 26 . Was that what it says . That. The worst performing sector interestingly enough energy. S p Energy Sector. Down almost 10 for the year. Back with michael block and ben willis. Do you reverse those this next year, would you think . Do you see energy doing better in 2015 . I do. Once the oil gets looking at the Energy Sector you have to look at the complex and the right places to invest. I think mlps, topper forming sector especially for the Retail Investor. Ipo and ipo coming in this that space under mlps and so much pressure for oil and tax selling and abates today and may see an opportunity to pick up some great bargains with great yields. Michael . I can remember the beginning of this year, i couldnt find anybody that liked utilities. A crowded trade. The difvidend paying stock and everything and a horrible time and look w457dhat happened. Now do you think . You couldnt find anything that liked utilities therefore they were saying go back into fixed income. Forget utilities. The opposite happened. 10year at 2. 1 making the dividend paying stocks attractive. Income players, fixed incomes players are in the stocks. I think that does reverse. Okay. Because theres going to be a move out to risk curve once the energy mess cleans up. I think that there is a bit more of a mess to be cleaned up. People will pile back into high yield and risk curve and look at utilities. No one left to buy them and consumer staple stock that is are expensive. Safe and a dividend and now what . Thats an issue. Last tradition that we look at, the dogs of the dow, what has happened sometimes is that the worst performing dow come poe innocent one year will be the best the next year and one of them. Ibm has been the worst performing component of the dow, ben. Is it time for big blue to return or what . They have major problems there. I think a risk trade worth taking because they have big problems and seeing right now is a rotation. While theres not money going continuing into the highyield plays look for the new money starting into new positions. Yords, in other words, enterprise, software the benefactors. Thank you both. Happy new year. Appreciate it very much. See you in the new year. Going out on a negative note but capping off yet another positive year for the u. S. Stock market. The sixth one in a row. Can it continue going into 2015 . Lets talk about that. A lot more as we get under way with the second hour of the closing bell. And with that that does it. 2014 on wall street is finished. Welcome to the closing bell. Im kayla tauche in for kelly evans. Bill griffeth. Waiting for fireworks from russia but who knows . Maybe we wont get fireworks there, kayla. We are watching that economy very carefully, obviously. The impact it could have. Suffered mightily because of the steep price in energy and all kinds of political problems they face there. The big question hanging over the russian economy going into the new year will they go into recession in 2015 . What impact will that have on the european economy, as well . Of course most recent quarter did post recessionary for the first time in no fireworks. Isnt that interesting . Days ago, of course the sites of much unrest. A lot of protests. Some peaceful. Some not so peaceful. Certainly a very interesting scene there, some delays we have seen in thailand and other places in asia waiting on this fireworks but well get you that momentarily. Lets turn to a show on wall street here. You have the choir singing there . We do. Im trying to get the sense of exactly what song it is. It is not one i imagine. Imagine. This was the world version of john lennons imagine. That theyre singing there. So lets listen in for just a moment here. One of the great tunes of all time. So apropos for this song. I agree. Backdrop of the song for the picture that is we are seeing. Finally, finally fireworks, yes. Delayed but beautiful nonetheless. Such a great song too. All right. Lets see how were finishing things out for a final trading day of 2014. Minus signs pretty much across the board. The dow finishing the day down 160 points just about the low for the session. The s p down 21 points. By the way, the dow capping a gain of a year and did better percentagewise and the nasdaq better with almost 14 gain and even 41 points lower on the close for this day. The third Consecutive Year of ganls for the nasdaq. Of course about within 5 of its 2,000 high a number in the 5,000 range that we have been watching for some time. Of course a lot of other me metrics to close the day in 2014 for trade. Bob pisani is here on the floor to walk us through what the big indices were and what the final tally is for the year bob. I feel like ive ascended into heaven. The singing is beautiful. Echoing through the hall. Talk about 2014. It really was a terrific year by and large for most indices and put up the leadership for the major industries. Dow transport was in the lead. Not quite final numbers but nasdaq good because tech had a good year. Dow industrials lagging because Energy Stocks really weighed on the index. Small caps notably underperformed with the russell 2,000 up 4 . The dow lead earls were tech and health care. Intel with a great year. Not a typo. 40 . United health and home depot. Look at microsoft and cisco. Both of them up 25 roughly on the year. As for the laggards here ibm was a real standout in tech on the downside. Competition in the services and software intensified. Sold that. Chevron and exxon no big surprise there. General electric down and pricing competition in the telecom business. Etfs continuing to see overall inflows. 