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tv   Closing Bell  CNBC  December 13, 2016 3:00pm-5:01pm EST

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20,000. >> and it is the cnbc holiday party. tyler will take his shirt off. >> i'm going to do that anyway. >> make sure you watch tomorrow for the fed decision on interest rates. >> i'm going to twirl my shirt tomorrow for that fed meeting. >> "closing bell" right now. > . i will have what they're having. >> and merry christmas everybody. >> welcome to "closing bell." i'm kelly evans at the new york stock exchange. >> and i'm bill griffith. is today the day? does the dow hit 20,000? up 117 points closing in on the big round number. today the dow is under performing the s&p and especially the tech-heavy nasdaq. we have some money managers with
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us who say there are still stocks worth buying at these levels. we'll tell you which ones coming up. >> the dow is up nearly 9%. the russell up nearly 15%. these are the kinds of numbers that make for a great year. with the fed's decision tomorrow we look at whether investors are paying more attention. >> by the way, in case you haven't heard the ceo of exxon mobil has been chosen by donald trump as next secretary of state. we are wondering what that move could mean for the future of the oil giant coming up later this hour. let's start with dow's run at 20,000 and nasdaq's push into record territory. bob pisani is tracking action on the floor of the stock exchange and courtney reagan is at the nasdaq market site for us. >> talking about this rotation. november industrials, materials and banks giving way now to new
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sectors of the company like consumer names. there is nike up nearly 2%. didn't have a great november but doing pretty well now. drug stocks, swing around to the right and let me show you here. remember when trump was talking about bashing drug stocks they had a tough time but now drug stocks like pfizer and lilly are starting to advance. consumer companies didn't do much in november but now slowly starting to advance. consumer staple names like cisco, tyson doing well. what is falling back? some big material names. alcoa down. some of the big industrial names. swing around here, a lot of people on the floor here. there is general electric that had a great november overall. that has stopped advancing. the bottom line, every time you see something falling back you
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have other groups coming to the floor and that is why this rally has been so powerful. >> the nasdaq is leading today's gains. a run down of what is happening that way. >> the nasdaq has been the lagging index since the election still positive but not as strong as the other two main indexes we talk about a lot. today the composite and nasdaq 100 are logging historic moves of 1.1 and 1.5% respectivally. s&p large cap tech sector trading at levels not seen since 2000. both the nasdaq composite and nasdaq 100 crossing new all-250i78 highs today. if the gains can hold over the next hour the nasdaq composite will be up for the sixth time in seven sessions. the nasdaq 100 up nearly 3.5% in a week. if you look at the point impact, who is leading the way you will see the fang trade back into
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play almost. after a tough month last month for the names apple is responsible for contributing about 11 points to the positive side to the nasdaq 100 today. amazon adding 8, facebook adding 6. the alphabet shares adding seven. microsoft is hitting all-time highs contributing seven points today and we got to hear from bill gates earlier today. coincidence or not it is worth pointing out. >> thank you. no doubt we are checking back with you. let's get to our "closing bell" exchange for this tuesday. david nelson is sitting right here with us at post nine. so is keith bliss and rick santelli checks in from the cme in chicago. what is your view? what is continuing to power this market? i get the post election rally and the rally is broadening out as people discover new things.
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now what? >> i think you can take all the over bought predictions and throw them out the window. people are chasing the market. if you were to look at traditional metrics certainly from a p.e. standpoint if you start to look at things like price to sales or dividend yields we are in the sweet spot of where we are. what has been key to the rally is broad based nature of it led by the small caps which was talked about before. >> you know investor psychology, trader psychology. is 20,000 a magnet? is that what they are aiming for and what happens when we get there? >> the humans and the robots will get us to 20,000. if it's not today it may not be this week but if it's not this week it is for sure next week because december is a seasonally strong month and the week before christmas is the strongest week in the strong month. we will push to 20,000. i said that a few weeks ago and it is absolutely going to
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happen. >> what are you seeing here? >> i was hoping today would be the ta i get to put on a party hat. i'm not sure how important 20,000 is. we know this is a price weighted index. goldman has led the charge. if you split the stock it would head to the back of the bus. i don't know how important it is in terms of the economy. i think what keith is alluding to what stocks are saying is that the numbers, the projections are probably wrong. the market is a little bit rich. i think earnings numbers are probably revised higher. i think stocks are telling us at this point. it's not surprising that we had the massive rotation. i think the bulk of the rotation is likely behind us and probably seeing first attempt because you are seeing outperformance. >> bitters bought the longest paper out there. the 30 year option was pretty good and gone to a 17-month high
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on the yield. what did you make of that today? >> whether it is two straight at the highest levels since april of 2010. june of '15 for tens right around that same point maybe july 15th for 30s. to me you can tell the market distance to be travelled by the company it is keeping. seeing rates move up right along with stocks moving up with a dollar that is paused but still moved well off the lows to me is a combustionable mix. you add in full employment. you add in -- think about this. we are closing in on 20,000 with the dow. all the metrics i gave you and here we are 25 to 50 with regard to the fed funds rate. it's too low. we all know it. either they jump on board or continue to see a lot of curve wiggles with regard to unintended consequences of
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lagging this far. 20,000 is a magnet. i think the real magnet is about 23,000 and 20,000 like your thermostat you have to pass every degree on the thermostat to get to a higher level. structural reform at this point in u.s. economy shouldn't be delivered. nobody knows how far it can take especially with accommodation in the system. >> tomorrow if they come out and in the statement if they say something more hawkish about the need to move more quickly will people take them at their word or say we know this is a fed that would rather let things run high? >> i think it will create a blip in tomorrow's trade. the real risk in the statement from the fed will be if they talk about quick and even pace rate increases which is a possibility if they sense wage
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inflation is in there and even though numbers were negative they are stronger than expectation. if they sense broad based inflation then that is a small risk. i think that there are too many positive things over the equity market. you take a look at money flows they are going into financials and tech and going into energy stocks right now. that is just going to propel us further forward and then the real question for me is has the fed been clever enough to thread the needle on monetary policy that we are going to get fiscal stimulus, reduce regulation and tax relief at the same time. >> markets are excited about it. >> the classic stock picker on our panel. let's get a couple of names from you. you like facebook which has suffered since the election, has not participated. >> it's doing pretty good today. hasn't suffered that bad. >> it hasn't ripped like goldman
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sac sachs. >> you like cbs. >> it's all the new media. it was understandable that some money would come out because there wasn't enough cash to go into the financials. if you haven't bought a financial at this point you never going to do it. facebook i like. you get on there. i go to something like amazon and it gets on my feed and i click and buy it. 22 times next year's numbers that is a pretty cheap stock almost a value stock. >> what about cbs? >> you know what is interesting is that the analysts, half of them say the glass is half empty. others are saying it is half full. what i don't understand is why anybody would downgrade it now. i thought via com was an alba trausz. i didn't want to see that. they both have the legacy assets, the cable assets, not
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that exposed to the bundle. you go to their website it's beautiful. ncis you can't fast forward through commercials. i think the wise move is to get out of broadcast entirely. >> wow. suddenly flush here. half full, half empty depends on whether you are drinking or pouring is my point of view. >> i guess i'm drinking. >> i have a theory that dow 10,000 teased us forever. never got there. do you think it could happen again here? >> i don't see it. just given what we see on the internles of the market there is no overhead resistance where we see major indexes. just the dynamics and the thought in the market place.
