first breaking news on how the tax plan will impact you ylan mui is live on capitol hill. >> reporter: treasury secretary steven mnuchin spoke moments ago about the administration's first step in turning the tax law into reality. treasury department and the irs have just issued new guidance it to employers, telling them how much money to withhold from their paycheck under the new tax law. >> the irs will be releasing a new withholding calculator that will be vail on irs.gov by the end of february. this will help provide individuals with certainty, so that they are neither overwithheld or underwithheld and can plan financial decisions. >> reporter: democrats have criticized the rollout of this process, saying that many people could actually end up paying too little in taxes. secretary mnuchin said that claim is ridiculous, and that this process has not been politicized. now, the white house is celebrating today's guidance as a win that will put more money in it workers' paychecks but the same time they are facing the deadline of january 19th to keep funding the government and the white house just said they have not reached a deal on immigration reform yet that's over deferred action for childhood arrivals has been a sticking point in those discussions and there is no deal on that issue yet, kelly >> ylan, thank you ylan mui tracking this all for us. all right. let's turn to the markets now. the stocks as we've established rallying to new highs. the banks now are gearing up for their earnings this will be key to starting off the earnings reporting season. blackrock, jp morgan, wells fargo, pnc all reporting tomorrow morning and the impact of tax reform will certainly be top of mind. wilfred frost is with us at post 9 with a look at what to expect. >> hey, bill the key focus this quarter will be on the earnings call, themselves, in particular, how it relates to tax reform as you said, including guidance on future effective tax rates, the likelihood that potential benefits get competed away or reinvested and impact of some of the more obscure parts of the bill management would like to address the sudden spike in yields that we've seen in the last few weeks. both tax reform and rising rates should be bullish for forward-looking commentary from management morgan stanley, for example, estimating that lower tax rates should boost the eps in 2018 by 16%. but when itle comes to the earnings, themselves, some concerns to watch out for. tax reform is bad for this quarter, due to the one-off write-downs, although those have been well telegraphed in recent weeks. second, trading will be down again, while consensus forecasts is for about 16% year-on-year decline, deutsche bank guided down 22% just last week. and third, loan growth has slowed, driven by commercial and industrial overall, despite some tough comps for the quarter, optimism about the future has supported bank share prices so far this year the kbw banks index up nearly 5%, having another decent day after a great day yesterday as yields were rising. >> we're going to talk about this in just a moment. stay right there. we just have a market flash on pitney bose whose shares are popping. >> reporter: shares of pitney bose were initially halted but resumed trading. a report from bloomberg that the firm has attracted buyout interests from blackstone to private equity firms the report cites that pitney bowes held preliminary talks with suito erors about a sale l month and the ceo is looking to sell the company again, you're looking at the stock up more than 13% here. back to you, kelly >> all right seema, thank you. >> wow. >> keep an eye on that one now let's get back to talking about the banks. with those earnings coming in the morning, are they a good bet? ken leon joins us from cfra. ken, like many, you're expecting this to be a messy quarter, aren't you >> there's going be lots of movements and adjustments but i think investors need to focus on two things one, with all these tax adjustments in 2017, looking forward, what impact does that have in terms of cash flow or return of capital? we think jp morgan will especially talk about how it's going to improve their ability to return capital and dividends and buybacks next year as the other banks. i think the core earnings -- >> ken, let me just jump in on that point before you move on, because this morning, the "ge "journ "journal" or other analysts raised the prospect goldman may have to diminish share buybacks because of the one-off hit it's going to take from this. do you have those concerns it sounds like you think the opposite may happen with an increase in capital return. >> so it's really going to be played on two factors. one, would be the tax effect, and secondly, we're going to have terrific earnings in 2018 that's going to flow down to capital. so i think when you look at dividend increases typically happen in the third quarter of 2018 that's after the federal reserve stress test. there's still going to be pretty good so i would stay on the optimi optimistic side. >> leon, in terms of those write-downs that, of course, we heard a lot about, to what extent do you think because those write-downs will be included in this quarter's earnings that some of the banks will try to flesh out other bad news and get one quarter away where they all miss and, therefore, might have miss tomorrow more than people expect so they can blame it on the one-off write-down because of tax reform and start 2018 afresh >> no, that's a great point, and it's also year end, and you're also 2017 is higher tax rates. so a great chance to put in more liabilities, charges, into the fourth quarter again, that gives momentum for a clean up 2018. >> so, how's the individual investor to interpret all of this, if the analysts are having trouble trying to figure out what to pick apart with all of this, looking ahead, should we just look past this report and look to the rest of the year, or what do you think? >> i think you stay focused on the core business, and for banks, they have the ability to grow loan growth has been modest. we think it's very -- much better for consumer than industrial the yield spread has been at a record low or narrow that's going to widen through '18 with multiple increases from the fed. that creates more opportunity for higher earnings for these banks, and also they're putting a lot of effort on cost controls we're going to hear about that from both the banks tomorrow as well >> ken, just kicklquickly, who e your favorites in the space, what would you earn into the earnings season? >> sure. tomorrow jp morgan is a buy, wells fargo is a hold. our top pick which we think they have all cylinders on fire is bank of america. they report next tuesday we have a strong buy >> all right ken, thanks for joining us >> ken leon. and wilfred frost, the base erosion -- >> i thought you pushed me on that, the base erosion anti-abuse tax. >> eiganti-abuse tax. >> how companies can push money around into different international entities that's been removed. we don't yet know how big of an effect it has on banks that's one of the factors. clearly in the past banks paidless than the corporate tax rate it's it co it's come down to 21%. clearly, net/net, tax reform is good for them. >> thanks, frost. >> thank you. >> i know, my apologies to ken i was just in the -- leon, that's a cool name. >> it is >> we have a busy day, wilf, thank you. beyond the banks what are investors expecting for the rest of earnings season we turn to bob pisani for that. >> hello, kelly. earnings season is upon us there's a lot at stake in this one. here's the good news first, this is going to be one of the best quarters in a long time look at this earnings expected to grow nearly 12%. most importantly, revenue back is finally back. expectations of a gain of about 7%, all 11 sectors in the s&p are going to see gains on revenues and on earnings this hasn't happened since 2011. second, profit margins are strong we're still near a record 10%. there's been fears that margins would begin eroding due to higher costs or lower prices that does not appear to be materializing. finally, an lialysts are raising earnings estimates for the first quarter. that's the one we're in. not because of tax cuts. analysts almost doubled expected earnings gains for financials on higher interest rates but also for energy stocks as oil hits mult year highs. look at this almost doubling. there are concerns out there t the immediate risk to the stock rally is guidance d disappointmentes companies will announce they're taking one-time charges. they may be reluctant to give the broad guidance the trading community is now expecting concerns over the fed raising rates aggressively, that's still out there. that's very real it's not an immediate concern. and finally the risk of a recession, this is the main killer of stock market rallies, historically, that appears fairly remote at the moment. but remember, guys, record earnings, global economic expansion, tax cuts, there's reasons the stock market's at new highs. that's it. guys, back to you. >> all right, bob, thank you see you in a little bit on the close. in the meantime we have 50 minutes left in the trading session here and everybody is off to the races we got pretty good gains for the dow, the s&p, the nasdaq, the russell and especially the dow transports which are up 2 1/3% right now. we have much more ahead today on the "closing bell. ahead today, walmart's big move on pay. what other corporate giants are doing it and which aren't what's it going to mean for the stocks but next, the flu strikes hard taking the 50 states out one at a time when we come back, where it's heading next, and what you can do to protect yourself this could save you a trip to the doctor's office. the "closing bell" with kelly evans and bill griffeth is back in two minutes r... ♪ james r. and associates. anna speaking... ♪ james r. and associates. anna. ♪ [phone ringing] baker architects. this is anna baker. this is what our version of financial planning looks like. tomorrow is important, but you're ready to bet on yourself today. spend your life living. find an advisor at northwesternmutual.com. [ phone rings ] how's the college visit? does it make the short list? yeah, i'm afraid so. it's okay. this is what we've been planning for. knowing what's important to you is why 7 million investors work with edward jones. another big rally day for wall street. the dow up 155 points right now. s&p, nasdaq, russell, transports it -- we're like a broken record here so far in 2018 but that is the story. the strength continues for the stock market >> rates have been up, royoil, w about oil today? >> yeah. >> more on that. >> the string today, retail's very strong, airlines are very strong and energy is very strong. today. so kind of a weird cross section there. >> even the temperature's high seriously, it's nearly 60 degrees in new york city this week it may feel like winter is starting to lose its grip but flu season is in high gear as you may be well aware. there are reports of crowded emergency rooms and treatment shortages all over the country meg