Transcripts For CNBC Closing Bell 20170216

Representative kevin brady last night. We have two Top Economists to weigh in. Federal prosecutors are reportedly investigating 21st century fox over whether it should have disclosed information about Sexual Harassment settlements. Those details as well. Lets get right to the latest. Eamon javers and kayla tau xi are at the white house. Reporter a bit of an airing of grievances from the president on a number of subjects. We did hear some Important Information about the sequencing of his legislative agenda later on through the year in terms of taxes and obamacare. Heres what he had to say. The tax would be easier in my opinion but for statutory reasons and budgetary reasons we have to submit the health care sooner. Early march, mid march and after that were going to come up and were doing very well. Reporter so the president there saying that health care goes first in march or mid march and then tax reform. You know, politically that could be a challenge for the president because as we know, Health Care Reform has been a bit of a quagmire for previous president s taking up all of the white houses attention or success in terms of whether its a failure. We also heard from the president a bit of a sour tone here a little bit more sour than you tend to hear president s in the first month of their presidency about the state of the country. Heres what he had to say on that part. I inherited a mess, its a mess. At home and abroad, a mess. Jobs are pouring out of the country. See whats going on with all of the companies leaving our country going to mexico and other places. Low pay low wages. Mass instability over seas no matter where you look. Reporter and also we heard the president complain a number of times at length about the media, the questions that he gets, the coverage that he gets. The president clearly at this point a bit of a media critic in chief here weighing in on all the Different Networks and their coverage of him. Kelly, a fascinating president ial performance today. Eamon, a quick question on something he only really mentioned in passing but it was related to Obamacare Repeal and then taxes. He seemed to say that because of budget reasons and otherwise he has to do Health Care First and then taxes. How significant is that . Reporter well, i think thats an important point. As i said, i mean, health care has been a quagmire for previous presidencies. Doing that first could distract a lot of the white houses attention from tax reform, at least until the end of the year. Congress is capable of walking and chewing gum at the same time. They can do multiple things, but the question is whether or not the debate publicly about health care as intense as its been will distract in any way from any effort to do the tax reform piece. You know, eamon, even though it was kind of a throw away lead in to higs point, the president said in some ways tax would be easier. The markets didnt respond. Maybe thats slightly comforting to him saying he doesnt think its going to be that tough to get taxes through. He said its going to be a tremendous, spectacular tax plan. He hasnt said what hes going to do but he said its going to cover both individuals and businesses. Well expect to see some rollout of it later on in the year. He did say that he did think that that would be easier than health care which indicates to me any way that he realizes hes in for a significant political fight as they figure out what republicans on the hill want to do on obamacare and if that matches with what the president and the team here at the white house want to do with obamacare. All right. Eamon, thanks very much. Meantime, President Trump also announcing his new pick for labor secretary following andy puzners name. Kayla tausche has the details. Reporter President Trump naming alex acosta for the role of the secretary of Labor Department. That comes after andy puzner, the fast food executives withdrew about both his business and his personal background. But the cv of acosta from puzner couldnt be more different. Hes most recently the dean of the law school at Florida International university. He has spent much of his career as a Public Service or government official. He is not an outsider by any means. He clerked for Justice Samuel alito. He was a member of the National Labor relations board, which is a key posting for someone who will be running a Labor Department. He was the u. S. Attorney for the Southern District of florida and he also ran the Civil Rights Division of the doj under george w. Bush. I think you could say hes not a billionaire, meaning that his Financial Disclosures and the reviewing of those Financial Disclosures will likely be a little bit he is easier for congress than it was for puzner. Perhaps the detail that makes him the politically safest candidate for President Trump to have nominated to this post is the fact that in all of those government roles that i just mentioned there were three that required Senate Confirmation and he passed through Senate Confirmation pretty much with flying colors and that was something that didnt escape the president when he announced that nomination at the press conference today. It was a detail that he haled very closely. Finally, there could be some bipartisan support for the record of the cases that acosta brought while he was running the Civil Rights Division of the doj. Among them suing Cracker Barrel for Racial Discrimination claiming they treated africanamerican customers with inferior service than to other customers and he also sued an Oklahoma School district for making an 11yearold girl remove a hijab claiming religious discrimination. The president lamented the speed of the cabinet approval, the progress that has not been made so far. So far 13 members of a 35 member cabinet have been approved. There is a little bit of opposition. The ranking democrat on the Senate Committee that will be reviewing this did put out a statement saying that she looks forward to carefully reviewing mr. Acostas qualifications though nothing as of yet that says that there is opposition, that she will be voting against him, but we will see. A lot of these votes have fallen on party lines. Kayla, thank you. Kayla tausche from washington. President trump met with congressional leaders and he brought up the stock market. And that was the other thing about the stock market sets new records every day, chris. I never see that. Well, you can see it right here. Weve only been talking about it day after day after day. For weeks. And as we back off those records slightly, lets get to our Closing Bell Exchange on this thursday. We have david katz from Matrix Asset Advisors and steve grasso and Rick Santelli out at the cme. Steve, let me start with you. This is really the mildest perhaps of pull backs you can have after a streak like weve had to the up side, seven straight days. All these records. Really the market sat still during the Trump Press Conference so maybe it wasnt drawing a lot of detail from that, but where do you think were at in terms of the need for any other give back after this rally . You know, mike, tremendous amount of funds have been sitting on their hands trying to wait for that pull back. You and i have discussed it. You dont really get that pull back. Its bought really quickly. Its a testament to me of how under weight firms were in the financials, in energy, in materials, in industrials. You look on a daily basis you see the leaders on a daily basis have been the financials. They take a couple of days off here and there. The market as a whole grinds higher and i think thats what it will continue to do. Steve, to follow up quickly, at some point theyre going o own enough, right . Sure. What would be the clues youd be looking for in the Market Action to say, okay, that rotation might be played out . Well, when you see from the november election when you see the xlf rip up about 20 and then President Trump talks about tax reform and they rip up another 5 , i think you have to see a leveling off. When you hear those good news headlines, when they move flat to lower, thats when you know they have their fill of financials. David, where would you be putting money to work . Well, markets hit highs but there are lots of stocks not at highs. Company like abne which is in health care, cvs, drugstore. Great companies. Selling well below their highs. Occidental petroleum and Johnson Controls which is an automotive industrial company, really industrial company, and it sells at a great price. Really hasnt done anything. All four of those we think could be up 20 in the next 12 to 18 months and you dont need a roaring market for them to continue to do well. Rick, you know, i think we asked you to take the temperature of the bond market a little too often because it hasnt been changing that much in tone, but you did actually have yields come down ever so slightly today. You had that very great philly fed number this morning. Do you think too many people are betting on higher yields and thats why its been tough for them to really get a skate velocity or whats going on . Plenty of people bet on higher yields but theres a give or take when it comes to the fixed market. Theres the investor class globally that can come in in the longer maturities. Then theres the moves that seem to happen before, during, after fed meetings that move the curve, in this case a bit steeper, but i think its quite comfortable for the tens right now in the midpoint of the year, 244, 245, which is also exactly where it closed last year. Ill tell you what, today is one of those days. You could say what you want about technicals, but it gives you some good moves. Were going to throw up a quick chart of the dow jones, twoday chart. What i want everybody to notice is that right after the opening we made the high thats still on the board, 20,639. Then we dipped a bit and came back to the exact same level like twin peaks and then, boom, it fell off. There was selling, profit taking, my guess, because it didnt take that level out. But whats interesting here, mike, is that 2s, 5s, 10s, 30s, the dollar index right at that same time, right around 10 35 eastern also moved lower. Were still really tight packed with regard to how equities lead, even treasuries at this point, with regard to