Transcripts For CNBC Closing Bell 20131216 : comparemela.com

but, of course, the contrarians say that's great news for stocks, actually, because when everyone is bullish is when it's time to worry. we'll take a closer look at what 2014 might hold up. >> it's an interesting survey. also, a tragic story that is gripping the nation's attention right now. a carjacking at an upscale new jersey mall turns deadly last night. it was the mall where we did our black friday show, the day after thanksgiving. >> that's right. we were there just a couple weeks ago. >> i mean, a horrible story, taking the life of a 30-year-old man. as it unfolds, just nine days before christmas, could this be another reason for shoppers to pause in what has been a tepid holiday season anyway. we'll have a live report on that tragic story coming up. >> let's take a look at markets at this hour. the final trading hour of the day. the dow is adding 145 points. closed to highs of the session. it's up about 1%. 100 points, bill, isn't what it used to be. the nasdaq and s&p 500. let's look across those indexes as well. the nasdaq bouncing above the 4,000 mark. up 0.8 of 1%. having the best day in three weeks. the s&p 500 adding, not bad, 13 points here. 1788. >> although, i was going to say on the nasdaq, twitter is down 4% today after noted investor dan niles told you guys on "squawk on the street" this morning he's short that stock. "closing bell exchange," abigail doolittle, peter kudla, tom carston, john smith and our own rick santelli. welcome, everybody, here. thomas, i mean, you think the possibility of a tapering is in this market. does that mean that we don't see a selloff if they start using the "t" word on wednesday? >> i think we could see a selloff, but we've really adjusted our thinking this year in 2013 where you used to ray much more severe pullback on news that might be announced, such as the taper. we now see that the market doesn't really pull back as much. so, i think that if they do announce the taper, it could shave some points off. i still think with low interest rates into 2014, stocks are the place that investors want to be. >> david kudla, here's jason writing in the wall street journal today, profit margins are more likely to narrow than widen in 2014. in other words, if stocks keep rising, they'll have to do so on stretched valuations and not stronger earnings. do you agree? >> well, i think that we will see profit margins compress. companies have cut their costs so much and profit margins are now at a record. but with revenue growth, that can increase profits on the upside, which we expect. and with an ultralow interest rate environment, even with rates creeping up here, we think we can have multiple expansion so stocks have further to go in 2014. >> abigail, you think we are headed for a correction, maybe 5%, 10%, no matter what the fed does, right? >> yeah, i do. i think when we look at today's move up in the equity markets, it's probably a brief relief pop before near term drop of 5%, 10%. i think this happens before the fed tapers or not. if they taper, the source is clear. liquidity addicted investors will go into withdrawal. if they don't taper, we're looking at two other factors. first, diminished returns of qe, which ben bernanke has talked about, and second, the ongoing uncertainty of this taper threat. markets, investors, hate uncertainty. and that sort of feed for volatility could really prove to be a negative factor for the markets. plus, the markets are up 30% to 50% this past year. if you've been brave enough to trade that fed froth, i think it really points to taking profits here. >> yeah, john smith, just to go back to this point, i mean, david basically acknowledged that perhaps for the market to go higher next year, it does have to be all on that multiple expansion. do you agree or do you see other forces coming in, or are we going to be able to increase earnings from what have been historically high levels here? >> well, i think when we're looking at earnings, we're looking at straight equities. i think we have to sort of rechange what our focus is going into 2014. this year was all about the rally of price, right? anything -- you wanted correlation and risky assets. going into next year, i think what you want as your themes are asset classes that have a little more of their total return come from income. in addition to that, you want noncorrelated, emerging market, high-yield debt, real estate and even, god forbid, commodities, might tend to do better. with a potential rise in interest rates from a tapering happening, you also want to be looking now more than ever at your fixed income portfolio to make sure you're protected from a rising interest rate environment. >> and, in fact, rick santelli, you've been getting that rising rate on the long end of the curve from five-year note on. the taper talk has gotten a little loud neither last couple of days here. what do you think they're going to talk about wednesday? >> i think the talk has gotten louder. the talk has definitely gotten louder. if you look at three-month chart, that's the last time we closed up this close to 2.09 in a ten. one of the cornerstones is to put investors in riskier asset classes. they have been successful in that. look at barclay's investment grade chart of the spread. it's hovering close to six-year lows. that's reality. look at perception. the etf, not nearly on best levels, even for this year. and i think that really says a lot about what's going on in the taper. it's like wizard of oz. it might be a line, but the courage isn't going to be there. i think a small taper is what's priced into the bond market. the bigger taper isn't going to be good for stocks. i think that's why the federal reserve has been literally dragging their feet. >> you know, it's fascinating to look, bill, at the size of the equity market. the rebound we've seen this year has put the valuations, again, to go back to justin's piece, but put valuations near historic highs relative to disposable income. i guess this 2014 could be the year, perhaps, we start to see some of that distributed, maybe profit margins come down because, you know, heaven forbid, employees are starting to make more. thomas, that world would be favorable, would it not? >> i think so. it's also an issue of managing expectations as we move into 2014. i agree with a lot of points that abigail and john made, which are that i think it's still favorable environment for equities as we move forward. i think investors do need to remain cautious because it is very likely that we see a pullback. but as we've seen throughout this year f we get a 5% or 10% pullback, it will create a buying opportunity for client to get into equities. i think a lot of clients who need that income will shift more from the bond portfolio into alternative investments where we're seeing much more attractive yields. >> abigail, i want to ask you about sentiment. we'll highlight a survey coming up of investors. 40% of whom feel we're going to see a market lower next year. now, i don't know what the other 60%, we're saying we have a breakdown of that. but you hardly have a situation where you have too much bullishness right now. there's still a lot of skepticism about this rally, even though we have the great gains you cited. >> that's a great point. i'm certainly a fan of contrarian analysis. even so, when we think about the 30% run the s&p 500 has had over the last year on this qe3, the extension of the twist, again i think we're at that point of diminished returns. i think if the federal reserve and other central banks have created so much instability within the currency markets, that's likely to shift at some point into the equity markets. we have this unnatural and unsustainable back drop that everybody's taking for granted. even though that survey points to that 40/60 split, i still think this is a complacent market. i think investors feel the fed has their back and nothing will take down the fed. at some point we'll see a shift where investors look at 1.6 gdp growth and slowing bottom line growth. it's just not as constructive an environment as the 170% return of the s&p 500 over the last nearly five years would suggest, in my view. >> at the same time, david kud lashgs on this point, if we have a situation where employment growth has been picking up, same for gdp growth but inflation remains so tame disinflation remains a concern among a lot of policy makers, that remains a pretty good environment for stock investors, does it not? >> i think it does. we have benign inflation environment. we could be at no inflation for years. there's no pressure on the fed to change their policy -- their easy policy they have now. we will begin tapering at some point. that's priced into the market. whether it happens this week or happens in the first quarter. but i think con temporary to abigail's outlook, gdp growth next year, 9% earnings growth, revenue increasing, top line growth increasing, we now have housing, last leg of the economy recovering, auto sales are booming, precrisis levels in autos. and, you know, we just continue to see -- and the sentiment of the average investors out there, the poll that said there are so many that are concerned about a downturn in the market next year. not only contrarian indicator but also important because we need those people that aren't bulls yet. we need to climb that wall of worry. as long as everyone's not a bull, we need that market top. >> i wanted to challenge abigail on that as well. thank you for joining us. even you, cowardly lion. heading toward the close. 50 minutes left here. the dow off the highs but still a pretty strong rally today. it's actually, frankly, got some traders on the floor skramping their head. >> that's true. by the way, we only have ten trading days left in the year, if you can believe it. is the santa claus rally coming? history says yes. up next we'll tell you about the nice gain santa typically brings to investors during that last stretch. and don't hurt the me messenger. a big snowstorm over the weekend kept shoppers home and more is on the way tonight and into tomorrow. >> drive safe. >> now here's a double whammy for retailers. 