tirrell is here with a look at how much worse this flu season could get, meg. >> reporter: hey, kelly, it is shaping up to be potentially be a worst one than we've seen in several years. we spoke to an e.r. doctor at stanford yesterday who said they're getting clobbered. he says this feels like the worst flu season since the 2009 swine flu. if there there's a couple reasons why it's appearing so bad this year. first, the strain of the flu a more severe one, h3n2. the flu vaccine isn't looking as effect ive as in recent years we talked to a doctor from the nih said it's looking 30% effective. in better years it's 60% effective at protecting people from the flu public health officials recommend everybody who can get a flu shot, right now adults about 43% last year of american adults got their flu shot. 59% of kids. and so that is pretty big business for the pharmaceutical companies that manufacture the flu shot of those, sanafee is the largest maker of the flu shot delivering 70 million doses to the u.s. for this flu season. see csl, australian biotech company with 50 million and glaxosmithkline with 50 million. another thing people are talking about the flu season is the shortage in iv saline bags driven by the manufacturing slowdowns in puerto rico after hurricane maria. now, there are already was a shortage in some of the products being manufactured there but that exacerbated these doctors we're speaking with say they are finding workarounds but this is causing a stress to the hospital system at a time, of course, during flu season when they really don't need it, guys. so, a lot of factors happening right now. >> yeah, and stay with us, meg, if you would let's talk more about why the flu season is so bad this year and why the shot isn't really doing the trick. >> yeah, joining us right now at post 9, dr. tom freedan. he's now president and ceo of resolve to change lives, part of a non-profit global health organization called vital strategies good to see you. >> great to be here. >> will we ever get past -- i mean, we hear that this year's vaccine's only been 10% effect if will we ever get past this annual guessing game that the companies have to do where we have a more effective vaccine every year >> three things to understand, first, every year we track how flu changes around the world to try to predict what's going to happen here. australia had a 10% effectiveness. we think we may see a 30% effectiveness. that's still a whole lot better than 0% effectiveness which is what you get if you don't get the vaccine. second, there are lots of things you can do besides or in addition to evacuativaccinationn help wash your hands, cover your cough. if you sick, don't go out and make other people sick if you're sick, go to the hospital or your cdoctor, see about getting tamiflu, that could reduce your illness or get you out of the hospital or make you not get as sick as you would be otherwise. >> i've been watching my hans like crazy and i got the flu vaccine. now that we know how bad this particular strand is, is there anything else people can do, are there follow-up vaccines or anything like that again, as you know, well know about new york city, it's kind of hard to avoid contact with a lot of other potentially sick people. >> it is every year, that's why flu causes tens of millions of illnesses and hundreds of thousands of hospitalizations. it's why it's important that everyone get a flu shot. but there are limited things that we can do as individuals. there are things we can do as a society. some of the things, really insisting people not go to work sick, covering your mouth when you cough, do make a difference. if you do get sick, important to consider getting medication because that can keep you out of the hospital or make you less sick. >> meg >> doctor, it's meg tirrell out in san francisco of course, flu is a huge problem but we're also hearing about perhaps the u.s. and the world's lack of preparedness for other huge pandemics and if we get something that we really have no way of addressing, pharmaceutical companies may not be incentivized based on past experiences to really step up there and put aside their more profit-making work to work there. what solutions do you see, if any, on the horizon for fixing that problem >> in ebola, the companies did come forward and come up with new products, they worked hard, put their own money into it so there was a lot of good governance, good citizenship during ebola we need that kind of approach even when there's not a global epidem epidemic that means congress needs to come up with the money to fund the centers for disease control and prevention, to be able to strengthen the systems around the world to find, stop and prevent health threats where they emerge so we can fight them there and don't have to fight them there. >> the iv bag thing is freaking me out when you read about this, how a basic thing can be in short supply i understand the puerto rico storms hit the articles raised concerns about the quality of these bags, period, over the last couple of years. what can be done there to quickly get more iv bags up and running and make sure that they're not defective? >> it's important that we recognize that if you have a just-in-time delivery system, you're going to have a problem when you have a surge. you have to anticipate surges like flu and build up your stock before then and come up with redundant systems. in an emergency you don't want to be breaking the glass and trying something new you want to have a robust system you can scale up when needed. >> by the way, is it my imagination or are we heari ini more about fatalities this year than past years? >> it's likely that we may, tragically, see more fatalities this year. this strain of flu is usually tougher on the elderly, as well as on kids >> so that just speaks to your suggestion that if you get sick, you know, seek care immediately. right? >> absolutely. >> don't wait. don't get in bed and wait for it to go away. >> particularly if you have an underlying health condition, a lung problem or heart problem or you're older, these are the people who are more likely to get into serious problems or women who are pregnant can get very sick from flu. >> dr. tom freidan, former direct r of the cdc, thanks for stopping by. >> thank you. >> meg, great to see you see you later. >> 40 minutes to go until the close. the dow up 163 points today. remember yesterday the s&p broke a six-day win streak the nasdaq is up 49. the russell is up 26. coming up, walmart, america's largest private employer is announcing plans today to give bonuses and pay hikes to hundreds of thousands of employees we're going to speak with a former exec about the move and the broader economic impact. and a little bit later, something's going on in the commodities world that hasn't happened in if six decades and it all has to do with natural gas. google that, kids. we'll explain what it is when "closing bell" returns help you reach your goals. it's having the confidence to create the future that's most meaningful to you. it's protection for generations of families, and 150 years of strength and stability. and when you're able to harness all of that, that's the power of pacific. ask a financial advisor about pacific life. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. fidelity. but through goodt times and bad at t. rowe price we've helped our investors stay confident for over 80 years. call us or your advisor. t. rowe price. invest with confidence. two new appointme . welcome back on this broad rally day, let's take a look at the sectors of the s&p 500. energy leading the way with a nearly 2% gain as we watch wti crude flirting with the $65 a barrel level brent almost at $70. energy followed by consumer discretionary, industrials, and materials. all up more than 1%. although we do have three sectors in the red if you know what interest rates have been doing lately, you can probably guess. >> yep. >> utilities are one of them, real estate the worst performer. consumer staples also weak. >> very interesting. let me, a personal note from those of us on "closing bell" for the last almost two weeks, all of us here at cnbc have been holding our collective breath waiting for the birth of a child to our executive producer here on "closing bell." finally, 11 days late, she arrived. yesterday. she waited until after the show was over. >> yes, because she's already a keen observer. >> we welcome to the family of cnbc, alexis helen robertson the daughter of our beloved executive producer, lisa, and her husband, nick. came in poun8 pounds not surprising given how she was late a big baby. >> mom and baby doing great. we think dad's doing great, too. >> i think so, yes. >> might be a little shell shocked. >> probably a little shell shocked. anyway, congratulations. >> thrilled for everybody. >> welcome to the world, alexis. that's great. so we move on. 36 minutes left in the trading session. if anything, the markets getting even stronger as we head toward the close. the dow up 163 points in record territory. just as all the other major averages are. up next, walmart sharing the wealth from its tax bill windfall announcing today more than 11 milli million employeesl cash in with bonuses and wage increases. we'll talk to an economist about the larger impact and whether other megaemployers will jump onboard. later as we mentioned crude oil is hitting its highest level. that's many more than three y r years today as the energy sector leads the market higher. we'll tell you what's behind this latest run-up and how high prices could rise, after this. welcome back here are shares of rh, restoration hardware, trading higher about 4% today. got an upgrade to buy from hold at luke capital markets. the firm saying the home furnishings company will differentiate itself from competitors with its new design gallery. >> i meant to bring it in. >> did you get one >> i got the catalog yesterday. >> yes. >> i thought they had stopped it. >> no. >> it's still like ten pounds. >> why would we get one? i've never bought something there in my life, how do they even know? >> poor mail carrier having to carry that thing. >> it weighed -- i wish we weighed it probably weighed six pounds. >> easily. easily. >> i felt bad. >> enough already. you heard of the internet? we don't need paper anymore. >> i mean, i actually do like paper catalogs i'll be honest not so many of them. it doesn't have to be so big. >> quite so big. crazy. time for a cnbc news update. here is sue herera hi, sue. >> i got a catalog, too, i'm e using it as a doorstep. >> easy. >> we start out with secretary of state rex tillerson welcoming his norwegian counterpart to the state department topping their agenda their work in the nato alliance to counter security threats in response to a shouted question, tillerson said he would meet with president trump later today regarding the iran sanctions decision. a key state department diplomat telling senate lawmakers that while isis has lost 98% of its territory in the mideast, the fight is far from over >> we have made significant progress since 2014 