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the iursha that we see from clients and hear out in the market place. i think we are going to hit 20,000 if not this week but next week we will zip right through it. >> a word of caution here, i'm -- >> that's why you are here. >> i think this is great. i'm really excited. i think the economy is certainly on it. a lot is based on the trump rally. last time i looked we elected a president. we did not elect a king. some of these things will be diluted. we still have a lot of democrats in the house and senate. there will be pushback and negotiations. some of these proposals will be diluted. for now let's party. >> you want to answer that before we go? >> it's not about being the king but having a senate and a house. i think there is low hanging fruit that even donald trump is not going to have any ability to stall. we have been waiting for this set up for a while. tax reform, rolling back regs, truly low hanging fruit.
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every investor in the market thinks that. >> thanks, guys. >> we have to send it to seema mody. >> markets hit new record highs s&p real estate sector is struggling to make gains. morgan stanley changing view to cautious from in line. the call comes from impact of rising rates and slower growth. some big names including extra space. you can see names down by as much as 1% to 3%. >> it hasn't been that great a performer. 45 minutes to go. the s&p is up 15 points. the nasdaq was up 1%. look at the transports. >> not today. >> you don't think so? >> i don't know anything. >> how would we know anything. >> you think so? >> i don't either. >> meanwhile exxon mobil is higher after news that its ceo
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rex tillerson has been chosen to serve as secretary of state at least designated. a leading analyst will tell us where this leaves exxon's stock and future. apple is higher today and the tech giant has started selling air pod wireless head phones following a nearly two month delay. they are not available everywhere just yet. we have details coming up. you're watching cnbc, first in business worldwide. [vo] quickbooks introduces jeanette.
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if you're just joining us there is the dow creeping ever higher closer to 20,000, up 117 points right now. what's getting us there? technology is among leaders. the nasdaq is performing even better than the dow today up more than 1% while the industrial average is up 6%. >> they went up 15% since the election. here is the big caps. intel interestingly enough leading the way followed by apple and then exxon. that company's stock trading
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well. >> boeing which has been in the spot light reluctantly is big laggard today. >> a couple of high profile visitors made their way today to meet with the president-elect. rapper kanye west appeared with donald trump after they met and trump called him a good man saying they have been friends for a long time. also billionaire microsoft founding bill gates at trump tower to meet with donald trump today. >> the big news is team trump announcing rex tillerson as choice for secretary of state. exxon shares up 2% among the dow components today. what is next for exxon with tillerson possibly leaving the cabinet come january? let's bring in stewart. he was leaving soon anyway. he hits the magic age of 65 that is mandatory retirement and was planning to leave in march next year. you move that up by two months they are ready for this aren't they? >> this has been something,
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planning has been a major part of the discussion for exxon for the last couple of years. they already selected their heir apparent. he is a 24-year veteran of exxon. i think really it amounts to staying the course for the company. they are sticking with somebody who understands the culture and how they like to operate. >> do you have insight as to why kanye west was there? going back to exxon, we talked a lot when it comes to financials about how well they groomed people to take over the firm. with exxon, who are we talking about that is likely to take over? >> darren woods is the president of their refining group. he has had experience in refining and chemicals. i think it is note worthy that it is refining. historically most operating and income that any is going to generate will come from upstream
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side. what is indicates is they are selecting the person they think is best capable of holding the reins for probably another decade or so. >> clearly they have suffered as has the industry by the lower prices that we have seen over the last few years. now they seem to be on the rise. what about the drilling in the arctic that rushed the deal. that has been stalled because of the problems that russia has had with the eu over ukraine and so forth. does he have to address that? do you think that gets in the way of rex tillerson's nomination to be secretary of state? >> actually, i really don't. i think the problems that folks have with drilling in the arctic first and foremost are just economics. even with rise in oil prices over the last two months $55 oil is really not sufficient to drive profitable economics.
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i think certainly some state craft issues will have to be worked out. the bigger picture for exxon and everyone else is figuring out where they can grow profitability. >> what do you think the mix will be between oil and natural gas? and what will happen if ivanka trump did bring al gore to trump tower? >> really interesting because you have had trump talk in the past about how he is basically a self-described skeptic of climate change being man made. he has said he is not interested in picking favorites when it comes to forms of energy consumption. i think there is a better chance that regulations on energy become lifted or alleviated than they are being extended. i think that natural gas is something that exxon has always been interested in for the long
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term. the deal in 2008 was i think reflective of a long term view that natural gas would be a bigger part of the energy pie. i don't think that changes going forward. >> are you buying the stock here? do you like it? >> we have a mutual opinion on the stock. this is not a growth stock. exxon does a good job at generating dividend increases. >> always good to see you. thank you. >> just want to bring to your attention as we speak of people in and out of trump tower tomorrow tech executives will meet with the president-elect. not among them will be jack dorsey who is the twitter and square ceo and co founder. interestingly donald trump has probably done more for the platform than just about
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anybody. talking about presidential tweet risks saying everyone has to keep twitter feed next to bloomberg terminal. not clear whether this was oversight. i'm guessing the former. it appears at least as of right this moment that jack dorsey did not get invited. >> that is interesting especially when you consider how much he uses that. i heard someone the other day, they believe donald trump will use twitter the way john kennedy used television as a medium to get the message out to the american people. >> and i wonder -- it's not too late. perhaps jack dorsey will show up tomorrow. it is clear that twitter has been integral to donald trump. >> the invitation is in the mail. we have 35 minutes to go in the session. keeping an eye on markets in rally mode. the dow is up 118. nasdaq is up 59. broad market s&p is up 15. >> apple get ag boost along with
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the rest of the market as tech giant starts selling air pod wireless head phones. >> and later a big rally and the big deal today. share holders approved the merger. will the trump administration? ceo gives us his take in the next hour of the show. they are the natural borns enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful.
