tv Closing Bell CNBC November 21, 2016 3:00pm-5:01pm EST
your television in the usb port, stream it wireless, that's it. >> that's going to disrupt all the media contracts, all of them. >> absolutely. something to watch, certainly. thank you for watching "power lunch." >> shall we do it together? >> one, two, three. the "closing bell" starts right now. that was lovely. welcome to "the closing bell." i'm kelly evans. >> and i'm mike santoli. they were in unison. >> that's amazing. >> as we say, the major averages all on track to close at new highs today. energy leading with tech and utilities not far behind. >> and the small caps are playing a role. the russell 2000 is seeing the longest winning streak in 12 years, but the russell is
underperforming today. >> it is. nonetheless, the dow is now up 5% from november. that's the fifth best monthly performance for the blue chip index in the last five years. >> and stocks are continuing to surge in the wake of donald trump's presidential victory. investors are bidding a lower tax environment will be good for stocks. coming up, we'll speak exclusively to the man in charge of writing tax laws for the house, congressman tom brady. and we'll talk about the potential cabinet picks as conflicts of interest rise for the president-elect and his real estate empire. outside of trump tower, ayman is the there, we thought we would have results by now? >> reporter: the door has been spinning all day long. a big series of meetings throughout the day, kellyanne conway just came down the elevator and talked to some of us and the press about some of what has been going on today, giving us a sense of the events
of the day and what to expect. i haven't had a chance to ask her about the billionaires that donald trump has been meeting with. you know, there are a bunch of billionaires for cabinet positions. wilber ross is in the mix, robert johnson of bet is in the mix as well. not clear what jobs they will get, but kellyanne said trump has been talking to people of all socioeconomic backgrounds, but she did say the billionaires have a special job. >> they know how to create jobs. they understand -- they understand the value of pursuing the american dream and i'm sure those folks are talented but also got loucky at some point. and they understand policy and trade. >> reporter: so clearly donald trump is leaning on the wealthy folks. kellyanne conway making the point that he's talking to a lot of people from the socioeconomic
backgrounds. we are waiting on news out of trump tower, no indication when that will be. we know the meeting with the top executives and top anchors has broken up. i talked to those folks as they left the meeting, it was off the record and couldn't tell us what was going on in that meeting, but that meeting was about the media's relationship with donald trump going forward as president-elect. and then later on as president of the united states. the media has been very concerned about who will access the president-elect. that means cameras go with him wherever he goes so we have a minute-by-minute record of who he met with and where he went. that is very important to the press and public to get a sense of where the president is at any given moment. and it can be significant for history. that's one thing you can expect that the media executives made clear in the meeting with donald trump. but we'll wait for word of that to leak out a little bit. it was off the record, but with that group of people, you might imagine there could be one or two leaks before all is said and done. >> we can only hope. >> by that group of people, you mean the media folks or the trump camp? >> i mean the media folks, the
reporters, the editors, the executives. we depend on leaks for a living. i was button-holing them when they came out, so i'm expecting it will leak out soon. all the people i asked about the meeting honored the off the record commitment. >> eamon javes, thank you. we have don chu here and kate nasdaq there as well. >> what we're watching is what you mentioned a few moments ago, the fact that energy stocks are propelling what is happening in the trading action today because energy stocks and the s&p 500 are double the next best performing sector, up 2% so far in trading today. that is all on the heels of perhaps some optimism over opec's freeze deal, maybe that helps put oil prices a little higher. but that 4% gain for wti crude
is helping big stocks like exxon mobil and chevron. exxon up by 1.33%. two of the biggest point contributors to the dow there. if you are looking for the action that could be hot, you want to check out history. because according to the data partners of kensho, during the week of thanksgiving, a lot of the retail focus companies are in the spotlight, if you will. according to them, since the year 2000, the s&p 500 is seasonally strong this week of thanksgiving, up by close to a percent and up 80% of the time, or 70% of the time. if you look at some of the standout stocks in there, take a look at nike or tiffany or amazon, all up at least 80% to 90% of the time, between 2% to 3% to the upside. the real stand is coach, watch these shares possibly for some move over the past 16 years as these shares have moved about 5%
higher on average just during the week of thanksgiving. so certainly if history is a guide, it doesn't necessarily repeat. but if it is, guys, retail stocks could be big this shopping season and specifically this week. back over to you. >> we'll see if people can get into the tiffany by trump towers. miss kate, what is leading the way at the nasdaq? >> well, the nasdaq is higher by .80%. we have two new records, the nasdaq composite hitting the intraday high of 40.64. and the russell at 1320. now on to the big movers today, the nasdaq 100 is tech moving higher. and the bank stocks are rallying. facebook up 4%. amazon and netflix also up 2% higher. and among the biggest movers in the nasdaq 100 today, in biotech and phrma moving higher. and regeneron is moving.
we'll keep an eye out to see if we close at the record highs here today, guys. back over to you. >> 4% move in facebook, wow, thank you, kate. we have kim forest joining us, steve grapho, and rick santelli from the cme in chicago. kim, since we saw facebook is one of the big movers today and under a lot of scrutiny lately, is this a company you would find attractive as an investment? >> no. not at this time. but i do have to point out, they had really great results, right? and you have to wonder, because they are a media company. that's how i look at them. not necessarily a straight tech company. but anyway, how much of that great quarter was due to the presidential election? you know, all the media companies get a real boost around the increased ad buying. so you have to really ask yourself that. and how long that's going to continue. >> steve, we're kind of
tip-toeing up into record territory across the board. it seems like there's a bit of a gravitational pull entering the holiday week, but yet it is a leadership profile than what we have seen since the election. anything to read into that on your screen? >> i think it is a good thing because we saw coming out of the election financials rip, we saw industrials rip, because of the infrastructure perspective, infrastructure plan. and now you're starting to see energy take a leadership role. you're starting to see the bank stocks come back in. if you look at the performance, if you look at amazon off that november 14th low, for all the stocks, amazon is up 9%. facebook is up 7%. google is up 5%. netflix is up 5%, 6%, 7% as well. so you are starting to see it healthy. we talked about rotation. i'm not so sure it is moving around on the same ship, we go from one side to the other side. and i think it is healthy that we see sectors out perform and then you see the market as a whole not move sideways but
higher. no one seems to be getting in front of the freight train right now, mike. >> no. it absolutely seems that the transports are taking a rest today. the other stuff is taking lead for the season. >> the market is still in the spotlight despite the record highs, but the dollar and rates were the big story until now. >> well, you know, i still think it's a pretty big story. the dollar index and rates have covered a lot of ground. and they have given back only sub amounts today. the dollar index after jumping 101 is only off a fifth of a cent. but your point is taken. i think the dollar index and rates have so much more to offer in terms of giving investors insightful strategy. because we are now out distancing the competition. and what i'm talking about are ten-year rates in all the various sovereigns, whether it is the u.k., whether it is the eurozone, whether it is japan. our rates are now unmatched,
meaning those other sovereigns aren't keeping up. you're over 200 basis points difference between us and boons. over 90 basis points between us and gilds. why is this important? because capital is going to follow the rate side of the equation, the strong dollar purportedly is going to export countries like europe and japan. but is it really? i think what it is going to do is put all the other central banks in the box. we have michelle doing wonderful reporting with regard to france and their elections and this whole movement that is really a continuation of things, whether it is tea party trump, brexit, it is all rolled into one. and i think it will put am huge amount of pressure on central banks to conform more to the u.s. normalization process. and i think that is something to pay close attention to. >> yeah, no doubt about it, rick. and kim, just to finish with you there, one of the aspects of this rally since the election is that certain groups are working and certain groups aren't. and there's divergence between individual stocks as well.