when isis first emerged, swept across iraq and syria that summer, inflicted suffering on thousands of civilians in the region, with impact far beyond. however, despite the advances made, our job is not yet done. and musician eric clapton says he is losing his hearing. he told bbc radio that he's struggling with tenitis, a ringing in the ear caused by noise-induced hearing loss he says he's quite anxious about being able to perform due to his illness. we wish him the best. >> absolutely. >> that is the news update this hour back to you. >> i'm surprised we don't hear more rock stars with that problem. >> oh, i think it's a growing problem, really is unfortunate. >> absolutely. >> thank you, sue. >> you got it, guys, see you next hour. >> yep. walmart is joining a growing list of companies today who are sharing their tax windfall with employees. the retailer announced it in addition to awarding up to $1,000 in bonus. it's also going to raise its minimum wage to 11 bucks an hour starting in february so will america's other megaemployers be following suit? eric chemi is back at headquarters with more eric >> that's right, guys. so what makes walmart unique here, it's the only company in america's top ten largest employers, you can see those companies behind me, it's the only company in the top ten that's announced a specific plan to raise wages for its employees. all these employers each have over 300,000 workers globally. that means not all of those workers are in the united states, but walmart is so big with 2 million employees it's multiple times bigger than any other company in this top ten. many of these top ten firms issued statements about the new tax law. generally those are filled with overall comments and not a concrete plan to raise wages like walmart has but some other large companies that have fallen just outside of this top ten, they have announced significant wage hikes. for example, take a look at at&t, they're one of many larger companies. at&t announced it would give a special $1 is,000 bonus to 200,000 u.s. employees wells fargo said it would wage its minimum wage to $15 an hour. see them right behind me along with lot of other brand names. boeing announced $300 million in investments for corporate giving and workplace improvements some analysts think with earnings season coming up you might see more big firms announce new plans to increase compensation because they get through earnings, get the positive bump from there and then get a pr bump from doing the announcements on this after that back to you guys >> that's what i wonder about, but then i'm cynical, is how much of it is a pr bump? >> no, we all -- that's why it will be interesting during earnings season for some of the companies that aren't as high profile, if they're doing the same thing or not. >> can i jump in there kelly and bill >> go ahead. >> please do. >> it's interesting if you notice a lot of those companies that were behind me, a lot of them were banks and telecom companies. a lot of people think this is to curry favor with the white house. pnc, zions bank, regions bank, washington federal, bankcorp that's the biggest industry that we see that's been doing these hikes. telecom, too, with m&a deals if you want to watch two seconders that will keep doing this before, nose are tthose ar to watch . >> eric chemi at headquarters. thank you. >> thank you. will walmart's bonuses and wage hikes offer a quick jolt to the market or leave a long-term impact joining us to talk about it, bill simon, former president and ceo of walmart usa joe, chief economist for the americas at nat texas. good to see you both bill, what did you make about the announcement today are we being cynical by saying that it's a pr bump for a lot of companies? >> well, no, i mean, walmart, they should be proud of what they've done several years ago, actually when i was still there, they launched a program called pathways which started to move wages up, starting wages, particularly, but also started to focus on development programs to get more out of the workforce to teach them, to train them, and to don th develop them progression, probably in acceleration of that program it's something they've been serious about for a while. i think the cynicism is probably not warranted here they're really sincere about moou moving wages forward and moving things forward today was a good step. >> joe, from your lens that's one way of figuring out how broad and broad-based the impact is going to be from all of this. are you looking at, you know, the prospect of higher wages across the economy with stuff like this contributing to it or are these just isolated cases? >> at this point, kelly, they're just isolated cases. it's certainly good news for the workers. everybody -- anybody gets paid higher wages, it's generally a good thing, it should be celebrated however, from a macro perspective, for the wagegains to stick, and this means broadened out beyond just walmart, by the warks the average retail wage rate is around $18 an hour compared to the national average wage rate of around $26. so it's low, but broadly speaking can get faster wage growth, the economy needs faster productivity growth. so if this tax package is to work, it will work because it galvanizes companies to spend on capital, to get capital deepening, give workers the tools to actually get paid more because they're more productive. >> right by the way, speaking of walmart, hang on a minute, everybody, we have a news alert. courtney reagan, what's happening now? >> hi, kelly of course the big news out of walmart was this morning when they gave us that announcement about the increased wages, the bonuses and expanded benefits for employees. at the same time, walmart owns sams club and they have announced that they are closing 63 of their u.s. sam's club stores that represents about 10% of the total stores so of those stores, 53 will be closed permanently somewhere around a dozen will actually be converted to e-commerce fulfillment centers the employees that work there will be given the options to potentially take a job at a nearby store, or stay at that store at the e-commerce fulfillment facility when that's up and running and, kelly, get this, even though they're losing jobs at kuscurrent stores, sam' club employees will be eligible for the one-time bonus that was announced today. when i asked walmart directly about the timing that seems a little interesting on a day when they gave us that big positive announcement about wages, bonuses and expanded benefits, they said, look, this came from two different parts of the business, yes, it is under the same parent company, this was not intended to be sneaky. we addressed it more on a local level when it comes to the sam's club stores closing directly with the employees, and those local consumers, but we are certainly not hiding from it and we are confirming the closure of 63 of 650 sam's club u.s. stores kelly, back over to you. >> all right so that's about 10%. which, i mean, that's a pretty big number. >> big number, yep. >> courtney, thank you bill, what do you think the significance of that is? >> well, i mean, it's really interesting to hear. you know, the challenge, i think, that they face, and really this is -- this is endemic of the transition that retail's in, retailers are figure out a sweet spot or something they need to be famous for that they're famous for have been very, very effective, but those who have just been okay at ek executing their plan haven't done well. walmart stores have done very well executing low price and broad assortment sams club in the arena that they're operating with against costco hasn't done quite as well and this is a transition, and that really brings up my point about the tax bill, too. you know, walmart probably got the biggest tax break of any company in america one of the biggest ones. they had the highest tax rate and their revenue was so high. they probably could get between $2.5 trillion and $3 trillion in tax breaks a year. the $300 million, $400 million they gave in wage increases and one-time bonuses is just a tip of the iceberg so they have a lot of powder and a lot of money to invest. and i'd like to see what they're going to do with it because they have an opportunity to, you know, to build their business. this move with sams club isn't surprising it's allowing them to focus on the hinge things that are worki which is the walmart stores and e-commerce business. >> joe, it highlights this incredible transformation we have witnessed in retail in the past year with the number of store closures and the migration to online. the investments that have been made there what do you make of that all that and what it says about the economy right now as well? >> it's not just limited, bill, to retail. we talk about retail because of the so-called amazon effect, but we've seen technology impact so many different industries particularly financial services. i would argue that the disruption that technology has now caused in many industries beyond just retail is one of the reasons why wage growth has been soft that you got a lot of worker anxiety and in in those industries where automation, say, for example have been the highest like motor vehicles, you've actually seen, you know, the -- obviously worker pay not move as much so, to me, the -- it's an extraordinarily unusual backdrop we've got but hopefully in the tax bill works as designed companies such as walmart and others will take that money and give it back to workers. i mean, that's what kevin -- the white house council of economic advisers said will happen. this is good news if it continues and broadens out. >> gentlemen, thank you, bill simon. joe. good to see you both thank you for your thoughts today. >> yes, sir. and 20 minutes to go until the close now. dow's hanging on to a gain of over 150 points today. a strong rebound by the s&p which was down yesterday first day after six-day-straight rally. nasdaq higher. and the russell 2000 small caps up more than 1.5% today. next up the rally and the dividend question. are companies going to start hiking those quarterly payments to shareholders? we'll get into that. >> yeah, barclays projecting disney to be the top media company in terms of revenue in the next five years. maybe no surprise given the pending deal with fox, but the content play analysts are targeting as number two is raising eyebrows the company that they are. that story's coming up stay tuned had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum -- just to help you improve your skills. boom! that's lesson one. education to take your trading to the next level. only with td ameritrade. we have a news alert on one of the hot topics in washington today, that would be immigrat n immigration. ylan mui has details. >> reporter: a quee group of bipartisan senators say they have reach add deal on the immigration program known as daca that group includes senators lindsey graham and dick durbin as well as senator jeff blake of arizona, a key voice on immigration. they say they have reach add deal that not includes a permanent solution for the