40% of americans who planned to spend less money this holiday season. we have the man behind that study coming up next. >> an important one. what a year it's been for the nasdaq. yes, it's outperformed the dow, the s&p 500, but will it lead the way in 2014? we'll hear from both sides coming up on the "closing bell." keep it right here. you're watching cnbc, first in business worldwide. [ male announcer ] here's a question for you: the energy in one gallon of gas is also enough to keep your smartphone running for how long? 30 days? 300 days? 3,000 days? the answer is... 3,000 days. because of gasoline's high energy density, your car doesn't have to carry as much fuel compared to other energy sources. take the energy quiz. energy lives here. take the energy quiz. sleep traiends sunday! interest-free for 3 event it's your last chance to get 3 years interest-free financing on beautyrest black, stearns & foster, serta icomfort, even tempur-pedic. plus, get free delivery and sleep train's 100-day low price guarantee. but hurry, sleep train's interest-free for 3 event ends sunday! superior service, best selection, lowest price, guaranteed! ♪ sleep train ♪ your ticket to a better night's sleep ♪ the retailers cannot catch a break. hits keep coming, large and small this holiday season. snore winter storm -- of course, we had one over the weekend which dumped as much as 18 inches in parts of the northeast. now more snow is coming tonight, late tonight, into tomorrow. that's going to put another crimp on some retailers, i would think. >> you're going to do the show from home tomorrow, right? >> i don't think so, but i'll be here. >> well, the holiday shopper overcome these obstacles and make up for short time? joining us with details on american consumer is greg mcbride. what's surprising here for all the improvement in household balances, confidence generally, expectations for spending this year are still sharply down. what do you make of it? >> yeah, you're right, kelly. i think a lot of this ties to the fact that although consumers have seen imprurmeovements of t household balance sheet, they're not seeing a change in the paycheck. that really crimps their ability to ramp up spending. not only on a consistent basis but even for, you know, discretionary purchases or those one-time holiday expenses. >> so, what's the optimism about then if they're feeling better about themselves, i guess they're feeling better we're not in a financial crisis like we were in 2008, but if they feel better about their job, if they feel better about the value of their home, why wouldn't they be spending more? >> well, a lot of this, bill, just boils down to the fact that, you know, they're seeing their net worth improve because of the stock market, because of the improvement in housing. they're not seeing an increase in the paycheck. so they don't have the capability or the willingness to go out and spend money they don't have. people are feeling more secure in their jobs. we've seen an uptick in big purchase items, automobiles and homes, but ramping up spending, they don't have the income to do that. >> you point out the biggest weakness is among households making less than $50,000. what can you tell us about that segment of the population relative to the higher earners. >> that's the thing, it was more pronounced for households with income under $50,000 but it wasn't confined to households under $50,000. the percentage of people that said they were going to spend less this year than last year outnumbered those than those that said they were going to spend more in every age group and income group. it was most pronounced at income levels under $50 thoi. also a disparity that increased with age. reflection of the fact that senior citizens living on fixed income continue to be heavily squeezed, long-term unemployed also feeling the brunt of that. >> when did you take this survey? the reason i ask -- i mean, we had the government shutdown, had you all kinds -- you know, the debt ceiling saga in washington, the fear that, you know, obamacare was going to collapse at some point. was it around that time? i mean, were hen were these peo feeling that secure? >> it's part of a poll we do every month. this was done this month right after the jobs report came out. we saw a lot of effects of the government shutdown that dented confidence in the past few months, kind of in the rearview mirror at this point. we've seen a complete rebound in terms of how people feel about job security, comfort level with debt, but when we asked a couple months ago, what's the biggest factor holding you back from ramping up your spending? most prominent answer was, stagnant income. that's reflected when we see this holiday spending intention. >> final question, greg, kind of to this point, but in years to come will it rely on americans taking home bigger paychecks to fix the situation, or do you get the sense there's perhaps something more lasting here, a damaged psyche from years of the boom and bust? >> well, i don't think it's necessarily, umyou know, the bigger paycheck in terms of a raise at the job you have. in some respects it's having a paycheck where there isn't one now. people that are unemployed that then get a job or somebody who's working part time and that transitions into a full-time job. i think aggregate household level f you start to see greater income coming into the household, that will translate to additional spending. >> and i guess one positive we can look at is at least they're not taking on more debt. i mean f they don't have the income increase, they're not going to spend that much more this year, meaning they won't add to the debt levels. >> we know they're not taking money out of their homes. they're starting to increase using credit card balances. >> but we have seen a slowdown in rate of increase in installment credit in this economy, and this speaks to that right there. good to see you. thanks. appreciate it very much. enjoy florida, while you're down there. >> much more on the holiday shopping season coming up, including mall security fears following fatal shooting in an upscale new jersey mall last night will keep shoppers away? stay with us right here on the "closing bell." meantime, with about -- 40 minutes left in the trading session here, we are hanging onto gains for the most part. the dow's up 146 points. the nasdaq, the one stellar again, up 29 -- almost 30 points now, right above 4,000 level once again. >> there's now a waiting list for tesla. model s in china. if the company can tap that market? a chance to drive away with this stock after 20% decline from the highs. we have a stock brawl coming up next. google acquiring eighth robotics company this year alone. the one they just bought makes robots for the pentagon. is google quietly becoming a military contractor and is that a good or bad thing for investors? we'll take aim at google army of robots. >> that's the one that can beat you at 29 miles an hour. i love him. >> that's coming up on the "closing bell." there's a saying around here, you stand behind what you say. around here you don't make excuses. you make commitments. and when you can't live up to them, you own up, and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most. but i know you'll still find it when you know where to look. anncr vo: introducing the schwab accountability guarantee. if you're not happy with one of our participating investment advisory services, we'll refund your program fee from the previous quarter. while, it's no guarantee against loss and other fees and expenses may still apply, we stand by our word. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. welcome back. shares of herbalife have been halted. do you have the news? >> yes. halted right now. news is pending. we'll bring it to you as soon as we have it. you can see from the chart, it was a good day for herbalife, up more than 3%. we'll watch that closely. meantime, want to give you some other big drivers today of this market, which is up pretty big. some drivers on the dow. exxonmobil moving higher after research note from goldman sachs saying there's an inflexion point in terms reduction and capital intensity in the so-called consumer majors and exxon is going to benefit from that. goldman upgrading to buy from neutral, price target $109. ibm having the single biggest impact on the market today. single best day for ibm since january. expedia seeing a big spike today. colony capital tom baric calling it undervalued compared to peers. he likes the ability to expand with very little capital expenditures. lsi is up big on news after buyout offer from avago technology, to pay $11.05 for each share. hard to find red on the board but tesla is down. down about 0.5%. >> thank you. there is word -- >> i don't know if this is what they've been waiting for but an important story. they announced the completion of the reaudit for the last three fiscal years, 2010, 2011 and 2012, has been completed by pricewaterhouse coopers and they filed an amended form 10ka. >> because the prior auditor had to step down for conflict of interest roonz. herbalife is saying no material changes made. that stock was up better than 3%. it was halted but -- >> we're working on this story. we have scott wapner on this as well, who has been following this very carefully because of the duel between ackman and carl icahn and others have been involved in past years. we'll get scott in here. >> just a note from davidson citing a belgian court case that herbalife won vindicating the business model. will the move to china be a winner for tesla's stock? >> while we're at it, let's