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welcome back. one of the best performers in the dow today which is up 118
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points and 80 points shy of 20,000 is apple. rising along with the rest of the market and starting to sell its air pod wireless head phones today after nearly two-month delay. for now customers can order online for $159. they will be available at apple stores next week. apple has not disclosed why there was such a delay. the tech giant says the air pods will ship in limited quants and launch in more than 100 countries. apple says the air pods will deliver up to five hours of listening time on a single charge. >> i have a theory why they were delayed. they can't figure out how to wear these things. this is the proper way to wear them. they are like antenna. you point them up. they are supposed to be facing downward. >> i imagine you are not the only one making that mistake.
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they are finally coming out. >> this is a little bit tricky timing. it wasn't clear as of yesterday the stories were about how apple missed the christmas season. >> ask and you shall receive. >> air buds not to be confused with the golden retriever from one of the greatest films of all time. now they managed to get them in production. other people already bought alternatives thinking this wasn't going to happen. it is not clear they are going to come in time. >> they will be so easy to lose, too. don't you think? >>. time now for a cnbc news update. >> do you remember my favorite martian. >> i was going to mention that but i figured you and i would be the only ones to know what i was talking about. i agree. >> thanks bill, thanks kelly. here is what is happening at this hour. defense secretary ash carter
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says three isis leaders linked to paris attacks were killed on december 4. he made the announcement during his visit to a military base in italy. thousands of people continue to flee the front lines of fighting in aleppo as the syrian military takes control of that city. russia says all military action has ended. turkey says it will set up a tent city to accommodate up to 80,000 refugees. after a decade long criminal investigation into a nationwide salmonella outbreak an executive pleaded guilty to a single misdemeanor charge of shipping tainted food. the guilty plea settles the probe. wal-mart will offer free last minute pickup on christmas eve for customers looking to have items shipped the last chance to place an order at wal-mart.com december 22 at
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noon. high noon. you up to date. >> this is why competition is a wonderful thing. all the retailers are trying to provide the best service possible and it's great for consumers. >> and as late as possible. although i think i would be a nervous wreck if by december 22 i didn't have it wrapped up. you never know. >> see you in an hour. >> speaking of twitter, kanye west explaining why he was at trump tower to meet with the president-elect saying it was to discuss multi cultural issues. he didn't dampen speculation by his involvement in politics. he said the issues included bullying, modernizing curriculums and violence in chicago. feel it is important to have a direct line of communication with our future president if we want change and did say 2024. >> just as friendly reminder there. >> there are reports out today that they were discussing a possible ambassador at large
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role for him. the president is interested in him as a business leader and cultural icon to do something in that way. >> kanye west had been treated for exhaustion among other issues. prior to that one of the last public appearances was at a concert where he spoke about potentially supporting or voting for donald trump. this is sort of an interesting way that only a day or two after he has done so with the president-elect. >> the parade on the red carpet in trump tower. we are heading into the last half hour of trading. we are at 19,916. 84 points away. a leading trader will join us to share thoughts as we head to the close here. the wall street journal tells us why he thinks president-elect trump could push for lower interest rates from the fed. stay with us.
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moving higher again all the major averages except for small caps. the dow is now up 120 points. 79 points away from 20,000. the s&p 500 broad market up today or about 16, 17 points.
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the nasdaq is having a really strong session up more than one percent. here is sectors leading the way. technology up 1.5%. utilities up one percent and lagging are industrials and materials. let's hand it over to seema mody. >> trying to find names not participating. take a look at shares of urban outfitters down about 3%. the apparel retailer gave guidance saying fourth quarter comparable sales in the low single digits signaling better performance than the rise predicted by analysts. despite the losses shares of urban outfitters up about 40% year to date. >> seema, thank you very much. joining me on the floor of the new york stock exchange with 25 minutes left in the trading day. what is your guess?
