tv Closing Bell CNBC December 1, 2016 3:00pm-5:01pm EST
he picked up the phone and talked for one american to another and talked about our plans, our plans to make america more competitive, to reduce taxes, to roll back regulations, to put american jobs and american workers first again. he made the case for america. and carrier decided to bet on a brighter future for the american people. and we are grateful from the bottom of our hearts. i'm very humble to be standing before you today. i truly am. my family and i are deeply moved by the opportunities people of indiana have given us and now the american people have given us to serve. i'm especially humbled to have played some small role in this wonderful news not only here in indiana but all across this country. i think it is important to give
credit where credit is due. first and foremost i want to thank greg hayes and his team at united technologies and the team at carrier, thank you for renewing your commitment to indiana and renewing your commitment to the people of the united states of america. i also just want to thank the great carrier team here in indianapolis and in the state of indiana. your hard work, your resilience, your work ethic even in disappointing times, i know for a fact gave this company the confidence to double down on the future of this company and the future of the people of this state. so i thank you, the carrier team, for giving them the confidence to do just that.
but lastly, on behalf of all the people of indiana, allow me to thank the man we wouldn't be here without for his efforts, for picking up the phone, for keeping his word. his efforts to bring us to this day of renewed hope and promise not just here in indiana but really for people that know that the strength of this country comes in our ability to make things and to grow things. it's a renewed day for manufacturing in america. i remember when donald trump was running for president he said that if he was elected president of the united states america would start winning again. today america won. and we have donald trump to
thank. and i got a feeling working beside this extraordinary man this is just the beginning of a lot more good news all across america. so without any further ado, my fellow hoosiers, it is my high honor and distinct privilege to introduce to you a man of action, a man of his word and the president-elect of the united states of america donald trump. [ cheers and applause ] >> thank you. thank you everybody. thank you very much. thank you very much. i love that red hat.
thank you everybody. i want to thank all of the dig niitaries that are with us today. we have a whole host, the mayor and governor-elect. great people. it's a big victory for the governor-elect. he won very convincingly. we are very proud of him. mike has been such a wise decision for me. when people were saying i don't know how good is he at decision making they would say but he picked mike pence. that's a good decision. everybody loves mike. he has become something very special. i want to thank greg hayes of united technologies because when i called him he was right there. i wish i could have made the call when they were doing their original decision but it worked out just as well other than i would have liked to have had an answer a year and a half ago.
we had a tremendous love affair with the state of indiana. if you remember during the primaries this was going to be the firewall. this was where they were going to stop trump, right? and that didn't work out too well. and it was a firewall for me. it was a firewall and we won by 16 points. and the election we just won by almost 20 points. and that was some victory. that is pretty great. i just love the people. incredible people. so i got involved because of the love affair i have had. this has been a very special state to us. i will never forget about a week ago i was watching the nightly news. i won't say which one because i don't want to give them credit because i don't like them much, i'll be honest. i don't like them, not even a little bit. they were doing a story on carrier.
and i say wow that's something. i want to see that. and they had a gentleman, worker, great guy, handsome guy. he was on. it was like he didn't even know they were leaving. he said something to the effect we are not leaving because donald trump promised us that we are not leaving. and i never thought i made that promise, not with carrier. i made it for everybody else. i didn't make it really for carrier. i said what's he saying? he was such a great guy. he said i have been with donald trump from the beginning and he made the statement that carrier is not going anywhere, they are not leaving. i'm saying to myself -- and then they played my statement. and i said carrier will never leave. but i was talking about carrier
like all other companies because they made the decision a year and a half ago. he believed that that was -- and i could understand it. i said i did make it but i didn't mean it quite that way. so now because of him whoever that guy was -- is he in the room? that's your son. stand up. you did a good job. you did a great job. that's fantastic. i love your shirt. wow. put it on, cameras. your son is great. he meant that. he really meant it. at first i said i wonder if he is being sarcastic because this ship has sailed. then i said -- it was 6:30 in the evening. i said the first thing i'm going to do is go there. do i call the head of carrier who is a great guy? i have always learned i have to
call the top. i heard about greg hayes. he is a great executive. united technologies is one of the top 50 companies in the united states and one of the top companies anywhere in the world. they make many other things other than air conditioners. their list of companies is incredible. i called greg hayes. i heard of him but never have met him. he picked up the phone. mr. president-elect, sir, how are you? if i lost he wouldn't have returned my call. if i lost would you have -- i would have tried but i think it would have been tougher. he is sort of nodding. but i called greg and i said it's really important we have to do something because you have a lot of people leaving. you have to understand we can't allow this to happen anymore with our country.
so many jobs are leaving and going to other countries not just mexico, many, many countries. china is making so much of our product that we are closing up a lot of plants. i mean, i wrote down some numbers that are incredible. the numbers of manufacturing jobs that are lost especially in the rust belt and the rust belt is so incredible but we are losing companies. it's unbelievable, one after another, just one after another. so i said you have to help us out here. we have to do something. i said because we can't let it happen. anyway, he was incredible. he said i understand. i said i wish i made this call a year and a half ago. it would have been easier call. only because of your son. your son, whoever the hell your son is these people owe him a lot. he is out in the factory. i thought they were all going to be in this room.
this room is not big enough. we just visited 1,000 people in the factory that are going wild in the plant. but i will tell you that united technologies and carrier stepped it up and now they are keeping over 1,100 people which is so great. and i see the people. i shook hands with a lot of people. >> he is ruthless but that is okay. i did say one thing to the carrier folks. i said the good will that you have by doing this all over the world, frankly, but within our country, you watch how fast you are going to make it up because so many people are going to be buying carrier air conditioners.
we have had such help here. bobby knight. nobody here in indiana heard of bobby knight. how great is bobby knight? we had such incredible support. a friend of mine called up and said if you can get coach knight -- i said coach knight called me a year ago. he said if you ever run i'm supporting you. i said thanks, coach. i don't know if i'm going to be doing it. he said if you can get coach knight. how good was bobby knight as far as we are concerned in indiana? is that right? we have bobby knight. 900 wins. two or three championships. olympic gold medal. he was unbelievable. he was going all over. he was the greatest guy. we had 16,000 people inside,
outside. we had i think 10,000 outside. this was three weeks before the primary. i said how are we going to lose indiana with this? we won big. so i want to thank all of those folks because it helped with indiana and with a lot of other places. so united technologies has stepped up and i have to say this. they did it in such a nice and such a professional way. tla going to spend so much money on renovating this plant. i said say that number. he said 16 million. the minimum number is 16. it is going to be in my opinion a lot more than that. he said i would rather say the lower number. i would rather have him say the higher number so i won't say it. it is just a difference in philosophy. both are okay. they are going to spend more than 16. they will spend a lot of money on their plant. i said to some folks i said companies are not going to leave the united states anymore
without consequences. not going to happen. not going to happen. i'll tell you right now. we're losing so much. so one of the things we are doing to keep them is we are going to be lowering our business tax from 35% hopefully down to 15% which would take us from the highest taxed nation virtually in the world. this is terrible for business, to one of the lower tax. not the lowest yet but one of the lower. the other thing we are doing is regulations. the regulations -- if i asked greg and your folks you would probably say regulations might be worse than the high taxes which is the biggest surprise of the whole political experience y. thought taxes would be nothing one and regulations up there someplace. the great leaders of industry and small business people who are just being crushed, if they had their choice between lower taxes and a major massive cutting of regulations they
would take the regulations. i don't know how you feel about that, greg. i just noticed i wrote down because i heard it. since about six years ago 260 new federal regulations have passed 53 of which effect this plant. 53 new regulations massively expensive and probably none of them amount to anything in terms of safety or the things you would have regulations for. six of eight of the air conditioning companies right now are located in mexico. six of eight. think of that. and 80% of the supply chain for mexico, 80%, is located in mexico. and we're not going to have it anymore. we like mexico. we think it's wonderful. i was there three months ago with the president of mexico. terrific guy. we have to have a fair shake.