so in theory, good time for stock picking. are you finding things that have been left behind that you might be interested in? >> we are. and, actually, we're looking at the wreck of people getting out of the income-paying stocks and moving back into bonds. so looking at the telecoms, look, we all use social media. and the thing we get delivered, the way we get it delivered to us is through our phone or through a landline, some sort of connection. and that's why we love them. it's because we continue to want to be connected. so why not buy that cord? >> you are not concerned about the industry, that it is matured and the churn is picking up because people are shopping for better deals. look at the impact that t-mobile has had. that's one of the players people typically like better in this space. >> sure. no, i understand that reasoning. but the other thing is,
t-mobile, if they get enough customers, they are going to have to plow the money back in and buy bandwidth and technology. and i think the old standbyes of at&t and verizon are well positioned. they can balance the load and they are just really solid companies. so you want cheaper access, but you also want access. >> exactly. yeah, absolutely. the reliability. steve, just a final point to you about what has happened in oil today, listen, especially with the stronger dollar, it's a pretty significant move. and once again it seems to be all the bidding up ahead of the opec meeting. >> and it sets up for failure. because if there's a freeze or slight cut, we are coming from record high levels of production and trying to get all those members in one boat to think one thing. they might talk bullish price of oil, but their actions will be bearish. we have seen it time and time again, 50 to 55 dollars.
hedges come on and you get overwhelmingly a lot of production come on. i think the limited upside here is not worth the gamble on oil. >> all right. we'll see if that filters into the rest of the market. thanks very much, steve, rick and kim. >> thank you, guys. 45 minutes to go. the dow is up 70 now. the s&p is up 14. and the nasdaq, let's see, the russell was up but doing weaker relatively speaking. same thing for the dow. the s&p and nasdaq had intraday highs once again today. >> at least a few points in that record territory. up next, facebook's ceo mark zuckerberg outlines new ways the social giant can tackle fake news stories. we'll see how this impacts the stock as the mounting tide to hold the social media's algorithms more accountable as well. later the house and ways means committee chairman kevin brady will talk to us about tax
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we have all three major indexes plus the russell in record territory with 45 minutes to go. the identity services protection company lifelock is being bought by symantec at $2.3 billion. the lifelock shares are up 15%. tyson foods is among the biggest losers. it reported the disappointing quarterly earnings blaming this on shortfalls on chicken, pork and prepared foods. the meat producer says donny smith is leaving at the end of the year and will be replaced by the company's president tom hayes. facebook shares are higher after the social networking giant approved a $6 billion stock buy-back on friday, but the company's under growing scrutiny for its role in the spread of fake news during the presidential campaign. >> julia boorstin is joining us
with more. >> reporter: mark zuckerberg posted on friday how he's working to tackle fake news. in an about-face from the earlier dismissal of any impact of the fake news on the election. zuckerberg writing, quote, we know people want accurate information. we have been working on this information for a long time and we take this responsibility seriously. the problems here are complex, both technically and fis so philosophically. he says facebook wants to rely on the community and trusted third-parties rather than be ash or t ash tor /* arbitors themselves. but this issue will certainly continue to be controversial. "the new york times" writing an editorial saying it is facebook and google's responsibility to stop fake news. the new york time citing a buzzfeed analysis of the top 20
fake news stories about the election on facebook saying they generated more engagement than the top 20 from real news sites. kelly? >> thank you, julia. as mentioned, the shares are up 4% today. >> not being heard just yet. >> exactly. but they were struggling since the election. they were one of the big laggers. the company's plans to use algorithms to flag and remove false content is putting the programs in focus as some critics are warning algos can be inaccurate and add bias which can sensor the content on the social site. >> for more on how this impacts facebook's bottom line, we have the editor and chief of contently. i want to say contentedly, but that is grammatically incorrect. joe, let's start with you. facebook is saying they are going to take some measures to disrupt the economics of some of these fake news sites and also use algos to try to vet other
content. do you think it can work? and what is the role of trying to scrutinize what these algorithms are actually doing? >> first of all, it absolutely can work. we saw during the hack-a-thon a group of students in 36 hours build an extension to flag fake news on facebook. it's hard to see why facebook didn't fix this already, but as journalists we have a responsibility to do a better job of reporting on facebook's algorithms. it is not just a big scary thing we don't know about because we didn't go to computer science school, right? but it is incredibly important to media organizations. 40% of the traffic of these sites comes from facebook. 52% of adults get their news from facebook. we have to be the checks and balance system to say, what is going on here? >> brian, is it okay to say, here are our algorithms, what do you think? >> i think it is good they recognize there's a problem. because the lack of recognition of a problem was and is compounding other trust issues
they have with advertisers, which is ultimately what is impacting their business to some degree going forward. >> you guys actually think this is a business concern because advertisers themselves don't necessarily want to be interacting in this environment where fake news is rampant? >> it is. almost all the advertisers are large brands mostly. and those advertisers have restrictions on placing ads in brand-safe environments only. and that means avoiding unsafe brand environments. so violent sites, adult content, pornography and the like, it's one of the reasons that facebook actually bans images of of a number of things that just don't quality for brand-sake environments. so the big news is not something most advertisers would have thought about before. and now they all will.
so facebook seems to be taking it seriously, but it's going to resonate as something that happens on facebook going forward. >> joe, it's interesting that you say there are tools here to be checks and balances against the algorithms. explains if this were granted how it would work in practice. >> well, so there are a few details to it there to tell you what content is being shared on facebook. that's what the buzz feed analysis is built on. they have built it through their technology hubs. we have all the social tech out there that journalists can use. i work with these folks all the time and they are happy to share tools and analysis for you to tell you what type of content is getting shared. as journalists, we should be using the tools to see how much is fake news getting shared more than real legitimate news, report on that and put pressure on facebook to actually keep their algorithm in check instead of viewing it as this magical thing we're not going to understand and report on. >> brian, i am curious why mark
zuckerberg is adamant in resisting the idea that facebook is a media company. why does he not necessarily want to acknowledge that by writing an algorithm, there is an editorial process in that. anything aside from his self-image as a tech entrepreneur? >> well, i wouldn't understate that as part of it. i think a lot of companies that are silicon valley based think of them as software companies or technology companies, not media companies. and i think there might be some risk around regulation if they put themselves forward as media companies. so that being said, there is willful disbelief that companies that don't intend to do evil could possibly be contributing to negative outcomes. >> is this, joe, just about an idea that you're pushing or something much more broad about, what is the black box of how these work? and by the way, it is different
with old lying media companies, there's a known process by which journalistic decisions are made. we know all about anonymous sources and what is considered on background and publishable, things like that. do we have to have a code of conduct for new media or just import that into new media? >> first of all, we are talking a lot about fake news. i don't think fake news is the bigger issue. the bigger issue is the way facebook creates filter bubbles within communities where you only see updates. you always see content from like-minded folks. and they say their mission is connect to this world, create open and connect a world. but facebook is actually creating closed worlds where somebody like my only gets to see the views that i want. >> but they have a right to see the site how they want to. >> sure, they have a right. but at the same time, saying they are not a media company is
ridiculous. when you drive 40% of content on the web, you are a media content. when most people get their news through you, you are a media company. the same way we apply journalistic standards, moral standards to "the new york times," "the washington post," to sites like buzzfeed and publishers, the standards should apply to facebook. >> we'll see. there is definitely tension there. we'll have to see how this all develops. joe and brian, thank you for your time. we have 35 minutes left before the bell. we have the dow still up in record territory. nasdaq and the s&p all narrowly so. >> up next, anthem and cig in are battling the justice department in court to save their blockbuster merger. bertha coombs has the latest after the break. and later congressman kevin brady will tell us who he would like to see running the treasury department when we come back.
