Im Stephanie Ruhle. Erik schatzker is off today. Bill cullen is joining me today. Bill cullen is joining me today. I wanted to be similar to santa claus. We are breaking news on the housing market. Olivia sterns is in the newsroom with headlines. The numbers look like u. S. November home sales fell by economist we surveyed were looking for new home sales to rise by about 4. 4 . This is a big disappointment. Thirdquarter gdp showing 5 growth in the american economy. Add to that the disappointing herbal goods orders and durable goods orders. U. S. Consumer spending rose by 6 10 of 1 . Incomes rose by 4 10 of 1 . Those numbers were in line with estimates. The takeaway is that new home sales in a month over month basis for the month of november fell point fell to 1. 4 . I do not think we will see too much of a market hiccup. Thank you for giving us the latest. We have hit a new milestone on the dow, 18,000. It is up a little less than half of 1 after the gdp report earlier this morning that showed the u. S. Economy growing at the fastest pace we have seen in over 11 years. The s p 500 has more than tripled since hitting their market lows in march of 2009. I want to bring in Jeremy Siegel. He says there is room to run. He thinks the s p 500 should be at 2300. Professor siegel joins us from philadelphia. What do you make of this morning . I did predict 18,000 a year ago. While luck should have it, here we are and at that level i still think this bull has room to run. We are much closer to fair market value than we have been any time in the range of outcomes is also more uncertain. I like the tailwind we have from the Oil Price Decline that we have seen in the last three or four months. I think that will make for a good 2015 in economy. Keep Interest Rates low. I am not sure the fed is going to tighten until autumn. That is a good climate for the stock market. Their y have hedged there. You had predicted we would be at 20,000 by the end of next week. What do you think not next week. You said at the end of 2014 at one point. I think we can definitely get there. From 18,000 to 20,000 is about run. Which is a good it is about what we have had this year. Number,eems like a huge but it is not that great. I think we could get there. I also say we have had a long time without a correction in the market. We almost got there with that ebola scare. 2015, a lot of uncertainty. We could have a good first half, a little bit of a sinking spell, maybe a correction at 10 , and then go out the year strong. One has to realize, short run predictions are very hazardous. I can only speak to fair market value. Given the Interest Rates i believe will prevail over the next year, i think the fair market value of u. S. Stock market is about 10 higher than what we have today. What could cause a correction . Tech valuations seem pretty crazy. Overall, tech valuations are not crazy. I believe the tech sector of the s p 500 is only selling for. Bout 15 times earnings less than the index. What we see is some of those alibaba, amazon, twitter, some of those newer stocks not in the s p 500. Those are the ones that are selling on expectations. Overall, it is so different in what we saw in the bubble of 1999 and 2000. At that time, it is incredible to think about it, but the s p five sector was selling at. Early 90 times earnings six times more than it is selling today. I do not see speculation. I see solid values in the stock market and attractive values in the stock market. Given the low Interest Rate world that we live in. What do you think is driving this . Corporate earnings that are exceeding said exceeding expectations . Is it low Interest Rates . Is it a combination . Combination. I think the realization i thought at the end of last year they asked me about the 10 year treasury, i said it is going to 4. 5, were going to start the hikes. I rethought my whole Interest Rate scenario and im convinced that the Interest Rates will go up in 2015, but not nearly as much as most people believe. As bill gross said, the new neutral fed funds rate is going to be around 2 . That is going to be one or two years out. In that environment, dividend 4 ,ng stocks yielding 3 or they are going to start attracting money. People need income. The baby boomers are retiring and beginning to give up on bonds and Interest Rate instruments because they are not high enough. I think that movement from bonds to stocks is going to continue in 2015. Could you attribute another reason to this layout light up because europe is worse than we anticipated . It is true that there is money flowing to the dollar. We see i think against the euro, were going to see it even higher. Europe he the euro, and stocks are selling at 15 to 20 this counts on u. S. Stocks. There is value there. It is a question of how far drug he wants to push the euro in order to spark a recovery. Dollarbasedsk to investors. There are sound values in europe. An unbelievably son sound value in emerging markets. China has come back, but russia and any other currencies when people ask me, next three to five years, what stock you thick is go to do the best . I think the emerging markets as a group will be the best performers. Specifically, where . Im not going to pick individual stocks. If you do not think russia is going out of business, youre getting them at three or four pe ratios. In china youre getting 10 and 11. Chinas growth is not going to go below 3 or 4 . It will be a 6 or 7 grower. Im not going to try to pick particular winners in the emerging markets. A lot of wonderful emerging market etfs you can invest in that spread the risk around. As an asset class, it is attractive, even though u. S. Is going to do well, i think emerging markets, three to five years will get the best returns. Any concern that risk is being mispriced in the bond market . Bonds are too high . Take a look at what is going on with oil. There is going to be headline inflation, perhaps negative