undocumented children of illegal immigrants, but that it also would address some of president trump's key priorities including border security, the visa lottery and what he's calling chain migration. now, these senators say that they are working to build support for their deal in congress and that means they don't have everybody on board just yet, in fact, we just heard from the white house saying that, in fact, there is no deal on the immigration issue so far and the key holdup here remains in the house where conservatives say they want to see much tighter restrictions on immigration, in exchange for any action on some of these undocumented children. but there does seem to be progress now with this key group of bipartisan senators saying that they have reached a deal, that they hope the rest of congress can accept. back over to you >> thank you, ylan ylan mui with the latest on immigration today. now let's talk about the markets which have been doing very well again today. all the major averages we cover are in record territory. joining our "closing bell" exchange today, peter costa from empire executions at post 9. so is tony from blackrock's equity dividend fund and rick santelli is at the cme group in chicago best start for wall street to a new year in 12 years is this vidence, peter, that the tax reform bill was not priced into the stock market >> you know, if you asked me that a week ago, i would say, yeah, it's already been priced in but the more and more you look at it, it -- i don't think it's even anywhere close to being priced in. and, you know, it's -- it's a good sign, obviously, but i think the expectation is more about earnings i think that's where the focus is even though -- >> the impact the tax bill will have on earnings, i guess. >> absolutely. you're is not going to see it on the fourth quarter earnings because it's not going to show up but i think people's expectation going forward, going into the first quarter in march and april, that's where i think people are expecting, expecting that increase. >> well, tony, i'm wondering about, you got an equity dividend fund, we're at a period where interest rates are going up, we're talking about stock valuations, kind of creeping up and being higher is that putting pressure make bing it harder for people to see dividends as attractive in this environment? >> yeah, so it's really important the dividend market, to extinguish between high dividend yields and dividend growth if you look historically, growth stocks outperformed in reflation their periods and done so, this is important, with less volatility, less risk. we're also emphasizing quality. >> do you think you're going to get dividend growth because of the tax cuts, is that part of it or would it be on top? >> it's on top we've had good corporate earnings that's going to drive good dividend growth. a lot of the tax cut is going to go back to shareholders in the form of buybacks as well as dividend growth. >> rick, not as much action in the -- for the treasuries as we saw a day or two ago when there was talk of the chinese not buying treasuries which they call fake news is that what that was about, or are we destined to go even higher from here, still rg do you think? >> i don't think that's what's it was about granted there may be some traders who traded on that always going to be comments about what large countries and economies are doing relative to their purchases and recycling of the dollars that -- when they import from the u.s., those dollars. when they export to the u.s. those dollars. i think the grand scheme of things, anybody who thinks you can oversimplify down to a chinese headline, or some of the markets moved on a nafta headline out of canada, there's bigger fish to fry what's going on with treasuries is really a culmination of so many things as we've all heard the last couple of weeks end of a long-term bull market that started back in the '80s. central banking, things that we have never seen, maybe we will never see again. slowly, very slowly coming to an end and reversing out of the markets. many experts have been calling for rates to rise for a handful of years those things can't be explained by those headlines i really think that 2018 is going to see higher interest rates on virtually all sovereigns, but what we can debate, still, is how much and how aggressive, i think in those two categories many will be disapointed. i think there can be moments of terror but i still think tro treasuries will be surrounded by hours of somewhat trading bored boredom. didn't have a range of maturi maturities on the long end last year i don't suspect this year is going to be a whole lot different. >> tony, circling back to what we were saying about dividend growth, where do can you see industries or companies with the greatest potential of that this year 1234. >> yeah, i think you want to have a foot in each camp, a foot in the aggressive camp, a foot in the conserve ative camp aggressive side, it's the blaze f place for banks to be. we're at an inflection point in banks' earns a period of sharp regulation so the pendulum swung sharp to the side of regulation that's turning into a tailwind now, right first you put the people in place, then the policy gets implemented. we're going to see great improvements in 2018 and rates continue to rise the value of bank is its deposit-gathering franchise. when interest rates are at zero, it doesn't produce a lot of earnings. >> that's your aggressive play what about the more conservative one? >> health arcare we have a slide on this. >> better not put up a slide >> utilities staples. they're expensivexpensive. they're very expensive versus history. yet, characteristics, quality characteristics aren't any better health care is totally different, it's a growing sector we're aging as a society that means we're consuming more health care. so it's growing. growing earnings, growing d dividen dividends. yet the valuations are very attractive. >> speak bing of banks, they report tomorrow morning. some of them do. that should set the tune. >> yes. >> for tomorrow. not to mention the rest of the earnings season. >> i think this earnings season for the financials is going to be very, very important. last quarter, you know, november, december, they had a good -- very good season i mean, retail, everybody did very, very well. i think you're going to start seeing that in the bank earnings, you know, starting tomorrow i don't think you're going to see too many companies miss. i think, if anything, there's going be beating expectations which is a good thing. you know, for the first quarter i think you're probably going to see the same thing, but after that, that's anyone's guess, but i'm looking toward at least the first quarter being solid. >> very good thank you, guys. peter costa. tony rick santelli. thanks for joining us. >> about ten minutes to go 159, how much we're higher on the dow. one thing movie ining lower tod, dollar index down nearly half a point. it's been struggling below 92 again see the positive impact on equities today and as oil spikes, natural gas makes history here in the united states. we'll tell you what kind of history when "closing bell" comes back let's get started. show of hands. who wants customizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online. energy stocks have been on a roll this year ascommodity prices rise to multiyear highs. jackie deangelis is back at headquarters with a look another the move in oil and nat gas as well jackie d.? >> good afternoon to you, bill well, crude hitting levels not seen since december of 2014. brent crossing $70 a barrel at one point in the session, and wti finishing at $63.80. what we have right now is the perfect environment for prices to rise. geopolitical tensions, the possibility of sanctions on iran being reimposed. opec cut that members are actually sticking to and expectation that demand is on the rise because of a strong economy, a rising stock market still, with a 10% move in the last month, traders telling me it may be time to take some profits short term here keeping in mind there's still support at $6 $61.50 switching gearin gears but stay the complex. nat gas. the cold weather last week took us over $3 a near 6% move today also the move that the u.s. is a net tat gas exporter for the first time since 1957. that's adding support to the market even though supply is plentiful the notion of serving global customers could lead to a tighter nat gas market, guys >> is jackie, thank you very much we'll talk about that more coming up here because we are coming back with the dow now up 182 points. >> now art cashin did mention it was about 250 million to buy on the bell. >> which he called a nonevent. >> yeah. so yet we're ramping s&p is up 18 nasdaq up 55 the russell is up 26 right now. >> we have the closing countdown coming up momentarily here. after the bell, bill ackman taking a page out of walmart's discount playbook. the unexpected move by his pershing square hedge fund coming up. you're watching cnbc, first in sissorwibune wldde account with a great rate. but if that's not enough, our app helps monitor your spending too. and if that's not enough to help you save, we could start a carpool. look at this traffic. don't worry. ok, if that's not enough we'll start a trainpool. oh i have a meeting in five minutes. and if that's still not enough... i got it. we'll just create a shortcut. we'll do anything, seriously anything to help you save. ally. do it right. talking 4th quarter? yes. your new brother-in-law. you like him. he's one of those guys who always smells good. his 5 o'clock shadow is always at 5 o'clock. you like him. your mom says he's done really well for himself. he has stocks and bonds. your dad wants to go fishing with him. your dad doesn't even like fishing. you like your brother-in-law. but you'd like him better if you made more money than he does. don't get mad at your brother-in-law. get e*trade. about 2 1/2 minutes left as we head to the close i'm just here chatting with some of the traders as during commercial break, we were just joking about, you know, there are no dips to buy anymore you had a minor move down yesterday. was that enough of a dip to buy? apparently it was. in record territory as you see for all the major averages the dow, highs for the day up 189 points now. the s&p 2,766. the transports, biggest gainer of the day percentage wise, more than 2% for the transports as the airlines and shippers and all the others continue their strength here. let me bring in bob pisani on the rest you look at the breadth of the strength here today. >> yep. >> pretty much across the board. so transports, i think we were going to look at that and show you the ailtime hill-time highs. >> not just tax cuts delta made a specific comment that business travel is the best they've seen in the last three years so there is part of this what we call the reflation trade, the economic expansion that's playing in here >> retailers are back. the xrt. that retail etf hitting a 52-week high today that's a gain of 2.5%. xle, the energy, we highlighted that jackie was just on brent hit $70 a barrel today for the first time in a while. >> and we have seen earnings estimates for the first quarter practically double in october, we had analysts estimates that were very conservative as we got closer to the end of the quarter and oil started moving over $60, the estimate, this is for the first quart e one we're in, started going way, way up that's one reason oil stocks are back in a big way. >> now it either continues tomorrow, or it stops by hitting a brick wall it depends on how the banks report and those are the big guys that report first thing tomorrow morning. >> so we know that loan growth is fair. not great. but they are being pushed up by the higher interest rate scenario i'd be curious to hear if maybe they'll change their tone from mediocre long growth to better long growth. i want to hear about it. >> the history-making rally continues on wall street and we get ready for the big earnings starting tomorrow we'll get you set up for that coming up on the second hour of the "closing bell" can kelly evans and company. a 200-point gain on the dow, kelly. hello, ethan >> thank you, bill welcome to the "closing bell," everybody, i'm kelly evans a huge pop in markets just on the bell here. the dow up 205 points. the first time all day we've been over 200 points it's been a big rally and broad-based one on wall street that's a gain to put the dow over 25,500 for the first time, at 25,573. gain of .8%. s&p 500 up to 2,767. nasdaq composite up .8% to 7,211 today. the russell 2000 small caps having a huge session up 1.7%. 