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bottom includes disney and 3m. with the decline of nearly 1%, goldman is downgrading the stocks from neutral today saying industrials could come below estimates next year due to growth in electronics as smartphone sales taper. >> over in health care, anthem and cigna are duking it out. bertha coombs is at the white house with more. >> reporter: the stake is for large insurance companies. they have united health, etna, cig cigna and anthem. john jacobs in opening arguments said this $53 billion deal would
leave large employers with three to choose from and it is some 35 markets that are no choice because anthem and cigna compete head-to-head. anthem thought it was easier to buy cigna. they are not nationally insured because they only operate their own networks in 50 states. that he prevent networks from other blue cross operators in other states. but if they merge with cigna, they together will have a large enough network to get great savings for employers and pass them on to employees. this afternoon joe swedish from anthem will have to defend those charges. he's expected to be called by the government and also explain how these two companies that are
so contentious will be able to integrate such a huge insurance merger that would leave them with 53 million customers. guys, back to you. >> bertha, yeah. a fascinating case, how is it going to develop with the turn of the administration? terms of what the justice department may do after 06 days from now? 60 days from now? >> reporter: it's an interesting thing, i spoke to anti-trust lawyers who said andrew jackson has to defer with facts on the ground. and the switch from aca doesn't impact large insurers directly. it's more of an exchange with the market. nonetheless, they said, look, the market is changing. everyone has to change along with it, but one of the experts on this afternoon talking about the way large employers like to work with insurers have they are moving towards new programs. they need large insurers to implement them, more value-based
systems. and large jurors with large footprints can implement those nationally. >> so much in flux right now. bertha, thank you. bertha is outside the courthouse in washington where this will be decided. time now for a cnbc news update with susan lee. >> hi, kelly. here's what's happening this hour. iran says a trump administration will not be capable of unilaterally breaching last year's landmark nuclear deal or revising it. the iranian foreign minister says nonetheless his country is prepared for every scenario under trump's leadership. 500 workers at o'hare airport in chicago will strike but after the thanksgiving holiday on november 29th. union officials are making the announcement this morning outside the airport saying that they don't want to mess up anyone's holiday plans. the workers are looking for union status and $15 per hour in wages. and so we start to see thanksgiving weekend in upstate new york. a lake-effect snowfall making it
difficult and difficult driving conditions causing several schools and businesses to close. significant snow is expected to continue in the region through tomorrow. and more problems for chipotle. the mexican restaurant chain facing a class-action lawsuit for false nutritional informati information. >> that's the cnbc news update. back to you. >> the 800-calorie spread has to be an error. >> we know the burritos are more than that. they weigh a pound! >> thank you, susan. less than a half hour left in the trading day. we have all three indexes up gently, but definitely all trading at record highs. the leading trader will tell us what he's watching into the close coming up next. >> plus, we'll speak with the technical analyst who will name names of a few stocks you may want to consider adding to your portfolio. stay tuned.
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welcome back to what could be another record-setting dow close. the s&p and nasdaq hit all-time intraday highs. and energy has been a sector leading higher. crude is higher on rising plans of opec agreeing to the meeting last week. among the gainers, conocophillips and wess. and we have the s&p 500 adding to the post-election gain here. here's a look at the technical picture. the s&p kind of drifting to a new high. what do you think we're set up for here? >> i think investors really have to be more selective at this stage in the year. heading into the week, very good. however, it's important to look
at a few things. one i want to call breakouts. we are breaking out in a new high territory in the s&p and nasdaq joining the dow and the russell. that is constructive. the second being blowoffs. we have seen huge moves in the financials and industrials. these groups likely won't move as quickly going ahead into the end of year. i think yields in general are set for a bit of a pull-back. 1 13.5% in one year is huge move. can technology carry the move? i don't know. third move, brent, we saw 60% of the stocks above the 50-day and 200-day averages. a far cry. and bullish sentiment is a fourth "b." people are convinced the market will run into the fed hike and right into the year-end. it may prove hike. we are seeing a 20% spread between the bulls and bears. in general, very constructive
price action. but there are reasons to think you want to be careful about what you own, that it can't be across the board and up and away. >> and be ready for a bull-back, pull-back? >> we are not done with the week and we are not done with the month. >> don't chase it today. mark newton, thank you very much. >> thank you, guys. with the nasdaq hitting intraday highs today, which tech names should be on your buy list still? joining us with his picks is neil dochi. we have been debating facebook and i see it is on your list this year. >> we came out with a note this year on facebook. and we are very bullish on the long-term prospects of facebook. there's been a number of investor concerns, one has been around facebook moving into a deep investment cycle next year. and when we looked at amazon and google back in 2010, they went under deep investment cycles for many years. and those stocks, amazon was up 400% from 2010 to 2015. and google was up 150% from 2010
to 2015. so even if facebook goes under a deep investment cycle, we think the stock can still rally from these levels. >> the cat is out of the bag now, google and square are the others on your list. you just mentioned google, so why is it attractive to you? >> yeah, i think there are a number of reasons. one, google is adding new ad formats to their business. so we think about expanded tech stats, promoted pins, these have a net benefit to revenue as advertisers try to optimize around the ad formats. secondly, next year at google will create ability to bid on mobile separate from desktop. that will give pricing to mobile. and we see a lot of optionalty from google and programatic and these those businesses can grow higher for google. >> and neil, square, is that a play on the general space for payments? or is there something else going on with the company? >> yeah, we actually think
square could be a really interesting acquisition target. you know, the fundamentals have been strong for this business. they have been able to show really strong margin improvement and get to profitability on a fairly quickly basis. and they actually have cornered the s&p market. so their take rates are higher than everyone else in the industry. they have had very little strong transaction margins. what they have been able to do successfully is market and sell loan products and high margin software to the large installed s&p merchants. and that has been able to create really large investments for square. so we think this is healthy. it's a good small cap name and we do see potential for an acquisition on square. >> neil doshi, thank you for your picks. we do want to get to a news alert on fidelity investments with seema moody. >> potential management changes
on the horizon according to dow jones on the story on fidelity. chief abigail johnson will reportedly succeed her father ned johnson as chairman of fidelity. johnson is 86 and has been chairman of the company since 1977. according to the report, abigail johnson will hold dual chairman and ceo roles. therefore, solidifying control of the boston money manager. we'll be sure to keep you up to date on this story. back to you. >> seema, probably the definite of orderly transition from father to daughter. we have about 18 minutes left in the trading day. we have all the major indexes. just a few points into record territory on a closing basis. the stock market on a role since the election of donald trump as president. one sector surprisingly not faring too well. we'll share which sector that is coming up next. and the house ways and means committee chairman kevin brady has been in regular contact with the trump transition team. we'll get the latest on what the new president has in store for the first 100 days of the new administration.