some of their moves on extreme pricing. David, any trip wires here that would turn you from being a buyer of the dips into maybe more of a seller . Many of trumps policies are pro business. The lower taxes, less regulation, still mu lus all very good. We are concerned about his language towards mexico and china and the possibility of a trade war. So that would be the thing to really watch out for. The market has been overlooking it at the moment assuming its not going to happen if that were to start to play out wed have concerns. All right. David katz, steve grasso, Rick Santelli, thank you all. Thank you. Meanwhile snap meeting with bankers today ahead of fridays ipo road show. We have been following the company and its bankers around the town. She made it to post 9. Snap road show has begun. Today Ceo Evan Spiegel and other executives met with the sales team at three major banks. There they talked about the ipo pitch and how the underwriters should sell the shares. And there are a lot of shares to sell. 200 billion to be exact. The company is raising about 72 of those proceeds with the rest going to the cofounders and venture backers. Snap chat is seeking a lofty valuation when compared to other social media companies. Snap chat almost 50 times whereas facebook is 15 times. Theyre offering nonvoting shares as well. The first time a company has attempted to do that, but sources say snap chat still thinks investors will buy in. Theyre pitching themselves as revolutionizing the way people communicate and highlighting their user engagement. Theyll stay on the east coast this week and then head to london monday before coming back to the states next week. Well see if their pitch sticks with investors though over the course of their road show. Well keep in touch with sources until then. Guys . We saw earlier how Morgan Stanley had decked out its times Square Office with snaps colors. Theyre rolling out the red carpet. Did you get a sense from the meetings, from the Way Investors walked away as to whether theyre impressed enough by what they heard to maybe put some of their concerns about the growth to rest . Investors have already taken a look at the prospectus. Tomorrows the meeting with the investors. The hard core east Coast Investors begin. Well get a better sense at that point. Todays meetings with the banks, im hearing that a lot of those were presentations teaching the bankers how to sell this ipo because this is a difficult one. This is the first big unicorn to go public in a few years, and so theres a lot riding on this ipo. Those bankers have a hard job ahead of them. Sure do. Although one of the few big ones in a while so well see how it goes. Leslie, thanks very much. Thanks, guys. A little bit more than 45 minutes before the bell. The dow modestly down below the flat line. S p and nasdaq. Russell is leading to the down side pulling back a little bit more than half a percent. And kevin brady insisting here on closing bell yesterday that the border tax will be in a tax reform bill. Border adjustability which is equal taxation of all products in the u. S. Regardless of where they come from or who produces them, that level Playing Field at the end of the day is going to be in tax reform. Some Retail Stocks are getting hit as a result. Up next, well debate whether the Retail Industry is a threat from the border adjustment. Is the fed too elitest . A former member of the dallas fed lays out her case later on the closing bell. Is is my retirement. Retiri retir t and i never ged oft. Is is my retirement. E tirelyepedretire . Yr ner te with e adad im in vestsnds sted invesr ines vest wh ad ere inors caveste and instn ve. Ot in ves. Up attrade. Com d get to sihud. As ctithinking lik whatseam spirit worth . 14. cs atsrtto lk to ur mom . Whats thealue o wan the s . Atsrtthe valuof piis tea, lk to ur mom . Not st wealth,healue o things tma. An staey dow down broadly. We spoke with kevin brady chair of the house ways and Means Committee. The border adjustment, which is equal taxation of all products in the u. S. Regardless of where they come from or who produces them, that level Playing Field at the end of the day is going to be in tax reform. And heres what House Speaker paul ryan said this morning about those worried a border tax what it might do to the dollar. With respect to currency adjustments, its it is obvious and mathematical that a currency adjustment would occur when we harmonize our tax laws with the rest of the world. For people who are concerned about it, i believe that there are things we can do and ways and Means Committee is looking into this to ameliorate those concerns. Joining us now to talk more about this, Douglas Holtz egan, former white house chief economist and michael faroli. Doug, let me start with you. He said paul ryan said its mathematical and obvious that this currency adjustment would occur. It strikes me that the strongest advocates for the border tax adjustment are the folks in congress, you know, potentially writing the bills and some academic economists. Private sector folks seem to have some resistance to this idea. Hows it going to shake itself out through this process . So i think its important to remember the context. No one can defend the current tax code so reform is desperately needed. The house reform taken as a whole would make the United States the place to invest, innovate and grow compared to every other country in the world by locking in a single tax and the border tax or the border adjustment in that tax system serves two crucial purposes. Number one, it removes any tax base incentive to move production off shore and number two, it gets ridden materially of the capacity of the big multinationals to gain the system and avoid taxes. Those are desirable features and really explains why theyre so locked in on having that as part of this system. Mike, the collar is lower by almost 3 4 of a point today. What do you think would happen if border adjustment goes into place. I tend to be more sympathetic to the argument that the dollar would appreciate, would appreciate substantially if border adjustment goes into play. As i talk to noneconomists in my job i sense a lot of skepticism around this argument. I think thats one of the reasons that the retailers are concerned. Even though i actually think its a good idea, i think im in the minority. I think some of the concerns that you talked about with the retailers and others may have more sway in congress than the arguments of the economists who back up this idea. Doug, you started out is yeah, go ahead. I think the thing to point out is i understand not everyone views this as a mathematical certainty as the speaker put it, but 160 countries around the globe border adjust their taxes and all have vibrant retail sectors. Theyve adopted these tax, raised these taxes and somehow they didnt go away and the dollar itself is 25 higher today than it was 30 months ago and in those 30 months we did not see the emerging markets melt down, we didnt hear the complaints about wealth transfers, we didnt see raging price inflation. So, you know, look at the real world. Look at the experience and take some comfort in the fact that all of this stuff has been vastly over blown. Well, you say its over blown, doug, you laid out the imperatives for why you think the code in general needs to be reformed. What is the acceptable potential cost you would be willing to bear for this . I mean, the Retail Business clearly thinks this is a grave threat. But, remember, the rates going to go from 35 to 20. That goes unmentioned. Theyre going to get expensing. That goes unmentioned. Theyre going to get a much more enforceable tax code. Their suppliers and others are going to have to be honest about their taxes and take the pressure off raising rates every year. So evaluate the reform as a whole and in doing so evaluate the fact that their markets are going to grow more rapidly. Selling in the United States will have faster top line growth. If you can tell me the combination of faster growth and currency appreciation you need to be made whole, then i think thats a sensible starting point for this discussion. If you just say no, what youre really saying is i dont want tax reform or the only tax reform i like is one where multinationals can gain the system. Thats not an acceptable set of options. We have to go, gentlemen. We continue to debate the effect this would have. 40 minutes to go until the close. Dow is down 5 points, s p down 4, nasdaq down 11, russell down 8 and transports down more than 100 points. Dow is up more than 12 since the election. Well hear from one market watcher that says the Stock Traders First Commandment is thou shall not short a new high. 20th century fox being probed about whether it told investors about Sexual Assault charges against roger aislles. Well have those details coming up. Ios, hhasta laista, baby soy at gn a litt co that r red the room. Any qution elr . Bueller . He room. Ththe mitefectct stream your enteainmen more with limid data whenenoutc at rele and ha dirplus, get e azing nei. Whenens not just a car,it youda and ha dirplus, get e azing nei. Go ahead, l yourself thesnd ebrid exen azing. See dow 30 pretty easily split. Cisco is the big winner. I think it made a 52week high a little bit earlier. Big Energy Stocks exxon and chevron are trailing. Twitter down nearly 2 . Anthony nodo sittings down with jim cramer on squawk alley earlier this morning. Heres what he had to say about monetizing the platform and the president s tweets. The president said stock market hits new highs, longest winning street. Lets go get bank of america on the phone. Lets sponsor that tweet . There is not a fire drill. Why not, man . We have an auction platform that allows advertisers to advertise in the moment in real time without us having to reach out to them. But what jim was getting at is wheres the urgency for this company . Exactly. So you have basically almost mustwatch content on there given the way the president communicates that way and all the commentary surrounding it. Its very passive, like as you suggest, kelly. Well, theyll come to us. Theres big questions. He didnt address this about advertisers interest and willingness to have their brands interact with the kind of stuff that flies around twitter. One reason why twitter