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do we do it today? after the fed meeting? >> hopefully the fed -- >> depends what the fed says. i think a lot is built into the market. i don't think we do it today. we are going to get there. the trend is definitely higher. we are approaching strongest time of the year. we have a running joke that we only invite you on on rally days since you are skeptical. you with this rally here. you understand why the market is going up at this juncture. but for how long do you think? >> we are going to get into the first hundred games until he gets a chance to put all his new policies in implementation. one thing i look at is the vix. it has been a little bit of insurance in a market that may rollover. we approach really solid resistance levels as far as technical support. looks like they are crossing over to the upside here. that is one thing i will keep
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emy eye on. it is something -- someone is buying insurance and for a reason and probably a good reason. this market has run far pretty fast. >> you haven't completely lost your skepticism. >> i hope not. >> thank you guys. ahead of the fed's decision steve liesman joins us with results of survey of nation's top economists and risk of recession. recession in the u.s. >> one of the reasons why i think we are nearing 20,000 is because of expectations of policies of the incoming president and that really means expectations for growth and means lower expectations for recession. take a look here. 23% was what the probability of recession was in the next three months in november survey falling down to 18%. remember back in january concern about china, concern about slower growth in the united states and ratchet up to near 30%. almost half of what it was back
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a year ago back down towards levels in 2014 and 2015. lower recession chance comes with higher probability of growth. they ratcheted not much for this year, just above the expectation expected. they were looking for 2.4. a little bit for next year they go up 0.4. 2018 looking for 2.8% growth. we have a new -- we asked this for the first time. do we got it? protectionism seen as number one threat to the u.s. recovery of the u.s. economy, 46 respondents include economists and analysts and they say protectionist trade policies are number one threat. what has come down? fear of global economic weakness as well as this was one of the higher ones, tax and regulatory policies, idea of tax cuts for business is something that has
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the group very, very optimistic about the outlook. one more thing i want to show you which is outlook for rate hike. that has come up. i want you to put it in context. 1.3% is the number expected for 2017. it was that back in april. same thing here. 2018 funds rate 2.1% exactly what it was back in april. now we have our outlook for 2019 up to 2.7%. it looks higher but not very long ago we were looking for rates just like this. >> exactly. it will be interesting tomorrow. thank you, steve. we'll see you then. tomorrow is the big fed day. more people may be watching donald trump's twitter feed for commentary on the fed's move. what do you think they do tomorrow? >> i think it will be as expected. they will raise rates. i think what we need to watch are a couple of things. in a statement the line i'm watching most closely is risks
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are roughly balanced. do they take the word roughly out? do they tilt it to the upside? the second thing you want to look at is how projections change in the next few years. they have been looking for 2% growth next year. there is a lot of excitement over the trump retration trade and i think the street is looking for the number to go up. the fed is in show me mode when it comes to fiscal stimulus. they are not going to move their rate path that much until they see something more substantial out of congress and trump administration. >> one of the long standing discussion points about the fed which is how much they respond to financial markets. if you said the fundamentals for the economy certainly haven't gotten worse lately, but the stock market is on a tear, is it the fed's mandate to respond to that? >> there are times when financial markets cause the economy to do something like during a crisis. most of the time the financial markets are simply following
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what the economy is telling them. the fed is the same way. they look at the financial markets for signals about where the economy is going. when they look at financial markets they are encouraged. bill dudley made this point. he has seen bond yields going up against an environment of stock prices going up. it looks like people are getting risk appetites back. i think the one wrinkle is the dollar up about 4% on trade weighted basis. that will exercise the material negative impact on growth and inflation. >> what kind of relationship do you anticipate a president trump will have with the federal reserve? he has governorships and fill early in the new year. >> given we have seen quite a variety of views so it is very hard to predict. we are talking very large variance here. my gut senses that see how he seems to be getting along with obama in a surprisingly good way that might be a useful template. trump cares about results and
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janet yellen wants the economy to grow fast. neither want interest rates to go up and don't want the economy to go into recession. donald trump is a guy who changed party affiliation half a dozen times. gary cohn, a registered democrat. not a lot of partisan fervor unless the fed sees the economy and inflation behaving in a way to move rates rapidly i'm anticipating less smoke and fire than we might have been thinking between trump and the fed. >> good to see you. thanks. we are heading to the close about 18 minutes left in the trading session. dow holding steady. we are 80 points away from dow 20,000. there is an old wall street addage you buy the dips and sell the rips. which stocks have ripped higher
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as dow 20,000 does approach. and in the midst of the rally we have a mega merger with shareholders agreeing to a sale. what is next? we will talk to hue grant coming up. this is my headquarters. this is where i trade and manage my portfolio. 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.
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welcome back. 14 minutes to go and the dow is up 129 points just 75 points away from dow 20,000. interestingly enough tomorrow we run smack dab into the fed decision. whether that throws a wrench into the works of the rally that we are seeing play out here we will have to see. the s&p 500 is up. nasdaq is up more than 1%. the russell is now positive. >> friday is the third friday of the month meaning expiration day. the last big one of the year. we could get funny volatility between now and then and on that day. who knows? that will all effect what goes on the rest of this week.
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let's check other movers. v verifone reporting a beat. did lower guidance for next year citing continued chip card delays as a reason. that stock is up 8% right now. jet blue up, as well. presentation to investors the air carrier said it plans to announce cost cuts that deliver structural savings by the year 2020. jet blue also said it plans to double its stock buyback program to $500 million from 250 through the year 2019. that stock up right now. >> buy the dips, sell the rips. it's a time honored phrase on wall street. dominic chu is back with some insight on the latter part of this recommendation. >> so if we take a look at the markets overall we have known the dow is marching towards the 20,000 mark. if you look broader into what
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has been fuelling the overall market rally there are specific parts of the market that are getting really, really up there in terms of possibly the price movement in the short amount of time. lots of people look at different measures of momentum. we are looking how far above and beyond a 200-day average price. how quickly is it rocketing up. if you look at the s&p 500 most extended about 13 stocks within the index or at least 40% above their average price. longer term view. if you look at names they are indicative of what has been driving the markets. we have spoken about morgan stanley but still that stock is right now 42% above its longer term trading average price. united rentals rent a lot of heavy equipment. they are up 43%, the trump infrastructure play since the election. bank of america, the only real
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big money center up 47% above its 200-day average price. single stock in the s&p 500 trading the most above the 200-day price nvidia up. semi conducters, financials a huge part of the overall picture. that semi conductor a massive move higher. we will see if that technology trend plays into the end of the year. >> great earnings recently and then from the election. >> dom, thank you very much. no big deal. $150 million to buy. >> just ten minutes to go. dow is up 123. s&p is up 16. the nasdaq is up 58 and russell is down again. >> next guest says three stocks worth buying with the market in record territory after the break.
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eight minutes left.
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the dow up 113. we are in a holding pattern. joining us on the floor at the big board co-manager of jensen quality growth fund. you're a portfolio manager. do you get nervous near big numbers like this? >> you can get a bit nervous. i think valuation is going to be a big talking point for the rest of the year. >> explain why you like a name like microsoft which is rallying today. >> we really like companies with cash flow. clearly nomdates the markets and has $120 billion of cash and any chance of tax reform could boost that. >> the word quality is in the name of the fund. you going for quality names. >> high quality companies with durable advantages, strong free cash flows and persistent
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returns on equity. >> i see pepsi is one of your big holdings. >> dominates the position. ten times larger than the nearest competitor in salty snacks business and diversified. >> coke, i don't see that making the cut. >> it does, actually. back to your point about valuations it is a smaller position in the fund today precisely because valuation isn't as compelling as other names. >> what about macro issues? rates are going up anyway. the cost of energy is going up right now. expectations for economic growth going up right now. are you so long term that you don't pay attention to any of that right now? >> we are long term. average holding period is seven years. we are very much at that end of the spectrum. one of the benefits of owning durable businesswise strong business models that they have
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the good times and the bad. >> real quickly united technologies has been in president-elect's cross fires lately. are you confident it won't be further? >> we will have to see how the president-elect acts when he becomes president. united technologies, carrier has been in the news. what we really like at united technologies apart from high return on equity is the play in emerging markets. you get engines coming out. >> even though he has his eye on pricing. >> that is all to be wary of. one of the characteristics, companies that have real pricing power for long term. >> good to see you. thank you for stopping by. we are coming back on closing count down with dow up 109. we are inching closer to dow 20,000. one technical strategist says there is a caution sign flashing and will tell you what it is
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coming up. you're watching cnbc, first in business worldwide.