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talk about. it's never too early. one sector vital to the economy has taken a turn for the worse. landon dowdy is joining me with today's sectornomics report. hi, landon. >> consumer staples typically a yield play have been falling since the election. the sector is down 4%, becoming the second worst performer in the s&p 500 since americans voted donald trump as the next president. but despite the slide in the sector, some staples with benefiting from the trump inflation, the trump presidency has many betting food prices will rise to give a boost to grocers. and since the election, kroger is one of the worst stocks performing year to date jumping 8%. and whole foods is up 6% as well. and costco up 3%. and we are hearing this is the reversal of what we have seen over the past six months when grocery stocks took a hit thanks to fallen food prices while other consumer staple names
traded higher. however, not all staples are getting a bump from trump. coty down 10%. philip morris slipping near 9%. and archer daniels midland down 8%. guys, back over to you. >> there are some movers, landon, thank you. about 15 minutes to go until the bell. and again, we're seeing kind of a broad-based rally on wall street today led by energy, but other sectors are participating as well. not that many all-time highs. >> it is not a huge push to the upside. nasdaq is outperforming, that is change. up next, we have anthony chen of chase to explain why the ten- year treasury yield is failing to rise after failing to do so after quantitative easing. that's when we come back.
less than ten minutes until the close. we are joined by the chief economist at chase. anthony, thank you for being here. >> great to be here. >> we are seeing the treasury yield hover at 234. people may look back to say we were printing so much money way back when, yield expectations went nowhere, why are we seeing
this? >> a lot of people know that the money created for quantitative easing was stuck in the vaults at the banks. now what we see is increase in infrastructure expenditures, lower taxes, fiscal policy. this money is going to circulate. milton freeman told us too much money causes inflation, but the money wasn't circulating. fiscal policy will be circulating. >> what about the growth piece of this? you know, how to invest is going to depend a lot on whether the economy is picking up into this or not. >> there's no doubt. let's not forget the monetary policy is stimlative. we'll raise the growth rates. when you look at next year, we're going to see at least 2% growth compared to 1.5 or 1.6% this year. and then in 2018, we'll see more. this is one of the first times that at a late stage on the expansion we are seeing expansion in the fiscal policy,
even though the unemployment rate is 4.9%. growth has nowhere to go but higher. >> you say we are still going to be raising rates gradually, but do you think all the talk and idea of the stimulus is going to push the fed to accelerate the time table next year? >> there's no doubt. given all the stimulus gradually is one or two rate hikes next year. but probably they should be doing a little bit more than that, but they won't. because what have they done in the last two years? one rate hike and this year one rate hike. next year they double it, but it is still gradually in my book. >> going back to how you should invest then, do you go with the cyclicals or do you see the industrials and financials in some of those areas doing pretty well? >> i think the cyclicals because economic growth is faster. you also want to invest in the companies to benefit from the lower corporate tax rate and want to invest in the sectors with high corporate tax rates. the energy sector, for example, and you want to also be aware of what happens if the dollar gets a little stronger. you want to see those sectors that have a lot of exposure
overseas, like, for example, the technology sector gets more than 54% of its revenues from overseas. if the dollar gets too strong, that might be a red flag. >> yeah, and what about the outlook for exports? just looking for the unintended consequences of all this happening, before we had the policy, everyone seems to be penciling in the bright side of them. we'll be talking about how trade oriented companies have trouble next year? >> we will basically be waiting to see whether or not the president-elect follows through on some trade restrictions and tariffs. so far we have not heard much noise on that. we have heard all the good stuff. if we continue with the good stuff and won't hear the negative stuff, it won't be a concern. >> recession in 2009, and now it's november 2016, that's 7.5 years in here. and now it's going to pick up? so how long is this expansion going to be? this is the longest one in modern times? >> this is the reason we have not seen the inflation. it's been weak. we are talking about closer to 2% growth since 2009.
and now we're going to start to accelerate. and historically when you have economic expansion and weak growth, they tend to last longer. >> and stocks respond to that at session highs as we stand here. they said there were 400 million to sell here but they appear to be selling off. >> we'll be back with the closing countdown next. and stay tuned, after the bell the trump cabinet is still being made. we'll talk to a former trade representative and hear who the president-elect might name and what will really happen with china. you're watching cnbc, first in business worldwide.
i invest with e*trade, where investors can investigate and invest in vests... or not in vests. sign up at etrade.com and get up to six hundred dollars. three minutes until the bell, we actually had the major indexes tradeding at their highs for the day. all of them in record territory. domenick chu on the floor with me. we still have the participation by things like the transports. >> there are. we have been talking about the transports for a while. they are not at the records we have been talking about for the s&p, but they have been steady. we have not seen a pull-back in transportation stocks since the election happened. so as we talk about the fedex,
ups, especially with transportation stocks as oil hangs in the balance given the opec chatter, certainly something to watch there. along the lines of transportation and oil, it also may be if oil prices stay lower, we have a tail wind for the consumer. and jack in the box is a quick service restaurant out there with earnings later this afternoon. that will be a big tell. and i'm watching campbell's and hormel tomorrow. it was the hottest trade from 6 to 9 months ago and all of a sudden the consumer statements -- >> canned soup -- >> and spam, tomato soup with grilled cheese, all that in the consumer trade, i would like to see some type of commentary about whether or not they are seeing those patterns change. of course, food deflation has been a big story that helps their cause. i would like to see something out of that earnings report to say something. >> tyson foods had a bad earnings miss. >> and that is why staples is one of the worst performing sectors because of the
double-digit decline on the percentage basis on the likes of what is happening with tyson. as we talk about the consumer staple stocks, it will be key to watch whether or not they have any kind of pricing power and whether or not the cost structure is working in their favor. >> and investors are buying them for the yields or if there is something else going on. >> everybody talks about the yields, but we have seen the real estate not doing so well. >> so the bonds are the new bonds, stocks are no longer the new bonds. >> the whole world is upside down. >> but the volatility index has been -- it was slow to come down after the election, people were on edge, but now with the holiday week, we are easing back. >> the low 13s right now. so sellers and volatility have been doing pretty well. that insurance policy has not been cashed in as of yet, but i always get a little leery. when people talk about the volatility coming down, you wonder if that is a one shock event. >> there's some room between being too nervous and
complacent. maybe that's where they are right now. thank you so much. ringing the bell here at the big board, we have spirit arrow systems celebrating the tenth anniversary. and up at the nasdaq, randgold resources. the next hour of "closing bell" is coming your way with kelly evans. welcome to "the closing bell." i'm kelly evans. and all-time highs on wall street. let's get right to the close. the dow closing 18,956 as it shakes out here. pretty much closing at session highs with an 88-point game for a half percent rally. and by the way, the top supplier closing by 33 points. that puts us less than 40 points away and closing near 19,000 for the first time. the s&p 500 up 16 points, just
two points shy of 2200. that's a new high for the s&p by eight points. the nasdaq up 47 points. nearly a 1% gain. 5368 is the closing high there. that is also about 30 points above its prior closing high. so some of these have been holding, at least for the nasdaq, since september. the s&p since august when the dow adjusted last week. we are 60 days from donald trump being inaugurated as president of the united states. coming up, we'll talk to kevin brady, chairman of the house ways and means committee about what this could mean for your taxes. joining me on the panel, we have the pro columnist michael santolli along with stephanieling from global asset management. and joseph bianca is here along with "fast money" trader tim seymour. wow, all we can say at this point is wow, mike.