27 points. closing at 1,586 that means we're seeing records pretty much across the board here for everybody i'm just double checking here. yep, the russell a record. the nasdaq a record. s&p a record and the dow, let's see, yeah, a record close record close for everybody quadfecta we'll call it. joining me today cnbc senior markets commentator, michael san tole l santoli. contributor stephanie link from tiaa investments we have records with the s&p also having its best month since february of last year. so far and here are the leaders and laggards in the dow. chevron up 3%. energy and oil had a huge day. american express lagged. it was down about half of 1% michael, what do you make of it? >> obviously an impressive run really seen an acceleration into this very young year, both an acceleration in the markets, apparently the economy and corporate earnings and investor optimism that's what i'm hear really to show you sem essentially attitudes followed stock prices higher. this is a crowd sensemetiment follofollopoll, going on for decades right here, this is is right now, record high, all-time record high, close to 80, essentially 80% of everybody in the market right now what does it mean? first of all, it's understandable by the actual behavior of the market, people are reacting to the strength however, when it's been above this top line, historically, it offer means the market is going to flatten out, going to pause maybe, kell, we're seeing a little bit of a short-term buying crescendo that has to settle out a little bit if nothing else. >> you look very comfortable over there. >> can i come back, though >> you can come back i think that it's fun to see it in big -- does it make you worry, stephanie? >> oh, sure, of course, it makes me worry i'm more of a contrarian to begin with so what happens in the beginning of the year because we wait for earnings for a couple weeks, you have this dynamic people between wanting to buy what worked last year, or they're looking at the reversion trades so far this year we've seen both last week it was tech and growth that actually outperformed for the week now this week we've got more value sick sickcyclicals driven bond market. right? as soon as yields started to creep up much higher, saw more of the energies, financials and te materials to tonight whthose sectors in the last two months of the year outperformed i understand why that's happening. >> yeah. >> now we got to wait for earnings earnings start tomorrow. that's really when the proof is in the pudding can these companies deliver? >> totally. >> absolutely. that's where you're going to start to make your money on the pullbacks where you want to place your bets. >> ian, i imagine we're giving you fodder for your weekly note on bubble watch and all of that. >> there's certainly a lot to point to each week but doesn't seem to matter very much as far as the stock market going up i mean, i think everybody rethis depend on rates and direction of rates and if rates start to move back up toward 3% i think you'll see a dramatic change in the way people are thinking about risk assets they're -- >> positive or negative? >> positive. i mean, i think people are just going to continue to pour into risk assets until they see the rates go dramatically higher because right now there still is no alternative and taken the handcuffs off everybody as far as regulation. so it's a perfect storm to bet into risk assets. >> and mike, a couple of things that arele looing tor looming tw bank earnings we'll talk about in a second. cpi, consumer price index coming i mean, yes, we have oil going up, some of these things feed into it. the real question seems to be are we ever going to really get inflation coming are we going to see it in wages? is it going to be sustainable? you know, that feels like it could kind of spoil the whole narrative here, but until or unless we see -- >> it ven theory it could. the markets collective will i are suggesting that financial conditions are way too loose, given where the economy is and given all these other d dynam dynamics inflation is the one piece that hasn't fallen into place to maybe get a genuine tightening going on where the fed actually has to do more so, yes, that is the piece now, these companies giving out bonuses, walmart raising minimum wage, because basically it's a tight labor market maybe that filters through i think the market is going to almost wait to see evidence that it's actually taking -- >> you know what i'm starting to wonder, should the fed come out and raise interest rates right now, just, surprise, you know, late night, just completely put everybody back on their heels and go, you know what, we get that inflation is not there, we also get that sentiment, that this is starting to get a little carried away. >> sure. >> would it be craze ity to do something like that? >> this context it would essentially be crazy when you have a brand-new fed chair, who's not even actually there. but it used to happen that way february of 1994, that's exactly what happened. between meetings, they jacked rates. and the bond market crashed and had a stealth bear market in stocks. >> yeah. >> and had to kind of rebuild economic confidence after that. >> we don't want that. >> we do not want that i am surprised, though, that if you look at the expectations for a fed hike in march, it's only, like, 75%, 80%, which is crazy to me. >> the fed officials, themselves, keep talking about, you know what, we haven't seen the inflation, we don't want to be too quick i just wonder, who cares at some point. >> they're never going to see it >> go ahead, ian. >> let me spare the suspense for the fed officials. jeff bezos and amazon made it pretty clear this whole temporary inflation miss could be a lot more secular. i don't understand why the fed is waiting to see something that probably won't happen, as opposed to changing their goal post and actually raising rates so people who are trying to save money can actually save some >> yeah, i just wonder at this point, you know, i know we're not at 2% exactly. we're pretty close and it feels like everything else is kind of in place let's talk about the bank earnings, though tomorrow morning blackrock, jpm, wells fargo, pnc, all reporting before the bell. this is a tricky one you know, i don't know how much we can infer about the markets overall from what they report given all the cross currents that are going to be dumped on investors in these reports, stephanie. >> right i think the headlines are also going to be messy because of the whole tax, right headlines messy. we're going to be waiting for conference calls and guidance and that sort of thing, about how much they are going to benefit from tax, how much are they going to invest, about deregulation, about loan growth, about net interest margin, for sure i think of all of the companies that are reporting tomorrow, wells fargo is clearly the one that everyone's waiting for to see if, in fact, they have turned the corner from last year's problems. right? are they going to be able to see revenue growth as much as expected i don't know i think they've given a little bit of revenue growth away to get that customer or retain that customer at the same time i think expenses while they might come down, i think there's a long way to go. that could be the bull case you think, oh, there's a lot they can do on the expense front. >> right. >> i'd be careful, the stock is up 12% since december 1st. beat the bank index by 7.5%. expectations are certainly lofty. so that's the one i'm watching, though. >> what are you going to be watching for, mike >> just whether we are, in fact, going to be in for another one of these sort of sell the news instincts that hits when earnings come. i think the bull case for banks is so well known and almost so universally embraced i don't think the valuations reflects crazy expectations really for the long term but seems like mostly a financial engineering story. lower tax rates, lower compliance costs, more share buybacks and dividends it's all about kind of the financial numbers moving around. it's not about the core business is it doing better, are you making more loans, is the economy asking for more credit is all those things maybe we'll find more about. >> the interesting wrinkle in all of this no matter how much they rallied since the election, whatnot, is the fact the loan growth isn't there i'd love to hear more about that tomorrow if they can fig wrure why. ian, what do you think about the banks? >> i think the market is has gone from an underweight position a year and a half ago to almost an overweight position i want to hear what they have to say about trading. i think that's a big deal. and obviously the positioning. i mean, if the stocks sell off tomorrow which i expect them to a little bit on the sell the news, if they don't come back over the next couple days you can make a compelling argument it's in the stocks at this point, all the tax stuff. >> all right fair enough. let's talk about the markets a little bit more today. taking a page out of mike's note today talking about sector leadership and the profile remains risk seeking the leaders today, transports up more than 2%, industrials, consumer discretionary, materials all up better than 1%. so, you know, talk us through that for a second. >> you're talking about the secret note that circulates internally here that we don't usually talk about on the air. >> e-mail him. >> obviously, no, i mean, look, the market is kind of swimming toward the most cyclical groups