is pushing video products. They look at snap and they dont want to pull a twitter. Its become emblematic of a way you have a social Media Network that can become a facebook, can become a twitter and where does snap chat fall . Advertising markets clearly twitters been going in the wrong direction. Facebook the dominant winner and google on the other side. Nodo talking about how much traffic and users they have in sin did i case which is if you do a googdle search and you fin a tweet, it was a big number but hard to know how theyre making money. Lets get to sue herera. Hi, kelly. Hi, mike. Pakistani Officials Say an isis suicide bomber struck a famous shrine killing at least 75 people and injuring 200 more. Hundreds of worshippers were at the shrine at the time of the blast. The military helping in the relief effort. Isis claiming responsibility. Secretary of Education Betsy Devos is downplaying her recent contentious confirmation hearing and the protests while addressing educators at the Community College National Legislative summit in washington. While some have flurry of at my confirmation in negative terms, i viewed it as passion. Passionate parents and passionate advocates who care deeply about their kids and about education. And monopoly is giving the thumbs down to the thimble. Voters rejecting the venerable game piece thats been in action since 1935 as part of a campaign to select the next generation of game pieces. Hasbro is holding a worldwide contest to choose the next eight tokens. Winners will be announced next month. You guys are up to date. Ill send it back down to you. Mike . Sue, thank you. Trying it out again . In writing the pun sounds better because i said, so what . Its only a thimbolic loss. People have no idea what a thimble is for. So theres not a lot of recogniti recognition. That could be too. I know what theyre for. Theyre for collecting from each state. Cast your vote. Theyre for collecting each state. Thats what the thimbles were for. My dad would be on the road, visit the different states and bring us back a thimble. Do you still have the collection . I think so. My grandfather built a thing we could put the thimble sz in. Look for it on ebay. Yes, exactly. Ill see you in an hour. Thank you, sue. Sure. Lets send it over to sema mody for a quick market flash. We are keeping a close eye on the dow trans ports which are now down about 1 on the day on pace for its worst day this month. Shares of avis budget weighing on the index down double digits. The Car Rental Company reporting a Fourth Quarter profits due to higher expenses. The stock on pace for its worst day in about a year. Mike and kelly, back to you. All right. Seema, thank you very much. We have about a half hour to go before the bell. Dow is has it just poked above . Just down. 002. We a. 02. Tax reform a hot topic. The tax would be easier, in my opinion, but for statutory reasons and for budgetary reasons we have to submit the health care sooner so well be submitting health care in early march, mid march and after that were going to come up. Were doing very well on tax reform. Up next, former dallas fed economist tells us how she thinks the president s tax plan will impact the economy and jobs. Trump introducing his new pick for labor secretary. The former ceo of mcdonalds weighs in on this choice later on the closing bell. Hey nile hey nile i justd to thanknkyopo. We onl it everne gary. Well, i el ptty smart. Wonlet this accplist go to my. Peopleoptions strategiesll, donr im still e sa old gwa, you oc n ops trinth inrswi ly at atrad less than a half hour to go and the dow is actually just turned green. It was down about 55 points. The other still pulling back a little bit. There has been a comeback in the indexes in the last half hour or so. Meanwhile, President Trump holding a News Conference addressing jobs, the economy and the market. I inherited a mess. It was a mess. At home and abroad. A mess. Jobs are pouring out of the country. You see whats going on with all of the companies leaving our country going to mexico and other places. Low pay low wages. The stock market has hit record numbers as you know. And there has been a tremendous amount of optimism in the Business World which to me means something much different than it used to. To me it used to mean oh, thats good, now it means thats good for jobs. Joining us is Danielle Demartino booth, author of the new book fed up. Welcome. Thank you. This administrations a little more receptive to that message it seems. It would seem. Sales went through the roof on election night. Did they . Yes. When it comes to policy, tax reform, all of these things that are happening, it almost seems like the fed is an after thought here. Im sure thats not the last verdict on it . No. I would be remiss to say were anywhere near we could write off the fed and the decisions it will be making. If you consider the u. S. Dollar and the effect that that could potentially have putting Economic Growth, fed policy i think can be maybe even potentially too much of an offset to what trump has planned for the economy because theyre not going to want to get too far behind the curve. As we saw in yesterdays cpi data, inflation is hitting a target. You think the fed could put the brakes on the growth we might see from the president . Look. If you look at the 3 trillion of losses that were racked up, that was real money. When you Start Talking about trillions of dollars, so we know that the economy and that the markets are sensitive to Interest Rates and its been kind of fascinating to hear all of the talk coming out of janet yellen and see not as much of a reaction as you would expect in the ten year . At the same time janet yellen in congress this week was reluctant. In fact, kind of refused to say, look, were going to plug in a lot of the potential policy moves that might come into our models or into our forecasts. Were going to stick with this idea. Were kind of getting close to our targets on growth in inflation but maybe no hurry. How does that all fit together . Its interesting because if you look at early 2016 she was actually pounding the table and advocating very aggressively for fiscal relief. So its interesting to see that she has changed her position as much as she has and when she is pressed she does refuse to incorporate any kind of potential stimulus measures that are going to be coming from the new administration into her thinking, into her decision making. Question for you, there seems to be a couple different ways the fed could go with new members who are appointed by the president. It could be judy shelton, hard money, gold standard. Weve spoken to john allison who would like to do away with the fed and then we talked about if there needs to be more Business People and practitioners which might imply nothing in terms of monetary theory and just bring a more pragmatic perspective. How do you think that might shake out here . Trump has a dilemma on his hands, doesnt he . He really does need low Interest Rates to pass through a lot of the more aggressive legislation that hes got proposed. If the borrowing costs of the country skyrocket, thats not going to be good for his first two years in office, call it, but i do hope that given some of the appointments that weve seen, that he does put more pragmatists in. If you read the original 1913 Federal Reserve act, it actually mandates that the president appoint people from a diverse number of industries to the Federal Reserve board and its clearly straight from that initial philosophy. As i understand it, the Federal Reserve act had 12 districts, 11 districts, because they wanted them to be within a trains journey over the course of a day to move checks around. The economy has changed a lot. The economy has changed tremendously. One of the things i advocate for is we can get rid of a few of these Federal Reserve districts. The west coast has exploded well over the past 104 years. I would venture to say that the west coast needs another Federal Reserve something. Something along those lines, seattle. You have it out for cleveland, dont you . Who loses . Cleveland or minneapolis . Actually, i say both could be absorbed into the chicago district at this point. If youre looking at pure economics. By the way, give all the District Bank president s a permanent vote. Last i checked, california, the largest economy in the country, texas follows, Economic Growth that emanates from the states does not rotate away every three years so why should the vote of those District Bank president s . It makes no sense. I think you can start to push through some of these reforms that have gotten stuck in recent years because of all the gridlock in d. C. Danielle demartino booth is fed up. Thank you for being here. Thank you. We have very quietly the markets coming back. 20 minutes until the close. The dow is green, russell is getting backed down half a percent. The high profile Sexual Harassment suits against roger ales have caught the attention of federal prosecutors. Well look at whats behind the feds interests. Thats next. Oh. Not the smooch method come on. Whats going on here . You know how Ge Technology alls us to fix problems before they. They slow prodtion, yeah. Well, no more catchy business acronyms. Wait, we dont need to smooch . Im sure we can smooch a solution we just need to hover over the candice, problem until. Just let it go. Hey, sorry im late for team buithat felt right. whhes so trusting. . When you have 7. 