>> yeah, another day where you just tacked on a little more to the old highs. this rally extended itself. i think the way you quibble with it is to say some of the groups have come a little far in a short period of time. and maybe sentiment is getting a little bit over this, but everyone feels the underpinnings are strong. the corporate bond market, we don't talk a lot about, even as the rates go up. it has done nothing but stay relatively strong. all those things working together. and i think maybe everybody is on board with the idea that thanksgiving week is nothing but up, but we'll see how it plays out. >> here's more on the record closings. the market is down here. kate rogers is up at the nasdaq. don, we'll start with you. >> energy has been far away, the best performing sector so far in this trading. we have oil up 3%, 4%, 5% in today's trade that. means that energy stocks are up by 2% double the gains of materials. the second best performing sector in today's trade as things settle out a bit.
but if you look at that picture compared to what has happened post-election, just to paint a little bit of color as to what the market has been doing ever since the election day, we have known that financials have been a huge part of that story. the vast majority of the gains in the s&p 500 have been driven by that sector. financials up 11%. industrials also part of the story as we talk about the idea of infrastructure and transportation, perhaps becoming a little bit more of a leadership-type sector in a trump administration. energy also up there as well. consumer staples and utilities, we have spoken about the idea of interest rates as they continue to climb to make these relatively unattractive sectors. so far they have gotten commentary. we are seeing the volumes and they are not that spectacular. maybe some of this short covering, but overall this is a seasonally strong week for stocks. we'll see if this plays out. remember, retail stocks are in focus as they typically do well as the overall market does during thanksgiving week. >> thank you, don. now up to kate keeping an
eye on the nasdaq closing in unchartered territory. kate rogers. >> we have a new record here, 5368. the nasdaq closing 30 points higher from the previous high close in september. also, the russell 2000 closing at 1322 up from last friday's high around 1315. also as we talked about earlier in the day, the 12th straight day of gains. also matching the index's longest winning streak since may and june of 2003. big day here. the big movers here today, the stories we have been hitting all day long on the nasdaq 100, symantec higher on 5% on the news acquiring lifelock for $2.3 billion. facebook another winner higher by 4% on news of its stock buy-back up to $6 billion. apple climbed higher by 1.5%. and the other stocks rallied including amazon and netflix up 2% each. there were a few losers, jd.com and auto desk were among the pickest losers on the nasdaq 100.
>> kate and dom, thank you. so, stephanie, the animal spirits have been unleashed here, how much further can this thing keep going? >> well, if we have a rotation within sectors like we did today, a little bit of a nuance here that the energy stocks and material -- material has rallied and led, but energy hasn't. it's been a lagger. and the weaker dollar today or at least the pause in the dollar, of course, the one-month high in terms of food prices, copper rose, natural gas rose, so it was materials and commodity driven. if that continues, sure, we can actually continue to see new highs. financials took a pause, but i don't think that is anything more than a pause. and i think if those two sectors continue to lead, i don't think you can go higher. >> because tim, to bring you in here, it is interesting that oil did so well, especially with the dollar. and if it's a little bit pinned on the opec meeting, it doesn't give all that confidence longer term. but maybe it is what stephanie is saying, the broader complex of commodities and picking up on the growth prospects.
>> yeah, we have 15-month highs in copper and a lot of the miners have lagged. and if doctor copper is the show of cyclical economy, then we have to catch up. if you want to add some emphasis on why this trade is working, it's a value trade over growth. and you have economic momentum that has been carrying you. remember opec in 2014, this was the opec meeting that failed everyone's expectations. took oil down 43% into the lows of january 2015. a lot of people are going to be watching this over their turkey dinner. i think you have a huge underlined bid for the market if they can prove they can get through the freeze. i don't expect it to cut, but oil is in balance. and energy will continue to go higher. >> wait, what are peaople watching over thanksgiving? oil charts? >> you have a lot of people that think if oil can take us higher, i think the entire market can go
higher. maybe you won't be watching that. >> i'll tell the fam to check on you. what is he looking at there? tim and jim sound similar, so mr. jim, let me bring you in here. and interest rates, that's been part of this huge move higher. so has the dollar. and again, are they going to keep rising? >> reporter: yeah, it looks like the interest rates are. we're having an inflation trade and the commodities are going up and the stock market is going up. then people are not only abandoning the bond market, but the biggest buyer of the bond market has been central banks over the last couple of years. if they're going to lead, that will cause real problems in the bond market. of all the moves we have seen since election day, the biggest and boldest might have been the bond market, which is a dramatic rise in rates. as it measures now, we have collected almost 7% in a total return basis on the global bond index. that's the fourth largest correction in global bonds in the last 25 years. so only 2008, 2000 and a little bit last year, those were the
only times to see this big of a sell-off in bonds. this is starting to become more epic in the bond market. >> starting to get. the question is what happens from here? does it become self-fulfilling if people look at their losses in bonds? or does it depend on the fundamental factors here? >> no, i think it can become self-fulfilling. as they look at their losses, they want to get out and then as they see the economy doing better, they perceive that central banks are going to stop buying. all central bank stimulus is fungible. that's my watch word right now. the ecb is buying, the bank of japan is buying. but the global economy is inflating and there is a fear they will stop buying, then rates might be in the early innings if moved higher, if we do get the inflation everybody thinks. >> jim, from much of this year, the story has been that negative or near zero rates globally were anchoring u.s. rates and everything else. now that we have a 2% point spread between the german and u.s. ten-year note, does that not restrain how high u.s. rates
can go anymore? >> it does restrain it, but what you'll see happen is the ten-year note in germany start moving hirer as well, too. if we get that global growth, to repeat myself, the ecb will stop buying. and if the ecb stops buying, the ten-year german will start moving up and that will give the u.s. a chance to start moving higher as well. >> what about the dollar, stephanie? the fact we are looking at it over 100. the dow is a huge story, you talk about the headwind for companies, but how does this play out? and certainly this is something i worry about. >> this is the euphoria of better growth, better tax rates, kind of the whole trump plan. and everyone is very excited about it leading to better growth. certainly, the dollar is a headwind. so you have to watch it. i don't think it's going to go up as fast as it did last year. last year was up 15%. and it was a real headwind for companies to kind of get their
hands around it. so this year maybe if it continues to work higher, you have the other things that maybe can offset it. so there are puts and take. you have to be mindful of that. >> what broader speak do you talk about in this environment. you have the huge moves where people are investors and think, if we're at all-time highs is this the time for us to buy it. everyone is talking so positively. where do we see value? >> if you think money is coming out of bonds, as jim just talked about, and it goes into stocks, that's actually quite positive. if you think rates are going higher, that benefits certainly the financials, which is why they have done so well. but they are still very attractive. i think industrials make a lot of sense because they, too, are kind of discounting trough earnings at this point. they are not the lay-ups they were when talking about it this summer, but they are certainly companies and pockets of industrials that are commodity-based. and if you have the commodity prices going higher, they will benefit as well. and i also still think the consumers are in pretty good shape. i worry about wages and higher interest rates.
but at the same time jobs are getting better and wages for them are getting better. so there are pockets at this point. >> before we let you go, what about gold? is that trade over? >> i think with gold it is very funny. if there was an environment where gold should be rallying, you have more political uncertainty than we have had in this country in 40 years arguably. you have inflation expectations with 12-year highs. people should want to own gold. and gold is down 10% from the intraday highs on the election night. so i think what you have is a function where gold is always supposed to be some portion of your investment profile, but usually people are buying and selling emotional lows in gold. now is not a bad time to own gold. >> tim, thank you for joining us. appreciate it. be sure to stick around. and jim, thank you for joining us to kick things off on this record-setting day. we have much more on "fast money" where they are going bear hunting with stocks at all-time highs. peter schi if, f of euro pacific capital makes the case for the bears at 5:00 p.m. eastern. we have breaking news on an
earth qquake in japan. seema moody has more. >> the earthquake is said to be the magnitude of 7.3 shaking billings in tokyo. residents are being asked to vacate the fukushima area. this is still a developing story. and a fluid situation. but at this point, there are early signs of an earthquake are being felt in tokyo and the eastern part of japan. >> especially what you said about fukushima, seema, keep us posted. she is back at headquarters. tax reformers are at the top of president-elect trump's office. up next, we'll speak to the man in charge of writing tax laws in the house. the ways and means committee chairman kevin brady. plus, trump threatened to impose stiff tariffs on china
and declare them a currency manipulator. is that tough talk or the opening of something more serious, even a trade war? that's later on "the closing bell." you're watching cnbc, the first in business worldwide. manage my portfolio. iwhed since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.