2 trillion in the etf business in the United States. Not quite where the 10 trillion in mutual funds are but substantial. Big winners, china. A lot of investments there. Not a typo. 51 . Thats mainland china. Not hong kong and didnt do nearly as well. Bio biotech up 34 . Ipos in that business. Cancer therapies. Quietly semiconductors didnt get a lot of attention but smh big in the space and attracted money moving up later in the year up roughly 30 and the reit business did very well. A lot of them refinance their debt at much lower rates, lower rates helped reits to buy new properties at much lower rates up 25 . Keeping an eye on how things do in 2015 but this decline we saw today, guys cant blame it on oil. Oil rallied late in the day. Energy stocks not the big drivers and the leaders like cisco and United Health care in the dow, bill they were the ones so i think a little bit of profit taking were a factor. I look forward to being with you once again in 2015. Thank you, bud. See you later. And you can stick around if you like. Add to our panel here. We have phil we have Morgan Brennan down from times square. Just in time. A little busy there. Kenny pulcari with us today. Fast money trader brian kelly and bk what did you make of the close and going into the new year . I think it is hard to read too much into todays close. It was really thin today. Theres just nobody around. So you know that being said going into 2015 i think theres a couple themes im looking at. One, i dont think the volatilitys probably a lot more in 2015 than in 2014. We actually despite a couple of big drops here and there had a relatively low volatility year particularly the last couple of months or last month or so. So thats one thing i was looking at. Yet again, bond yields here in the u. S. And around the world. You just had the charts up how much the dow is up. I think 8 or so. 7. 5 . Thereabouts. Tlt up 20 . Again, thats still a better investment this year. Plus 2 to 3 dividend on this. Bk no one was around but someone was selling into the close today. Kenny, art cashin said a billion dollars for sale in the market going into the close. What was that all about . I dont think that anyones surprised about that. We have been talking about the final day, people take advantage. They do take some profits. There is some tax loss selling until 4 00 to get the benefit for the tax year and so therefore its kind of very typical what happens on the last day of the year that youll get a day like this. This was not big volume i dont think people should read anything into todays weakness at all. It is a typical last day of the year trading kind of scenario. You sound like youre expecting higher prices then. I am. I think 2015 will be a good year. I think the only thing you have to really worry about in terms of black swan is the ecb in january and does russia implode early in the year and catch people maybe off guard. January is not seasonally that strong and december is and with todays trade, we are getting early word we may have seen the dow close lower for all of december. Phil, is that significant in your mind . It is not. I mean to counter up the song imagine six years. Six years of positive returns on the dow and the s p. This year more than 6 higher than the average on the s p. I think so many of us worried about valuation, worried about it today or last couple of days. I wouldnt. I think the opportunity today is as strong as it was in the last couple of years. I think valuations are right where you want to be and its powerful time for us. Morgan you have been covering the nasdaq for us. You are also what i call our point a to point b correspondent. You follow the Transportation Companies and they have a pretty good month, didnt they . Yeah. They had a very good year. Railroads to parcel carriers fedex and u. P. S. Its been a strong year for the companies and the fact of oil come off 45 , 55 only benefited them. Look at Railroad Traffic for a last week going into christmas, actually for the entire year it was really strong year for the railroads and the amount of volumes they moved around the country. I think those are all indicators that the u. S. Economy is picking up and i think its interesting to see what is going on with tech companies, with health care. Two of the top three sectors for the year and everybody im speaking to think theyre two sectors that continue to be strong moving into 2015. Most interesting thing there is so many of the large cap names, facebook, intel, apple has been the big story, especially in the second half of the year and done for Semiconductor