we are not getting anything. we have nafta which is a total and complete disaster. it's a total and complete disaster. it's a one lane highway into mexico, nothing coming our way, everything going their way. and i don't have to mention who signed it anymore. it's so nice. i don't have to mention who backed it anymore. we don't have to mention that anymore fortunately. but it is a one-way street and it is going to be changed. we have to bring our jobs back. when they expand -- one of the things that made me so happy is when greg said that they have over 10,000 jobs that they are going to be producing in the very near future and is looking to the united states instead of outside of the united states where almost all of those jobs would have gone. so one of the reasons i wanted to do this particular conference is it is so great. so many people in the big, big
beautiful plant behind us which will be more beautiful in about seven months from now, they will have a great christmas. that is most important. but also i just want to let all of the other companies know that we are going to do great things for business. no reason for them to leave anymore because your taxes are going to be at the very low end and your unnecessary regulations will be gone. we need regulations for safety and environment and things. most of the regulations are nonsense, become a major industry, writing of regulations. and that these companies aren't going to be leaving anymore. they are not going to be taking people's hearts out. they are not going to be announcing like they did at carrier that they're closing up and moving to mexico. over 1,100 jobs. that number will go up very substantially as they expand this plant. the 1,100 will be a minimum
number. so i just want to thank everybody and specifically i have to thank the people that i met back stage. incredible people. the spirit, the love. people are crying. they are all crying. it's taking us a little while, but think of this, i don't think we even announced we were running when this deal was originally announced. and in the end what happened -- that makes it much more difficult. it is hard to negotiate when the plant is built. greg said the plant is almost built. i said i don't care. it doesn't make difference. don't worry about it. what are we going to do with the plant? rent it? sell it, knock it down, i don't care. we are going to do fine with their plant. where we are starting is from a much easier place.
it is hard a year and a half ago to make an announcement and all of that work is done. great business people have flexibility. if you're hard lined, we're not going to move, flexibility is why they have done so well over the years. that is why it is a great company because they have flexibility. we are not going to need so much flexibility because we are going to have a situation where they are going to know we are going to treat them well and there will be consequences meaning they will be taxed very heavily at the border, make product in different companies and different countries and then think they are going to sell that product over the border which will be a very strong border. believe me. and i think companies -- we will build a wall. we will build a wall. by the way, people will come
through the wall. we will have doors in the wall. people are going to come through on worker permits to work the field. we will have people come through but it will be done through a legal process. one thing that is not going to come through are drugs. the drugs are going to stop. so i just want to thank all of the people at united technologies most particularly you because you are fantastic, greg. i want you to tell me how many air conditioning units you sold in the last six months from today because i want to say i think it is going to be a number that will surprise your folks because of the tremendous good will that you have created. i want to thank all of the workers at this plant, all of the carrier workers most importantly. [ applause ] i want to thank my great, great
vice president-elect. one of the really good decisions. i want to thank mike. we are going to be doing this. they say it is not presidential to call up these massive leaders of business. i think it is very presidential. if it is not presidential that's okay because i actually like doing it. we are going to have a lot of great people that can also do it and do it as well as i do it. we are going to have a lot of phone calls made to companies when they say they are thinking about leaving this country because they are not leaving this country and the workers are going to keep their jobs. they can leave from state to state and they can negotiate good deals with the different states and all of that, but leaving the country will be very, very difficult. i want to thank everybody. we love you folks. i want to really, really thank the people of indiana. we had two massive victories in a very short period of time.
all of the workers have a great, great christmas and a fantastic new year. thank you very much everybody. thank you. thank you. thank you very much. >> president-elect donald trump at the carrier assembly plant in indianapolis with his new bff united technologies ceo greg hayes. this became the symbol of the job losses that mr. trump talked about during the campaign. he promised the people at carrier that he would make sure that those jobs did not migrate to mexico. after a phone call to greg hayes he made a deal and that is not happening. >> what does it mean for other companies which he threatened strongly are not going to be leaving this country without consequences. phil lebeau is on site there in indianapolis. a real feel good day there. >> absolutely. if you thought this was just a victory lap for donald trump and mike pence to celebrate the fact
that they saved 1,100 jobs here in indiana, there was also a lot of campaigning and messages sent in terms of business in america. i call it the carrot and stick approach. if you are a company we are going to lower taxes and regulation. you not going to think about wanting to leave. the stick? if you do decide to leave we are going to make it tough for you at the border. we will make it tough for you in a number of ways and you better think twice before you think about moving your plant. did you catch at the end where he said it won't only be me contacting companies we have other people on the team contacting companies. you can bet that resonated with ceos and boards for companies who either made plans to move operations to mexico or are thinking about it because the message has been sent that donald trump plans to be very proactive in terms of keeping companies here in the united states. >> i mean, there was a threat there, phil, without
consequences it is not going to happen and then he said they will be taxed highly at the border if they want to leave. they can make deals with individual states. they cannot leave the country. just within the industry that you cover, transportation, auto industry which have built a lot of plants in mexico, what do you think the reaction is going to be to a statement like that? >> well, i think those -- there are so many companies not only auto makers but auto parts suppliers who have operations in mexico. i have yet to hear anything from donald trump about if you have an existing operation we are going to force you to close that up. that would be far different conversation. but for those who have not already set up operations or are thinking about expanding or adding additional facilities down there, you bet they are paying attention right now because at some point there will be a discussion about capacity for different plants in north america and if you are running a
company, a manufacturing and you look at where you want to set up your operations you are definitely going to look at mexico especially if the rest of your industry is down there. now with donald trump saying if you have plants in the u.s. you better think twice before setting up something in moeks co. >> we have isolated that point of mr. trump's comments about the consequences. let's listen to that one more time here. >> companies are not going to leave the united states anymore without consequences, not going to happen. >> let's go to eamon javers who is at trump tower in new york. again, as we were just discussing with phil lebeau, you wonder what other companies are thinking about in that regard. are they going to want to have to please the white house in order to keep jobs here in the united states? >> reporter: that's a really good question. you also look at the interaction between donald trump there and
the ceo of united technologies as they were sort of talking back and forth on the stage. donald trump maybe reviewing some things about that conversation that the ceo didn't want to have revealed. if you are president-elect of the united states you get to do that. presidents and president elects love to have moments to check off a campaign promise. it sets the tone for the new administration coming in in january. you have to wonder here a little bit about this speech. i don't think i ever heard a president or president-elect say that he didn't remember making a campaign promise but saw it on television and then realized that he did, in fact, make that promise and now will have to live with it. you got the sense that the weight of the office is starting to register with donald trump and he had an emotional reaction to it and decided he has to do something. it's very personal for donald trump here, guys. >> thanks very much.