brawl on tesla, shall we bring in our bull, matthew and our bearso lead to exponential increase in number of units produced by tesla in the next five years. the market cap of the company, $18 billion. yeah it's had an incredible run but we see $50 billion market cap for tesla in the future. >> that seems absurd. listen, i'm all about disruptive technology companies and tesla definitely qualifies, especially as an ecosystem play. look, the disruption's already occurred. you said it, the stock's gone from a couple hundred million market cap to upwards of $18 billion. that doesn't make it immediately a short sale candidate. disruptive tech companies traditionally trade at inflated valuations. but what i am saying is this, that there's a lot of disruption going on in the market right now. and it makes much more sense to find new opportunities than it does trying to squeeze more profits out of old ideas. i definitely -- >> i'm just -- >> that makes sense. >> -- if that's the case. you can look at what's happening in china and saying isn't the incremental demand there going to be as positive for this stock as any other auto maker? >> yes, you could make that case that the demand is there. you also have to think about this from a fundamental basis. if you look at the other automakers, they trade at price to sales below one yet tesla carries price to sale above ten. they may be ready to disrupt the auto market but does that mean they're going to disrupt the way a business is valued? i don't think so. >> short-term comparison -- >> go ahead. >> i mean f you're comparing tesla to other car manufacturers, that's unfair. tesla is in its own -- >> but they make cars. >> they certainly do make cars. but i think this -- it's more than cars. it's more than cars. it's a brand experience. i think that's re -- it's going to reinforce demand, bring new buyers for tesla's models without a lot of marketing expense. it's much like a starbucks. they don't spend a lot on marketing but able to track new demand. i see that happening with tesla. i think the china story's a big one. i think they'll sell 10,000 to 20,000 cars there in a couple of years and that's a huge incremental increase in production. >> 10 sthou to 20,000 cars -- >> are you investing in the tesla car or in elon musk? >> i think it's -- elon musk is a huge part of the story. i would never want to bet against elon musk. he also owns 23% of the stock. he's a big owner, for sure. he's had a tremendous record of success. he'll take tesla in a direction we can't even fathom at the moment. yes, it's cars but it's going to start reinventing the way consumer transportation, the industry as it is, and i don't think that's -- the stock at $18 billion is giving it enough credit to that. >> i'm not drinking that kool-aid here. i buy on technology, not the jockey. >> keep drinking. >> that was a real brawl. love that. thanks, guys. appreciate it very much. i figured you can't go a whole segment on tesla without mentioning the founder of the company. up 135, just off the highs of the session right now on the dow jones industrial average. >> nasdaq may be a few points off all-time high but it's been the best performing index over the last five years. up next, find out whether the nasdaq can remain red hot in 2014 and possibly regain 5,000 once again. >> oh, yes, that magic number. also, a new poll finds nearly 40% of americans believe this market will drop next year. we highlighted that earlier. we'll hear from somebody who says that's exactly why investors should keep pouring money into stocks. that's still to come on the "closing bell." [ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com. a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪ welcome back to the "closing bell." i'm scott wapner at news desk where we continue to follow this developing story with herbalife and has received reaudited financia financials back. this is a positive move because of what it could mean next. the company has been waiting for several months to get reougaudi financials back. kpmg was the original auditor. they had that problem and moved on with pricewaterhouse coopers. they have filed an amended 10-k for fiscal year ending december 31 of 2012. i have carl icahn live on the phone with us here on cnbc. carl, are you there? >> yes, i am, scott. >> what does this news mean to you, carl? >> well, i was certainly happy about it. you know, i'd like to say that i've never really doubted that this was a viable company. you know, i guess i was one of the few people that bothered to read that report a year ago when they made so much of it. and when you read the report, if you bothered to read it, it was, i believe, nonsense then. and i think all these criticisms are pretty much nonsense to begin with. when you say, yeah, maybe the marketing could be a little better or worse, i don't know. i'm no expert on that. but this company is a viable company for years and years. and i think if you really look into it, it gives a lot of people work that are out of work. so i can't understand these criticisms that these people are being taken advantage of. a lot of people make a living on it, some don't, perhaps. but -- and, you know, it's not a secret their earnings have been increasing at about a 10% clip. if you look at multiples today on the s&p, it's sort of a no-brainer. the s&p had multiples of 16 times earnings. this company, i haven't done numbers recently, maybe ten times earnings. why should this company with 10% increase not be going 20 times earnings? why are the other ones going at 16 times? you know, sometimes investment is just sort of a no-brainer. i think this one, when i bought it, obviously it was. i disagree vehemently with ackman, as you know -- >> the stock as we're watching it live on cnbc, as it reopened for trading, the volume is huge. the stock move is huge. it's up about 10%. it's over $75 a share now. and i think the most applicable question now is, what happens next, right? everybody sort of assumed this was a company that wanted to do a buyback, whether it was a debt-fueled buyback, debt buy out, and they only had to wait until they got audited financials back to make that move. what happens now? what do you do? what happens? look, as far as i'm concerned, i want to tell you, i'm not on the board. i do have confi on that and i certainly can't speak to that. i can only talk about my own opinion. as you know, i'm a big fan of buybacks on companies that i think are cheap. it's a good for a shareholder when you do buybacks. that being said, that's my own personal opinion. i certainly have no information concerning that. but if you ask me as a shareholder, i think this company is undervalued, as i've said for a long time. and i think when a company's undervalued and it has capital, i'm a fan of that. but -- >> but you'd admit, i guess, getting an audited financial back, the next step in this whole affair could be that something happens, whether it is a buyback of some sort, as i mentioned, possibly a leverage buyout. it's easier to borrow money, moi point is, once you have audited financials back. >> well, you don't have to be a ph.d. in finance to figure that out, right? so, look, from my point of view, i feel that those who believe in herbalife, i think some of the doubters were saying they weren't going to get audited statements, but there is no reason for that, in my opinion. and i think, as i've said all along, as i've said over a year, look at the numbers. you have a company growing at 10%, in an industry where they got one of the cheap multiples because of all this noise coming from -- for the most part, from bill ackman. >> bill ackman himself, oe just did another big presentation, carl, at one of the -- the robin hood conference that just wrapped up. it was almost a year to the day we're talking here right now that he first unveiled his short on herbalife. he's just done another presentation at robin hood. perhaps he was one of those out there doubting the fact of what the company could do because they didn't have their audited financials back. >> well, you know, the statement, scott, about -- the statement, often wrong, never in doubt. and i think the case of herbalife and ackman, that is the quintessential example of that statement. >> yeah. carl, i appreciate you calling in and talking to us about herbalife. we certainly appreciate it. an interesting development. a lot of people in wall street were wondering if and when this would happen and if it would happen before the end of the year. thanks. >> sure. >> carl icahn, thanks. >> may have just dropped his sound there. we briefly dropped your sound. >> you still there? >> i am. you guys hear me? >> yeah. we lost you for a second there. we get carl icahn to take a vick story lap, that's understandable. i'd be very curious to know what bill ackman thinking about this whole thing, obviously. >> it's even bigger than carl icahn at this point because there are other names who are in this trade. >> soros. >> bill steritz and soros, we think it is. ackman is already, as he said, restructured his investment there to ease some potential pain of a -- you know, a so-called short squeeze. >> that's what i was going to ask. he did convert -- it was a little less than half of that position from a pure short into a bet on out of the money options, de not? i've got to imagine that those, you know, assuming they were at a strike price well below where we're trading now, are almost worthless, vindicated not only by reaudited financials but the court ruling in favor of herbalife validating the company's profile, the way it does business, just in the last couple of days. >> right. there's already been a lot of pain felt by bill ackman in this particular trade. i don't know how many tens or hundreds of millions of dollars he is down on paper as a result of everything that's happened. because of the herbalife short and the fact the stock