Stocks biotechs, it is interesting to see how they performed this year and what theyll do going into next year. When you think about oil, though, someones gain is someone elses pain. Bk im wondering with all of this benefit to the consumer logistics companies, at what point do you look at oil and say, this is a pretty big point of instability for the overall market . I think you look at it. I mean look at what happened over the last month seeing the first decline. Looks like oil stabilizes. There is another side to this. Lower oil prices great for the consumer but if you live in texas and north dakota youre a little bit searched about your job potentially at this point in time. We mentioned the transportation stocks. Mentioned some of the railroads. Look at Canadian Pacific and canadian national. Those are companies that have benefited from the canadian oil sands. Western ka yad nan oil is below 40. I think 37, 38 right now. So you know, our pockets exploreation and production stocks kayla, most interesting potential plays of 2015. Its the number one question i have had in the last six weeks. Should we buy the xpo, the exploration etf, the estimates have come down 40 for some of the earnings on the big names like eop im talking about for two weeks. I think the probability that oil will be in the 60s or 70s 1 year from now is higher than the probability of 30s or 40s and on that call alone, i think looking at exploration and production stocks are worthwhile. Kenny . I think i absolutely agree. I dont im not buying the oil story is so so negative. I think theres huge positives from lower oil, not only to some of the bond investors, looking to benefit the companies that are going to benl fit of Lower Oil Prices in terms of where they invest there. What about people saving money and have a little extra to put towards an investment, a retirement, put into the market. Or even catch up on repairs that they havent made to the house because its been difficult for them and so i think theres a huge benefit. I think oil certainly is the theme and one of the themes and big themes in 2015. I think its going to cause m a and heating up next year in terms of the oil patch. I think you will have a lot of xaenls looking to scoop up the assets. Hang on there, phil. Well have more throughout the hour. Youre not going anywhere. Except for brian kelly. You can go. See you and the rest of the fast money crew at 5 00 eastern time. Good luck getting into times you are already there. Yeah. Good luck getting out of there then tonight. Sneak out the back door. Very good. See you later. Very brave souls there at fast money. 2014 is now one for the record books. When we come back well tally the biggest winners and losers for the year. Bob doll will join us with the top predictions for 2015 as well. Well focus on the financials. What happens if and when rates rise . One fort folio manager is betting big in the small bank space in 2015 and tell you which ones are looking ripe for a deal and how you can cash in in the new year. Watching cnbc, first in business worldwide. Tough finish for another strong year for the stock market here in the u. S. Dominic chu joins us now with the final tallies for 2014. Dom . All right. So kayla, bill yes. Maybe not the way some investors wanted to finish out the year but still, it is a great year for stocks here with the dow jones notching records this year. S p 500, as well. Nasdaq coming ever so close. Just a stones throw away. Close the books on 2014 and take you through just what happened in this full year to date in 2014 because now we can call it 2014. The dow industrials down today and year to date still up by nearly 8 . 7. 5 gains. So again, a rocky road especially in october. Dow industrials up by 8 . Leading gainer in the dow industrials average so far in 2014 now that we have closed the books on it you can tell its intel and spoken about it before. Shares up 40 year to date. A strong move for the company. The worst performer, we have spoken about it all day today, big blue ibm. Shares down about 14 . Now we move on to the large cap s p 500. Broader index of the market. You can see here up 11. 5 year to date. Another good year for the s p. It too notched a record. The best performing record in the s p 500 and Airline Stocks Southwest Airlines this time around up about 125 . A very steady road higher here and Southwest Airlines with a lot of other ones here. The worst performing stock in the s p 500 you would expect oil and gas related and transocean down about 63 . So again, the s p 500 again, remember, record levels despite the selloff and finish off here with another large cap index. Nasdaq composite index, 5 or 6 from a record level and see up 13 year to date and thats been a rocky road as well. Among the larger cap companies, american airlines, again, the best performing member up about 112 and look at one of the worst performing stocks in the nasdaq for the 100 index, not the composite, Russia Telecom company, year to date losses about 68 . I just want to throw in small caps as a quick tag here for you gifs because the russell hit a record level up about 4 5 . Up here 3. 