eamon javers outside trump tower. >> he used that opportunity to take a shot at the media. he was watching a nightly news. he doesn't like them very much so he wouldn't name names. how about we move on? >> steve liesman is with us. senior economics reporter. we will get to steve in just a moment. we are going to talk about this question should government be getting involved with carrier or is this setting a bad precedent for other kaech companies to tr set deals with the trump administration? the founder of public policy blog reality check. we are going to be joined by steve in a moment. allen, you have been a fan of donald trump's policies, economic policies on trade and another comment on trade. but on this idea of whether it is setting a dangerous precedent, where do you come down? >> i think what is crucial to realize is that i cannot imagine
that there is a single company in this entire country that would relish moving into mr. trump's cross hairs by threatening to hold up the federal government with a move of manufacturing down to mexico. that's not going to be a very pleasant experience at all. and if you have any doubts about that, ask jeb bush and marco rubio. mr. trump can really turn it on. he is a master of public opinion. he is a master of this mass version of retail politics and the idea that he is going to be outmaneuvered by folks who were usually very cautious and very timid corporate representatives who were very aware of the impact of bad pr doesn't make any sense. >> i know you were on last hour before mr. trump spoke.
i know you are not a fan of this carrot and stick issue that is going on now with carrier, but companies that make decisions to move jobs overseas often are trying to take into consideration the role the federal government plays in all of this when it comes to tax and trade issues, right? >> listen, first, i think this is the worst economic speech by an american politician since 1984 promised to reverse rag economics. the idea that american corporations make business decisions not based on the fact that we created an ideal environment but out of fear of punitive actions based on who knows what criteria exactly from a presidential administration, i think that is absolutely chilling. i'm all for making sure we have -- >> that's my point. they make decisions based on tax
issues. they think taxes are too high. they make the decisions based on federal government decisions anyway. >> but not based on fear that they will be slapped with a tariff, that they will have contracts taken away from them or the president of the united states will attack an american corporation for trying to create a valuable product. >> whether or not he has the authority to do what he did. i am floored by his comment here. i want to get it down right where he says they will be taxed heavily at the border. maybe jimmy knows or alan knows if the president has a right to tax a specific company. i believe they can tax an industry or a product but i don't think you can tax a specific company based on the idea. this is one of the most explicit tariff threats certainly from a president-elect. i think he has the right to use the bully pulpit to say you want to keep jobs in america.
you go to the idea of threatening to tax stuff at the border and i don't know that it is extra legal but from my understanding of the law he does not have the right to tax a specific company. >> the president has vast powers under the trade act to raise tariffs. >> company went to mexico then you can raise a trade barrier. this is putting sort of a preemptive tax or something. he may be off the grid legally right here. if a democrat had made the speech republicans would be using rather harsh language. this is amazing. >> i want to make the conversation a bit because there were key lines from the speech. wanted to get your thoughts on that. for all of those people
wondering whether the president-elect would be as tough on, say, mexico in ripping up nafta. we did get news on that. he called nafta a total and complete disaster, a one lane highway into mexico. that is a pretty clear signal that he is not backing down from this stance. >> we also have to remember that when he did visit mexico earlier this fall he very specifically mentioned the idea of improving nafta. nafta can stand a great deal of that. in particular, he spoke about frankly what bill clinton spoke about when he was pushing nafta. that's been a lost opportunity. and saying that we can restructure nafta to benefit all
three countries. i want to make one more very important point. when folks like jimmy who i respect tremendously, when they talk about chilling effects and american politicians we have a big population of folks that we call corporate lobbiests and the state of u.s. regulation and the state of the american tax code today very powerfully reflects the very important leverage that these well paid lobbiests have. they have in lots of cases written those tax codes to benefit their companies. >> steve, you want to answer that? >> i want a neutral tax code and talking nothing about american entrepreneurship. >> we are talking about sweeping changes. until that is made i think we
have to be realistic also in recognizing that foreign governments rig trade flows all the time and it is high time that the u.s. government responded. >> that one way road he keeps talking about, american exports to mexico have -- >> don't tell me just about exports. many of those exports come back here because the parts and components of finished goods. the gross trade statistics conceal more than they reveal. >> i think it is becoming not clear yet but this example today at carrier plant that we have a businessman coming into the white house who is not afraid to call another business person to try and cut a deal. clearly he has been a deal maker his whole career and cut a deal that in this case worked out in favor of u.s. jobs. >> right. but at a cost. there were quite a bit of
incentives put together. there is a cost to it. i think that is worth while. i think the idea of talking president and he can't do this because he will spend his time doing that. we have to address foreign policy which i think he will do. i think there are things he can do to make the u.s. more competitive but the idea that he is going to threaten companies and whether or not he has the legal ability to do such things there are rules that need to be followed. i think you would agree with that. >> that's why i don't think that this policy is going to remain individual company centric for very long. >> so we have hit the trade issues and incentivising companies and potentially punishing companies. final question, steve, as someone who has covered business news for a long time, the idea that he singled out greg hayes,
ceo of united technologies and really speaking personally about their conversations, wouldn't have picked up the phone if i didn't win the presidency telling him you are going to invest a lot more than you say you will, what kind of message does that send to other ceos in this country? what do you think they are thinking? >> the first message is to journalists. this is a very different president. i think eamon javers said it, he makes it personal and that as you know is a very big part of how you make a good deal sometimes is you make things personal. it's very different for companies and i think the use of carrier as an example is a double edged sword in the sense that i'm going to suffer a potential publicity nightmare if i am singled out as a company. on the other hand carrier did get something of a deal here.
you could have other companies coming forward and may do what they have been doing for a while. there are lobbies out there who are against this sort of corporate welfare. i think bernie sanders is against this kind of corporate welfare. there are libertarian tax groups who say we can't do this. >> guys, we have to go at this point. thank you all. we didn't really introduce ourselves. welcome. this is "closing bell." i'm bill griffith. the dow is in record territory a little bit. we are up 48 points. the other major averages are negative. >> no love for technology. the nasdaq down 1.5%. it has been hammered on some reasons that we are talking about and will get to that more. much more on carrier's move to keep 1,000 jobs here in the u.s. and the role president-elect donald trump played in that decision. we will discuss the idea about whether it is a good thing
ultimately for our economy. and bank stocks caught fire since the election. technology shares have been left out in the cold. two leading stock watchers will tell us whether bank or tech stocks are the way to go in the new world under president trump. they will name names coming up. you're watching cnbc, first in business worldwide.
we have auto sales breaking news with seema mody. >> the health of the automotive industry total vehicle sales coming in at 17.87 million. that is down from the 18.25 million units that we saw a year ago. interestingly enough if you break it down in terms of deliveries the total industry unit deliveries increased compared to last november. most auto makers bigger than expected gain in the month of november. we are talking about general motors, ford, toyota, hauonda a nissan. ford trading at highest level on this upbeat report. sharp contrast for fiat chrysler
which cut fleet sales. shares of fiat in focus down slightly against auto index. back to you. so the autos among those gaining today even though others like technology are moving lower. we have 20 minutes left in the trading session. the dow up 46 points with other major averages down to begin the month of december. goldman sachs is 48 of the points. >> 48 and jpm. president-elect donald trump taking on the tech industry while embracing wall street. we'll discuss whether you should be avoiding silicon valley stocks as a result on "closing bell."