95 online u. S. Equity trades, you realize the smartest investing idea isnt just what you invest in, but who you invest with. Isnt just what you invest in, but who you invest with. If only the signs were as obvious when you trade. Smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Welcome back. The dow has turned positive with about 18 minutes left in the session today. Well see if the other markets can follow suit and whether it hangs on to that. The only one in the hour to do so. Theyve largely been weaker. Lets get a check on todays market movers. Molina Health Care Shares have been plunging. They posted a much larger than expected quarterly loss. The company blaming the challenging obamacare market. That should have been anticipated. Shares down 17 . Avis budget down. Missed profit and revenue expectations. They cited weaker volume and pricing. They issued disappointing sales guidance. Those shares are down 13 . Fox news reportedly a target of a federal investigation over settlements it paid to individuals who filed Sexual Harassment suits. Julia boorstin has that. Reporter the wall street journal is reporting federal prosecutors are investigating whether 21st century fox sufficiently disclosed its Sexual Harassment claims against former fox ceo roger ales. They revealed when an attorney representing a former fox news anchor Andrea Tantaros said another client who worked at fox news was subpoenaed by investigators as manhattan u. S. Attorneys securities fraud unit. Fox issuing a statement saying, quote, neither fox news nor 21st century fox has received a subpoena but we have been in communication with u. S. Attorneys office for months. We have and will continue to cooperate on all inquiries with any interested authorities. Fox has been trying to put roger ales Sexual Harassment suit behind it after firing him in july. In September Fox agreed to pay Gretchen Carlson to settle her Sexual Harassment suit, 20 million to Gretchen Carlson and millions more to settle allegations from other womens that ailes allegedly harassed. Certainly an issue fox wishes it werent dealing with anymore. Yeah. I mean, julia, i guess the company has said that, you know, you read their statement. I guess the question is whether they obscured some of the funds that were used for all of this as well. Reporter yes. There are various questions here. Fox has said very clearly they have not received any subpoenas. Theyre not aware of any additional inquiries. They have been cooperating with the authorities on everything regarding this. But i think the real question here is when you have major settlements like this, 20 million, millions more dollars for other women, whether or not adequate disclosure to investors and communication with them while this was going on about how much of an issue this was and how much were going to have to pay to put it behind them. Yeah. Well, weve all read those very long kind of legal proceedings, sections of corporate filings and presumably maybe this was one of those things that might have been in there, but hard to know exactly what theyre looking at. Julia, thank you very much. Meanwhile, lets send it over to sema mody for a market flash. Flat performance for the dow, s p and nasdaq. There are a lot of individual movers including mgm shares down 9 . The casino operator reported lower than expected Fourth Quarter revenue and profit due to softness in its Las Vegas Convention business. It also saw weakness at its mgm grand properties and their shares are up over 40 over the past 12 months but, again, a big mover in todays session to the down side. Mike . Seema, thank you very much. About 14 minutes left before the bell. We have indexes kind of crawling towards the flat line. It looks like we have the dow just barely there and the s p with a very narrow loss. Nasdaq and russell have been the leaders recently and are giving the most back today. Up next, nicholas kolas will be coming down from the mountain with the First Commandment of stock trading. Stay with us. Is happening before our eyes. Shift in Human History sixty to seventy Million People are moving to cities every year. At pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, it looks like we have the dow c just barely there and the s p dear predictable, theres no other way to say this. Its over. Ive found a permanent escape from monotony. Together, we are perfectly balanced, our senses awake, our hearts racing as one. I know this is sudden, but they say if you love something. Set it free. See you around, giulia major indexes all hitting new today highs earlier today which means according to our next guest, its time to think about the First Commandment of stock trading. Tell us about it. Which is what . Basically thou shalt not short a new high and buy new lows. Theres never been a higher price to sell. Why wouldnt you short it . At either end of the spectrum the investors are doing so at a high level of conviction, setting the price. They know theyre buying at a new high. Theyre keeping going. You have to have a better edge than they do to even have a shot at outperforming when you short the new highs. Youre talking about the trading ranges which come and go. What about longer term . What seems to be happening is the markets getting more comfortable. The Trump Administration is going to find its groove, start working with congress, getting the tax cuts done, deregulation and the fed is going to behave itself, go two times, not three and it will come together nicely with a big boost of earnings. Goldilocks. The other element if all of that is at work, it seems as if investors have felt to be under invested. Youve seen them chasing this higher. Youve talked to a lot of clients, traders. Is that still the dynamic that seems to be at work . Put it this way, we had more buyers than sellers at our desk. It showed us there is still an appetite to buy stocks even at these levels. As long as we keep churning along and not breaking down, the buys are to the up side. When the breakdown happens, does it come along the whole rally, sharp, severe, pretty quick and comes springing back up . Weve been waiting to are that. We ran in place. The bedrock issues for stock prices are what are earnings doing, what are Interest Rates doing . We have the shot at the brexit and election. We didnt dent it. As long as you dont dent the earnings confidence numbers the stock market keeps going up. You track the vix, volatility index closely. Its been plummeting lows on its range, 10, 11. Does that mean its a problem or is it reflecting the fact that its been so calm . Reflecting two things. First, correlations are off setting better over volatility declines. I think youre going to see the vix move higher. As growth increases, as Earnings Growth increases uncertainty increases. Thats a driver of stock prices and volatility. Its not clear Earnings Growth has been that well. The beats are not that high as much as they usually are. The percentage of people beating on the revenue side is not as high. The percentage of people lowering their earnings forecast is not as high. Theres a sense that investments will move upwards. Is that setting us up for a situation which the reality is becoming divorced which the, you know, appearance is becoming divorced from reality . Right. We have been anchored around 118 a share on the s p for the last three years. Oil came down a little bit, technology picked it up. We havent seen a big increase. Now were looking for 133 this year. Thats a lot more earnings volatility. Should drive stock va la till the hopefully to the up side. This is as early as ive ever heard talking about next years earnings, 2018. No visibility but its up around 147. Yeah. Thats where you have to go to make the market sound cheap . Yes. Thats where you get the 16 times earnings and you feel okay. That almost certainly requires that tax rate to come down and for the earnings to rise. Its a big number. Its pretty clear where the risk is. The risk is that the tax reform doesnt happen or its watered down. That changes everything. Thats the entire story. Thats the entire story. I would argue the most bullish thing would be if we dont get it, the market goes up anyway. That would probably be one of those things that you were glad you didnt short the alltime high. Exactly. Thank you. I think were going to Julia Boorstin for a news flash. Thats right. We have some news here on at t. Its going to be will be launching a new unlimited data plan. The new plan will be available to all consumer and business customers. Previously at t unlimited data was limited to its directv customers. So this is expanding its offering of unlimited data and it also seems to be in response to verizon announcing a very similar just a couple of days ago earlier this week. So this is at ts unlimited new at t unlimited plan including unlimited talk, text on four lines will cost 180. Back over to you. Julia, thank you. We have to get you on samsung. Reporter thats right, kelly. Were just getting word crossing the wires that a south korean court has approved an arrest warrant for samsungs lee jay young. He is the heir apparent. He was in court and he avoided being arrested in january during hearings after the court ruled that there was irn sufficient evidence but on tuesday in south korea prosecutors made a second bidikuindila for his arrest saying they had collected more evidence in recent weeks. They have approved the arrest warrant for lee jaeyong. S samsung is one of the Largest Tech Companies in the world. It makes up most amount of exports out of there. This is a big deal and it definitely destabilizes the business. We will continue to track this, but a little bit more information. The reason he was in court is because he has been embroiled in a scandal that has also led to the impeachment of south koreans President Park and he has been accused of paying bribes. So well continue to look into this and try to get a comment from the company as well. Kelly . Wow. Dramatic twist. Thank you. Back with the closing countdown in a couple of minutes. The Trump Administration sending mixed signals on china and hollywood is clear where it stands. The great wall opens this weekend with matt damon. Well look at what that means to the future of hollywood. Plus, we have much more on President Trumps News Conference coming your way. This isnt donald trump that divided a nation. We went eight years with president obama and we went many years before president obama. We lived in a divided nation and i am going to try, i will do everything within my power to fix that. Iand i know a thingd, or two about trading. So i trade with trade, where tr traders trade on a trademarked traplatform. Get off the comper traitor i wont. cannon sound mobility is very important to me. Thats why i use e trade mobile. Its on all my mobile dices, so it suits my mobile lifestyle and iteeps my investments fully mobile. Even when im onhe me. Sign up at etrade. Com and get upo six hundred dollars. One minute to go before the bell. The markets been working on a sevenday winning streak. It looks like its going to be a squeaker. The dow in the last half hour