welcome back. trump tower here in new york continues to be the center of intrigue as americans await more cabinet nominations from president-elect trump. eamon it eamon javers, another hour, we are still waiting. >> reporter: you are right. kellyanne conway came down to talk to members of the media. one of the questions she got is one facing this trump transition since election day, which is how is donald trump going to manage the thicket of potential ethical conflicts that come up as he continues to own the trump organization, have his family members involved and actively running it, even as he serves at president-elect of the united states and then president of the united states. she was asked if donald trump is sure that he's not going to violate any laws as he does that. here's what she had to say. >> i'm very confident he's not breaking any laws. he has many lawyers, accountants and advisers to tell him what he
must do and can't do. and he's a businessman. he is also working a transransi. and he's the president-elect. we are in unprecedented times. he is very successful. >> reporter: kelly, there was a bevy of media big-wigs here. some of the nation's top television anchors from broadcast, cable and corporate executives who run the television networks all meeting with donald trump in a one-on-one or group meeting here in trump tower. that meeting was off the record. we button-holed a number of participants but they wouldn't tell us what was said in there. but you can be sure the relationship between the television media and the trump campaign an soon to been trump white house was a center point of that conversation, particularly the issue of press-pool access to donald trump's movements, which has been something of a conflict here over the past week or so. just as the press and the president-elect get used to doing business with each other here at trump tower.
and lastly, i should tell you that among all the visitors here, we also had the naked cowboy here at trump tower. he's the famous character, not exactly naked, he does wear tighty-whi tighty-whiteys. i was able to get a selfie with him myself. so no major news here, but we had the naked cowboy. >> he got in the building? they let him in the lobby. he's a savvy guy. >> i have video of him coming through security. he put his guitar through the x-ray machine. so he went through security. he was wearing his tighty-whities. the secret service did not blink any. he can't get into the white house, though. >> no, he can't. thank you. as president-elect trump continues to formulate his cabinet, he's working with a like-minded house and senate with expectations for the first 100 days of the administration.
representative kevin brady, chairman of the house ways and means committee is in contact with the president about hitting the ground running. and in a cnbc exclusive, we are joined by the man representing texas' eighth congressional district since 1997. thank you for joining us, kevin brady. >> thank you for having me, kelly. >> so how have things evolved and what -- which is the most important cabinet appointee you're waiting on in terms of what to get done right away? >> well, clearly treasury plays a big role. especially because you've got the american public just sick of this slow growth economy. you've got a president who wants to act and grow the economy. and you have house republicans that have produced a built for growth tax reform plan and are ready and eager to work with the new president to make it into law in 2017. it's important to have a treasury with all hands on deck helping us move this tax reform. you need leadership from the white house. and certainly we're going to get it. >> yeah, it sounds like you're in touch with them. what are you hearing?
what are they telling you? are you getting a sense of what they would like to have ready and waiting? >> well, look, trump's transition team, it's only been two weeks since the election. it feels like two years. and he hit the ground running. clearly, they want us ready. and the good news is the house republican blueprint and the trump tax plan are probably 80% in sync. i have no doubt that we'll be able to find common ground on the rest of it. we don't know yet what the president's first 100 days agenda will be. we assume it will be fixing the broken tax code. so we've got our heads down right now focused on delivering that pro-growth tax reform plan for him. >> congressman, when it comes to reforming corporate taxes, simplifying the corporate tax code, that's been one of the efforts that really seemed like it had bipartisan support, at least on paper. but every time it got into the details, you had corporate interests, you had industries that wanted to preserve certain things. do you think that this effort will be able to avoid that and
actually get to simplifycation? >> they are watching the same companies we are move overseas. ed they know we can't compete anymore. and so we are open to their ideas on how to grow this u.s. company, how to simplify the code, so much so that most files can file on a postcard. of course, we want to bust it up and have a much more fair tax code. i'm certainly that my colleagues will engage with, especially how we make sure american can compete in going forward. >> congressman, is there a chance on the tax code that perhaps there's only one part that can get done in the first 100 days, meaning maybe it's on the corporate side versus the individual? and do you get a sense as to which way congress might be
leaning towards? >> you know, that's -- that's under construction, but if we want to leap-frog america back into the lead pack among our global competitors and actually grow wages in jobs and the significant way, i think it really needs to go all together. you know, lowering the tax rates to the lowest rate in modern history, whether you are a corporation or a family-owned business. full and immediate expensing to drive business investment in a way we have not seen before. and modernizing the way we tax our business so we can compete anywhere in the world and when, especially here at home, coupled with a fair, flatter tax system for families in a big incentive for savings and investment. all of that is critical for growth. >> but you're not saying we're going to file on a postcard next year, right? >> well, i tell you what, what we're proposing, not for next tax year, but what the house republicans are proposing fair
and simple is about 95% of americans will file using a postcard style system and it works. >> you guys think that's going to happen? what are the odds of that happening, just ever? >> what i know in our town halls, i think i have done nearly 40 in my district and then many across the country, many americans are for a fair and simpler tax. it feels like washington is not listening to what they want. so i'm optimistic. >> well, i think a lot of people are. myself included. it's a nightmare. finally, just as treasury secretary still has to be filled, who would you like to see in that post? >> well, i tell you what, i serve with jeb henchley in the house. i think he would be a great secretary on a broad areas, including tax reform, how we compete around the world, and i think after eight years we finally have a way to stop the
job-killing regulations coming out of washington. this president and the treasury secretary will have a chance to stop on day one regulations such as the new proposal on debt tax and the family-owned businesses. i'm optimistic that will grow the economy as well. >> congressman kevin brady, thank you for joining us. >> thank you. chairman of the house ways and means committee. let's send it over to seema moody here. what is happening there, seema? >> well, we have our eye on shares of palo alto. earnings beat expectations. the revenue a bit light at 398 million. that's below wall street consensus. if the revenue guide is what investors are focused on coming below forecast, that is hurting the stock here down 14% after hours. kelly? all right. that will leave a mark. seema, thank you. what do you make of what is
happening in palo alto right now? >> software security is controversial this year. this stock had a nice recovery from 125 up to the 160 level. so i can see that you have to have a beaten raise if you want to rally that much. i don't think software security is dead. i think this is the very best one. if you wanted to own the space, this is the one i think you slowly pick at. but certainly not tomorrow because let the dust settle a bit. but in 12 months' time the stock is higher because the trend is still there. >> and a consolidating industry as we saw today with symantec making a bid. first there was brexit. could france be the next country to leave the eu? we'll head live to paris to hear for her country to exit the eu. and the dollar has been soaring since donald trump was elected president. but coming up, we'll explain why his victory is not to blame for what could hurt corporate earnings. stay with us.