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for wall street and special interest. >> we're going to get things coming. and this country instead of in other countries. >> so far as president-elect trump he is embracing wall street. he chosen former goldman sachs. tektitc since election day financial stocks have been flying higher while tech stocks have been struggling. coincidence? >> up another 1.57% leading s&p. joining us to discuss this divergence, vice president of portfolio manager at capital group and chief macro strategist. you think there is too much optimism at this point baked in the financials about the trump policies? >> no. i don't think so. i think right now most of the
stocks, bank of america, citi bank, jp morgan so under valued that now we are seeing a revergence to the mean not too much past. >> money is coming out of the tight winners. they were most beloved going into beaten down sectors. >> we had consumer confidence increase, so those things, gdp correlates with banks and lending and everything like that not to mention the fact that we have infrastructure coming online. those are all positives for the banks not to mention the regulations that some of dodd-frank will be rolled back. i think that will help. trump says he wants to lend. steve mnuchin said the same thing. some of the ownerous regulations we have to get rid of. >> bank stocks all lower and goldman sa mman sachs continuesy
the dow. what do you make on the decline in tech stocks? >> not much has changed with the business of these tech stocks so you have to look elsewhere. we are looking at what bond yields have done. why are we looking there? it has to do everything with what you should be willing to pay given what the risk free rate is. so the ten year has gone from about 178 up to about 248 today. that's a huge move in two months. so you should be willing to pay less for a stream of earnings that is further out. that is the very definition of what a growth stock is. so that's a long way to say we are reverting to the mean on the growth stocks. and it seems natural given the rising yields. >> but as an investor in technology, are you not troubled to hear what we just heard moments ago from president-elect trump who said companies will
not take jobs outside the united states because they will be taxed heavily at the border, they will not leave without consequences? isn't tech directly effected by that? >> it depends on what tech you mean. tech on making little consumer gadgets, they are already offshore. i don't know who is left here. we have not made meaningful amounts of electronic equipment here. second thing is i'm not sure what actual mechanisms he has to tax them heavily. and thirdly, the kind of stocks that we are interested in, the more enterprise software and hardware kind of stocks, they are actually going to be poised to benefit if you believe that employment is going to meaningfully pick up. tech does well in late cycle of an expansion whenever people are being hired because we have to
hire or buy pcs, tablets, whatever and boost the infrastructure for the extra employees. tech does well. >> very quickly. any tech you buy if getting into cheap territory here? >> i don't think trump is against tech. he is on twitter every morning. i think really what he is talking about is we are going to make deals with all companies to try to keep companies in america first. he wants to do a lot of things. in those stocks is a trillion dollars. as money moves back to value and back and forth you have to sell to increase your financial holdings. >> we have to go at this point. thank you very much. appreciate it very much. 11 minutes left in the trading session here. >> let's show you where we are. the dow is certainly outperforming. s&p is getting hit. russell is down a percent. our next guest says the s&p
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sell, not a big number but might take some of the sheen off here with the dow up 63 points. joining us, chris hieszy, he sees the s&p rising by 10% next year even though there are some who feel that the first year of a new administration usually is the most difficult time for the stock markets. what do you think? >> there are three phases. the first phase is now which is hope. we're hoping to see pro growth initiatives come through. then there's the enthusiasm of the trickle of the first 100 days of maybe using the executive order and slow down some things. and you have to have real action. growth isn't coming until 2018, late next year. the stock market with as much as people are overexposed to long dated treasuries and the overly defensive position in equities you could see a powerful rotation. >> as we've seen the so-called
trump rally for the s&p we're looking at some pretty elevated numbers. average is about 14 or 15. so is the higher multiple justified at this point? >> you know, i would say it is justified, number one, because it's there already. but now you're going to have to actually see the earnings grow. you're going to have to see that pull through. we haven't had, as we all know, for five or six quarters. we get nominal growth up, we see loose fiscal conservativeness and monetary policy and that will eat into the multiple and if the multiple stays sticky that's where you get your 10%. >> wish we had more time but we had a news conference out of indianapolis that got in the way there. thanks chris highsy from bank of america's wealth division. we have the closing countdown coming up in just a moment here. after the bell, president-elect donald trump just saying in indiana there will be consequences for
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heading into the closing, about two minutes left in the trading session with the dow up 40 points, bob joining us for the closing count. the dow is going to finish in record territory. >> but we did have a warning from caterpillar who said the earnings estimates are too high. we've been talking about how expensive the stock market is. caterpillar said don't get ahead of yourself but still up today, 52-week high. >> the trend continues when we look inside the dow, goldman sachs leading to the upside today, carrying the dow here while intel among the technology stocks going the other direction. that's the biggest laggered in the dow today. >> as a matter of fact, all the tech names, qualcomm, sea gate, texas instruments, again, they're being used as sources of
funds to buy better alternatives like the bank stocks. look at that. >> oil, the rally continues here. brent and wti both in london and here in the united states getting comfortable above $50 a barrel right now. >> we see stocks hit 52-week highs. remember oil was $45 at the open yesterday. we're talking 15% moves in the biggest tradeable commodity in the world. truly amazing. >> and we have a jobs number out tomorrow by the way and ahead of that the yields on the treasury curve went higher big-time today for a brief time, the ten year was up 12 basis points at 249 at its peek. it's finishing out at 244. >> could there be a more perfect storm for the banks, improving economy, maybe long growth down the road. what a turnaround it's been for the banking industry. >> we're going out with a record
close for the dow today. ringing the bell today christie brinkley and some of the rockettes. they will be outside lighting the new york stock exchange christmas tree and we'll be out there as well coming up the next hour here of the "closing bell". welcome to "closing bell". i'm saraizen in for kelly evans. here's how we're finishing up the day on wall street. it is a tale of very different major averages. the dow closing at a record high propelled higher by financials like jpmorgan and goldman sachs. the s&p closing lower by three-tenths of a percent and technology getting hammered
today. the nasdaq closing lower by 1.4% today and yesterday marks the nasdaq's worst two-day decline since early september. it's going to be a busy hour for earnings as well. we've got courtney reagan covering ulta results. aditi roy is all over work day's numbers. donald trump taking a victimly lap in yesterday today after reaching a deal with carrier to keep its factory in that state running. the agreement keeps more than 1,000 jobs in the u.s. but is keeping manufacturing jobs in the country truly good for the economy? we've got a debate on this for you coming up. we've got breaking news. let's go out to andrew. >> reporter: right now, howard schultz, the ceo and chairman of starbucks announcing plans to step down effective in april, april 3rd of 2017. wall street, some of this had been telegraphed to the market
but others may look at this as a big surprise. kevin johnson, the company's current president and coo will become the ceo of the company after that. kevin johnson joining the company just two years ago but has been a board member of the company since 2009. he used to be the coo of juniper networks and prior to that worked for microsoft under steve ballmer. this of course big news for starbucks across the board and may raise speculation about what howard schultz is going to do next. he will remain the executive chairman of starbucks for now. he will be working on their premium project. they're putting together these premium roasteries around the world. there's a big 'em pour yum in seattle where i am right now. they're going to be rolling them out in smaller stores, at least 1,000 in the united states, and then in bars inside other starbucks and that's going to be
the project that he's going to work on along with other social projects but the day to day operations are going to be managed by kevin johnson. we should say speculation about whether he is laying the ground work, howard schultz, to eventually leave the company and perhaps run for political office, so much talk about whether he ultimately wants to run. he of course a friend of president obama, had been a supporter of hillary clinton and has really pushed so many of the social initiatives that we know about when it comes to starbucks, whether it was the come together campaign back during the government shutdown or later the race together campaign which to some degree was faulted as being -- critically faulted by so many of their customers. but big news here in seattle right now, and i should say that we are going to have howard schultz and kevin johnson on squawk box tomorrow morning to discuss all this. i should also say if you've been