has moved into positive territory. Just marginally. The s p has been hovering over that. The high beta index, hp has been a leader. Thats been a big give back. Financial stocks, too, gave up. At the lows of the day, bob pasani is here. We did not have much of a dip but the oils are suffering. Chevron is at a new low for the year. Exxon is trading down like that, 9 or 10 . Well talk about it tomorrow. We have to figure out some way for oil to deal with the valuation problems. Bob, thanks very much. Ringing the bell today here we have cycle for survival up up at the nasdaq it is the Bowery Mission as the closing bell gets going right now for the second hour with kelly. Hi, everybody. Welcome to the closing bell. Im kelly evans. Lets see how were finishing up on wall street. If the dow closed higher it will be a new record for the blue chips. Has a gain of 8 points on the bell for 20,619. Well see how things settle out. Cant say the same thing for the other major averages. The dow and the s p 500 have had five days of winning streaks. Weve seen them close higher seven days. Same for the s p and 11 times for the nasdaq. Were seeing that kind of come to a halt with the nasdaq, s p and especially the russell 2000 dropping on the session. Again, the dow does look like its setting another record here with an eight point gain to 20,620 in the session today. Well have more about that and President Donald Trump delivering his first solo News Conference tackling a wide variety of topics. Well bring you the highlights that it will have on the market and business coming up. Joining me on the panel we have cnbc columnist michael santoli. Navalier founder and chair louie navalier and tiaa manager stefani link. Welcome one and all. Mixed session. We didnt seem to see a huge reaction to the president s News Conference. All day hes given theres been plenty of fodder about the stock market. 1 17 News Conference. The market sat there. Clearly everybody was watching and listening. It was one of those kind of quiet low volatility days that we havent gotten recently but we got used to in january and february when we were in that range. Given how stretched this rally has gotten and people got a little bit over heated chasing it in the last several days, you have to consider this to be very modest digestion day. Well see what it leads to. You did have negative breadth. More stocks down than up. If this is what a down day looks like, its not that bad. Interesting, stephanie, that cisco might have made a difference for the dow turning positive, up 3 . We havent been able to say that in a while. Mika lee alluded to it. It felt like a down day in certain sectors. If youre running real money. Today wasnt so fun, but that said, i would welcome a pull back. I think its very healthy. Weve had a great run and but what i think is interesting is that this run has been so diversified. I think some people were thinking of this year value would be outperforming growth. Both styles of work, large and small in terms of the size and mid. So its been interesting. Also the sectors have also been very diversified in terms of what has outperformed. I think its very encouraging. I think earnings are good. You get these great economic data. Every data point was pretty much better than expected. When you get the philly fed number at 33 high i didnt know it could go up to 43. Claims were low, housing starts. You said something that keys right into it almost welcoming a pull back. On that note, we had a ceo telling cnbc, he called this a trump bubble. Alan blinder was on squawk on the street calling this a mini boom. Take a listen. The economys looking very good. Consumers are spending. Businesses are preparing for that or are reacting to that. And theres a significant demand for credit as there should be. I dont know what to call this, kind of a mini boom. Lewis, what would you call it . I would call it continuation of animal spirits. President trump continues to talk up the market. He did it last week, he did it this week. The one clear thing thats happening is the companies with positive analyst revisions are definitely the big winners. Our folks did a good report on that this week so amidst all of the oscillations, the stocks have the most positive analysts comments are the winners. Im looking, too, mike, there were a number of companies today that, you know, especially on the earnings front didnt perform what we talked about. Gnc, trip adviser, mgm, avis, wendys missing on the bottom line. Other than cisco, that reflects what happens, its not like you could hang your hat on the earnings. Not on the corporate side. Fourth quarter earnings were noisier than a lot of people thought. Good enough to keep the picture intact for high single digit gain overall this year. As steph was saying, its kind of a selective market. You have a fairly large number of s p stocks well off their highs. Thats why volatility is so low. Basically a lot of stocks down. Others leading the way and thats the proverbial stock market. I think to me its the macro indexes, the citi economic surprise index is a threeyear high. Meanwhile, investors, animal spirits, in other words, shortterm traders bullishness is high. How that shakes out is the question. Yet were talking about a bubble. We dont really believe it. We dont know if the economy really is taking off. We dont know what the fed is going to do. Theres a wall of worry out there at the same time. I think thats actually good. You dont want everybody to be so euphoric. I am worried about some of the sentiment numbers that weve been getting, but i also like some of the daughters, too, because that actually keeps the market sane. And to your point of a lot of stocks that are down, thats where your opportunity is. You dont want to chase in this market. You dont have to. But i think you do want to use some of these pull backs. I welcome a pull back because i want to be buying more. So much comes back to tax reform and what happens. Donald Trump Holding his first solo News Conference since the inauguration. Eamon javers joins us. Reporter hi, kelly. It was obviously a wide ranging press conference. The president highlighting his criticisms of the media and others throughout the course of that, but we got one piece of news here that i wanted to highlight for you. Earlier in the day it looked like Steven Feinberg was all set to come in here and conduct a broad review of u. S. Intelligence agencies and maybe even have a broader mandate than that as part of this white house team. The president was asked specifically about feinberg in this press conference. Heres what he said. Chairman, you mentioned a very talented and successful man. Hes offered his services and its something we may take advantage of, but i dont think well need that at all because of the fact that, you know, i think that were going to be able to straighten it out very easily on its own. Reporter the president there saying he doesnt think he needs Steven Feinberg even though hes offered his services. He thinks theyll be able to work all of this out on their own. That would have been seen as a real threat from the intelligence community, somebody coming into the white house to review all of the way the spy agencies work in this country. We got an answer on that. Then we also saw the president serving as his own economic and stock market analyst here today talking about Market Performance since hes been elected. Heres what he had to say on that front. The stock market has hit record numbers as you know, and there has been a tremendous surge of optimism in the Business World, which is to me means something much different than it used to. It used to mean, oh, thats good. Now it means, thats good for jobs. Very different. Reporter and, kelly, the reason president s usually dont talk about stock Market Performance on a daytoday basis is they dont want to make the dow ticker a scoreboard on their presidency because they know markets go up and markets go down. This administration, however, has not been hesitant to cite stock Market Performance as one of the reasons why they should be given full credit for the economy and the performance just since the election, kelly. Eamon, thank you. Eamon javers in washington. As they say, what goes up can come down. Without a doubt. In the same News Conference he said he inherited a mess. The economys a big mess but the dows at an alltime high. One of those two things doesnt fit together. In less than a month you havent been able to clean up the entire mess. Louis, you were speaking about animal spirits. When you look at the rally and the stock market generally, where do you see the opportunity . I see in the stock buy backs. What happens is at the end of any earnings season some consolidation is normal, but in recent quarters the stock buy backs have got the market up and going a little faster than normal. So i dont see the normal consolidation that i usually do. Every dip now is a buying opportunity of powerful stocks and i think we should take advantage of it. March and april are seasonally strong months so your best buying window is the next couple of weeks. Let me just ask you though, louis, about different part of the president s press conference today. When he talked about how health care has to go first and then taxes can happen. And even though he spoke optimistically about the time line being somewhere in march, health care sounds pretty complicated. So, you know, how soon realistically should we expect that reform to happen . Well, i think the Corporate Tax reform we definitely need. If that is delayed more than two months were going to get upset about it because were counting on those earnings and those earnings will be boosted by the Corporate Tax reform, but health care is also important because, you know, theres a 3. 8 tax on all of our investments. So wed like to see that disappear. If that 3. 