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i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle and it keeps my investments fully mobile... even when i'm on the move. sign up at etrade.com and get up to six hundred dollars. "closing bell" is sponsored by e trade. don't just see opportunity, seize it. 90 seconds left in the trading session. bob pisani with me here. doesn't like we are going to make it today. >> we will. >> like a watched kennel never
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boils. >> simmering right now. the number of times that the market teased us dow 10,000 held and held. >> 1999. remember that? >> where was the strength and weakness today? apple for much of the day. strongest dow component while boeing was weakest here. >> this rotation we talk about apple was weak in november and now come to the fore. consumer staple stocks were weak. that is why this is so powerful. >> wti continuing to creep higher hitting 17-month high today. right now trading at 5281. the day before the fed meeting they had an option that went very well. it is at 18-month high with yield around 315. >> not going to take away from the rally. the day before the fed meeting traditionally a rally day. s&p goes up a little less than 1
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percent historically which is what we are getting today. 0.36% gain. materials and industrials falling back a little bit as everything else comes to the fore. >> no 20,000 but still a record. more to come on the second hour of "closing bell." see you tomorrow. thank you, bill. welcome to "closing bell." i'm kelly evans. record highs again today on wall street. here is how we are finishing up on the dow up 112 points on the bell to 19,908. gain of more than half a percent. s&p 500 broad market index up about two-thirds. to 2,271. nasdaq closed less than 1%. off the highs of the session as it closed at 5,463.
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russell did close positive there. it is slightly higher to 1,373. the story of the day is how much closer that puts the dow to closing above 20,000. in fact, we are just about 90 points away from that level. also the story today that surge in tech stocks from that surge to two names to short at a retail investing club. we'll tell you how you should be playing this rally and whether it can last. joining me to talk about all of this we have cnbc senior market commentator michael santoli. for more on today's market action, fast money trader will be here in a moment. michael santoli, we have many mikes here. what do you think about this rally? >> if we didn't have this sort of interesting but sort of arbitrary round number on the dow i think you would be saying new highs across the board in the big cap indexes.
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the nasdaq out performing. you had rotation into groups that maybe lagged in november. we are kind of coming away with why didn't we have oomph. you have to have context here. i think it is really obvious there is not a lot of urgent selling. the selling kind of rotates from group to group. some rest and some take on the lead. i don't think you can assail the condition of the rally except to say it looks stretched. you have to have a pullback before too long and sentiment must be getting ahead. >> i see you are saying you are buying the laggards including tech and health care, utilities had a great day. >> last week it was all about the banks and industrials and energy to some extent. of course, the russell. what i noticed last week was the skill if you will on the iwm puts was at a six-year low.
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2010 row have to go back to. to me that sets up a warning signal that maybe it is setting in. to me it said the market is not going to crash. let's look at tech and health care. health care got beaten up on comments by president-elect trump. i'm saying there is quality tech to own and quality health care to own. as for bonds i think they are getting cocky here which means utilities, reits and staples can get a lift. i think that continues in the short term here. >> steve grasso, a lot of talk about how many people are coming into the market and buying here. is that happening in force? >> i think that it's probably both. it's the only market that all of us can pick a sector and we can all say i agree with that because the sector rotation happens now. it happens on a daily basis, weekly basis and since the election.
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financials, energy led out of the gates. now it is reits and utilities. those proxys everything is owned. and everything -- one day when you say i can't pay these valuations, don't. pick something else that you feel is not overbought. it is not a valuation game but a positioning game. >> michael -- >> number one. how long do you think that can last? >> that's a question. the setup that steve describes is correct. you don't have a lot of people looking to exit right now. and the question comes in as you have a fed meeting that everybody knows what is going to happen and maybe a waiting for what is going to happen as you have big round numbers like dow 20,000 hit, the u.s. dollar is it going to top on the fed decision? i think the sense that maybe moves are culminating here and doesn't mean we enter january with pent up selling to be done. i don't think we are set up for anything like we saw into last
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january. you don't have credit markets falling apart. those were two big factors last year. >> another factor at the time was china. it is interesting because in a way that is another place of fear if you want tocall it that right now. but it's just the market is not in the mood to care. if you look at u.s. equities. >> not in the mood to care. as mike number one points out mike number two will reiterate that. i need an eye patch or something. we will leave the jokes at that. it is a different kind of fear that is going on here. a lot of faith is being placed in this new administration. what if there is pushback on stimulus? it is not as if congress comes in and trump hires oprah to say you are getting a tractor. >> you never know. >> should hire me to do that. >> the point is that this stuff is pretty wonky and takes a
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while to filter through. >> it is a multiplier effect. and we did talk about china. now it is frankly geopolitical fear where we don't know what is going to happen with the taiwan situation. that's not a game you necessarily win right away. >> a different environment that would be a good enough reason to be a huge worry point. the nasdaq had no problems today moving higher. let's get to courtney reagan at the nasdaq with more on the rally there. >> so we had a record day across the board especially so for the nasdaq which has been a laggard compared to the dow and the s&p since the election. today was a new day and different much better day for the nasdaq if you are long with both composite and 100 logging nice gains of 1 and 1.3% respectively or so. that means we are higher for the last six of seven sessions. if you take a look at what bob pisani has been talking about with the rotation and we have more risk on trades now going
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into tech away from some of maybe the other risk on trades that we have been seeing. we are seeing the sector and the tech etf actually trading at 16-year highs, not since what we have seen september 2000 with tech. we are looking at really nice moves there. the rally today is really broad based. if you look at the leaders for the nasdaq 100 we have sea gate but tesla is there as well as mylan. we have a lot of different players leading the way higher just intraday up more than 2.5% for the names at the top. if you look at fang trade that is working again today if you take out that work with the old google name. facebook up strongly. apple up strongly as well as both alphabet class shares adding a lot of positive impact to the dow. not to mention that microsoft shares are at all-time highs. these are names that we know are big caps, widely held and important to follow along
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especially when we see the trade working again and leading the way higher. back to you. >> thank you. we should also note tomorrow trump is meeting with tech ceos at trump tower and mike o'roark with more on this meeting. this big move in tech and what you think is going on here. >> i think you guys summed it up great. what i call what is going on a reverse rotation where now the market is looking at the sectors that have lagged. coming into this week the technology sector was only up 1.8% since the election versus the financials being up just about 20% or industrials and materials and energy being up 10% or so. i think investors see the catalyst of the meeting with president-elect trump tomorrow and they said technologies lag. if we believe -- if people truly believe in the new bullish growth outlook technology will play a part. obviously, the initial outlook
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was these companies have benefitted from globalization so trump can be damaging to them. of course, they will benefit from other things. so people are looking at it as meeting trump face-to-face is a positive while if he is talking about you on twitter that is not so good. >> that said he brought media people to trump tower and didn't sound that like was a positive meeting. is that guaranteed to clear the air? >> i think this is definitely what the market is perceiving it to be. he backed off with the romney incident. he backed off of building the wall in mexico. so his bark has always been a little worse than his bite. he is a businessman. he gets things done. i'm not saying that in a negative way. when they come out of the meeting i bet there will be a lot more handshaking and smiles versus what we have seen leading up to this point.