a close watcher of starbucks, to some degree this has been hinted at. there was a restructure of the company earlier this year where kevin johnson took operational day to day control of the company, but this a very different issue. i got a chance to spend some time with both of these gentlemen just before i actually got on air, and it is an emotional one for howard schultz. he's going to be speaking to analysts and investors on a call in just about a half-hour and then later to employees. he's just sent out a note to employees about this decision, something he's wanted to do for quite some time. but again, the other important note, he tried to create a succession plan if you will. he planned to leave back in 2000. he became the chairman of the company, came back to the company in 2008 as the ceo amid faltering sales, but he says he's going to do it differently this time. he said last time he metalled a little too much. he was not emotionally ready to really leave the company. this time he is. but when i say leave the
company, he's not leaving just yet. as i said, he will remain the executive chair and his office, despite him saying he doesn't want to hover, his office is connected to kevin johnson's. so that's the news from here right now. >> good news. >> yeah, andrew, you couldn't see it but initially with your report the stock was down 6%. it's come back some. it's down about 4% right now. you anticipated my question when he did leave before he had to come back and turn things around again. it's clear that howard schultz is the steve jobs of starbucks. he is starbucks, so it's going to be tough for kevin johnson to keep that kind of symbolism going. he can operationally manage this company but he's not the symbol of starbucks, is he? >> very much so. and i think what you're going to see over at least the next couple of years depending on how this all plays itself out is that you're going to continue to see howard schultz as the face of starbucks when it comes, as i said, to so many of the social
impact projects that they have developed over the years. but when it comes to the actual operational day to day management of the company, scaling of the company, one of the things howard told me right before i got on the air, he said, look, kevin is, quote, better equipped to run the company when it comes to scaling the business, the global nature of the business. kevin of course is a technology executive, has been involved in the mobile piece of starbucks and so much of the execution of this global strategy as they add something like 2,000 new stores every single year. so i don't think that howard is planning to disappear from the scene any time soon. he will remain the face, but again, when it comes to how this company has operated on a day-to-day basis, it will be kevin johnson's. >> any insight, andrew, into the timing of this announcement? starbucks has had somewhat of a difficult year in the market dealing with different restaurant problems and
pressures like traffic. i remember the last earnings call they talked a lot about the uncertainty of the u.s. election. do you know why this came to be today? >> in terms of the timing, this has been something that they say they've been planning for quite some time. when kevin johnson joined the company back in 2015, at least from my reporting, it sounds like it was hinted even then, at least among howard and kevin, that something like this could ultimately come to pass. howard schultz now 63 years old. as i said, they did put together a number of pieces of this prior, so i would be a little surprised if wall street -- for those who paid attention to the company in great detail, i think that this succession plan had been relatively signalled. the timing of course may be the question. this has been in the works -- they started talking about this apparently at least six months ago in terms of the timing right now. so not related -- someone said today could it be the election.
not related to the election at all. >> okay. mike is here. what do you make of this development? >> andrew makes a good case that if you're reading between the lines and looking at these nuances maybe you saw this coming. i think the street is a little surprised. he's 6 3, he's a young 63. to your point about being the steve jobs of the company, he got the benefit of the doubt for investors that he's looking at the long term and if they want to buy a bakery company, if they want to buy a tea company, if they want to have certain initiatives, you basically give him credit for knowing what's good long term and that maybe comes into question beyond this point. i don't think anybody thinks the franchise, the brand, is in any kind of jeopardy. it's much more about that halo effect that he did bring and that's why it made sense to me the stock would back off a little bit after having by the way an extraordinary run since the election. >> stephanie from tiaa global asset management is on our panel with us as well. what do you make of this? do you like starbucks?
have you bought it here? >> i think it's fairly valued. you're getting decelerating growth but i don't think this is that big of a deal, nor is it that big of a surprise. when johnson came on two years ago to work at the company, i think that that was what he had in mind all along. and he's been very vocal on the conference calls too. the fact that schultz is going to be still the executive chair person, i think that's very, very important because he'll still be very involved in the strategic development of the company. so i wouldn't sell on this news, but i'm not buying it either. it's a little too rich for me. >> andrew? >> one other point in terms of what he's going to be doing. i know i emphasized some of the social impact work but when you really try to understand the premium strategy, he's going to be actively involved and he's going to have a small team that's going to be working on that. there's the roasteries, the similar pour yum in seattle, they're developing one in new york, in singapore, then they're going to be doing store models
and putting a lot of this into stores. when it comes to the extent that there's a growth piece of starbucks going forward, howard schultz i believe intends to be a big part of that. >> steve grasso also with us, just stepped off the trading desk. reaction to this? there's going to be an investor call in about 20 minutes. >> i do believe that there's a schultz premium to starbucks. having said that, this stack has underperformed. if you look at duncan doughnuts, it hayes unds underperformed th. i had thought that something was wrong with coffee in general if you look at the stocks preelection. they were both falling off. i think the traffic issue that they pointed to as far as the election unknowns, i think it's a fair amount of uncertainty because people weren't in the stores anymore. people are not in malls, not next to a starbucks, they're not shopping. out of the election we see people getting back in the stores and both stocks run. >> if you take this chart back ten years it's a moon shot.
mike, i think the question here that investors have to face is howard schultz is a vision guy. what does that say for the company's vision going forward? clearly he has faith in mr. johnson and we're going to hear more from him in the next 24 hours thanks to andrew, but that seems to be the word that sticks out. >> there's no doubt about that. i don't think though that the issues in the next year are going to be that different than the ones that schultz would have been dealing with as ceo if he kept the job, which is are you going to be able to keep up this pace of china acceleration in terms of the rollout. are you really going to be able to kind of fight on multiple fronts here, as well as dealing with where you are in the united states in terms of keeping com store sales moving and all the technology initiatives. i think all of it remains the same but again i think the market questions that it's going in the right direction. >> you think this one is fully valued but what about the category itself, are there other companies that might be able to
take advantage of the fact that howard schultz is stepping aside here? >> i don't think starbucks is at any risk of losing market share, any risk whatsoever. i think what mike said, what's happening in china, can they grow. >> their plan is to open a store a day for the next five years. >> but more important, can they keep growth in the united states because people are a little freaked out that that growth had started to moderate and slow, and when you're trading at 25 times forward estimates and growth is decelerating, it's expensive. i think the category in itself is not that attractive. they're not that cheap. i'm not even that excited about consumer discretionary or staples to begin with. >> she doesn't even buy lattes. >> not even with the red christmas cups. andrew, we'll give you the last word with starbucks shares down about 4% here in after hours. >> i'm watching that stock and as the news crossed i'm surprised only because i had been under the expectation having read so many of the analyst reports and talked to so many investors that they thought
this was coming but perhaps this is coming as a bigger surprise to many. as a matter of fa as a result, we're going to have a lot of questions and we're going to have the opportunity to ask the questions that investors have about this tomorrow morning. they're going to join us live from seattle right here on squawk box at 7:30 a.m. eastern time. looking forward to that interview and hopefully getting those answers. >> certainly look forward to that. if i'm howard schultz, frankly, i want to see the stock go down 4% rather than up 4% when i announce that i'm stepping aside if you know what i mean. >> i don't know about that. >> he still owns -- >> he owns a lot. >> you know what i mean though. andrew, as always, thank you very much. i'm thanking steve as well i think. >> yes, we're going to watch him on "fast money." >> that was great. my best show ever with you guys. >> we'll see you later. steve and the rest of the gang will be on "fast money" coming up next hour. ceo brent saunders will be there in an exclusive interview to
talk about why he's sounding the alarm for drug companies during a trump presidency. as you've seen starbucks shares sinking on news that ceo howard schultz is stepping aside, next we'll discuss whether this is a buying opportunity for that coffee chain. and president-elect donald trump promising to keep companies from moving jobs overseas. today he's taking a victory lap for carrier's decision to save more than 1,000 american jobs. coming up, we debate whether keeping those jobs here is really in the best interest of the economy. when "closing bell" comes right back. pha elusive today. is it because so many go after it the same way? chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim.