8 tax disappears for our investments because of Health Care Reform, then its going to add another spike to the market. But that let me ask you about that, louis. Thats only for people above a certain income threshold, right . Thats correct, but its pretty much every one of my clients so its significant, okay . And a lot of the money in the market has to pay that tax so we would like it to disappear asap. All right. We have to get to some news here. Thank you guys for joining us. Kick things off. We have a news alert. Meg turrill, what do you have . Theranos ended the year on pretty thin ice financially. They had about 200 million in cash on hand at the end of 2016. Thats according to reporting coming out from the wall street journal. Thats less than 1 4 of the funding it had raised from investors and partners. The company told investors it didnt generate any material revenue in 2015 and 2016 and hasnt set aside any funds for potential liabilities that could come about as some of its pending legal challenges. The company, of course, has been sued by both its investor Partner Fund Management and walgreens. Those two parties seeking to recover about 240 million from theranos. They ended with 200 million in the bank. Weve reached out to them. Well let you know what we hear back. More bad news for that company. Thank you. Meg with the late jest on theranos on year end. Moments ago President Trump signed a bill repealing environmental regulation. Lets listen in. Thank you very much, everybody. Thank you, guys. Eamon javers is standing by in washington. Eamon, could you make sense of what this regulation or the or this bill the signing of this bill will do . Reporter yeah. Well, thats right, kelly, this is a bill that would roll back a provision regulation by the department of the interior called the stream protection rule. It was billed by environmentalists that would protect the environment by blocking Coal Companies from dumping debris into nearby pone wanted that rule rolled back, what they said was it declared war on the coal industry. This is a pro coal move that will not be seen as positive by environmental types. Weve soon a lot of coal miners at the white house. Coal was such an important part of this president s campaign. He did very well in coal country and this is a move to roll back a rule they dont like in coal country. It had only been in place since december of last year. Eamon javers at the white house. Thank you. President trump also announcing Alexander Acosta as his new labor pick. What he could mean for the jobs market. Also, the tech sector on a tear since the election. Up nearly 10 . The ceo of Applied Materials joins us with his take on the surge. Youre watching cnbc, first in Business Worldwide. Acro the sta, with the hp the lowest ta talented worce, d rldclasinnovaon likeplattstsrgh, where e mostdvdvd transportation is ready en ut and in cni, likeplattstsrgh, ere e future ismariizing. T us help growour compas morrow ertoy at esd. Ny. Govizing. Welcome back. President donald trump picking Alexander Acosta as his labor secretary designate to replace andy puzner after he stepped down amid controversy. Kayla tausche has more. Reporter kelly, President Trump is choosing a career attorney and official to run the Labor Department. Hes the first hispanic cabinet nominee and boasts a background dealing with labor relations, discrimination and hes worked for a conservative Supreme Court justice and the bush administration. An investigation into polite sized hiring while he ran the Civil Rights Division. Hes been confirmed by the senate three times for prior appointed posts which is the biggest plus for trump with more than half the cabinet not yet confirmed. I think were setting a record or close to the record in time of approval of a cabinet. The numbers are crazy. Some of them are approved immediately. Im going forever. I still have a lot of people that were waiting for. Reporter acosta brings a conventional background that the white house likely hopes will have less for democrats to pick apart. Confirmation amid a cabinet transition that has seen some drama, two withdrawals and one resignation in the first month. The Labor Department has a special sense of urgency because unlike other departments that have new policies and new laws to be writing, that fiduciary role is something thats currently on hold and Investment Advisors need to know what to do in 180 days or so. Putting someone in that role to get a handle on exactly that is going to be important. Great point. Kayla, thank you. What does President Trumps new labor secretary pick mean for jobs in the u. S. . Joining us are jamie richardson, white castle vp and ed renzie, the former ceo at mcdonalds. Welcome, guys. Hello. Jamie, let me ask you first. Putting the fiduciary role aside, because it feels like we should be talking about the sec when it comes to that, but in any case, jobs broadly with the Labor Department, what are you looking for with the president s cabinet pick . Well, you know, i think if we look at march, the Labor Department turns 104 years old. Were looking for a leader to take us to tomorrow. So whether youre a familyowned business like white castle with 10,000 employees or spearman financial with 5 employees, we want a leader whos going to recognize the work force is changing, its a dynamic workplace and employers are at their best when we can provide more employment. Ed, what about you . What do you think is going to be the most important thing for the new labor secretary, whomever he is, to do as he enters office . Well, i think that we need to continue to create jobs and opportunities for people that are unskilled and need training and development. I think the Labor Department today is skewed way too heavily towards unions Strategic Direction and not employee rights. I think the new secretary of labor better focus on that. Thats a balance between corporations, the labor unions and the workers rights so young people have an opportunity, recent immigrants have an opportunity to develop, learn, get skills and moving forward in the work force. We need to be the land of promise and hope and our Labor Department in the past 16 years has been nothing but an obstacle. Jamie, would you point to specific things that the Labor Department has done in terms of policies in place, in terms of regulations that you would figure an impediment. What would you like the new person to come in there and try to either sweep away or tweak about the approach . I think one that comes to mind immediately is what we just saw with the recently looked at overtime rule, that overtime rule in terms of what impact that might have while its on pause right now, its forced a lot of employers, as ed mentioned, put a lot of hiring on pause and its changed the way we think about how we employ you. Its been an ongoing assault. I think if you see the former secretary of labors endorsement of a 15 hour minimum wage, and he even talked about a 20 minimum wage by 2020, those are things that seem good on paper but its a false promise because as i indicated, those firsttime employees are the ones that dont get the jobs. We see youth unemployment skyrocket. It takes the Employment Community and puts us in a pause mode. Were looking for the opportunity to provide more opportunity for people. Ed, what about the overtime rule . Its one of the recent pieces of legislation thats had a big effect on a lot of the workplace. Its caught in this tug of war now about where the future of the department is heading. Whats the right thing to do there . Well, theres no question about it. The overtime rule is ridiculous, just like the joint employer matter. These things all serve to do one thing, empower unions to manage companies indirectly. And it stops hiring. I can tell you in companies that ive been involved with, this overtime rule has caused them to get rid of hours and employees are dropping below a threshold so they dont get paid. Managers have been demoted to supervisors and taken out of those roles and forced to work 37 hours. Its disrupted Small Businesses like crazy. Its illthought out. I dont know where the critical thinkers are that think long term about what these issues are. The Labor Department is heavily skewed towards unions and the rights of workers are lost. The opportunity for Small Businesses are lost. If we dont get this turned around were going to be in trouble. If acosta doesnt work out, were looking at two other guys that would like to be in that seat. Thank you for joining us. Jamie richardson of white castle and ed rensi of mcdonalds. Lets go to seema mody. True car, the car shopping website reporting Quarterly Earnings better than expected on its bottom line. Adjusted loss of one sencent. Revenue, too, topping expectations at 74. 1 million. In fact, Fourth Quarter total revenue up 17 from a year ago. Its franchise dealer account looking strong. Shares up now almost 11 in extended trade, kelly. Does that mean were going to be seeing more of the truecar guy on every commercial . That might be the case. Im kind of a creepy all right. Thank you. Shares up 13 . And Toll Brothers offering manhattan condo buyers major incentives. Is this a sign of further cracks in the luxury market . Thats next. Chicago mayor Rahm Emmanuel happened president clinton pass nafta. Now hes wondering why Corporate America isnt speaking up against Donald Trumps promise to rewrite it. Thats coming up. A warning that the market is in trouble. Lets ask diana ol olick. She can give us answers. Hi, kelly. Buy a swanky Toll Brothers manhattan condo and toll pays the taxes. Mansion taxes and new york city transfer tax. Add them up thats 2. 