leveraged to growth, the kinds that you actually want to see lead the market if there's something sustainable going on below it the transports in point terms more than the dow today and the dow is up 200. >> by the way, the dow transports up 254 points, over 11,000 right now. >> one example, within the s&p financials consumer discretionary because of the retailers got excited about money in consumers' pockets. so as long as that lasts even if we get some kind of a pullback, the market stalls out, if that leadership profile lasts, it's hard to get too bearish on exactly what it means. some point this year i think great chances for a 7%, 8% pullback who knows from what level. >> yeah. >> as long as this remains the case and breadth of the market seems okay, it's kind of insulating you from something really ugly. >> i would actually say a lot of people are still in a lot of tech and growth. that's obvious from last week and the reactions that we saw. so what if we start seeing a little bit of selling of the faangs and money coming into some of these cyclicals? i don't think people are selling facebook and buying caterpillar. i just don't. >> i'm starting to hear people talk about what are the risks that tech earnings start to disa i point or the growth rates start to slow? businesses are maturing, regulatory risk is there, there's massive hiring been done to kind of address that. maybe you're right, i don't know if it's happening yet, maybe are we at one of -- >> i happen not to think it's a direct seesaw with the large cap growth stocks. utilities are getting smashed. now, it's a small market cap growth i think low growth yield stocks are getting hurt bad semis have definitely kind of looked like maybe they're stalling at the peak perhaps but i just think it's hard for a market to stay a bull market and people to look at facebook at 28 times earnings with a 28% growth rate and say, no, i don't want that. >> right, right. >> you know what i mean? >> i totally agree. >> except the late '90s. >> i have a little bit of both i do have some faang and i do have some growth i do have a lot of the value truly i think there is still value. if you think the economy and the global economies are going to continue to expand, which i think that they will -- >> ian, we'll give you the last word, what do you think is the leadership here? >> it's got to be kodak, what else is the leadership besides that right now. >> i didn't give you a hard tim about the airlines today. >> which part. >> i was thinking about it, though. >> oh, about getting run over on all my shorts. yeah guilty as charged. >> exactly >> yeah. tough way to make a living >> we'll leave it right there. ian, thank you for joining us. stephanie link as always appreciate it. thank you, both. second hour of "closing bell" is just getting started. >> next, where some of the smartest money in finance is going. we're talking to a top mind in the private equity industry. see why one firm says there's almost nothing to buy anymore. plus, a beehive of bitcoin go inside a factory where they're making them as fast as the electric company will let them the "closing bell" with kelly evans is back in two minutes most etfs only track a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. we know life can be hectic. that's why, at xfinity, we've been working hard to simplify your experiences with us. now, with instant text and email updates, you'll always be up to date. you can easily add premium channels, so you don't miss your favorite show. and with just a single word, find all the answers you're looking for - because getting what you need should be simple, fast, and easy. download the xfinity my account app or go online today. welcome back charlie munger spoke to becky quick yesterday and called a bubble in venture capital. he said, "think of the bubble back in 2000 and that year they put $50 billion into a bushel basket and burned it and gotten the same results." we're joined by venture capitalist alan patrickoff. >> what a way to start an interview. i think charlie munger bought stocks i didn't know he made venture investments. i've never seen him in my field. >> he's an l.a. guy, where arena investments recently said it was suspending -- because there was too much capital sloshing around and the valuations were too high so got a couple of people there on the west coast now saying, you know, maybe something's out of whack here. >> i don't think this is an east coast/west coast situation or point of view, but i can't argue with the fact that valuations have certainly gone up in the last year, two years i don't see -- i've been there for several previous bubbles, and i don't think this has any similarities to what we saw in 2000 where companies were -- at least companies i was involved with every week you had at least one or two, couldn't meet the payroll. i don't think we had a company in the last year that's -- they've all been well financed i think they prepared for perhaps a time of decline in the market. >> i wonder, though, when i think about the size of the funds that are being raised and think about softbank's activity and the amount of money -- i wu wonder what you think about their involvement. it doesn't feel like 2014 where every day we're talking about a new unicorn and, you know, some fresh kid on the, you know, scene who's got an amazing idea for -- it feels more like we keep talk bing about all of the investors putting all of their money into a lot of these investments. what do you think about that >> well, i mean, the area that so softbank's playing in is also companies that are much further advanced i think you've seen a enormous proliferation of capital coming into the later stage of the markets which involves, you know, investments -- say it, $15 million and over $15 million and now softbank has set new parameters in the field. but, you know, down in the seed area, there's an enormous entrepreneur wave going on in this country like i've never seen in all the years i've been in this business i've been in pretty long there's an excitement. i was up at columbia business school today talk bi inging todo 100 people all can't wait to do something they've been fervently passionate about i think there is a lot of money at the higher end of the market. at the early stage, we're talking about $1 million, $2 million, $3. milli million investments not talking charlie munger levels >> what particular areas in terms of industry, in terms of approach, what are the new ideas that are exciting you at this point after we've been, you know, in this cycle for a little while? >> i'm personally hopefully get our firm greycrof focused on voice, google home, alexa, opened up a whole new area of a lot of companies using voice, what we're going to see in the car is going to be a lot of use of voice for things we never anticipated. cyber security, of course, is the hottest button, autonomous vehicles as you know, we just invested yesterday in a major new opportunity in this company called yield street. i guess you'd say that's our hottest investment, last, most recent investment. >> that's financial technology. >> absolutely, financial technology which is democratizing the high yield market. >> so last thing before we let you go is is there anywhere you do see a bubble in your industry from where you sit >> i see it on the later stage higher valuations of companies which think they're pre-ipo which is a common fallacy that i've seen over the years which is they're investing and they think that within 12 to 18 months this company's going public and they end up with what i call long-term engagements and the marriage doesn't happen. it's going to depend on a fervent ipo market, and it hasn't -- that hasn't materialized yet and that's what i think people are counting on. >> that's a great point. thank you for joining us today appreciate it very much. alan patricof. we have a news alert on a silicon valley venture capitalist what's happening >> that's right, kelly, news here just crossing on peter thiel who has apparently made an offer for gawker, the online news site that, of course, mr. thiel helped to shutter by funding litigation against it. that according to reuters, gawker has been inactive, kelly, for more than a year but is now conducting an auction for the assets that are remaining. many of those assets like deadspin had, of course, bought in 2016. thiel not saying exact lly why wants gawker, kelly, and the value of that bid apparently could not be learned but the headline here, peter thiel made an offer to purchase gawker. kelly, back to you. >> and we'll see what his plans are if he does buy it. josh, thank you. meanwhile netflix shares rallied more than 66% over the past year and a major bank now thinks it's on its way to becoming the second largest media company by revenue our "fast money" traders tell us how high they think the stock could go, next. first, though, the white house taking more steps to make it more difficult for poor borrowers to get loans from banks. banks. richvator. if that is, in fact, the case, next right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass. you or joints. something for your heart... there you go. but do you take something for your brain. with an ingredient originally found in jellyfish, prevagen is the number one selling brain-health supplement in drug stores nationwide. prevagen. the name to remember. welcome back big rally on wall street today dow was up 205 on the bell pretty much went out at session highs with a little late-session pop. the s&p 500 added 19 nasdaq added 58. russell added 27 all four major averages closed at record highs. it's time thousanow for a ns update let's get back to sue herera. >> hi, kelly here's what's happening about this hour, everyone. ford telling owners of 2,900 ranger small pickup trucks not to drive them after finding out an exploding takata airbag inflater killed a driver in west virginia ford says it will repair the trucks at the owners' homes or tow them to dealerships for the work don't drive them hundreds of rescuers continuing their search for survivors in the wake of the devastating mudslides that hit southern california. the death toll now stands at 17. santa barbara authorities originally raised the missing person count from 16 to 48 but then said that that was a clerical error and reduced the missing person number, thankfully, to only eight so far. president trump holding a prison reform roundtable at the white house earlier today. he jokingly answered a question from a report eer about his physical exam tomorrow. >> how do you think the physical will go tomorrow >> i think it's going to be very well i'll be very surprised if it doesn't. it better go well otherwise the stock market will not be happy >> and that is the news update this hour. kelly, i'll send it back downtown to you. >> he said it better go well or the stock market won't be happy? >> yes >> yeah. >> it was a little off camera because that was a pool shoot, but, yes, that's what he said. stock market would be very unhappy if it didn't go well >> oh. >> we'll see. >> following -- i did that -- george