the big mover in the after hours here is starbucks, just announcing that howard schultz will be stepping down as ceo. meantime, we've had some earnings crossing the wires. we're going to get back to starbucks in a moment but smith & wesson earnings are out. >> smith & wesson shares are falling, now down about 5% in extended trade. we're talking about the largest gun maker in the united states. reporting earnings that came in well above expectations. in fact, a 12 cent beat on its bottom line, revenue topping
expectations but third quarter guidance came in weak and that seems to be what investors are focused on. the election has brought forth very different views on gun restriction. interestingly enough, after trump won the presidency, we have seen shares of smith & wesson down about 14% since the election outcome, but this is a stock that is still up about 27% over the past 12 months, but that's why. this conference call for smith & wesson will be very key to see if executive management comments on gun restriction and the new landscape under trump. back to you guys. >> thank you. down 8%. this is worth a comment. it pivoted after the election. >> on a dime, turned south, and really it seems like the market probably has this right. yes, they've had very good results but that only means fewer guns people have the impetus to buy next year. completely discretionary and psychologically driven purchase.
if you don't fear this boogy man coming maybe there's less urgency. more earnings on the ulta salon. >> pretty much beats across the board. we'll go through it. reporting $1.40 per share versus analyst expectations of $1.37. revenue stronger than expected. comps up 16.7%. that beat what analysts were looking for for growth of 14.8%. e-commerce sales up 59% year over year. salon com, those are up more than 10%. the guidance fourth quarter beats across the board for ult ta and raises guidance for the full year. you can see shares up sharply after hours at 4.5%. those shares have had a decent run over the last year or so to say the least. if we can quickly bring you gap,
they did report november comparable sales down 1%. the street had been looking for a decrease of about .3% so worse than expected. a good comment from the cfo says that the traffic remains challenging but the performance improved in the back half of november. of course that's when big holiday weekend sales started kicking off. perhaps turning of the tide at gap. old navy down 2% but banana republic up 5%. haven't seen a positive number there in quite some time. shares for the gap are down just slightly. >> that's an improvement for banana. >> thank you, courtney. one more. let's get earnings on work day. aditi roy with those results. how do they look? >> a significant beat on the top and bottom lines. revenues coming in at $410 million, handily beating street estimates which were $400 million. on the bottom line, earnings were a big beat, 3 cent gain per share versus street estimates, that number they were looking
for was a loss of 4 cents, so a 7 cent beat there. on guidance, the company is basically in line on revenue. other important metrics, it was a $335.7 million on revenues coming in from subscriptions, that's also a beat. the company said it's providing more flexibility to customers on billing terms which is expected to be a headwind on subscription revenue through the fiscal year. another key metric that wasn't in here but will be talked about in the call is billing so we're looking at that and all of these positive metrics seems to be moving the stock. it's up right now 2.25%. back to you guys. >> aditi, thank you. keeping an eye on starbucks shares in the after hours, trading after ceo howard schultz announcing he will be stepping down. joining us on the phone for first reaction is nick setyan. he's got a buy rating on the stock. nick, does the after hours move lower surprising, now down 4%?
>> no, it's not surprising. i think howard stepping down was something that caught us all off guard. there's no two ways about it. this was a surprise. we should have probably known this in hindsight given all the restructuring announced earlier this year and given what happened last time he stepped down. i do think there's a lot of investors that are nervous. having said that, it doesn't seem like he's completely stepping down like he did last time. it does seem like he's going to be involved in retail innovation which is absolute key, why investors love him so much and he's going to be involved in defining what the premium for starbucks is which is going to be the next growth leg of starbucks, at least in my opinion. so i think there's going to be a call in about ten minutes here. i think they will cause some fears. not surprised investors are
nervous. i don't see the stock trading much low 22 times p.e. which implies in the mid 50s or so. >> if you're just joining us, this all takes place next april is when howard steps down and kevin johnson takes over. nick, is kevin johnson the guy for this job, do you think? >> i think they must have a lot of respect for him. he's been a ceo before. he's been involved for the past two years in every asset of starbucks' business. investors know him well, respect him very much. i think if there was going to be one person to take over, it's no surprise it's kevin johnson. >> those are some big shoes to fill though i would think, mike. >> nick, i guess i would wonder as johnson moves to take over, what are the top priorities or the things you'll be looking for as clues to the company's priorities right here in terms of trying to maybe reassure the street? >> i think the key is going to
be what howard's role is going to be as chairman and i think that's going to be very overt. it's not going to be subtle as to what the key in terms of going forward are. that's going to be continued retail innovation which has been the primary driver of the north america comp and it's going to be what the next leg of starbucks' brand evolution is going to be. he's again going to be involved in that in terms of premium space. so i think those two things are going to be starbucks' focus going forward. >> nick, do you actually think this is going to mean more m and a and maybe schultz, that's going to be his m.o., try to drive growth via more acquisitions? >> i think if there are acquisitions, they're going to be tiny acquisitions. i think if you'they're going to
acquisitions that facilitate the direction of the company, like buying the italian pastry shop to go with the premium strategy, et cetera. it's not going to be wholesale type of acquisition. >> nick, thank you, appreciate your thoughts on starbucks today. >> thank you. >> the journal has a great graphic. since the return of howard schultz back in january 2008 s&p 500 up 65%, starbucks up 527%. >> that was a turnaround. they needed it, that's for sure. when we come back, it's certainly great news for carrier workers but is president-elect donald trump's moves to keep those jobs in the best interest of our economy? we'll debate it next.
anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade kwm back. if you're just joining us, starbucks shares are trading lower in the after hours, down 3% after the coffee chain announced that ceo howard schultz will step down next spring. coming up we'll get "mad money" jim cramer to join us to talk about what this means for the company's future. >> he knows howard well and he knows this company well. meantime, president-elect donald trump was on a victory tour through indiana today showcasing his deal with carrier corporation. they will keep 1,000 jobs in indiana rather than migrating to mexico and in return they'll
give carrier $7 million in tax breaks. carrier will invest another $16 million to keep operations in the state. >> here is what trump said about that deal this afternoon. >> i will tell you that united technologies and carrier stepped it up, and now they're keeping -- actually the number is over 1100 people which is so great, which is so great. companies when they say they're thinking about leaving this country, they're not going to leave this country, and the workers are going to keep their jobs. they can leave from state to state and they can negotiate good deals with the different states and all of that, but leaving the country is going to be very, very difficult. >> let's bring in paul bone akjelly from the action institute. what was your reaction to hearing donald trump say it's
going to be very difficult for companies to move jobs overseas, there will be consequences, they'll be taxed at the border? >> i'm not really sure that that's probably a sustainable way to create good paying jobs in this country. we get those kinds of jobs when workers and entrepreneurs figure out how to make great products at prices that people want to pay. if the only way to keep production in this company is to either threaten or bribe a company as appears to have happened here, i'm not sure that's a sustainable mod of for keeping jobs here. the bottom line is carrier wanted to move those jobs to mexico because it's cheaper to make air conditioners there. if the end result of this is that more products are made at a higher cost in the united states, people who buy air conditioners or whatever product was going to be outsourced will be paying more and in return we get a smaller number of people who will be better off. >> paul, what do you think? i know you're in favor of this, but as donald trump threatens consequences to companies to take jobs overseas, if they keep them here, are there economic
consequences as greg suggests? >> well, i think that we're at risk of making a little too much of the president-elect making this phone call. this is after all the state of indiana. this happens all the time. governors, mayors, legislature, city council make special arrangements to keep jobs. it's not new. i don't think that's the main story here. the main story here is an economic plan for mr. trump that wants to cut regulation, cut taxes and on top of that so far he's putting together a reform cabinet. economic growth comes from individual human beings who have talents and gifts and the ability to use those gifts and their labor, and with a secretary like betsy devos, we can retool education, make our workers more productive because at the end of the day it is unleashing the economic potential of americans that grows jobs. >> i don't think it happens all the time. >> your point is well taken though, paul, but in the near term though are there going to
be companies that are going to be listening to what donald trump said today about consequences of migrating jobs overseas, and what do you think corporate america is going to do about that in the meantime here? >> i think a couple of things. first of all, this is a president-elect keeping his campaign promise, but i think secondly, you're going to have two things happen. the president is going to focus mostly on with paul ryan and his treasure secretary, commerce secretary and others a much broader plan. but secondly, you are going to have companies who are going to take notice of this, they're going to put greater pressure on their governors and say, look, we would like to stay, we would like to use the capital, the talent, the market and everything here, but we can't remain on the number 11 position of the economic freedom index. over the last ten years we've been dropping and we need to have an economy that puts us back up there so there's no reason to look to go anywhere else. >> greg, as the president-elect focuses on really a relatively
small section of the economy, the manufacturing economy of the united states which has some export elements to it it's become actually more attractive for companies to relocate to mexico, right? the currency markets are making that so. you see the mexican pay sew go down in value so it seems hard to have any kind of a strategy, even if it's a broader one, to try and defend that sector of our economy. >> you're absolutely right. by the way, donald trump is not the first head of state to try and save a manufacturing sector with phone calls and pressure and carrots and sticks. this happens all the time in countries like brazil, and france. it happened all the time in puerto rico and those countries continue to economically suffer and stagnate because the overall economic climate was terrible. i agree 100% with paul that if the result of the trump administration is a more sensible tax and regulatory system, that's all to the good and we're going to get jobs that belong in this country. i don't see this sort of deal
making as a sustainable model. this country creates and loses 5 million jobs per month and manufacturing around 300,000 jobs per month. what is mr. trump's strategy? how is he going to find the time to cut deals like this every month. i think it's better to make the education, tax and regulatory systems better. >> don't you think some of the offset is going to be the fact that he's going to lower corporate taxes to 15%? i get that it's less expensive to have these people in mexico but at the same time he's really making an effort to lower the corporate tax as a nice offset and a benefit. what do you think about that? >> that will be but the lower corporate tax is just going to basically make it cheaper to invest but not necessarily invest to make air conditioners but to do all sorts of things like to produce hospital products or health insurance or retail. it's not the job of the government or the corporate tax system to tell entrepreneurs what types of products to make.
and as i think michael was referring to, presidents have to look at the overall impact of the policies they pursue. the mexican peso has fallen 11% since donald trump won the election because people are afraid of a trade war with mexico and they're also anticipating a big deficit boost which is going to drive up interest rates and the dollar. it's going to hurt the u.s. trade balance with mexico more than help. >> good to see you both. thanks for joining us here. >> thank you. coming up, jim cramer will weigh in on starbucks ceo howard schultz stepping down next spring. what that means for that stock coming up. and also we'll talk about the future of the ipo market with the new york stock exchange president tom farley and we'll be joined by model and business
generosity is its oyou can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter? get your mind out of the gutter. mornings are for coffee and contemplation. that was a really profound observation. you got a mean case of the detox blues. don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. if you're just joining us, what a day we've had. i think the dow finished at an
all-time high, up 68 points, and the other averages went south. the s&p down seven points. nasdaq continues to lag. big technology still going down since the election, down 1.36% today. the russell which had been having a pretty good month now down 6.5% as we begin the month of december. sara. >> time now for cnbc news update. >> hi guys. here's what's happening at this hour. russia's space agency says an unmanned cargo ship launched from kazakhstan and headed to the international space station has crashed due to an unspecified malfunction. most of the space ship's debris burnt as it entered the atmosphere. a terrible accident to tell you about, a pick-up truck smashed into an iowa walmart at full speed, killing three people, scattering merchandise all over the floor and stopping right before the produce section. the driver was one of two injured and was transported to a local hospital. a recount of the
presidential election results in wisconsin began today. the green party's jill stein requested the recount and raised $3.5 million to pay for the cost. donald trump beat hillary clinton by 22,000 votes out of nearly 3 million votes cast in that state. >> on a lighter foet, victoria's secret models hit the runway in paris. bella hadid hit the runway with her sister and a host of other models. the show will be telecast on december 5th. makes you never want to eat again. that's the news this hour. back to you, bill. >> thank you very much. >> i'm serious, really? >> makes me want to have a hamburger. on we go, thank you. donald trump kicked off his victory tour. he's calling it the thank you tour. it began in indiana today. he made that speech at the carrier facility. you saw it live here on cnbc where more than 1,000 jobs will
stay in the u.s. rather than being outsoared to mexico. the president-elect had tough talk for facilities thinking about moving in the future. >> he's laid out protectionist policies on the campaign trial that have a lot of people in california nervous about their jobs. for that angle of the story, deird deirdre bosa is here. >> reporter: 1.5 million jobs are tied to this port alone from long shoremen to rail workers to truck drivers. along beach port there's just as many tied to that industry. so the ramifications could be huge for the job industry throughout california and throughout the nation if trump follows through on his promise to slot chinese goods with tariffs. when you consider that 60% of the containers coming into this port arrive from china. some u.s. trade experts say that could have ramifications for
other parts of the economy. >> 25% of the 240 billion or so that we've imported from china in the way of containerized goods so far this year comes through the ports of l.a. and long beach. that's a vital linchpin in the national supply chains. >> reporter: but to others there is longer term damage being done by the flood of cheap chinese goods that are coming in. experts like o'connell say that a port like this which relies on foreign goods coming into the country is at odds with not just trump's trade policies but his promise to revive manufacturing here at home. back to you. >> deirdre bosa on the docks in long beach, california, thanks. starbucks shares are falling hard on news that ceo howard schultz is stepping down. jim cramer knows schultz well. he knows the company well. the stock is off its lows for
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i am more pleased than what i had even imagined. i at least look, i would say, five years younger. i'm 52 and i look better now than i did when i was in my 40s. i feel great. [ male announcer ] and that's not all. the first 100 people who call will also receive $250 off any hair loss solution from hair club. call now! so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird. last year we opened over 2,000 stores globally and those stores are performing at higher auvs than any prior generation in history. second, certainly same store comparables and the point that howard was making yesterday is don't get caught up in comparables.