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>> that's one -- by the way, to your point, mike, ibm has put out a statement or an op-ed published on usa today in which the company talk s about how it is hiring 25,000 workers. saying we have thousands of open positions and say michael santoli they are going to invest a billion dollars in their existing work force. >> this is partial answer to the question of will this generation of ceos that has come up being globalests but being focussed on productivity, are they going to change their tune? ibm 25,000 workers doesn't get back to the employee count of 2013. this is just kind of we are going to do this anyway kind of move. >> what do you think about the point that they have open positions? does that imply they can't fill
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them in. >> you look across the board large companies have enormous number of unfilled positions. the job openings outpaced the people who can fill them. >> we know that a lot of tech companies are reliant on immigration to give them not only their workers but their ceos, the startups that we all use and include in their lives. would you imagine immigration is a center piece and what kind of response or softening from the trump administration do you suspect might be going on here? >> it is interesting when you go back to the comments bill gates made today making that association with jfk. so i think, you know, gates' interpretation is trump can be a pragmatic man and hopefully will find good solutions to the problems we have for this country. again, you guys stressed since the top of the hour there is still a lot of uncertainty about the execution of all of these policies and strategies and there is a lot that needs to
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play out. >> one thing, we were talking about the optimism number which came in strong today. >> five-year high. >> there were problems with that number. cap x spending down. net compensation and plans in the next six months down meaning the survey says wages are going down. more jobs than people can fill? why don't you raise wages? people need to be retrained to do new jobs. we keep hearing about stimulus, road building, bridge building, industrials are up. money needs to be spent retraining people, too. education will solve problems and ibm can lead the way, tech companies and this administration. >> i think it was a darwin thing. the species that survives is the most adaptable. >> that is why i had pet cockroaches. >> how are you surviving this market? >> we bought the market. people have collectively bought
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this market. so even if it is a transitory gdp boost to 4% or 4.5% are you going to sell the market or buy it? you will buy the market. i do think wages will be going higher. you will not sell the market. you are going to buy the market. i'm coming up empty with reasons to sell the market. >> we have to go. thank you so much for joining us. you have to stick around. catch the rest of the crew coming up next hour. kate moore will tell you what you can still buy with stocks at all-time highs. the dow closing in on record territory on the march to 20,000. noted short seller tells us which stocks he thinks are overvalued right now. the dow only closed above 19 k for the first time three weeks ago. we will look at charts to show whether history says investors should be worried. you're watching cnbc, first in business worldwide.
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welcome back. all major averages pretty much closing at record highs today. definitely the dow at 19,911.
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is now the time to look for names to short? joining us now is ben axillar focussing on research activism. welcome back. you say make corporate governance great again. >> our issues are two fold. we think it's facing fundamental challenges, more competition and the company is bol ser itting numbers. the second issue is corporate governance which we think needs change with rotation of people on the board level. >> is it a cloud play? >> cloud play and human resource software sector. >> which has become kind of crowded space? >> we agree. they are facing competition on the low ends from some cheaper solutions and at the higher end from oracles of the world. >> just want to mention ultimate
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software says the report contains substantial inadequacies. the company points to track record of growth and financial performance to help investors make their own decisions. >> my reaction to that is the same reaction. it's the same reaction we got. what happened with most of these companies we have seen the companies guide down and seen them kick off directors. >> what about burlington would you mention? this is a company in the retail space which has tremendous success stories like tj max. >> they recently put out a quarter that slightly beat expectations. we have been continuing to focus on their pack and hold inventory and continuing to boost margins. we don't think it is sustainable. analysts keep posting numbers. it becomes a miss and we see it unfolding next year. >> how much of the valuation
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already accounts for some of this stuff? in other words, is burlington a retailer that seems like it is trading cheap cosmetically like a lot of them have and had rallies lately? >> this is a big problem we continue to see in the market many industries are overvalued. burling tomato came over 20 times earnings. ultimate software valued at five times revenues. now it is interesting that analysts don't value it on earnings and that points to our skepticism with the numbers. if it were to trade in line three to four times multiple we see 20% to 30% down size. >> burlington denies claims made in the report. as markets continue to move you think it would make it easier to find stops that you want to short. is it harder to execute because momentum is upward? >> it is issues with the company. we agree the higher the market
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goes up the more rational the prices the better environment it is for us. we continue to do what we do and that is focus on forensic financial issues and push our agenda and get the change that we expect whether executive resigning companies normalizing earni earnings. >> they say don't fight the tape. >> what about terms of potential short ideas. >> our reports are very dense. our recent report was 70 slides. we have contracts that we got. that is another 300 pages. it takes time to digest this information for the mutual fund managers and digest it. we think over the long run we have good success with our calls and try not to get too enamored with short term dynamics. >> sticking to his chops. stocks are rallying to close at record highs. we have much more on the move coming up. president-elect trump picking rex tillerson to be secretary of
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state. could republicans concerns about tillerson's relationship with vladimir putin put his nomination in jeopardy? we'll try to find out. eli lilly announcing an insulin discount program. we will look at details. stay with us.