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both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t. let's go out to seema moody with more on the japanese earthquake that just struck. >> there are further reports of the large earthquake hitting japan across the country from tokyo, the capital of japan, to fukushima off the east coast of the country. the earth quake has been downgraded from 7.2 to 6.9 according to the u.s. geological survey. there's a tsunami warning with expected height of 10 feet off the coast of fukushima.
it's expected to hit any minute now. according to the agency, there's no tsunami danger for alaska, washington, oregon or california. that tsunami warning is something to keep an eye on. and the global assets are on the move. we did see the u.s. dollar fall against the japanese yen. and in the japanese adr, that seems to be lower as well. >> fukushima decided a devastating tsunami several year action. thank you. nationalism is on the rise in the wake of the brexit vote and the election of donald trump. and san francisco could be the next country to experience a political shake-up. michelle caruso-cabrera is joining us from paris where she spoke to marine le pen. good evening, michelle. >> reporter: good evening. here the french establishment said wait, if somebody like an outsider like him can win, maybe she can, too. she was previously considered a fringe candidate. now wall street is very worried
about her because she says she wants france to exit the european union and also abandon the euro. which would be a dramatic change and threat to the currency. beyond that, her economic positions are called socialist. she wants to nationalize the banks, temporarily, at least when they change currencies if she becomes president. she wants to actually put price controls on things like bread, milk and sugar. she wants to lower the retirement age here in france. and she wants to raise the pay of civil servants. here's how she justifies the policies. >> translator: this is an economy of a country that has just fought a war. so long as we have suffered a war with great economic losses, entire sectors have disappeared. the toy industry, the clothing industry, the jewelry industry, all of it has
collapsed. so the state has to boost it. >> reporter: so this is part of her platform that she emphasizes out on the trail. she focuses very much on immigration and on trade. sounds similar to donald trump, right? here's the thing, she may very well face-off against somebody who is radically different than her. the guy who won or appears to be on the way to perhaps winning the republican primary is very much in favor of free markets. so those will be two very different economic platforms when the french go to the election polls in april. back to you. >> yes, free market candidate were to triumph here, that would be the most striking result of this year yet. michelle, thank you. reporting today in paris. we'll see if francois or le pel will shake things you want. time now for the cnbc news update with susan li. >> here's what is happening this hour, the u.s. charged a yemeni
man with attempting to provide material support to advertise lambic state. the new york resident was charge in a criminal complaint file in brooklyn's federal court. protesters clash with law enforcement officials at the dakota access pipeline overnight. they say police fired tear gas and rubber bullets while firefighters intentionally sprayed them with water in subfreezing temperatures. police say that the firefighters are actually putting out fires that were set by the protesters. and jurgen klinsmann is fired as the u.s. men's soccer coach. he led them to the second round of the 2014 world cup, but the team was knocked out of the semifinals and have started 0-2 in the final round of the 2018 world cup qualifier. and hip-hop icon snoop dogg is helping to distribute free turkeys to members of the englewood, california, community. the rapper joining englewood's mayor to hand out 3,000 turkeys,
or just about. a do-gooder at the end of the day. back to you, kelly. >> when he's not cooking with martha stewart, he's handing turkeys out to those who need him. susan, that's a great thing he's doing. china has been one of president-elect trump's biggest targets, but will he keep his promises on tariffs of chinese imports? we'll hear from the u.s. deputy trade representative up next. ♪jake reese, "day to feel alive"♪
welcome back. the dow, the s&p and nasdaq closed autorecord highs. the dow as 18956. the s&p at 2198. the nasdaq at 5368. and for the s&p and nasdaq, it's been a couple months since they have been able to do that. the transpacific partnership has been tabled. let's get back to seema moody with a look at how america's retreat from the tpp could open some doors for china. seema? >> hi, kelly. well, president-elect's rhetoric with china could be a negative, but his potential plan to tear up tpp could be a big positive for china as experts say it would i understaundermine the a
allowing china to step in to fill the void. this was brought up by xi jingping. there have been reports of china working on its own trade deal to counter trump's proposal. three countries most likely to strengthen their relationship with china including japan, south korea, which both are dealing with their own economic did stress at home, and phillip keens who continues to praise china, a move that could have geopolitical repercussions in the south china sea. the trump victory has helped the dollar rally. another win for china and its exporters. for more on trade relations with china and whether donald trump will keep his promises on trade, we are joined by a former
deputy trade assistance for north america. it's great to have you with us, sir. how do you anticipate this all playing out? >> i don't think donald trump has the leverage. his big guns are to withdraw from nafta and to threaten to withdraw from obligations to china. those are credible, so he won't have the leverage his predecessors failed to achieve. >> you say he won't have leverage. but what would give him leverage to make bigger threats about withdrawing? how would he sort of go about trying to get a win here? >> we are tightly locked in by trade obligations. so there is nothing he can do to create leverage except to violate treaty obligations and threat on the withdraw from treaties and lift the obligations off our shoulders. and neither threat is really credible. >> what about the possibilities here in terms of being a trade
rep? >> he's really underqualified. right now trump is looking at a couple of people according to the rumors, and they are both farly underqualified. this is not like the secretary of congress. this is not a job to go around and give speeches about the economy. this is entirely about trade agreements, the 800,000-page agreements that make up the international law of international trade. it's the most complex area of law in the world. and all the u.s. trade representative in his office of about 175 officials do is write these agreements, revise the agreements, negotiate them, interpret them and enforce them. and you really need to be a technical expert. at a minimum, he has to be a lawyer and good one. and should have a background in trade agreements. these gentlemen don't have any of that background. >> so if nothing happens, what do you think happens to the chinese currency? does the yuan continue to weaken? >> well, i think that we have a big problem with currency manipulation which china.
and the one and only good chance we ever had to deal with currency manipulation with china was through the tpp. if we could have gotten a currency manipulation chapter into tpp and then we could have gotten enough countries in the pacific to join tpp and they would have, we eventually would put china in a corner to join it and then for the first time they would have serious currency manipulation obligations to the united states. without the tpp, and without any serious currency manipulation obligations of china, it is very difficult for us to manage that situation. >> are we able to be sure at this point that if china had a hands-off policy about currency it would not keep going down? >> well, the conventional wisdom is that they are deliberately devaluing it in order to give advantage to chinese producers who are competing against americans. and i can't -- it's hard to foresee how the chinese economy is going to go. there are so many factors in that direction, but the conventional wisdom is that their currency has been undervalued for quite some time.
>> matt, i know you are dismissive of all this, but what happens if the administration is serious about trying to push forward some of the rhetoric that brought it into the white house in the first place? i mean, they are going to be able to, you know, if it is making better deals, i know these are huge complex agreements, but they have also got a lot of lawyers and people around. if there's a will, there's a way. >> well, i was one of those negotiators. and i can tell you, the office of u.s. trade representative has about 170-plus of the highest quality most brilliant hard-working negotiators on a career level who keep their jobs and the administrations come and go that you will see anywhere in the world. they are not going to get any better than they already are. they are the best of the best. when you sit down with other countries, there's a limit to what you can accomplish. the best deal we have negotiated was tpp and trump killed that. so i'm not sure where he thinks he's going to go from there. >> i'm just saying, it might be the best in your point of view, but that is not what was the
popular expression on election day. >> yes. and it wasn't the best deal we could have had. it was the best deal we have ever negotiated. there are some things in tpp i would have done differently and definitely would have dug hi heels in for currency manipulation and was disappointed the united states didn't. >> we'll see what happens, matt. thank you for joining us this afternoon. >> thank you. >> that is matt gold. restaurant stocks have been surging since the presidential election as well. after blaming tough quarters on political uncertainty, are names like mcdonald's and wendy's set to see a comeback? things to sink your teeth into next. and monsanto and 3m are sinking their heels into earnings. we'll tell you if there's more pain ahead. important than your health.