if you look at comparables in 2016 we posted a six same store growth in comparables. this last quarter was four for the u.s., five for the americas. i think this combination of new store growth, long-term same store comparables and we'll go through ebbs and flows on that. >> that was starbucks chief operating officer kevin johnson last month talking about starbucks business. news breaking at the top of this last hour he will be taking the reigns as chief executive officer of the coffee giant when howard schultz steps down next april. shares of starbucks has been under pressure in the after hours since then. at the low they were down about 7 -- 8% at one time. now down 4%. >> who's the person you want to hear from on this? "mad money's" jim cramer. he knows this company inside and out. what was your reaction to the news? >> initially sad. i know, please don't because
you're deeply linked with the success of the company. i happen to know kevin for a very long time and kevin is terrific. that was my interview with kevin. he knows the company well. but nobody can stay ceo forever. howard is 63. we always knew when kevin johnson came in that it could be a transition. at the same time there's only one howard schultz and howard schultz built an empire, a fantastic company. he stepped aside once before and the stock did not do well. he's not really stepping aside this time. he's going to be the executive chairman. going to run the roastery. but you know what, what can i say? it's like the end of an era and i don't want the era to end because it's a great one. >> jim, stephanie is here, she's got a question. so you know that a big part of the starbucks story over the years has been margins because schultz has been laser focused on cost and really keeping the margins in a range where they could expand and they could see operating leverage on the bottom line. do you think kevin johnson has what it takes to deliver operating leverage in a slower growth environment which we have been seeing? >> steph, that's a great
question because i think that starbucks' biggest problem is through put. i think almost every sees that there's too long a line. you can only open so many starbucks. kevin johnson is a technology expert. i've often called this a technology company. given that their main product is you got to get through in the morning. kevin could do that and i like that howard is going to the roastery which could be the next big concept. they're synonymous, howard schultz, starbucks. when you hear that and see that he's not going to be the ceo, you say, wait a second, kevin johnson is from juniper so it does raise questions whether whether or not he can do the job. i'm sad to see howard not be ceo. what can i tell you? >> end of an era according to jim cramer. thank you. preparing for his show tonight.
i'm sure we'll hear a lot more about that and don't miss this on cnbc with howard schultz and kevin johnson tomorrow 7:30 a.m. on "squawk box". >> that's eastern time. meantime, marketing rallying since donald trump clinched the presidential election. coming up new york stock exchange tom farley joins us with his take on the so-called trump rally and if he sees more people jumping into the stock market with this all-time highs. a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
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♪ welcome back. we are outside the new york stock exchange right now. nat "king" cole is on the stereo. it's time for the 93rd lighting of the new york stock exchange christmas tree. and joining sarah and me right here, we have tom farley, the president of the new york stock exchange. does christie brinkley really need an introduction? we're glad you're both with us. this started in 1923, clearly this beats the rockefeller center. >> it's been through world wars, economic cycles. just a quick kind of history, lower manhattan was in the doldrums back then. the stock exchange wanted to revitalize it. ge had the idea that maybe we should light christmas trees with light bulbs and not dangerous candles. and so the stock exchange and ge worked together to put up the tree. it's the longest running tree to be lit in the world. >> what's going to happen here? >> we'll have a countdown to
ten. our special guest -- >> you get to light the tree this year. >> i know, i'm very excited. i was suggesting we light it with a mallet. >> the way they ring the closing bell. you might knock the tree over, christie. >> when i'm lighting the tree at home, i need a mallet for my head. there's always a strand at the top that doesn't light up. let's hope that doesn't happen today. >> i think it will go smoothly, they've got quite an operation. i was going to pension your perseco bottle, you're getting into the business world. >> this is my rose, i have one that's zero sugar which is really very interesting. and then my sparkling rose, which is so delicious. and it's all organic, all natural, and vegan. so we're really unique in the market. and it is flying off the
shelves, i'm happy to say. it is the most delicious perseco you can get. it's campaign from italy. in france it's $200 a bottle. mine is under $20. >> the beauty of the strong dollar. tom, we've seen a change in the sentiment on wall street since the election. it's clear the markets are at all-time highs, the dow closed another one today. are you seeing a change in the nature of trading at this point? >> no question, more a change in the psyche of leaders of the companies that are listed on the new york stock exchange. there's definitely a sense of a pretty major change to taxes, and there's going to be an easing of our corporate tax regime, the highest in the oecd nations. number two, there's a very real sense that some regulations that are inefficient, that are harming business, are going to be rolled back. that's some of the enthusiasm that you're seeing. >> are you going to see that enthusiasm trickle into more ipos, opening in that market? >> yes. i've been wrong on this for nine
months, so let me preface it, i'm not a prognosticator. very low interest rates, very low volatility, you would think we would have had many more ipos than we've had. however we're talking to a lot of companies now saying, hey, we want to go in the first quarter, the second quarter, and event seen that in a long time. >> the enthusiasm is certainly on wall street. hollywood came out pretty much against donald trump. you're very much in that world. what's the reaction? >> you know, i have a couple of concerns. my number one, i'm concerned about the environment, because i know that some of the things that are good for business are bad for the environment. and the environment is something that there's only just so much of. and climate change is real. and if we don't protect our climate, we're going to pay for it in ways that you can't even imagine. and the government has done studies that show that we really do need to take it seriously.
>> that i get. but the strong dollar will help your imports, bringing the perseco over here. >> you know what, if the dollar fails, they'll go from not buying champagne to buying more per assessme perseco. >> there you go. >> seriously, of course i want there to be a strong economy. but i'm worried about children's health issues as my number one priority. and the children are the first to feel the effects when the environment suffers. so i think we have to find a balance. we have to find a way to protect what we have and also prosper, because america is desperately calling for that. >> point well-taken. it's time, folks. shall we get to the 93rd lighting of the new york stock exchange christmas tree? take it away. >> let's do it. thank you, guys, for having us on. >> thank you so much. s. >> good to see you, christie. >> are you guys ready?
are you guys ready? kids, are we ready? [ cheering ] christie, are you ready? >> i'm ready. >> christie rang the closing bell flawlessly today, including a very strong gavel, so i have high confidence. how about we count down from ten. ten, nine, eight, seven, six, five, four, three, two, one -- >> happy new year! [ cheers and applause ] >> great job, well done. thank you, ladies. thank you so much. it was nice talking to you, thank you so much. thank you. let's make it three years next year. >> we'll work on it. >> thank you so much. it was awesome.