5 year to date. The russell 2000 very much a volatile roller coaster ride and seen be myany as a leading indicator. Not as much of a performer aenl hit a record level. At one point in 2014. The stats are still coming fast and furious. Our team working the adding machines. This turned out to be the worst performing last day of the year since 2001. You got the love the guys on the data team. They have done great job. A great job there. Thanks. Absolutely. Whats next for the markets . Where do we go from here . Lets get bob dolls outlook. Oversees more than 200 billion. Happy new year to you. And to you, kayla. All right. Lets walk forward to 2015. David tepper says it is not out of the question to see the s p rise 8 to 10 because the economy is Getting Better all the tenets are there here in the u. S. Do you agree . I do. I think the u. S. Economy is surprised to the upside. Much of the second half of this year jobs and initial unemployment claims falling. What we have yet to kick in is real wage gains and seeing some of that next year. Corporate Business Investments been pretty good and even the government will move from a negative impact on the economy in 14 to a positive one in terms of gdp in 15. The only drag is likely to be net exports given the weakness in nonu. S. Economies. What about some of the other bricks that are in the wall of right now, bob, like the fed possibly raising Interest Rates, maybe as early as you know mid year . The problems overseas europe and japan with their Central Banks at odds with our own fed right now. Russia. We could go on and on there. Do any concern you enough to change your portfolio for 2015 . Not really. I still want the vast majority of the earnings in my portfolio to come from the United States. Thats still where the positive Economic Growth is in the world. We may not be setting the world on fire but at worse were the best house in a bad neighborhood it would seem. I think the points you bring up are legitimate ones. You talked about it earlier. Not just the magnitude of decline and how fast it happened. Does that cause dislocation . Does that cause credit problems . We have to keep our eyes open on that issue for a couple of months. I think one of the issues that well struggle with is whats the impact of the dyivergence of a good u. S. Economy and overseas weak . Whats that mean for currencies . Question marks to persist for 2015, i suspect. Lets get the panels thoughts on this as well. I know you have questions for bob here. Bob, a quick question. When you think about where emerging market debt is or even more so Alan Greenspan talked about the United States could not be an island oasis among the terrible things out there. Do you think we can be that oasis . What do you think about emerging market debt and strengthening dollar and expense of the debt on that side to be problematic . No question a rising dollar and might add falling Commodity Prices is usually not good for emerging markets. Whether something breaks is the question. If nothing breaks then its just matter of Economic Growth and as you know only 12 of the u. S. Economy is exports. Were relatively insulated, isolated compared to for example, germany where almost half of its economy is exports. Big, big difference. You are right. We have to keep our eye on that area. Economically, i dont think they give us a big problem. The question is, is there a financial disconnect . 70 consumer driven economy. Thinking of us as an oasis, i agree with bob. I think the u. S. Can withstand issues of tn outside and survive and grow in spite of not having successoverseas. You talked about u. S. Sen trick stocks. Whens your take on small caps given that fact . Thats a great question. Im going to talk out of both sides of my mouth. I want to be up cap but try to find those companies that dont have so much dependence on overseas growth. I think that withdrawal of liquidity or lessening of excess liquidity ie the fed the reason small has begun to underperform big and persists next year. Wow. He wants to be up cap. I like that. Go with the large caps i guess, what that means opposed to smalls. Thank you, robert. Happy new year. And the same. Thanks. Bob doll. All right. We have already heard 2015 market predictions from some of the streets heaviest hitters so we are taking it to main street. Closing bells Retail Investor roundtable is back. Its a favorite. Well find out how individual investors are gearing up for the new year and if the group beat the s p or not. Might have done better than many Money Managers out there. First, financials eking out a gain versus the broader s p in 2014. Will that momentum continue in 2015 . A guest will have his bank outlook and where hes investing next year when we come back. Overall good year for stocks in 2014 and financials among the better performing sector in the s p for the year. Whens in store for them in the new year especially if the fed starts raising rates, huh . Yes. Anton, talking about financials we usually tend to talk about the big banks. And thats not