come in the First Six Months of the year. This is going to pull prices down. Are we going to see the fed tightening in a zero inflation environment . , they areg hawks leaving the fed in two or three months. When you talk about the voices that are going to be there, they are not hawkish. They will not be increasing the rates anytime soon. That is a wonderful environment for the stock market. Professor siegel, always great to get your thoughts. Jeremy siegel of the university of pennsylvania. Like anotherounds reason why you do not want to be a shortterm investor. If you are a professional investor that has to offer liquiditys, how are you going to navigate this market . Is the opposite of a perfect storm. It is it the opposite of a perfect storm. Ron baker be a day trader. Wrong day to be a day trader. Republicans have reform laws in their sites. There are more than a few bankers who like the sounds of that. Usain bolt may be the fastest man in the world, but that did not stop me from giving him the race of his life. My interview with the sprinter, coming up. You are watching Market Makers yurik. Welcome back. Im Stephanie Ruhle along with my coanchor for the day, ill bill cohen. Republicans are taking aim at doddfrank. Weakening the law is one of the toplican congress priorities. Dean baker, the founder of the center for economic and policy research. Lets start with Elizabeth Warren. She has made wall street public enemy number one. What do you think . It has been striking. The big issue that senator warren was raising was this item in the omnibus bill that passed that took away a provision doddfrank requiring big banks to pull out their derivative trading divisions are you a have to separate them from the insured bank. This was slipped in at the last minute and senator warren set this was a giveaway to the banks. Citibanks lobbyists had written the legislation. She could not stop the bill. The democrats were divided on it. The republicans mostly supported it. It was laying down a marker. She is going to fight tooth and nail. We will see big battles in the year ahead. I want to share comments she made on the senate floor last week. There is a lot of talk lately about how doddfrank is imperfect. There is a lot of talk coming from citigroup about how doddfrank is not perfect. Let me say this to anyone who is you,ning, i agree with doddfrank is not perfect. It should have broken you into pieces. Is that a constructive way to look at the banking world . What fuels the u. S. Economy . What is that . Was a reasonable proposal. Forof the amendments getting the cosponsor from delaware, that would have broken up citibank. Got into this, we mess because of reckless behavior by the large banks. They were bankrupt. If we left this to the market, citibank is out of business. The government stepped in, brought them back to life, and now they are dictating policy. Citibankactly is dictating policy. I do not understand. They literally wrote this item that was put into the ill. Put into the bill. They essentially wrote this process provision that reverses one of the provisions in doddfrank. Is that not what lobbyists do . So you and i can go there with lobbyists and say hey congressman, x, y, and see. Theyeason why they know there is a ton of my behind it. They are getting their way based on the fact that they have a lot of money and power. The reason they have a lot of money and power is rather than let the market put citibank out of business, the government save them. Agree thati can there was an opportunity where the market could have worked its magic and the banks that could have failed would have, but that did not happen. That is history now. Comments from Elizabeth Warren are gratuitous, especially about citigroup. Especially since she was the sponsor of this 21st Amendment Act that is going nowhere in congress. Instead of being gratuitous, which i think she is. She has been gratuitous about the Antonia Weiss nomination. Why can she not be constructive instead of being on her high horse . We have to figure out how lines are being drawn in washington. When it comes to working in citigroup is going to win every time because they have the money how are they going to win every time . Please, let me answer the question. They say, you want support for your Campaign Next time, they are there. Most of the public is not. You need gratuitous comments from senator warren that sharply framed the issue is she because she has to get the spotlight on it. I have been talking about this for years. You would not have me here talking about this as a new issue. She had to make a strong statement. She has to motivate the public. In that context, she has a chance of winning. How exactly do the banks win when they are paying billions of dollars in fines . How are the winning there . It is better to pay billions of dollars in fines and have your bank open up and personally end up in jail bank broken up and personally end up in jail. People passed on fraudulent. Ortgages no investigations, note prosecution. When you are a chilean dollar and, when you are a trillion dollar bank, it is a small price to pay. Is wholdnt we say, here we have, lets run things in a constructive way . Are you going to punish people for things their predecessors did six years ago . I was not a big fan of those fines. I would have said go after the individuals who committed the fraud, but we gave them a blank check and get out of jail free card. Going forward, we should have broken the banks up. Given that we did not, we need vigilance on that. People opposed it, including the Obama Administration. They said, we will watch them. Senator warren is saying, we will have to watch them closely because we know what they do when we do not. Some of what you say, i agree with. We should have been more vigilant in the prosecution of wrongdoing. Raking up the big bank does not make sense. The problem britain up the big banks does not make