has rallied. now sits, as we were watching live, exploding up to $75 a share. i think most people really expected that this was the key thing that will to happen before the next big event could happen. now that the audited financials are in the house from pricewaterhouse coopers, one can only imagine what bill steiritz is thinking and what carl icahn can be thinking about next and what bill ackman is worried about what may happen next. >> a lot of those shorts may be squeezed, as we speak right now. >> up more than 10%. thanks, scott. >> thank you. we're going into the last 20 minutes before the closing bell. the dow off the highs as we're up about 132 points. still a strong rally after some weakness we saw last week. i think it was one of the market's worst weeks since the summer. >> it was. almost time to say good-bye to 2013, but not before you toast a market rally. in recent years, the last ten days have been a good time for the markets. we'll have those numbers coming up next. try to figure out if history is going to repeat itself. >> also, after the bell, it is rise of the machines. forget google glass or google now, google is in the robotics business. take a look at these. coming up, we'll examine if a search is on -- a search giant is on way to become a defense giant. bill's going to race that one. i don't just make things for a living i take pride in them. so when my moderate to severe chronic plaque psoriasis was also on display, i'd had it. i finally had a serious talk with my dermatologist. this time, he prescribed humira-adalimumab. humira helps to clear the surface of my skin by actually working inside my body. in clinical trials, most adults with moderate to severe plaque psoriasis saw 75% skin clearance. and the majority of people were clear or almost clear in just 4 months. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira, your doctor should test you for tb. ask your doctor if you live in or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. you should not start humira if you have any kind of infection. make the most of every moment. ask your dermatologist about humira, today. clearer skin is possible. 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(announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates. welcome back. stocks staging a pretty nice rally to kick off the week. that's welcome news. so far december hasn't been so nice to investors. >> not this year. but is this the start of the long awaited santa claus rally. why are we playing gene autry? jackie looks at recent history and the last ten trading days of the year have traditionally been kind to investors, right? >> good afternoon, guys. that's exactly right. look, the stock traders almanac defines a santa claus rally as proceed pen tis for s&p to rally during the last trading days of december and first two trading days of january as well. since 1980 s&p posted an average gain of 1% during that period, finishing positive 71% of the time. in fact, the index rose more than 1% in 18 of the last 34 instances or 53% of the time. like the s&p, the dow also rose about 1% during the santa claus rally, finishing positive 74% of the time. and the dow was up more than 1% in 19 of those last 34 cases, so 56% of the time we saw higher dow. there's one clear winner. that is the nasdaq, guys. posting an average gain of 1.16%, closing positive 77% of the time. and of the last 34 instances, nasdaq was up 21 times, clear winner, 62%. so, clearly, the winner of the three major averages. the last santa claus average took place in 2012, when the nasdaq gained 3% and the s&p was up 2.3%. the dow jumping 2%. want to give a big thanks to our data team, especially giovanni for digging out these stats. it looks like we could have a positive close to the year. >> there's none better than gio. thanks. hanging onto the gains with the dow up 139 points. the nasdaq is the stellar performer, as we've been talking about, with a gain of 28 at the moment. as the new year approaches, people tending to develop a taste of the bubbly and it seems starbucks is no different. how do you feel about a can carbonated skinny vanilla latte? >> that's what she had. >> i've never been a huge fan. they soon may be served up by a barista near you. yes, carbonated coffee drinks. more on starbucks' move into the bubbles business coming up. 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jordan waxman from hightower is with us, so is chris heisey. what is this about? >> taper yawn. >> taper yan? >> even if they talk about tapering on wednesday, you think the market would take it in stride? >> absolutely. it's all about guard guidance from this point forward. the taper yawn, now it's all about earnings heading into the first quarter of next year. it's also by back to future market, mid-late to 1990s, same macro environment, same microenvironment. >> what do you think? >> i think investors are looking for tax losses, selling bonds. they don't want to take gains this year because taxes are up, income taxes, capital gains taxes. personal deductions have been phased out and most people will have big tax bills to pay in april. >> i feel tax-related selling going on as well because clearly this market has lost upward momentum we had had. every dip we'd seen this year was bought with vigor. we're up today but it remains to be seen if that continues this week. >> flows would indicate the opposite. that is happening, no question about it. but not in terms of the volume that we normally see because there simply isn't as many losses. when you take a look at fund flows into mutual funds as well as etfs, it's been a constant movement in. i suspect more window dressing is happening in terms of buyers and sellers and gains and losses. >> you're right, it's probably in fixed income they're taking losses. >> if you have losses in fixed income, you let them ride well into next year. when money is looking to come into the market for aaa imbalance sheets, it's not looking to treasury flow and u.s. treasury. it's going to look to big caps, mega caps, which have started the rotation right now. i think that continues. >> is that what you're looking at as well? >> completely agree. technology, financials, industry, and on cross the board in the united states. >> what about outside the united states? we're hearing more and more guys come along here with that con temporary play to go to emerging markets. it's been beaten up so much, they figure it has to come back at some point. >> i feel you have to buy international growth. it's two multiple points cheap on the developed side and even cheaper on the emerging market side. chris and i were together talking about emerging markets last time. i would still avoid the etfs and buy consumer-oriented, consumer products companies in the emerging markets. can you find money managers who are finding those locally-oriented companies rather than big company mining companies. >> the only place there's not a taper yawn is in the deficit countries in the developing markets, emerging markets that have large deficits. that's where the taper yawn is. >> the rise in interest rates would hurt them a lot more than here? >> absolutely. >> you're not playing emerging markets, per se, or being more selective like jordan? >> very selective like jordan. country by country, company by company. we want to own what they need versus the actual country itself. the second half of the story might be a deficit developing country -- second half of the year might be a deficit developing country. >> we'll see what happens. good to see you both. see you later. we'll come back with the closing countdown for this monday. after the bell, remember when the future of robots looked like this? yeah, they were always in black and white. well, now this sci-fi nightmare has given way to google's reality. the search giant is the proud owner of this dog-like robot there. it's real and it's ready to go. but ready for what? that's the question. we'll have that story ahead. you're watching cnbc, first in business worldwide. my mantra? family first. but with less energy, moodiness, and a low sex drive, i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron. the only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting and increase in psa. ask your doctor about axiron. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com. 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[ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. all smiles here. four minutes left here. we've had this rally today. we're hanging on. this is the dow. we had a pop first thing this morning. even though the asian markets were down hard overnight. europe came back. there was this turn in the markets. and the dow has since gone positive and went sideways the rest of the day. don't forget, an options expiration on friday. we'll see if this has to be unwound at that time. here we are, up 133 points. the better gainer percentagewise today is the nasdaq once again. well, now it's come back off that high. the dow was up 0.85. 