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pharmaceutical stocks getting a pop today as the index rose broadly. they have been under per230r78ance since the election. last week president-elect trump took aim at soaring drug prices and today eli lilly is offering a discount for one of its most expensive drugs. >> eli lilly with news of a partnership with pharmacy benefits manager as well as digital health company blink health planning to offer up to 40% discounts on its insulin drugs. these will take action in the new year and aimed patient whose have highest costs at the pharmacies, those who aren't covered by insurance or high deductible plans. it is interesting to see eli lilly doing this on insulins.
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these were targeted. trump talking about drug prices more generally. bernie sanders targeting lilly and insulin prices over the last few months starting to tweet about this saying why is the price of insulin gone up 700% in 20 years? it's simple. the drug industry's greed. lilly responded saying that those price increases didn't take into account a lot of rebates or discounts and the net price has gone down since 2009. interestingly, though, it's the patients who aren't covered by insurance that don't get to take part in those rebates. what lilly is trying to do is target those specific patients who may be left out of the system. it is often those patients we hear from the most in the controversies including the epipen. a lot more companies trying to come out amid scrutiny of drug prices. another maker come out with a
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pledge. interesting to see how companies are responding to this environment. >> one thing i never understand is talking about list prices or actual prices or who is in the system. the price itself seems almost impossible to determine sometimes. clearly it moved up enough that it is hitting people everywhere. >> i think the whole affair has exposed that food chain and confusion around it. if you look at pharmacy benefit companies they have not been good stocks. i think it is because of all of this with hmos there was a sort of built in incentive to contain drug costs and seems there is enough gaining. lilly maybe like ibm saying they are going to hire people wanting to be proactive. >> are you seeing these companies kind of lineup now to say we are being proactive and trying to kind of, you know, quell any political risk that might be headed our way? >> companies are responding in
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different ways. interesting to see this idea focussing on patients who get hardest hit by list prices of drugs. at the same time you have companies pledging certain things and you hear where they say they put their money where their mouth is and priced below their competitor. >> thanks for bringing that story to us. three weeks, that's how long it has taken for the dow to hit 19,000 and march close to 20,000. we discuss whether the rally has legs or whether we have come too far too fast.
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welcome back. 114 points higher on the dow wasn't enough for the close above 20,000 but does put us 89 points shy of the mark. the s&p 500 up 15 points. nasdaq was up 51. it was the out performer with nearly 1% gain. and russell 2000 was negative until close. we have a news alert on valiant. >> according to filing pershing square capital management says
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it sold common stock. that cuts the stake to 7.8% from 9% according to the filing saying the sale of stock was in order to generate a tax loss in 2016 from investors. we are not seeing shares move on this news. back to you. >> just looking at headlines it says the share sales is to generate tax losses. >> seems like they want to have tax losses to offset gains. from what we know i don't know that there are enormous capital gains. you never know what they are trying to do. this stock is exhibit a. >> you mentioned it but they had a comeback along with a lot of managers. so 3.5 million share sale of valiant. even if it is for tax loss purposes is it significant enough to change people's
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opinion or reflect his own changing opinion? >> i don't think you want to have that read through but the kind of thing that happens when you have certain investors. clearly these investors didn't say sell some but make sure you hold on to the value. maybe that is a sign of surre surrender. the big question has been the balance sheet, can you service and roll over that debt? >> or just make the case for a longer term, maybe the whole thing. time now for a cnbc news update with sue herera. >> president obama signing into law legislation that makes new investments in cancer research and battling drug abuse. the 21st century cures act will invest $1.8 billion for cancer research moon shot and authorizes giving states over $1 billion over two years to prevent and treat the abuse of opioids. isis claimed responsibility
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for the bombing of a cairo church that killed 25 people and threatened more attacks against christians. the name it gave for the suicide bomber differed from that announcement by egyptian authorities on monday. isis gave no explanation. mexican police and soldiers uncovered two tunnels used to smuggle drugs. one reached to san diego. the other was unfinished. and retired nfl legends jim brown and ray lewis visiting trump tower to talk about brown's ameri can. they told reporters after meeting with the president-elect that they talked about putting politics aside and doing what is right in helping people. that is the news update. you up to date. >> they were there, too. >> everybody is there these days. very busy. >> very much so. everyone is stopping by. interesting to see how this bears fruit. the dow moving closer to the
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20,000 mark. has the rally gone too far too fast. on squawk box in july katie stockton said she was watching for a technical breakout in the s&p 500. >> i want to see consecutive fridays, two weekly closes in the s&p 500 above that 2,135 level. that would convince me that we have broken out and then you can arrive at impressive target. 2,400. sounds crazy. >> well, katie is out with a note today saying the s&p 500 is now actually showing sell signals. she joins us to explain more and to see whether this might be a buying opportunity. welcome. >> thank you. >> so first let's talk about some of these indicators that show to you like this whole move might become a bit stretched here. >> in relationship to the short term event but in the last week or so it's the first time we are seeing signs of exhaustion. we track series of indicators
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that are distributed by a sometimes guest on this program. and for the first time they are flashing sell signals. for the dow industrials there was a timely buy signal based on the same model. to me it is when overbought conditions start to matter and give way to loss of short term momentum not to take away from the fact that there are widespread breakouts. so the momentum is still there from an intermediate and long term perspective but i think these signals warrant caution. >> and widely followed. a lot of times we have a fundamental view on things will look to kind of say is now -- basically help time things. is now the time to buy? it sounds like in this case maybe the s&p goes lower. >> saying is the risk/reward if you are entering to buy versus sell good or bad?