the whole story but we have to start there because theres a big deadline coming up on monday that will pretty much shape the way that investors feel about those big banks for the rest of the year. What are i dont you thinking about in the ccar submission . Surprised again. Everybody waits for citi to have the big capital return and waiting for bank of america to return capital. A lot of big regionals can keep returning capital and increasing the an ask of what theyre doing but i think m a a big eger part of their ask. The hope is of course theyll start buying back more stock, issuing more dividends. In the super regionals and the smaller banks, obviously, buying the potential acquisition targets then you get a return on those. Where are you putting your money in there . I love the carolinas, yatkin financial. 4 billion bank in charlotte, raleigh. So you have good economics going and then you have got a lot of franchise value in case something happens. I love the southeast, atlanta. Coming a state bank. I love florida. Theres not much left. Its over a billion in assets to buy. Bank united opening branches in new york city. Is he a buyer or seller . Thats a really nice big franchise that they have cleaned up coming out of the crisis. What about the feds raising rates . Which banks ask like oldfashioned banks and make money on the spreads as they go higher . I think big Regional Banks do very well. You know, suntrust regions. Can make a lot more money from the spread. Asset sensitive. The real key is hanging on to deposit because they have not had an alternative, a place to put the money outside. Fed raised rates, you have bonds at higher yields, money markets ss all of a sudden. It creates disruption and m a, you have to pick winners from the losers. They need more free toasters . Yeah. I agree with you. I think the Regional Banks are a great opportunity. Still dependent on deposits and accumulated and not making money on them. Soon 25 to 50 basis points and investors can buy an etf, an individual bank. Buy the Regional Banks. A great opportunity. Undervalued. A great chance as rates rise. Heres one of the thing that is worries me of an etf and active management. Take a regional like texas. What kind of credit issues could emerge in texas banks if Oil Prices Continue to stay low . Thats a big fear for next year. Texas, oklahoma louisiana. There are a lot of states where people say i dont want to touch a regional that has outsized exposure there. Im great as picking banks but oil . No. Im avoiding those states right now. With an etf you have them in your portfolio. Do you think if the Regional Banks get stronger to play even a bigger role in kind of a Housing Market because if you think about it you go to the big banks and you have to give your firstborn and secondborn before theyll look at you to get a mortgage and might be perfectly capable. Right. Do you think that people are going to start to go back to the regionals and right in their own backyard, they understand the economy. They understand the jobs. They understand what people are doing and therefore its easier for them to buy houses in those regions . Im right on with kenny. Those local people even in those states gorks to a Regional Bank dying to lend. You get an opportunity for an etf and wont have the risk of a large bank and other issues with the volcker act and so on. So whats really interesting is ben bernanke went to apply for a mortgage and had a tough time with a job change. So you know they have to make some of the rules easier. Really needs to be change out of washington to make it easier for people to apply. A lot of regionals had really bad credit issues and later in the cycle of recovery and seeing them just now on the upswing. The sector is far below the success of the s p and havent reached the 2008 peak. They have plenty of room in the Financial Sector considering the s p up 60 and theyre not at the peak. Earnings multiples are a big discount from the s p. Forward s p earnings are, what 17 times the forward earnings of the big banks at 12 times, 9 times. Banks hope the multiples go up. Hopefully youre right. Always good the see you. Happy new year. Well it is the last trading day of the year and 2014 marks the sixth Straight Year of gains for the dow. Can that major average bank another one next year . Hear from the Retail Investor roundtable and their best ideas for 2015. Every year that ends in 5 typically is an up year art cashin points out. Times square just about 7 1 2 hours away from midnight here on the east coast and the crowds anxiously awaiting the drop of the ball all day. She inspires you. No question about that. But your erectile dysfunction that could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid long term injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any allergic reactions like rash, hives, swelling of the lips tongue or throat or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. All right. It is not the kind of story we like to hear celebrating the new year but theres a tragic event in shanghai. Mary thompson has what we know