5 discount which can add up to a lot when youre talking about a condo priced up to 13 million. Right there on two new projects, one in chelsea and one in the west village. Its part of the National Sales event that happens at differ times of the year. The sales event offers a limited Time Opportunity to take advantage of exclusive moneysaving incentives which vary among communities and regions. Now obviously developers offer incentives all the time, but this is a big one and when you look at the latest stats on new york luxury development, you can see why. These are from Jonathan Miller with douglas element. Here are the red flags. The median price for new construction in the last quarter of last year was up 44 year over year but closed sales were down 13 . Heres the kicker. Inventory up 34 . That is not a cocktail thats not going to make any developer feel good. Why dont they lower prices . They dont want to signal that theres a problem. They want to protect the prices of other units in the building. Incentives show up in the final public sales but not in the sale prices. Back to you. We should have negotiated harder on the apartment . Like super high end. Well, look, they talk about new development, but when you look at all the ones on the website theyre priced from 3 to 13 million. Luxury is placed at 4 million and above. This is really the luxury market of all of those brandnew development thats in manhattan. Theres just too much. Well see if theres any trickle down for everybody else. Thank you, diana. The tech sector up 32 over the past year. Well talk to Applied Materials ceo about techs big run and how trumps agenda could impact it right after this. Soe r azing adg owle thats a gatdea, buwhy nt you st gtoinwichat s casharstrategiids, en actual trd ousath tra . Know told brainfo you told my c mmm, . Tatohenowlf ottrs onhior. T td aritre. Mmm, . Atairdweppach uralth mem stra esnoedgeha work and a pl. Crefiplan but to l atairdweppach uralth mem stra generatioto genation. Nd a pl. We. L iplan but to l welplan bad. The stock market has hit record numbers. There has been a tremendous surge of optimism in the Business World which to me means something different. Now it means thats good for jobs. That was President Donald Trump addressing stocks hitting record levels since he took office. And today the dow managed to do that again rising at 8 points to close at a new record of 26 poi 19. Time for a cnbc news update with sue herera. Heres the news update at this hour, everybody. Iraqs interior Ministry Says a car bomb in baghdad killed at least 55 people and wounded more than 60. The bomb targeted Car Dealerships in a mostly shiite neighborhood. Isis claimed responsibility for the attack. House Speaker Paul Ryan promising reporters that obamacare will be repealed and replaced in march. He said Major Insurance Companies like humana deciding to leave the Health Care Marketplace not only reduces choices but it creates instability. Obamacare is not simply stuck in some kind of a status quo, it is getting worse by the day and it will keep getting worse unless we act. We need to rescue people from this collapsing law. The senate has confirmed President Trumps pick to run the white house budget office. Representative Mick Mulvaney squeaking through. John mccain opposing mulvaney for backing cuts to pentagon spending. Thank you, sue herera at headquarters. Major averages touching record high. Take a look at the tech filled nasdaq. Its outperformed the other major averages. Its hit 14 record highs compared to the dow and s p which have hit ten. One stock soaring is Applied Materials. Up over 100 last year. Lets bring in Applied Materials ceo gary dickerson. Just off First Quarter earnings yesterday. Welcome. Thank you, kelly. So i guess the elephant in the room is apple and its plans for oled, and i dont know if you want to address that directly, but maybe you could tell us some of the advantages about oled screens and mobile phones. This is a great time for Applied Materials. Applied equipment is used to manufacture every chip and advanced display in the world. Were setting records. Every quarter our markets are strong and our position in the markets have never been stronger. There is an acceleration of the adoption of oled into mobile devices, and thats fueling tremendous growth for applied. Our display business has grown orders in the last four years by a factor of five up to over 2 billion. Thats huge growth and thats why it would seem that this has a lot to do with apples plans for 2017. Can you confirm that youll be able to continue to grow at the pace that youve managed to start posting . Well, you know, were really in the early innings of the adoption of oled into mobile devices, and even at the rate of equipment being purchased today, over the next few years we can see 2 billion or more of equipment for Applied Materials and then after two years were still at about 55 total adoption. So that adoption is broadening across all of the different types of mobile devices and the manufacturers of those devices are also broadening. Gary, when you talk about a growth path like that and the end market demand that seems to be there and the returns that youre managing to get it, it would seem like that is an incredibly attractive market to invest in and try to add capacity. Is that something that you can see coming on . Is the industry not at a spot where thats going to be an issue . Well, you know, where applied is better than anyone in the world is in materials innovation, so what were seeing in a Semiconductor Business and in display are larger technologt inflections. Organic led displays are also changing. Those technologies need materials innovation to enable those inflections and applied has by far the best talent, the best technology, the best competencies to enable those inflections. So were in a fantastic, fantastic position. Gary, what does that mean for dealmaking activity and what is still a very fragmented sector. You guys have walked away from some deals lately, and do you expect that to cycle to kind of restart . Well, i would say that applied has never been in a better position. Our markets are fundamentally stronger than theyve ever been, and as i said, our position in those markets are also incredibly strong. So applied is in a position of strength. We look for opportunities where we can accelerate our growth, that are synergistic with Applied Materials and get a financial return. We will continue to look for those kinds of opportunities, but our organic Growth Prospects Going Forward are really fantastic. All right. That is gary dickerson, the ceo of Applied Materials. Thank you for joining us. Thank you. And we have a news alert on elliott managements paul singer. President trump said he had met with the Hedge Fund Manager this afternoon. We just got a statement from singers spokesman saying he can confirm the meeting occurred and the two, quote, discussed policies to advance a pro growth agenda and the president s success on behalf of our country. They had a Good Exchange of ideas. Mike, as youll remember, the president said paul singer was part of the lets call it sort of republican establishment of the never trump category. I think i remember him telling us he would write in somebody instead of voting for the president. He was one of the holdouts. This is not a unique story to him. Obviously President Trump has pulled a lot of these doubters over and the president seems to want to make much of that. Elliott management reiterating that meeting happened today. Lets send it over to seema mody. Shares of nu skin down. 79 cents adjusted on revenue of 531 million which also came in below expectations. Perhaps a bigger concern is guidance. The company saying for the First Quarter we anticipate revenue of 480 to 500 million assuming a 1 to 2 negative impact on foreign currency. The Company Providing an update to its previously announced managed transition. It is expecting to name a new chief Financial Officer in the next few weeks. Again, were looking at shares of the company down about 7. 7 . Earnings missing street expectations. Kelly . Kind of a battleground stock. Seema, thank you. Rahm emmanuel is defending nafta. Wonders why big business isnt. The great wall has 171 million in china since its debut, but few believe this big budget import from the middle kingdom starring matt damon will make as much of a splash here. It could have impact on china. Thats coming up. Youre watching cnbc first in Business Worldwide. Go aert same way moretodais iy ead getngught uwith t t rm r the investmentaners pgi a l vw, teaming eclized venv the al iesmagementns ds leadininveors. Sissespr its to rk w ei heio heio gogette sissespr and shouldbeepers. Its to rk w ei heio heio. Welcome back. Just minutes ago President Trump signed a new law stripping back an environmental rule fill filling one of his Campaign Promises to help the coal mining industry. In eliminating this role i am continuing to keep my promise to the American People to get rid of wasteful regulations that do nothing, absolutely nothing but slow down the economy, hamstring companies, push jobs to other countries although i must tell you weve stopped it. Youve seen all the factories, all the plants that are moving back. Theyre going back to a lot of places so you know that, right, fellas . Theyre moving back. Fast forward. General motors, fiat, so many. Very happy. Compliance costs for this rule would be over 50 million a year for the coal industry alone, and its unnecessary. I want to also thank the incredible coal miners who are with us today. I think we can make thank them the most, right . The political leaders. [ applause ] you folks have put up with a lot and, you know, in other countries they love their coal. Over here we we havent treated it with the respect it deserves. Even for defense having that coal is a very important thing for us. So i want to thank you all. This rule were eliminating, its a major threat to your jobs and were going to get rid of that threat immediately. Were going to fight for you like i promised i would in the campaign. And you were very good to me, and im going to be even better to you, i promise you that. Thats the president speaking about his plans to help the coal industry. Youre looking there at csx up 3 4 of a percent. It moves a lot of coal. That has a few other things going on in its business. It certainly does. Looking at arch coal. We had a string of bankruptcies of the Coal Companies. Peabody, one of the ones the biggest in the sector. Much of the coal being produced last year was from companies that had filed for chapter 11. Thats true. It had bottomed before the election. The coal stocks were great performers. I think Natural Gas Prices usually have a lot more to do with whether the coal industry is doing well. Theyre back down below 3 bucks. Nothing is distressing. Thats the driver. Well see if they get new life in a way out of some of the signals in the administration keeping its promises. Chicago mayor rahm emanuel is known as a democrat helping president clinton pass nafta. John harwood caught up with him. John . Reporter kelly, in two different white houses chicago mayor rahm emanuel adapted to the needs of a globalized economy. He helped bill clinton pass nafta and president obama with the tpp. Emanuel wants to know why pro trade American Businesses arent