28-point gain there. still back above the 4,000 level. two stocks to highlight, twitter. dan niles, who nailed the facebook trade back when, is now saying -- he told us on "fast money halftime report" today said he's short twitter and that took the wind out of the sails of twitter today. it got to $60 about the time the market opened this morning. when dan came on the air, he was saying he was short and the stock is down 4% today. very quickly, one more herbalife. it was halted up. saw it here live on cnbc with carl icahn, when the company announced pricewaterhouse coopers, their new auditor, has completed the reauditing of the last three fiscal years, it's signed off and the stock is up almost 10% as we head toward the close. we'll have more on that coming up. it's greek day at the new york stock exchange. that's why we invited peter costa but we're mistaken. you're italian. >> my daughter is about as close as i've gotten to greece. she was there. >> we're glad you're here anyway. what is this rally about? what is the market telling us? is this a bounce off oversold condition? >> people are saying it's a bounce but i'm looking at it more positively. i think people are starting to realize, we'll have a tapering at some point. let's put that out of the picture. most of the economic data we've gotten over the last two months has been pretty good. >> it has been. >> i think some people are starting to look at it and say, you know what, we're going into 2014 with some really positive -- positive news. i mean, you know -- >> but we haven't hit the metrics the fed has set for itself at this point. we are not at 6.5% unemployment. and maybe more importantly, we are not at the 2% inflation rate that they have set for themselves as well. we haven't gotten to those levels. do they start talking about tapering even though we're not there yet? >> well, you know what, the thing about inflation and getting it to 2%, to me, i think that's a very -- a very serious issue. i've been reading more and more reports that we're almost -- there are some signs of a deflationary period, which i think would be horrible for the market. i think it would be horrible for everyone if we go into that. so, i'm a little concerned about that. i'm not concerned about getting to 2% inflation level. i think, you know, the fed is, i'm not. i think the unemployment numbers, i think, we'll get to that point. i think it will get to it faster than -- you know, if you look at charts, it doesn't look like it's going to get there until 2015 but i think we'll get there earlier. >> what are you going to do ahead of the fed announcement? the news conference, the whole thing on wednesday. >> you know i'm long this market. i sold out a little when we mp higher. it's a trading environment. the next ten trading days are going to be a very narrow band. up 130 onedy, down 150 another day. it's going to bounce off these levels for the rest of the year. >> we've got the expiration on friday, a quadruple witching, very, very volatile and interesting on friday. >> yes, it will be extremely interesting. it's also a great day for brokers down here because that's usually when we're our busiest. >> that's when you get that volatility coming in. say hi to your daughter. >> i will. >> up 132 on the dow. up 28 points on the nasdaq. on what is this rally? what is it all about? what does it mean? where do we go from here? all questions to be asked coming up on the second hour of the "closing bell." with kelly evans and company. wait until you see who's on the panel today. i'll see you tomorrow. welcome to the "closing bell." i'm kelly evans. a big rally on wall street to start off the week. has santa claus finally come to town? here's how we're finishing. take a look across the major indexes as dow adds 130 points, just shy of 1%. the s&p 500 up by two-thirds. nasdaq up 25 points. there was late-breaking news on herbalife and bring in our panel, dan green, michele, patty edwards from u.s. bank in seattle. dominic chu. welcome to all of you. >> thank you. >> patty, yir remote and in seattle, maybe the view is different there. why the strong start to the week? how much do you read into it? >> you know, i think if you look at the economic landscape, things aren't that bad. we had a little pullback last week. you're starting to get a little hope about what's coming in the future. you're seeing some m&a. it's been picking up over the past couple of months. i think that goes forward. >> dan, m&a-driven boom, what do you think? >> i don't think there's going to be an m&a-driven boom that explodes six years into the expansion. but from a valuation perspective, it's hard to make the case things are more attractive than a year ago and that did not spur on the boom we're talking about. >> patty said something about -- did you just say six-year, dan? the point, we're about to enter, potentially, the sixth year of this bull market. that is extraordinary, is it not? >> it's huge. >> the reason everybody feels so reluctant about it, it's climbing a wall of worry, a cliche for the markets. what it comes down to for investors is you have a lot of forces at work, not the least of which is central bank intervention on unprecedent the scale all over the world. as long as that's in place, this still could have legs to go higher. that's what all the experts tell me. what it comes down to, how are the marks going to react? i don't even say. when the fed pulls back on stimulus. >> that's hovering over this week. >> don't you feel like we could be in a reinforcing cycle here? we started to get hints about the possibility of fed taper because of economic taper, then the budget deal. market doesn't crack. everybody sees, the market doesn't crack, maybe it's priced in. maybe it's not going to be so scary. then the herd mentality that piles in. >> a lot of our viewers and us on the panel focus on the equity market but the -- as compared to before the taper talk when the yield was 160, the ten-year yield is closer to 2.90, so you've held onto some selloff which does suggests, doesn't assure, that if you get more talk going forward, you won't necessarily see similar level. >> here's the interesting thing about what happened this summer. the ten-year almost had a little taper or you could say financial conditions tightened, we went from the low of 1.6% up to almost 3.0. dan, is it too soon for us to declare that did not actually slow the economy? that it was okay, we survived? or, you know, we turn a corner in 2014 and then the slowdown really hits and we say, we should have realized at the time? >> i think it's generally okay to say that things that happened in the spring and summer haven't slowed the economy, whether it was the shutdown or spike in yields. growth is not going to be good in the fourth quarter. almost surely going to have a one-handle. when you look into estimates for 2014, btg expects growth to be around 12.7%. that's a pick up from what we've seen this year. >> i was going to say, what's significantly different this time around is that first talk of taper, do you remember what it caused in the emerging markets? it looked like india would have a balance of payments crisis. that was an recall warning to them. they did lots of things so this time around you don't see the same impact. when you don't see that negative ripple effect, don't get me wrong, some places will suffer, i think it gives people a little bit more comfort about going into that environment. >> what about the u.s. shores? one thing we talked about when the taper talk first started happening in may is this idea long term rates were heading higher. the real question is how they were going to affect housing recovery, the fragile housing recovery, and so far we haven't seen any real signs it's cracking. quet is, if 30-year fixed rates go all the way back up to 6%. >> there are plenty of people who say 2014 could have a more material slowdown in a housing market. frankly, it's the commercial residential -- i mean, commercial real estate side of things that start to look pretty strong here. guys, hold that thought. let's bring in guy adami from "fast money," when you look at these markets, what do you think here? >> the market doesn't want to go down. it had every opportunity last night, with the s&p and 20, 25 handles. it felt as if it wanted to test down to that 1740, 1750 level we talked about. reversal on good economic data out of europe. the market wants to go higher for whatever reason. in terms of this taper stuff, i've been in this camp for a while. i think it's torpedo full speed ahead. i didn't think they would taper in the fall and i don't think they'll start any time soon. they might jump on it a little bit but actions speak louder than their words and their actions indicate to me they're still going full ahead with this. >> guy, why -- >> can i -- >> patty, go ahead? >> i'd say, i agree. it all depends on how they taper and when they taper and what the message is coming out of these meetings. if they don't taper, i think the market rallies. if they taper with moderate growth expectations, i think the market rallies. we're saying if the market -- if they say they're going to taper and strong growth, that's actually a downside. that's probably the only situation that's not priced in at this point. >> boston dynamics is making these insane robots. did everybody see the videos? we know this is in development but to see the extent to which the technology is here, they'll do incredible stuff with it. guy, what do you think about buying a google here? >> listen, we've liked google for a while. after the last earning release when the stock exploded to the upside, it would take a pause. it really hasn't, never really looked back. i think google, to me, is one of the stocks that still works on any tape. we've talked about that a lot on "fast money." valuation is reasonable. i think google is fine on a benign taper. >> quick question about the nasdaq generally. it's often been looked at as house of momentum names, social media names, high fliers u the ones that do really well on good days in the market and poorly on others. yet we start to look back and realize maybe over the last five years, the nasdaq actually outperformed or may be the place you want to be to almost be defensive when it comes to what the fed does or doesn't do. what do you think about that, guy? >> don't think you're being defensive. i think there's some interesting names. i think there have been tremendous trading opportunities. i can't believe that we've gone eight minutes and we haven't mentioned twitter yet. i thought the price action in twitter today was really interesting to watch. opened around the highs, spent the rest of the day trading lower. interesting volume. we'll see how the rest of the week pans out. i know