sense. They were the saviors for the investment banks. Lets talk about Something Else that you and i will perhaps disagree on. You have come out and said you are against the Antonia Weiss nomination. Antonia used to work for me at lazard. I know him to be the kind of person we would need at the Treasury Department in this kind of position because he brings a certain knowledge about the way markets work. Lazard is not a too big to fail bank. Lazard got zero dollars from the fed at the bailout. I cannot understand why a guy with that kind of knowledge would not be the kind of guy that you and Elizabeth Warren could support. I am mystified let me back up. And bank of america both would have gone under as with many other banks. Your plenty of commercial banks that were involved. You have plenty of commercial banks that were involved. Doreference to mr. Weiss, i not know the guy personally. I cannot speak to is he a good person or not. Im sure he is a very good person. The point is, we have a history of horrible regulation. E have regulators many of these people were the brightest students at the best liberal arts colleges. The fact was, the best and brightest ailed us. Failed us. All those people were there during the housing bubble years. We need people who have their First Priority focus on the public. Other mr. Weiss fits that bill, i do not know. Baker dean baker. We will be back. Welcome back to Market Makers. Erik schatzker is off. We brought in a special cohost, bill cohen. Before we get into more time together special holiday time. The top Global Business stories of the morning. A huge read on gdp as we head into the new year. Thirdquarter growth was revised up to 5 . That was higher than the top economist estimate and is the fastest growth we have seen since 2003. One economist tells us the fed probably will not make too much out of this single data point. The fed is looking at a longerterm trend. They will not base Monetary Policy on one quarter past data alone. Given the weakness we are expecting to translate into fourthquarter gdp, around 2 gdp rate, that leaves 2014 at an annual pace of just above 2 . On par with what we have seen the past several years. Not to take away from what weve seen in terms of growth, but looking at that on a longerterm trend, leading us in the range of growth we have seen for some time. The dow smashed through the 18,000 mark after that gdp report. Dow, s p, and nasdaq nasdaq is down sliced down slightly today. Totook less than six months move from 17,000 to 18,000. Hamm will cut spending at 41 . Ompany by that is after the huge plunge in crude prices. Hamm is the founder of Continental Resources which was one of the First Companies to get into shale drilling. Ham tells bloomberg his company is nimble and can adjust to oil price for tuition. Oil price fluctuation. Failed insamarass his effort to get lawmakers to back his nominee for president. He has one more chance. And a vote earlier today, the candidate fell short of 200 ballots. If he fails in the third and final vote, parliament will be officially dissolved. There has been a lot of handwringing about holiday sales. There is one segment that may have held up. Or markets correspond correspondent, julie hyman has been looking at the boom in jewelry sales. I do not believe anyone in my house is contributing to this boom in holiday sales, but other people are. A lot of the jewelry sales are self gifting as we now call it. People buying jewelry for themselves. I spoke to sever quindlen, Sarah Quindlen. She says 421 straight months, we four 21 straight months we have seen an increase in sales. Is 2600ge price point. That has been a big increase over this time last year. People are spending more on jewelry. She says it does express the confidence people are feeling in the economy. There is another data point which looks at this that the total size of this market in the 36 at Jewelry Stores is 36 billion. Who are we talking about . We are talking about a lot of independent jewelers. That same data told us that more exist for0 businesses jewelry sales in the United States. I talked to Sarah Quindlen about that idea of going to an independent jeweler. This is how she explained it. This is the personalized relationship people are seeking. We see this in smaller business spending pulse as well. Which is been wanting this perspectiverom that , people want that personal relationship. It is a trust purchase they are making in the first place. They want to do it from someone who knows them and someone they know. A lot of it is independent. Is that why you would say there has not been more consolidation . There has been some consolidation. Now,u look at signet right as well as sales zales. Been thatas not consolidation. This might be a contributing factor. If you look at tiffany and signet together, they account u. S. Jewelry of sales. It is not a huge amount. Theit im thinking about jewelry im wearing and most of it is from independent Jewelry Stores. Have Commodity Prices helped jewelers . They have had some pricing power. It could help or hurt. It could help on margins but you could also have consumers pushing back and think gold prices have fallen, wiser price of my jewelry not fallen why has the price of my jewelry not fallen . They are not seeing a lot of pressure on what they are offering to people. What is interesting is if you look at the breakdown of what people buy, diamonds is by far the largest chunk they are a girls best friend. Sharetinum is taking a from gold as that becomes more popular. I think 2600 is a lot of money for an average price. It is. Yes. It is. Think any jewelry gets are coming to my house. Thank you for giving us the latest. For we returned, the battle the skies rages on. How does cheap oil factor in . That and more when we returned. When we return. 2014. Are wrapping up when you look back on this year, what are your most standout events . Oh my goodness. I think the