complaining. I have to be honest, one of the things thats surprised me in the past weeks, you know for president clinton i worked with bill davis spearheading that. In congress on trade deals i supported president obamas Asian Pacific deal. I supported it and went to the white house and helped him get the korean. Yes. How is big business silenced about this . President s been talking about tpp and you would act like it was its like an unfortunate accident. But im a little surprised given the energy that they think about, the importance they see from globalization how theyve maybe its the lure of the tax cuts. I have to be honest, i really want to know how sincere you were about how important globalization is. I still believe in the promise of globalization with Real Investments in infrastructure, training, et cetera. Reporter now President Trump may be moderating his tone on trade. He recently described his changes in nafta as tweaks. Chicago is a major exporting city you can expect a democrat like rahm emanuel will applaud if he does. Kelly . John, stay with us. Again, mike, this gets to the heart of the issue. We love everything hes saying on tax reform and the like. Were not as pleased about the protectionist stuff. You wonder if over time if the president feels like he won on that message, does he shift a little bit the messaging . And just how comprehensive does he feel he needs to be in terms of taking action to say that he fulfilled the promise . I think thats really the game theory that investors are looking at. Saying, look, if he wants to claim credit for some measures here and there, maybe a puntative tax, thats fine. If were talking about getting hostile towards big trading partners and getting into a trade war where it kind of goes out of control, the argument is china has a higher pain threshold than we might. John, i feel like there have been a lot of companies to make clear that these policies would hurt them. We saw fred smith, the ceo of fed ex, he said i was surprised they had me in and kept me in because his views on trade are very different from the administrations. Reporter well, exactly. Peter navarro who is his special trade adviser gave an interview to the Financial Times not long ago where he said were going to bring those supply chains back to the United States. That is something that businesses are going to have difficulty with. And, you know, you guys were eluding to it before in the discussion of this coal regulatory move that the president was signing this afternoon. Be clear what that move is. He was deregulating a or removing a regulation that was involved with protecting streams near coal mines. Given what mike was just saying, the threat from natural gas and other Global Forces are whats behind the decline of coal. What is the cost of the gestures, the efforts that he is making to deliver for those blue collar voters in states like West Virginia and ohio and pennsylvania who voted for him . The same is true on the issue of trade and supply chains. He said in that photo op Companies Used to take jobs over seas but weve stopped it. Im not sure that American Business thinks hes stopped it and well have to see how serious he is about those words. All right. John harwood speaking there with chicago mayor rahm emanuel on that subject. Thank you, john. And its a big budget version of east meets west. The weekend chinese owned Legendary Pictures releases the great wall in the u. S. How this movie could be a turning point on hollywood chinese relations. Stocks are in for a major shock. Hell explain why at 5 00. Her nnnef thwod innovativeuses. Damen and special effect monsters and an exotic setting but the weekend opening of the great wall may have more at stake than any film release. Julia boorstin is here to explain. Reporter the great wall is the biggest ever chinese hollywood coproduction and now its aiming to draw u. S. Audiences. Produced by legendary east and chinese tech company, la vision pictures the great wall is the first english language film from a top chinese director and the most film shot entirely in china. Its already grossed 225 million overseas, but when universal distributes the movie here its expected to gross less than 20 million over the long Holiday Weekend with a weak 35 rating on rotten tomatoes. It comes as hollywood sees more potential to make money in china. A positive call between President Trump and xi jinping are soon set to renegotiate the number of u. S. Films allowed into china and the percentage of revenue that the u. S. Studios bring home from the chinese box office. Now that sounds like an explanation. Say with us for the movie when i first saw the trailer because this is more than a year ago. This was supposed to come out at christmas. I didnt know what was going on. Jason bourne gets lost in china. There was some sense of tactical play. Did this movie even do that well by Chinese Standards . Reporter it didnt do as well as some other u. S. Films have done overseas and i think that this is one of these films thats been in the works for years. Very expensive, a lot of expectations, a big u. S. Star and the reviews have just been bad. I havent seen it myself but the reviews have not been positive. Theres been a lot of talk about how chinese audiences and american audiences like Different Things in films. This is a film that appeals more to a chinese audience than american audiences. I think there was a lot of hope that this would be the first big chinese movie that would break out and have global appeal. Thats not going to happen this weekend in the u. S. But i think this will be the first of many actions between hollywood and china. One of the big stars they were aspem bling this global roster of names. I have to say, i have a feeling the United States is exported a lot of bad movies to china so maybe they owe us. Thats true. Maybe we deserve it. Thank you, julia. Up next the stunning of remarks about passive versus active investing. Stay with us. They say the world does not revoe around you. But today, m it can. I am helping 1800flowers find the perfect gift ouof trillions of combinations. And workg with the new York Genome Center to find treatments as personal as dna. And i am helping sesame street make education unique to every child. Hello, my name is watson. Workintogether, we caoutthink anything. Hello, my name is watson. I cant wait for her to have thatollege experience that i had. The classes, the friends, the independence. And since we plaed for it, that student debt is the one experience, im glad shell miss when you have the right financial advisor, life can be brilliant. Ameriprise the debate over active versus passive investment remains a hot topic. Fidelity out today with some stats. Seeing a total of 58 billion was withdrawn from actively managed and in turn 16 billion floated to passive ones. Yesterday Berkshire Hathaway spoke to Daily Journal shareholders and one of the topics he touched on was the future of index funds. Is there a point that index funds cant work, of course. If everybody bought nothing but index funds, the whole world wouldnt work as people expect. Theres also the problem one of the reasons you buy a big index, like the s p is because you have small index and it gets popular you have its a self defeating situation. If you get too much in one sector, of course you can get catastrophic changes. I dont see that happening when the index is three quarters of a whole market. The problem is the whole thing cant work perfectly for ever and but itll work for a long time. That is Charlie Munger speaking yesterday. Its a theoretical conversation since index started and even the biggest advocates will say there is some threshold at which it starts not to work. But its nowhere near where we are now which is perhaps a third of all assets in large cap stocks. Theres a ways to go. Another munger comment from yesterday, he didnt mean to make this a point for passive investment but he said what is berkshire own apple and airlines, we used to be able to shoot fish in a barrel. Its not as easy. If they only have a small edge, maybe you want to think about indexing as your way to go. Thats whats so fascinating. Its gotten so much tougher so people will naturally throw their hands up the obvious choice is to go passive investing then its theres risks with that too. Van guard just hit trillion dollars in assets and the environment that we entered into around the time of the election and largely because Interest Rates went up right afterward, has really created an environment where its easier on paper to beat the index because youve had stocks outperforming a lot. The markets not moving as one any more. Of course theres just as much chance to lose money and pick the wrong ones if all you want the shot and that shots been served up for you. Speaking of 4 trillion, its also the amount that theyve added. Theyre taking some of that from the bond funds. It has been a tremendous move not just in this country. Right. Really the flows bonded to stock have not been as dramatic as you would think given the market move. Really been price effect changes and sellers are not there. If you own stocks people have been hanging on to them. If youre going to get that follow on, one of the biggest etfs has been the dow diamonds which is a complete afterthought. Which show you retail money. That could be bad if it goes too far. I think its hard to make the argument. Still one of the analogies he made was to the nifty fiftiy. You bid these stocks up and their value dropped by twothirds. Do you think that could happen with passive investment . I dont think in 2,000 you had Something Like that too. If you look at the top five right now those massive growth tech stocks, maybe we had too many of our bets in one place. Just like in 07 it was all in banks. See you tomorrow. Closing bell is over. Fast money begins now. Fast money starts right now, live from the nasdaq markets. Im melissa lee. Tonight on fast. The man who moves markets and call the trump rally says a market accident is ahead. Hes here to explain what has him so worried. One of the big ipo is about to hit the market. And later oil is doing something very unusual and it could be sending a bad warning sign to Energy Stocks. Well explain. But first we start with the press conference thatto