there were comments out of folks about twitter being unreasonable valuation. i agree. i think facebook finally did what it needed to do. we talked about that. the last time we were on we said facebook should trade up to 55. and lo and behold, that's what we got up to today. do you chase it here? i don't know. trading is all about getting in front of these moves, not trading them after they've happened. >> guys, stay right there as well. want to bring in steve grasso joining us off the floor. steve, can i ask you about this herbalife news right before the close. the stock's up 10% today. >> that one has crushed many, obviously, on the short side. this is a stellar example of when you're in a stock, the upside for short, the risk is unlimited. it's the buyers versus sellers. i hate to get primitive about this. >> it's cultish. >> you have momentum on the buyers' side. every time the shorts think they're going to seize the day, it only gets magnified with every ratchet higher and squeezes them and gets more painful. >> what is the vise around bill ackman's head at this point? >> he restructured this short trade, bill ackman did. it's no longer short shares borrowed with infinite losses. he bought put options, that limits your risk to what you paid for those options. that's why it's important. he may not have as much of -- >> but it's got -- >> he also learned his lessons, too. fund managers don't need to disclose when they're short other than piling on and letting people know, talking their book done. i think that was the major thing that came out of that. >> he still has the short position, though. he reiterated with 100-page presentation why he was short. whatever amount he spent on those options, i believe $1 billion short, you know, unless we turn -- you know, unless herbalife halves from here he's not going to be in those options. >> even though the market did well today, i feel a lot of clients are definitely getting ahead of the news. as guy was saying before, trading before it actually happens and locking in some profits. if we hear no taper, knee-jerk reaction, market goes higher, but we probably level off. probably a sell the news event. >> if herbalife is more of a cultish stock, what is the broader? >> i think we're heading higher. i think most guys are lining up because they think this market should be bought. i think they're waiting until the foot comes off the pedal. i don't see that in sight. who knows when taper happens. it will eventually happen. >> let me add real quick, there's a lot more going on here than just the amount of bonds the fed may or may not be purchasing. so, the initial reaction might be knee-jerk up or down whether they buy 85, 90 or 75, but the fact remains there are other xoen ebts that make it a much more nuanced conversation than a lot of people are giving it credit. >> give us some examples. what's the most important thing in this market? >> for instance f the fed were to say tomorrow -- or wednesday, they're going from 85 to zero instantly, your initial thought would be, that's terrible for the market. if i were to tell you the fed was going to add to that a promise not to raise interest rates until the unemployment rate got to zero. that makes if a much more difficult conversation. while obviously i'm talking about the extreme scenario, it does -- >> i'm going to bet the market goes negative on that, dan. >> yeah, exactly. guy, final thought? >> final thought is -- i'm in steve's camp. i'm a reluctant bull. i think the market, the foundations of the market should be earnings, earnings, market and market revenue growth. i'm not sure we have that. the bubble doesn't exist in equity valuations. the bubble exists in $4 trillion balance sheet. it's right around record highs. that's what you should be worried about. in the meantime, the market has improved today, it wants to continue to grind higher. >> i think dan really likes that point. >> guy, i love you up. know that. but margin debt is not a signal of a top. it is entirely related to the price actions. if the market goes higher, margin debt's going higher. if the market comes down -- >> patty, quick question. do you think we'll get a melt-up in high-flying names to the end of the name? >> the high-fliers are the ones with extended valuations. we're looking at this as an opportunity to maybe see a rotation into the large cap names with the lower valuations. and, therefore, you're getting a better deal in there. >> great. thanks very much, guys. especially guy and steve grasso. you can catch guy on "fast money" at 5 p.m. much more ahead on this program. more on the rally coming up. after the break u a new survey showing investors not so bullish on stocks in the new year. that's right. this is actually a good sign for markets. stick around. many have cashed in on the reverse psychology of the stock market. that's coming up next. raytheon, north rupp grum mond and now google, is the tech giant on the way to becoming a major defense contractor? interesting question. keep it-t here. we're aig. and we're here. to help secure retirements and protect financial futures. to help communities recover and rebuild. for companies going from garage to global. on the ground, in the air, even into space. we repaid every dollar america lent us. and gave america back a profit. we're here to keep our promises. to help you realize a better tomorrow. from the families of aig, happy holidays. welcome back. herbalife is a big win other a big day for the bulls. jackie has details. >> let's start exactly there, with herbalife. stock halted in last hour of trade and spiked on news it completed reaudit for fiscal '10, '11, '12 from pricewaterhouse coopers with no material changes. that was the key. the company had been waiting for this for several months and seen as a positive on the street as the company looks to move forward. lots of questions over whether it had a viable business model, specifically between carl icahn and bill ackman. a quick note on volume. dwubling 30-day average volume into today's trade. take a look at shares of aircap holdings as well. a big day on news it's going to buy aig's internal lease finance unit, seeing more than 30%. oncomed spiking on news it's added to nasdaq biotech. we have breaking news on boeing. phil lebeau with details. what can you tell us? >> breaking news from boeing. a big dividend announcement from boeing. increasing dividend by more than 50%. it will go up to 73 cents a share. at same time the company is announcing a share repurchase of $10 billion. again, a share buyback of $10 billion and 50% increase in the dividend to 73 cents a share. back to you. >> yeah, phil, it's happening so often, we need to start having a nickname for dividend increases and buyback programs. those that couldn't see the chart, boeing shares are up about 2%. thank you, phil. stocks hitting record highs. according to a new survey, investors don't expect that run to push into 2014. poll showing 39% predict stocks will drop. only 14% think the year will end higher. guys, thanks for being here. >> good to be with you. >> hank, you can't really invest on a survey like this alone, can you? >> no, you can't. but i think it is indicative of the continued anxiety that's out there. the fact that we're nowhere near any levels of greed from a sentiment standpoint that might get you worried about frothiness. the reality is, this is one of the most hated bull markets of all time, for the past five years, no one has believed in it. >> scott, what's troubling as well is for people that haven't believed in it, maybe haven't participated in it, they keep looking at indexes at or near highs wonder if they get burned again. what do you say about that? >> we would take the other side of that. this is a one-time survey of 1300 people and it doesn't have a track record. we would rather look at investor intelligence survey, which is indicating adviser sentiment is at decade highs. we would take that as a contrarian indicator. that combined with multiples right now, which we think are extended, especially if you look at schiller norm azed pe at 25, historically it's 16.5. what that means is, you know, over the next couple business cycles, you can expect 1.3% from your equities. we would -- we would throw out equities in terms of fixed income, especially on the short end and intermediate portion of the curve. we think there's a correction in the market. but we are bullish on the economy. >> now, i mean, that's interesting. again, people can argue back and forth on valuation and what metrics you choose, scott, but to talk about saying that you like some opportunity in fixed income here, can't they both do well in this kind of an environment? >> yeah, absolutely. i mean, 160 billion has come out of bond funds in the last six months. there's another contrarian indicator for you. you know, we see a lot of value in corporate bonds on the short end of the curve. equities can come off 4% to 7 % and still be in a bull market and continue higher. i agree with that statement. >> i mean, hank u, how much higher potentially do you think equities can go? especially if we're at a time when corporate profits have peaked, perhaps they'll start to be forced to hand more of their profit share over to consumers, maybe a good thing from the cycle point of view, but what's the price target as you look a year or so out? >> well, look, you know, i don't think you can make the case necessarily that corporate profits peaked. if we get a stronger economy next year, i think that translates into slightly higher earnings. look, i don't think we can expect another 25% year. but a 10% to 15% year, i think, is certainly very doable next year. and i would argue from a fund -- a flow of fund basis that we had five years through 2012 with massive outflows of equity funds, inflows into corporate bond funds. we're only in the very beginning of reversing that. so, i think we have a ways to go. >> we'll see if the average investor comes around to that view. guys, thanks for your time. appreciate it. >> thanks, kelly. >> google leaping well beyond humble beginnings as a search engine. coming up next, will google of boston dynamics, which makes the world's fastest running robots, will it catapult google to big league of defense contractors? 