so far. Bill cctv of china and others are reporting that 35 people have been killed and 42 injured in stampede along the bund a river front prominent in shanghai and occurring as part of or during a new years eve celebration. We dont know what caused the stampede and cctv and other News Agencies reporting that 35 people have been killed and 42 have been injured receiving additional updates well bring them to you. Thank you. Thats a shame. Lets move on. We wind down another year on wall street. Great time to check in with how main street views the market in a segment we love to call Retail Investor roundtable and my favorite segment, too, kayla. All right. Joining us today, dave wasnick, david myers, and also troy green. Welcome back. I will start with you. Why what are you expecting in the market ahead and how did you fare in 2014 . I fared very well in 2014. Primarily, driven on the energy boom, rise and fall and the just general market upswing and for 2015 i think that with lower Energy Prices we will see an environment where retail consumption is going to increase and also going to see companies who have a cost structure highly tilted towards Energy Prices. Youre going to see that reduce and see an increase in earnings and Free Cash Flow and see a lot of companies doing buybacks see a lot of increased just in general environment in the market. Come on troy. You didnt pick 50 decline in oil, did you . Not at all. I recognize when my thesis is broken and in that play it was broken. Oil prices cratered an i had to get out, absolutely. Professor, whats been your outlook and see going in the new year . Okay. Well, first happy new year. Bill and kayla, glad to be back. First of all market valuations are pretty stable. Looking at value line at the beginning of the year the median of its universe was about 19 and were about 18 as of a week ago. So i think the valuations are relatively stable. Absent any other major events in the economy and i dont foresee we should have another good year. I would what will you pick then dave . Some of the thing that is have done well. I was on the program previously. Visa. Outstanding holding in the large cap category. Okay. I still with some caveat like the Skyworks Solutions stock, provided you buy it on the dips. Priced to perfection now and reduces the opportunity for longterm yield. Okay. And synaptics. Approaches growth at a value price. That would be quite a run to continue for visa. One of the leaders for the dow this year. David, you think the dow can go to 20,000. What are the forces you think in 2015 will get it there . Well i dont want to overstate it but you think that we could see another 8 year and well push towards that 20,000. I dont know that well actually get there but go that direction. The forces are the panel david, you go ahead. Youre the guest. I was going to say that one of the big caveats is the drop in oil prices are actually going to go towards a lot of companys bottom lines and its going to incur more hiring to see the unemployment further decline and just really speed up the gdp a little bit. David, what are you looking to grow in 2015 . Quickly. I love to short the vix when it spikes like days today and the banks Going Forward like bank of america. So youre going to do with anton. We have heard talk of people worried an enthe market is expensive, especially the professor, 19 is fairly valued and forgetting that low Interest Rates warrant higher valuations and so many people miss the market missed the 20 run. Dont worry about it. I agree with all three gentlemen. Less cost to companies, get more reward in stocks and more risk in bonds. Troy you get three picks here. Lets talk about one. Ill just itemize them barry plastic, Abercrombie Fitch and gen therm. Is there a theme . No. I think the theme is basically if i would set one would be retail consumption to cost and the structure will choose. I would say gentherm is one to pick. Its a Market Penetration growth story. The company, they primarily manufacture climate controlled seats and they have a 50 and 100 market share. Protected product growing and as you see, retailers buy more cars and into the new year and upgrade from the delayed purchases of new automobiles you will see a gentherm continue to penetrate into the auto purchasing boom i think well see. Theyre mostly in luxury cars and i think they drop down into the lower tier cars and continue penetrating that market. Were out of time. Kenny, would you be shorting the vix here . Would i be shorting the vix . I asked you first. No no. Not shorting the vix. I actually think i think you get a lot of volatility come early in the year and so id be careful about shorting the vix right here. All right. Good to see you, gentlemen. Thank you for joining us. We love the segment. Happy new year. Thank you. Absolutely. Thank you. You, too. Big year end stock stories heating up the website today. Allen will join us next. Later, will stocks continue to do better than real estate . Next year. Or will a better economy give the Housing Market the upper hand . A Miami Real Estate agent joins us. We can guess what shell say but well let her say it anyways. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. You are looking at times square. That is the big dance here in new york city as preparations are under way for new years eve in just about a few hours from now. Suns going down. We will have fast money live from there and a circus and we are all ready tallying up the scoreboard for investors, how sectors did and that is going to be the big story. Yep. What are people diving into on cnbc. Com right now you ask . Allen has the hot list for us. Allen . Hey guys. All about the market and the tallies for the day. Our number one story right now is the 100 club. These are stocks that doubled in value over the year. This is like southwest, Electronics Arts pilgrims pride and four others ones there for you. Tough go to the website to check them out. People love to see the bigtime winners. Along in that vein we have an article about the dogs of the dow. This is the theory where you pick the ten stocks with the highest dividend yield and we have whats in and out. Cat, exxon, coke theyre in. Out, microsoft, intel and cisco. The tech guys. They fell out of it right now. Its an interesting theory because its a way to clean house and look for, you know basically stable stocks that might give you a little bit of an oomph there. Finally, we have a piece written by kelly evans herself as a new years present. Its taking a look at four headlines she thinks are looming ahead in 2015 that people should be very aware of. That includes the yield curve, oil patch layoffs, what millennials might do in terms of messing around with the Housing Market and then finally, she also said people should be aware of stock market multiples. Those are the big three right now, folks. At least she is tearing up the website if shes not here right . Exactly. I thank her frl it. She never rests. Happy new year. Same to you. Stocks outperforming real estate this year . But could it be different next year . With an improving economy, prices in some major markets like new york city and miami heating up could next year be a big year for housing . Well talk to one of the stars of bravos Million Dollar listing about that topic up next and we want your take in the meantime on which will outperform in 2015. Equities or real estate . Go to cnbc. Koch slkcomnbc. Com vote and well get the results and well be back in a minute. Okay. So if you invested in stocks in 2014 theres a good chance you did pretty well. If you invested in real i state, maybe not so much depending on where you were. Whats the outlook for 2015 . We want to know what you think. Which investment will do better in 2015 stocks or real e snat estate . Go to cnbc. Com vote and vote. You interviewed robert shiller, the Nobel Prize Winner the other day about this topic. In 2015 if you wanted to own stocks which i know you said are expensive for a while or a house which is the better investment . I dont think of housing as a very good investment unless you have a plan unless you are a smart real estate manager. So i would still go with the stock market. Interesting. The housing expert himself saying stock market is probably a better value than housing, but we want to get another take on this. Joining us now samantha, the first woman to be featured on bravos Million Dollar listing. We appreciate you spending your new years eve with us. Thank you for having me. Do you agree, stocks over housing . You know i heard that but i also heard that its also good if you have a plan and i think thats the main point. In real estate you have to have a plan. I bought my house for 550,000 now homes in my neighborhood are selling for 750,000. Thats something you cant find in the stock market. I mean unless correct me if im wrong, on that. Unless youre in tesla or one of those things. And that brings up the point, the old cliche is its not a stock market, its a market of stocks and the same thing is in real estate. Its all local. Its very specific. Right . Exactly. Its very local. Its very specific. Do you have to have a plan. You have to map out can i actually afford the home and can i get the return . Is always good to have exit strategies. Again, i bought my house at a certain price and i know that if i need to go and rent it if the market turns, i could rent it and cash flow 100 of what im paying with my mortgage right now which is phenomenal. Panel . I have got a couple things to say here. The first is i think that was part of the pickle that folks got into when we got in the housing bubble is this idea of looking at their real estate and their home as an investment so i think its important to have a plan, but i wonder if the way you approach it shouldnt be different. Instead of looking at it as something youre going to, you know make money on something youre going to actually get your money back out of. I just wonder how much the way to approach your house as an investment has changed posthousing bubble and what your thoughts are on that. Im a big believer that when you look at buying a home you always want to consider exit strategies from here on out. Anytime i work with clients, thats what i do because its the worst Case Scenario the what ifs. So what if Interest Rates rise next year which, of course they will, how is this going to effect it. Will you be able to sell . If Interest Rates raise, even though we have looser credit standards, lower down payments so theres a lot of opportunities for millennials to enter the marment and a lot of people, but at the same time there will be people who have to rent because they cannot afford a home. So in that case you have to really again, its very local. Look at your market. What are the rents . Are people renting in your neighborhood and go after that and plan accordingly. Kenny, are you getting sweaty palms . Can you see me . 