w. bush i got to go along for the physical when i was an intern i didn't go in for the physical. you know what i'm saying. >> glad you clarified. >> the motorcade we have a news alert on ibm. deirdre bosa, what's happening >> hi, kelly, ibm announcing it has a new chief financial officer, james cavanaugh he will take the position effective today he's currently senior vp of finance and operations the release does not give a reason for the change or specify whether shorter will be staying on at the company. it says next week web the company reports earnings on thursday both men will be on the call just a reminder here, ceo jenny rometti is nearly seven years into her turnaround plan we'll see if a new cfo helps right that ship. back over to you. >> deirdre, thank you. the white house is reportedly changing decades-old rules, lending to borrowers. >> treasury is seeking to make changes this year to a 1977 law that requires deposit-taking banks to make financial products broadly available where they are chartered. not just to affluent customers and neighborhoods. in a report the treasury published in june, that recommended broad changes to the law, including how banks are graded, and how such communities are defined. a treasury spokeswoman telling cnbc "the community reinvestment act is outdated. it was written in the 1970s before the internet and rise of interstate banking the cra requires modernization to align the goals of the statute and ensure that banks' investments better support the feeds of their communities." it's a law that treasury secretary steven mnuchin and comptroller joseph otting of the occ know intimately, when each of them ran one best bank the bank earned a satisfactory rating from the occ with high marks for lending but low marks for location of branches and hours. otting was grilled by the fed and occ during the sale of the bank with regulators demanding to know how the larger bank would, in fact, serve its larger community once the merger went through. now treasury's currently soliciting feedback from stakeholders they want to make these changes this year. and they expect to issue guidance once they hear from all of those various stakeholders and you can imagine that there will be many of them kelly? >> all right kayla, thank you, kayla taush s tausche. let's bring in the former chairman at wells fargo. thanks for joining us. e wanted your thoughts on this >> it's good to take look look at cra community groups and banking organizations like the america banker association and financial services roundtable and independent bankers association, getting these groups together, say, how can we make it better and more effective >> so this concern about redlining which is where banks wouldn't lend money to poor neighborhoods at the heart of the regulations and concerns people would have about rolling them back. how would you describe today's environment, like where does that fall in terms of it being a concern? are banks going to pull back is that funding going to dry up to those communities >> i really don't think so i don't think there's much redlining going on anymore i think what can concern communities is as you know, many banks are closing offices, particularly in rural areas. and there just may not be banking services there i don't think there's anybody who is -- any mainstream bank who is redlining anymore. we need to do more to help particularly low-income people get into homes we need to help small businesses, particularly minorities and women-owned businesses, who we can do a better job of that i just think we need to broaden our picture here and see if there are things that the community needs that we can improve and go beyond redlining, if you will. >> dick, as somebody who ran a large bank subject to this regulation for a long time, just give us an idea of exactly how it came to be incorporated in everything the bank had to do, in other words, the costs and the responsibilities attached to adhering to cra. how did it maybe disrupt your business or did it create any kind of opportunities as well to be in some areas >> i think if we look -- i think initially there was a lot of concern. and the concern was that the government wanted us to lend money to people who could never pay it back. and i think that concern has gone away, basically and i think most -- let's just say that for some reason cra was eliminated, i think most banks would continue to do what they're doing in the community we think it's good for our communities. we can't be successful as a bank if our communities aren't successful everyone in the community needs to be successful and you do have to do some extra things to make sure because there's, you know, obviously low-income people have issues that others don't. but you can still lend to those people and so i think that cra's been good for the industry and good for america and good for everyone i think it can be better i mean, 1977 is a big -- lots of changes since then and getting people together, all constituencies, is a good idea >> dick, one final question i just wanted to ask you about wells fargo, itself. there -- they've been underperforming, obviously they're trying to put the issues, many issues they've had behind them with tomorrow's earnings release if they don't, do you think that puts pressure on tim sloan in terms of him staying on top and leading this bank forward? >> i don't think it should you know, i've been retired now for eight years so i do not know what's going on in internally in the bank tim is a great banker. i think he can help to solve the issues that are there. i don't think what the earnings are in one quarter or any of the valuations should be a basis for his -- for determining whether he should continue as the leader or not >> yeah. we'll have lot to learn in the morning about how well they did in this quarter then and many others dick, thanks for joining us. >> thank you today we begin -- no we're got going there. yes, we are. we're going to the "takea"takea" long awaited ipo from dropbox. filed for a controversial public offering at long last. remember, it was founded 12 years ago. noteworthy, the first ipo apparently from the portfolio. also noteworthy publicly traded rival, box, rallied nearly 4% today. michael, is the first of a 2018 ipo wave >> it could be obviously, maybe four or six of the big ones, everyone assumes it's a when, not if they come public also interesting that box rallied. i think one of the things it will do, dropbox being public, it's going to create the other comparable company, give somebody an idea to back into what icloud worked within apple. you know, the game starts when you have one of these dominant players. i also happen to think, though, a certain mystique builds up around thee companies that stayed private a long time. >> yes, totally. >> once it becomes public -- >> the mystique is gone. >> that's kind of a funny factor. >> box, itself, experienced that. next, president trump renewed his call for an internet sales tax last night remarks at a signing event, he said the internet, they're going to have to start paying sales tax because it's very unfair what's happening to retailers all across the country being put out of business. they definitely would include amazon, but amazon shares were up nearly 2% today mike, i wonder how much this issue matters to their business anymore. >> it's hart d to see it matter that much. generally amazon collects state taxes. not as much with third-party sellers. it's not purely a price driven, all-in cost decision to shop at amazon. >> not anymore. >> who knows amazon might even eat the tax. you never know given the fact they're giving free delivery and create ed that to be the indust standard, what would happen down the road it's not clear to me the reason the corner store is losing out to e-commerce is because of sales tax. >> night have started with price. now it's about convenience going ifbe a hard thing to trum shoppers in seattle surprised by higher price of beverages after a surtax on sugary drinks. costco is not trying to hide much it will cost them a case of gatorade is now $26.33 how about a case of dr. pepper, instead of $9.99, it's $17.55. costco is reminding shoppers the tax doesn't apply outside of the city i think shows it has their best interest in mind >> right, exactly. they're obviously not trying to gouge anybody. they don't really get the difference it shows the complications of a local tax on a very low-priced product that there's no impediments to getting it elsewhere. seems as if it had minor efficacy someplace. >> also if you're buying one soda, one drink, you're going to notice it. especially if you're in a bulk store like costco, it's doubling the price. they want to make sure everyone doesn't hold them accountable. >> i wonder what a gas station would do if they were allowed to show what the taxes were versus -- >> that's not a bad idea the price is so similar, one station to the next. what are you going to do where are you going to go netflix up 13% so far this year wou. the "fast money" guys are going to talk about whether it's safe to get in now or is it too late. plus hedge fund manager bill ackman made a big move on fees, when the "closing bell" is back in two (daniel jacob) for every hour that you're idling in your car, you're sending about half a gallon like sacramento are investing in streets that are smarter and greener. test test by embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic. then that data runs across our network, and we use it to optimize the timing of lights, so that travel times are shorter. who knew asphalt could help save the environment? ♪ welcome back in case you missed it here's look back at what happened during "trading session" today >> let's begin with the markets, new highs yet again for stocks new records. energy, industrials once again leading. less than 20 points now away from dow 25,500. >> walmart announcing it will increase its starting wage for hourly work ners the u.s. to $11 an hour beginning next month and pay a with one-time cash bonus to eligible bonus and nancy pelosi said it's going be armageddon if this tax bill passes you have more than a 1 million receive more than billion dollars in bonuses >> on both the top and bottom line >> bitcoin is under pressure >> we gave the president an update this morning on trade i think he's very pleased with where tlings are going renegotiating nafta and we expect it will be renegotiated or we'll pull out. >> the dow up 205 points that's the first time all day we have been over 200 points a big rally and a big one based on wall street. how about shares of netflix, finished up another 2% after barclays initiated bullish cover of netflix the second biggest media company by revenue, next only to disney. welcome, thank you guys for joining us karen, you're not a big fan of netflix. of the product, absolutely of the stock, no i love the product for me valuation always comes into play. it seems to be kind of priced in already for big things to happen it's coming the other thing in the barclays' note, they said if sk subscriber growth is higher