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(vo) so do we, business pro. so do we. go national. go like a pro. google buying military robot maker boston dynamics. josh lipton, these are not scenes from the new star wars movie, right? >> no. they could be. you know, they're very fast. i've heard some saying they look like they came from the set of the terminator movies. they're fast, agile, very life-like. google isn't saying exactly what the purpose is. what i've seen is they're going to obviously fulfill the military contracts of boston dynamics, which is the company they just bought. google is not interested in becoming, obviously, a military contractor itself. but they're not saying about what their ultimate purpose is. they confirmed they bought the company but they would not get into specifics about the price of the acquisition or the purpose. i've seen reports that maybe with with technology their targeting manufacturing. they could also be looking at rivals like amazon. remember, amazon in that q3 earnings they rolled out 1400 robots in their warehouse. a little unclear as to what the purpose of the technology is. >> and josh, stay right there for a second. michelle, if you buy a company that is a defense contractor, doesn't that make you a defense contractor? >> i don't think they think of its a defense contractor. they think of it as robotics company. google is obsessed with robots. we know this because they have ray kcurr on the staff, founder of singularity. >> what is this -- >> this concept -- it's a place that google has backed. also ray curr, one of the greatest thinkers of science in our time right now, believes there's a singularity coming when humans and robots are almost the same. we'll have a human map of the brains and computers will move so fast they actually have feelings. so, this is -- what are they going to do with this? i don't think they know what they're going to do with this. they think this will make search look quaint. >> let me read this for a second if you want to know where google's playing when it comes to sectors. they've got google ventures, google wallet for finance. chrome cast, microsoft, android phones. google green for energy. guys, the list goes on and on. >> can i just say, as one of wall street's preeminent forecasters, this is only going in one direction, it's the complete and total domination of human race by robot overlords. i want to go on record saying, i have the greatest respect for them and whatever you need, i'm in. >> sky net will come on line, too. >> dan, is this a buy, sell or hold? you're missing the important -- >> buy a robot overlord all day. >> i suppose, dom, this is a situation where you kind of have to buy into the space if you believe this is where progress is going because what's going to stop it? >> it's not just that. i will bring just the objective stock price of the company into this whole thing. google has not been getting momentum tesla has gotten this year. it hasn't been getting the headlines like net flikts fliction has gotten. google has been a consistently fast growing company ever since their ipo. they're getting into a lot of impis lin business lines. it's the reason that stock is $1100 per share. >> incredible. breaking news. let's get out to scott cohen who can tell us what's going on. >> more news in the madoff probe, particularly the jpmorgan as spektd of it. we've been reporting jpmorgan and federal regulators on the verge of a $2 billion settlement. part of what we learned the feds are looking into is whether jpmorgan impeded regulator, office of controller of currency, which was investigating this. confirmed by treasury inspector general which subpoenaed jpmorgan earlier this year after being told by the controller of the currency it had issues. this office was looking into allegations made bit occ that its oversight of the bank was being impeded, specifically with banking services to madoff. subsequent to that, they got information from bernie madoff himself which they followed up on as part of this subpoena. we are told, again, this deal could be wrapped up in a matter of weeks with potential deferred prosecution criminal charges that would be put off and a $2 billion fine and penalties. kelly, back to you. >> scott, thank you very much. guys, to the panel, i know just a quick question on this. we've got another -- jpmorgan again. any thoughts, dom, on whether or not this is going to be -- if you look at the company's share performance -- by the way, madoff headlines, regulatory fines, all of that not notwithstanding, it has continued to move higher. what do you do with it at this point? >> you hit the nail on the head. the company set aside tens of blgs to deal with litd gags. the stock price is relatively speaking higher than it was several years ago. and assen investor, don't think there's anything meaningfully different from the madoff settlement. >> the huge thing is, again, dan's point here is that they've reserved a lot of money for all of this litigation type related activity. so to think this is going to have that adverse an impact on jpmorgan may be a little naive. >> shares not moving much after hours. pat y though thoughts on financials? >> they've been under a cloud. they're continuing to come out from under that cloud. rising interest rates. that gives you spread. i think it's actually a positive for financials to have most of this dust cleared away. >> we'll see if that actually happens. guys, thanks very much. we have to take a quick break. word of deadly shooting at high-end mall is rocking holiday shoppers. we'll talk to retail experts sizing up the fallout. 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[ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. strong and nearly three months. mohr thompson, a nice way to start the week. >> it certainly was. a couple things driving the markets today. of course, we had good economic data starting over in europe. with german manufacturing data. then strong economic data here as well. industrial production and capacity was stronger than expected. add to that a couple of big deals. we have the lsi being acquired by avago and. all of that combining to drive the dow, the s&p and the nasdaq to the upside in today's session, kelly. >> been a big year for asian companies buying u.s. names. there's some charter whether m&a will be a driver into next year, perhaps. >> it's interesting to see. david faber had a great interview of rob kinler of morgan stanley earlier today. his one concern going into the year, valuations have climbed so significantly and whether that puts any kind of a cool on m&a activity going into 2014. certainly a number of people have been waiting for it because they've been saying what we're missing is ceo confidence as you continue to see better data, you think that would drive ceo confidence. now have you to deal with slightly higher valgss. >> you're right. i'm just thinking that combination of easy financing. even kroger today raising debt for their acquisition. everyone i've talked to, confidence is maybe finally there, maybe that will overcome higher valuations. >> if you talk to any bankers, they say there's been a lot of talk, a lot of talk. they're just waiting for -- >> the action. >> -- the action, exactly. everyone's waiting for the action. i think once you get an idea of what the fed is going to do, the health care law in place now, we'll see whether or not that gives people any impetus to do more deals in 2014. >> in the meantime, we'll cue up toby keith. mary, thanks. two suspects remain at large after a deadly carjacking in an upscale mall in new jersey. brian thompson covering the story all day long in front of the essex county courthouse. what's the lateest? >> kel y here in newark they put a $10,000 reward for information leading to the capture of who they believe two suspects who drove into the mall at short hills, probably the highest upscale mall in new jersey last night, and then proceeded to cruise the parking lot. they found their suspect, their victim, a man and his wife, who had finished their shopping around closing hours at 9:00. walking to their suv, a range rover. they jumped out. they accosted them. he apparently struggled with them. they shot him in the face and he died a couple hours later. she was unharmed but then they made their getaway in their car. the car was recovered. that's a huge clue here for lawmen, the essex county prosecutor. they're putting all the man power they possibly can at this hour. >> people are wondering why the guy struggled so much, but perhaps to do with the fact his wife was already in the vehicle at the time? >> yes, she was. she was ordered out of the vehicle at gunpoint. you can hypothesize all you want. young man, 30 years old from toms river, new jersey. you know, it's always possible that he just wasn't going to put up with this and didn't realize how fatal the encounter could turn out to be. no children, which is good news. sometimes people think they're invincible. >> i'm sure. probably caught so offguard by the whole situation. brian, thanks much. appreciate your time and that update. last night's mall shooting added unwanted pressure -- also put unwanted pressure on retailers, we should say. not only seeing sluggish holiday sales. my next guest says last night's reason is another reason for customers to shop at home, or at least not shop at the mall. eric beader joins us. to what extent do you think an isolated incident at one place will have a knock-on effect to keep people away from the