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welcome back. before the restaurant many were blaming slowing sales on who would run the country in january, remember? now it's over and we know donald trump will be in the white house. we'll look at the names now. since the election, mcdonald's is up 4%. wendy's up 10%. panera is up 12%. joining us now, nick, we have interesting moves that it seem investors are taking the chains at their word when they say uncertainty is a problem? >> absolutely. i think the biggest reason is the corporate tax potential because most restaurants have a
very large percentage of their units domestically that would help restaurants dramatically. i think there is a little too much optimism on the labor front. i continue to expect very similar level of labor headwinds next year. lastly, there is some expectation that transactions or sales growth is going to see a little bit of a lift post-election. i think that is true to some extent for the experience that event diners like a cheesecake factory or b.j. grills want to see. fast casual names like a jack in the box or a panera bread. >> i think there are puts and takes for sure. i'm more concerned about the commodity prices. how do you think the companies are going to deal with higher commodity costs into next year? >> well, next year commodity costs are going to be roughly
flat to down 1%. this year commodity costs were down and food costs were down 3%. so that was a bigger tailwind in 2016. that shouldn't be a headwind in 2017. that's just not going to be as big of a tail wind in 2017. >> it's interesting that you say that you think that the ongoing trend for labor cost inflation is probably going to continue. have we seen the reaction in the stocks, maybe that there was some expectation that we would be getting more of a minimum wage hike? i mean, what do you interpret from basically the way that, especially the quick service restaurants have come back since the election? >> absolutely. we have seen labor inflation in 2016 at 6%. the tailwind on food costs, the bottom line is of a lot of these restaurants. next year we're going to see labor inflation at 4% to 6% ranges again. so there was a lot -- there is a lot of expectation of labor headwinds continuing next year. that's both minimum wage, that's
health care, and that is just pressure, natural market driven pressure. they just can't find managers, not enough. so they have to pay up for managers. we have seen a lot of unit growth, unit additions. we are seeing units having to be closed or the unit growth rates come down in 2017 because the costs have come up so much. and the cash returns no longer make sense for the growth names. there was expectation for labor inflation. there is some optimism that may be on the health care front. it won't be as bad as it was in 2016. it's too early to tell. >> nick, thank you for joining us. >> thank you for having me. >> i didn't realize conan grill was publicly trading. i learned something there. let's go to phil lebeau with details on boeing now. >> ray conner who has run the division of boeing since 2012 is stepping down immediately. ray conner is staying with the
company through the end of 2017, replacing him immediately is kevin mccallister, the current president of ge. at the same time, boeing is creating a third business unit. remember, they have commercial airplanes, they have the defense business and now they are creating what they call boeing global services, which is basically taking the service and contract work from defense and commercial, putting it into one entity. that's a third division run by a boeing veteran stanley diehl. a replacement at the top for boeing, ray conner is stepping down replaced by the head of ge commercial airplane services. there's going to be a conference call with boeing's ceo later on today. we'll certainly have an update for you. guys, back to you. >> phil, just based on what you know about the company, how significant are the changes? >> it is significant. you're looking at a slowdown right now in orders for new
aircraft. and that's indicative of the fact that you have seen record orders, not only at boeing, but at airbus as well, over the last four or five years. and at some point it was due to slow down. now that it's slowing down, boeing has decided, okay, we're going to he's going to run the company. i'm not sure how much things will change immediately from the way things were run under ray connor. but this is a tougher environment he is stepping into than when ray connor stepped in the job. in 2012, more fuel-efficient aircraft. a lot of orders placed. >> look at the backlog. now things are different for kevin mcallister. >> thanks for joining us with that news. as we keep an eye on shares of boeing. the dollar climbing more than 3% since donald trump was elected president. we'll tell you why, when we come back. ♪
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welcome back. the dollar has been strengthening since donald trump was elected president. but many multinationals have already been warning about a stronger green back eating into their earnings. eric chemi is here with more on that story. >> that's right, kelly. obviously, in the last two weeks we saw trump get elected and then saw the dollar rise. so not surprisingly, a lot of investors are getting ready to blame trump for weak earnings, due to the strong dollar. but here's the thing. companies were already complaining about the dollar hurting earnings before trump's election. we dug through thousands of quarterly filings by s&p 500 companies from this year, and we saw tons of instances of currency-related complaints from why earnings were so low. whirlpool, kraft hines, some of them. all these companies mentioned
the stronger dollar for why their earnings suffered, well before the election. research early into q3's earning season showed the strong dollar was the number one reason companies cited for bad earnings. more than wages, more than oil, more than the election, brexit, the fed or china. and, again, this was almost a month before the election. not all companies, though, lose on fx. some are good, like wall street traders, can trade the currencies around. look at caterpillar, including profits from fx hedging. and, of course, not everybody, kelly, thinks the dollar is going to keep rising. jim paulson from wells capital management told cnbc this morning, he thinks the dollar is going to drop, mainly because of rising inflation expectations. >> and it doesn't seem like they're, you know, just coming up with an excuse. but that this is actually -- we're just going back to a trend that had already been in place. >> yeah, the year over year gains in the dollar were really peaking about a year ago. i mean, it's only up about 2% this year. so a lot of this has been
working their way through the system. i think, not just because we had the election and saw what the market did subsequent to that. the u.s. dollar index got to 100. euro dollar looks like it could get to parity, and all of a sudden it seems like wow, it's come so far. >> and to that point, the first half of the year, yeah, we were talking about the dollar falling as a tail wind for earnings. the fact it's bottomed and gradually rising, is something that is gaining attention and that actually coincides with how interest rates also bottomed at about the same time and the dollar started to go too. so, it's all part and parcel of the same thing, inflation, better growth, we're tightening versus other monetary interests doing more easing. and that's going to continue for quite some time. >> i would also add, steph, you would know this, analysts don't spend time trying to analyze the fx effect. >> you can't. you don't know how they're going to trade. it's guessing how good a trader or hedger is going to do. >> some companies are saying, he
with have had huge hedge and don't make money on it. >> the unknown, extra vol. >> eric, thank you. markets hitting record highs today. will the momentum push into tomorrow. we'll tell you, next. 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,
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welcome back. it's a holiday shortened week and already a history-making one as we mentioned with the triple record highs, quadruple if you include the russell. what are you watching? >> obviously just watching the indexes and whether they hold on. you don't want to see them drift up to new highs, so maybe more energy and also yields, naturally, existing home sales tomorrow. a couple big consumer earnings, as well. >> i want to see how long the financials take a pause. they have been a real gem in terms of the leaders this last couple months, anyway. but then, of course, oil. that's really important. the api data tomorrow and then eia wednesday. so if oil continues to rally into opec, that makes me more nervous. because you could have a sell on the news and you could have a sell if we disappoint and a sell if it's good. you know? so we'll have to see. >> i'm not sure if we'll see before black friday. do you go near it or leave it alone and let it shake out? >> typically, you sell the retailers at thanksgiving, buy them at labor day and sell them -- that's the trade,
anyway. i have plenty of retail discretionary. i think the consumer is in pretty good shape. you have to pick your spots. i like the department stores. >> are you going to be shopping on black friday? >> i will be here on black friday, with you, i believe. >> i'm on amazon. >> exactly. and walmart's deals start at midnight. stephanie, michael. thank you. see you bright and early. that does it for "closing bell." "fast money" starts now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. tim seymour, karen finerman, dan nathan and guy adami. that man there, peter schiff, euro pacific capital in danger of becoming extinction. and energy stocks pushing the markets to new highs, but dennisgartman saying don't trust the rallies. he'll be here. and the one site that has tim seymour so excited, he won't stop talking about it.