80 of our viewers we know theyre watching, theyre investors, but 80 want to go with stocks versus real estate next year. Sam, it goes to my point. You say you have to have a plan and think ahead but you said it yourself, if rates go up next year typically its going to put pressure on prices. So if youre buying a house this year thinking youre going to flip it a year from now, that may not happen so quickly. If rates rise and you see people pull back housing prices will adjust and theyll adjust lower and so i think when you buy a house, you have to have a much longer term outlook in terms of how long are you going to be there, are you going to be there five years, ten years . Are you raising a family . Youre not jumping in and out. Right, exactly. Which, again, so for example, if youre seeing that rates are increasing, you might want to really strongly consider renting your home because next year in my opinion, were going to get a lot more renters. I mean we had it this year. Were going to have more next year. And to her point, the millennial generation is a question mark. The reality is the millennials are going to be transient, theyre not going to want a home with an anchor. Homes have never appreciated more than 2 on average going back to the 50s. Even 4. 5 youre getting right now, thats exceptional. You get a rising rate, youre going to rye totry to make money in reit stocks those millennials, theyre fickle. 78 of our viewers would go with stocks over real estate. Stocks are more liquid. Keep the hope sam. Come to miami and come buy Miami Real Estate. We would not mind that. Were moving to your neighborhood, sam. Look at this view. We are. Were envious. Well come back with our panel, tell us what theyre focusing on for 2015 in two minutes. Stay with us. [coughing] dave, im sorry to interrupt. I gotta take a sick day tomorrow. Dads dont take sick days, dads take nyquil. The nighttime, sniffling sneezing, coughing aching, fever, best sleep with a cold medicine. All right. Two minutes left. Get your pencil and paper out. Well make our predictions. Write all this down. Are you ready . Who wants to go first . Ill go first. First off, two points i want to headache. One, for so often we talked about how the middle class has struggled. Not this year. 2015 will be the year of the middle class. Increasing wages, low gasoline prices. The consumer will be better at the end of the next year and the middle class will win finally. Youre trying to win friends. Im on record on this one. By the s p large caps the mlp market once it settles down. Who cares about a little volatility. Dont be afraid of mortgage reits. 2015 will be the year we start to see the lift on crude exports, on the crude export ban. Thats what i think is going to happen in 2015. Were seeing lightly refined con den sat move out of the country with wti coming off as much as it has and with the republicans taking over the congress i think youre going to see legislation that refines that ban. January 6th 114th congress opens. But the big question is kenny, will kenny shave his head again in 2015 . I will if it raises money for charity. It grew back pretty good. Cyber security. I think thats going to be a big theme in 2015 especially after the hacks weve seen this year jpmorgan, certainly at walmart, all the retails, and now the sony hack even though we cant figure out who it is. The fact is its raising that conversation. The viewers want good luck for next year theres an old italian tradition, on new years eve you have to eat lentil soup. That means bill has to stay up until midnight and then after midnight. Can he do it . Not now. Power nap . Not now. My prediction rory mci willlroy will win the masters in 2015. That does it for us on the the closing bell. From all of us at cnbc have a happy and healthy new year. Fast money starts right now. Happy new year. This is the final fast money of 2014 brought to you from new york citys times square. Its been a great year for the bulls. Well tell you how to keep the party going in 2015. Live on new years eve from the nasdaq, fast money starts right now. We are almost in the new year here at the nasdaq. Do you need an Investment Strategy . Tonight on fast money were getting you ready for the new year. Im sarah eisen in today for melissa lee. Our traders on this new years eve, tim seymour, jim leven