shopping malls? >> this is very scary, a high-end mall and shoppers worst nightmare. most have tons of gifts and they're afraid someone will steal them. this is scary for malls. i think we'll see some action on the mall community going forward. >> what do you think the mall community can do? they're fighting a battle both inside the shopping plaza, now outside. you know, there's already ramped up security in a lot of these malls. we've seen violence, seen shootings there in the past. to some extent, you can understand why people these days feel uneasy about going there sometimes. >> you have to add more security cameras, a deeper security presence. you're right, you have to have a balance define an enjoyable shopping experience and being in a securitized state. i think we'll see a little more going to securitized going forward as opposed to where we are now. people can do this online, shop online. they'll look at this as why do i put myself going through the hassle of shopping at a mall and, worry about my livelihood or everything i buy disappearing. >> what can you tell us about foot traffic trends so far this year and during the holiday season so far? >> this has been a tough year for retailers. foot traffic has been down, almost across the board. people that are succeeding, they're succeeding off low expect takings. you've had poor weather, too much inventory. this is a year when most retailers will look back in 2013 and say it's a year to forget. >> final word, i mean, what do you do then as an investor? are there names that would look more attractive here? >> you have to look at next year, use your comparisons. look for high quality names that have been beaten down, that have strong management teams that know how to run inventory. names like american eagle or express where they've been beaten down and you can take advantage of the fact investor sentiment is weak and it's not going to get stronger for the rest of the year. >> thank you so much. appreciate it. >> thank you. breaking news now from washington. top executives are heading to the white house tomorrow. eamon javers, what are for? >> it looks like this is a blockbuster meeting of some of the top technology investor at the white house. a white house official telling us they'll be meeting on two of the most contentious subject this is white house has to deal with. both healthcare.gov website will come up in this conversation with president obama and also these national security disclosures from edward snowden. that's been such a tricky topic for some of these executives in the technology space to work with. so the white house saying they want to pick these executives' brains and they also want to, apparently, take their temperature a little bit on the nsa disclosures and where all that is going. >> do you know who is all involved? >> a stunning list here. tim cook of apple, marissa mayor of yahoo, sheryl sandberg of facebook, randall stevenson of at&t and on and on. there's about a dozen or so ceos and top executives on this list. it's going to be a big high-power group at the white house tomorrow. >> i wonder to what extent the ruling today the nsa surveillance has potentially -- is unconstitutional will come up in conversation as well. >> obviously, that will be a big topic. of course, the judge in that case stayed his own ruling here, so the government has an opportunity to appeal there in terms of gathering metasddata o americans of their phone conversations overseas. that's one that will be ongoing. it boggles the mind you could have a single meeting with this number of principles and the president of the united states and touch on these two incredibly hot button, contentious topics of the health care rollout, nsa and edward snowden. very difficult topics. i would love to be a fly on the wall in that meeting tomorrow. >> or a drone. >> yeah. coming up, the cnbc.com hot list. plus, starbucks wants to put fizz on its balance sheet. the world's largest coffee chain taking aim at multibillion carbonated drinks business. looking at covered call strategies to generate income? 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[ male announcer ] open an account and get a $150 amazon.com gift card. call 1-888-330-3136 now. optionsxpress by charles schwab. b. call 1-888-330-3136 now. welcome back. we've told you that since the spring, starbucks has been experimenting with carbonated drinks like ginger ale and root beer. it's not just beer. turns out it's not just soda. sarah, first of all, welcome. >> thank you very much. looking at consumer giants like star bucks and fizzy coffee. >> have you had fizzy coffee? >> i have not because it's only available in some select locations in the u.s. i have had carbonated hot ginger ale. that was in japan only. starbucks letting you carbonate your soy macchiato. only offered in a few select locations. i talked to starbucks today and they are encouraged by the results that they are seeing. they are finding that people like to know what is in their sodas or carbonated coffee or tea. you go in and order your traditional coffee. they press a button for carbonation. it's not on the menu. i talked to some analysts about this. they are optimistic about the carp nated market. they also liked the fact. in other words, starbucks gets a majority of its revenues early in the morning. >> shocking. >> this is is a whole new area for them. >> i did a profile of soda stream this year. what made clear to me is, italians like soft carbonation and americans like big carbonations. >> that gets me to japan and singapore. i recently returned and i had their hot ginger ale. the world's first hot carbonated beverage. it is delicious. >> it doesn't hurt to drink it? >> i don't drink coffee. this sounds like punishment. >> you can carbonate ice. >> i drink orange juice. >> americans love soda, people love soda but they are more health conscious and more aware. >> sparkling water, america in the last couple of years has suddenly embraced sparkling water. you couldn't ask for this stuff and now it's everywhere. i wonder if this speaks to it. we know diet soda sales have been going down. i wonder what this means for soda stream? people feel like maybe they don't need it at home? >> soda stream has had enormous success with this. >> i love soda stream. we gave me my one and she still uses it. >> this doesn't seem like there is is a high barrier of entry. if it proves successful at starbucks you will see it immediately elsewhere. >> you know how complicated it is to order at starbucks. do you want soy, skinny, tall, grande, fizzy? >> can you walk into any star bucks? >> no, only austin and atlanta and still only select ones. if they are testing it now, don't expect it mainstream until 2015. starbucks don't have any commitments to officially launch this yet. they will just see how it does. >> it's kind of like beyonce dropping out of instagram. >> more closing bell, thoughts and tweets next. keep it right here. so as his financial advisor, i took a look at everything he has. the 401(k). insurance policies. even money he's invested elsewhere. we're building a retirement plan to help him launch a second career. dave's flight school. go dave. when people talk, great things can happen. so start a conversation with an advisor who's fully invested in you. wells fargo advisors. together we'll go far. wells fargo advisors. 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(vo) so do we, business pro. so do we. go national. go like a pro. where does the united states get most of its energy? is it africa? the middle east? canada? or the u.s.? the answer is... the u.s. ♪ most of america's energy comes from right here at home. take the energy quiz. energy lives here. >> welcome back. we will get to some final thoughts and before we do, we accidentally aired a piece of music with inappropriate lyrics. that obviously should not have been on the air and we deeply apologize to you for that for any offense that it could have caused. a market day that surprised a lot of people. >> it was a really good day. of course the whole issue is what happens on wednesday? it's hard to believe that the nearer term action, the next few weeks won't be entirely decided on wednesday afternoon. >> by that. what do you make of this when you hear we're in the final ten trading days of the year? is it a close your eyes and buy or with those that are much more cautious? >> we're still looking for good solid earnings growth. we're looking for two of the right and up. >> the value at $2.6 billion. the exchange ratio represents about a 35% premium. as you can see there, kkr, up big, big, big on this news today. >> jackie, thanks very much for that. we will digest that one. are you skeptical about what happenses? >> no, i am one of the optimists on that front. hopefully the multiple expansion gets there and roughly speaking that's exactly what you're seeing. >> fine if it happens at the same time that maybe wages start to rise. >> that's a great sign. there's this idea that you have to be aware that things in the market are not always up in a straight line. it takes about 18 months between 10% or more corrections in the market. we're all right at 26. >> we' getting spoiled. santa came very early. thanks to you guys very much. appreciate your time this afternoon. speaking of zero to hero, what are you guys talking about? >> it's almost the end of the year and i'm sure a lot of people are looking for new picks for their portfolio. so zero to hero. we will enveil all of those picks on the top of the hour. >> we just said someone talking about aeropostale as a long one. >> i'm melissa lee, here's tonight's line up. there is one clear loser in today's session, twitter. it's not so teflon any more. tesla going mainstream. you won't need hundreds of thousands of dollars to drive one of those vehicles. and a clean bill of health for

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