it could be one of the best they have the first movers, now you're seeing some of the biggest players in the world trying to eat their lunch. so, amazon getting into business obviously, fox disney, hulu, lot of people out there competing for content. i don't know if they'll be able to re-create with this competition, recreate the kind of success they had. i can't get on board with this stock right here. >> steve, make the case. >> sure, i can agree with everything that karen said she's a value player it's like asking where what kind of fish she likes when she doesn't like fish. where netflix was in december, should off all the leaders, kelly, it was down 10%, 9% where it is now? 10% above of where it was on the december lows. still proves there's an apartment tight for growth within this marketplace. you're not getting that growth anywhere else. >> but you're making it pretty clear it's a trade >> it's an investment. longer term. they're cure rating their own data now international growth is compensating for domestic growth. >> all right, guys, thank you. much more "fast money" action 5:00 eastern. don't miss it. news alert on president trump now. what's happening if. >> kelly, the wall street journal has posted an extensive interview with president trump that conducted today a wide-ranging interview a couple of the highlights, the president's comments on north korea, the president here saying he probably has a very good relationship with kim jong-un the leader of north korea, no known contacts between the president of the united states and kim jong-un personally but the president is asked here if he has spoken with kim jong-un the president said i don't want to comment on it. the president also touching on steve bannon, his ousted former political adviser here at the white house, after comments he made to the author of michael wolff. the president said he feels betrayed by steve bannon also, the president talks about two fbi agents here who exchanged text messages that were critical of the president the president says that amount in his mind to treason lot to look over. >> i can't keep up i can't. it's like, the list to go through keeps piling up. thank you very much for bringing the highlights. the investment services on sale more of what's happening at pershing square, next. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. i ...prilosec otc 7 years ago,my doctor recommended... 5 years ago, last week. just 1 pill each morning, 24 hours and zero heartburn. it's been the number 1 doctor recommended brand for 10... ...straight years, and it's still recommended today. use as directed. we rbut we are not victims.ack. we are survivors. we are survivors. we are survivors. and now we take brilinta. for people who've been hospitalized for a heart attack. we take brilinta with a baby aspirin. no more than one hundred milligrams... ...as it affects how well brilinta works. brilinta helps keep platelets from sticking together and forming a clot. in a clinical study brilinta worked better than plavix®. brilinta reduced 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no. thank you so much. thank you. so we're doing it. yes. start saying yes to your company's best ideas. we help all types of businesses with money, tools and know-how to get business done. american express open. zblmpkts welcome back. some breaking news on amd. john ford, what's happening amd out with a more detailed statement on the moves to patch these chips flaws. there are two different categories, there's spector and meltdown with these chip problems meltdown is seeming to affect just intel processors. amd said it was affected by a couple of variants of spector. on one, it was a near of-zero chance of being exploited. the stock is down about 3% on that change in detail. they also say that the issue with the microsoft update that was causing problems for some older amd chips they expect to be fixed by an update coming next week. kelly. >> john, real quickly, are we getting a better sense of the scho schoep. >> kelly, it's hard to say, because these chip flaws were really discovered in the lab it's not clear how -- how much hackers would be able to exploit them in real life. the chip companies initially coming out and saying it's not as bad as it looks given certain estimates on how the patches would slow down systems, they have to make adjustments in how they're affecting systems. i'm not sure, if you were skeptical to begin with about how these things roll out not a lot has changed. still systems that need to be patched. >> all right, john, thank you. again, amd still falling 3% after hours. we turn to hedge fund manager bill ackman who's slicing his fees apparently. >> the fact that bill ackman is slashing his fees should come as no surprise. however, that's because the firm just posted its third straight year of losses not exactly what this is about, though, this fee change has to do with a settlement with allergan shareholders that was recently announced that settlement reached $2020 $0 million. pershing square is lowering its managing fees. it's all about hedge fund accounting pershing square earned an incentive on that at the time. now with this large settlement several years later, that profit is actually a lot lower. closer to $2 billion they essentially overpaid in 2014 ackman decided to lower his management fee to 1.275% for eight quarters the firm is slashing management fees instead of incentive fees because lps haven't been paying incentive fees kelly. >> so, it's been a tough couple of years they saved -- the investors have saved some money on that at least. thank you very much. >> one world town in washington state is experiencing it own bitcoin boom >> kelly, dozens of bitcoin miners have come here for the hydraulic power. after this break, i'll show you behind this door one of the largest bitcoin mining operat n operations in the entire united states don't move 5 o'clock shadow is always at 5 o'clock. you like him. your mom says he's done really well for himself. he has stocks and bonds your dad wants to go fishing with him. your dad doesn't even like fishing. you like your brother-in-law. but you'd like him better if you made more money than he does. don't get mad at your brother-in-law. get e*trade the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. by the way, bitcoin and bitcoin futures were lower today after news that south korea is considering banning all crypto trading, the latest blow to the currency in that country but it's not discouraging bitcoin miners michelle caruso-cabrera is in wenatchee, washington. >> reporter: jeff, pan the camera you can see this is a huge room full of hundreds of servers. there are 1,800 servers in this one bitcoin mine owned by the salcedo group. they have three facilities like this, mining five to seven bitcoins per day when you add it all up, the current bitcoin price is about $2 million worth of bitcoin every month. we've put one of the servers here so you can see how small it is most servers you think are really big, when you think of server farms these are very special purpose built servers. they don't have a cpu, no memory, no data storage. just a very fast chip that calculates all those equations that you need to finally achieve a bitcoin when you solve those equations. we'll show you just how many of these there are, on and on why in wenatchee because these servers require tons and tons of power it uses 7 1/2 megawatts of power, enough to power 11,000 homes. they're trying to get up to 42 megawatts by this summer all of these things generate a lot of heat. we're going to go back here. this is my favorite room because it's really warm and watch this okay back ere, all of the back of these servers feed into this room it's so nice and warm in here, kelly. remember, washington state is very cold. that's another reason they come to washington state and wenatchee, because the cooler temperatures help keep these servers cooler look, another row of exhaust, just showing you to see how vast this facility is remember the pink panther, you see all of this insulation then we'll go back around. and here we go, i want you to see the last room. then we'll send it back to you and here is yet another wide room of hundreds of more servers, kelly this is what it takes to mine bitcoin. the electric bill for this company, more than 100,000 a month. but by july it will be more than $1 million a month. >> that's much bigger than i realized i appreciate that walker they're going to keep mining it all the way down thank you, michelle, great stuff, all day very much appreciate it. michelle caruso-cabrera, in wenatchee, washington, not wisconsin, what's wrong with me? coming up, mike wilson, a wall street strategist, says there's one sector to keep buying in 2018 he'll tell us what it is on "fast money. tomorrow, it's a day filled with promise and new beginnings, challenges and opportunities. at ameriprise financial, we can't predict what tomorrow will bring. but our comprehensive approach to financial planning can help make sure you're prepared for what's expected and even what's not. and that kind of financial confidence can help you sleep better at night. with the right financial advisor, life can be brilliant. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley welcome back a quick clarification on the management changes reported not long ago martin schroeter will become ceo. back over to you guys. >> deirdre bosa out west, thank you. ken griffin in chicago is building a real estate portfolio around the country robert frank is here >> reporter: this is the third real estate price record he's set in just three years. the citadel founder bought four floors or 25,000 square feet of condo tower on the gold coast for $58.7 million. now he's going to turn that raw space into a home. before this he spent $240 million or more for a collection of apartments in a condo in central park south in manhattan. he shelled out $200 million just for the land for a home in palm beach he's building. he paid $60 million for a new penthouse in miami, the most expensive ever, although back on the market is this a lot of money yes. but he made $1.7 billion last year >> is this what he do in his spare time does citadel just run itself >> reporter: it's a level he's never seen before. he would say if you buy the best of the best, it will always hold its value. but we've never seen a real estate binge like this at this level, all at once amazing. >> robert, thank you >> when you have that much money, you have to bring you're allocation up to a certain%. >> reporter: 20%, you've got to work >> thank you michael santoli, thank you as always that does it for us at "closing bell." "fast money" starts right "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm memblissa lee. tonight on "fast," crypto fallout. there's one cryptocurrency that's surging we'll tell you what it is. plus stocks are at record highs and there is one name that's having an incredible start to the year. it could be just the beginning of an even bigger impacticome b. we'll explain. first, a record day for the market, the dow su