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he has been very good over time with these indicators in terms of just trying to tell you should i rely on continued momentum or is it time to take a break? in that clip we showed i was there on the set. i wasn't arguing. >> katie, when it comes to the move in the s&p do you think we can drop 100 points before this continues higher? >> i don't think it is that big of an event. the breakout point was about 2,194 for the s&p 500 so that is initial support on the chart. maybe it's not that modest but i don't think it will be much worse than that based on how quickly pullbacks tend to unfold after breakouts. the more sort of fast and furious that the pullback is the more likely it is a counter trend move. i think folks should brace for pullback after the fomc announcement. and then certainly be looking for opportunities. i think an important point about the signals that we have seen
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just over the past week is that they have really been concentrated in the financials sector and the financial sector has been source of upside leadership accelerating higher after the election. >> thanks for joining us. we will check back in with you soon. >> sounds good. some more breaking news on wells fargo. >> more bad news from wells fargo declaring living will deficiencies on wells fargo which resulted in restrictions. wells fargo is expected to file a revised version addressing remaining deficiencies but the bank is prohibited for establishing international bank entities or requiring nonbanking subsidaries. wells fargo is not subject to higher -- looking at shares down about 0.6% on very light volume. >> is this what the kitchen sink looks like?
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we have seen faucet and drain and the water. what more is there to throw at wells fargo? >> you are in the penalty box. this interestingly the living will provision is one of those things that the incoming trump administration wants toperhaps do away with. it was one of the qualitative measures making an assessment. >> the capital implication here because they are forced to raise more. >> definitely -- this is down the road a bit. i don't think anybody says you are under capitalized. in this technical way it could hamstring a little bit. >> a blow again for wells fargo. shares down less than a percent on that news. mon santo share holders, stock is up more than 5% since the election. president-elect donald trump has been critical of mega mergers. will the deal get done?
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the monsanto ceo joins us. trump picking rex tillerson as secretary of state designate. some raising concerns. how the track record could impact his chances of getting approved for the cabinet position. you're watching cnbc, first in business worldwide. really want to be there...ou r, but you cant. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready. because we're helping leading companies lead with digital. i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't.
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president-elect donald trump making more cabinet decisions
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today. former texas governor is reportedly trump's choice to head up the energy department. exxon mobil ceo rex tillerson tapped to be secretary of state. here is a hint of his world view from a cnbc appearance. >> there is a lot of uncertainty in the world today, certainly in the big producer regions, the middle east, relationship with russia and those are enormously important parts of the world for everyone's economies. energy is the life blood to economic growth. >> with more on trump's latest choices we are joined by president and ceo of the center for strategic skpr international studies and kay bailey hutchison former senator from texas and cnbc contributor. welcome to you both. john, i understand you know mr. tillerson and i wonder what you think he will bring to the role of secretary of state.
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>> i have known rex tillerson for 11 years. he is a man who fits squarely in the long standing american tradition of pragmatic realism and foreign policy. you are going to find a champion for american values and he is going to do a very good job. >> you agree with that mrs. senator? >> i certainly do. i served in 20 years in the senate and i knew rex well. he has a real knowledge. i think he blew president-elect trump away with his knowledge of all of the different governments and what was going on inside the governments. i think he is very well prepared for this job. >> john, what about this issue about his relationship with vladimir putin personally and just his ties because of the business he has done there with russia? >> he does know president putin well. he has interacted with him extensively. i have some remarkable people on my board, people like henry
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kissinger. rex tillerson stands every bit their equal in understanding russia and knowing russia. and i think that is exactly what we need at a time when we have a very challenging russia. we want somebody that knows how the president thinks, people around him, what motivates their thinking, the way in which they behave in negotiations. i think rex brings a knowledge we're going to deeply need in the years ahead. >> although marco rubio is among those who criticized this pick and the coziness, the potential for problems there. while there are issues where the u.s. and russia have mutual interests like fighting isis there are other major problems like annexation of crimea that are a lot of cause for concern. is it possible that they are just too friendly? >> no. i don't think so at all.
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i think rex tillerson has the background and the boy scout upbringing. he is going in there to represent america. he knows how vladimir putin thinks just as john said, but he also knows what is right for america and what is right for our allies in the region. and i think rex tillerson is going to be a strong ally for america with the people who support us and our values and our freedom and our democracies. so i think that is why knowing putin is good. being able to work with him in a constructive way for the interest of freedom loving people throughout the world is the key and that is what rex has. >> john, really just to go further on that point, being a ceo of a global company dealing with almost every country on the planet, he was in a role of trying to get deals done, get
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business done, perhaps sometimes was hostile or leaders who don't necessarily follow or agree with our way. i guess the question is, what from his prior role suggests that, in fact, he is going to be an advocate for american interest and values overseas? >> there are two things that have shaped rex tillerson's career. one is his increasingly large role leading exxon mobil and the other is his role leading the national boy scouts. i know a lot of americans smirk when you hear that. you have no idea how important the boy scouts and the values of the boy scouts are to rex tillerson. it just runs through his character. and everything that we have grown up with, duty, loyalty, obedience, trust worthiness, these fundamental values are rex tillerson's values. that's what we want in the secretary of state. >> my uncle is an eagle scout.
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i wish i had half of his knowledge of the world. the natural world and just how to survive in it. thank you both for joining us this afternoon. >> thank you very much. monsanto shareholders approving the sale of the company to bayer making it the second largest deal in the year. the company's ceo joins us to weigh in on whether here thinks it will pass regulatory approval and what it means to the future of agriculture. markets hit ag record high today. where a retail investing club in georgia is finding opportunities is also coming up. the greatest population shift in human history is happening before our eyes. 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, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim
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welcome back. stocks hitting record highs for the 16th time since the presidential and looking for te best ways to play it. one military town in georgia is working out their strategy. and our contessa brewer joins us with how they're doing it. hi, contessa. >> reporter: hi there, kelly. this 11-member middle georgia investment club is hedging its bets based on what they think is going to happen in the trump administration. in their december meeting last night, they talked about the uncertainty on drug prices, what will happen with obamacare, and doing more research on health care before investing. hey, but they like oil and gas right now. they're also standing back and watching trump's stance on china and other countries before the election they were considering selling prosperity bank. they decided instead to put a stop loss on it.
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>> he's going to be a lot more relaxed on regulations and all that. so now the banks are -- actually turned out to be a good move to keep it. >> reporter: hey, they're doing something right. in 20 years, they're still in business, very profitable. a quarter of a million dollars in their portfolio. up 23% this year. they just decided last night to buy 75 shares of facebook. kelly, it's their first for ray with an internet company and i asked you guys, what took you so long. they said their club guidelines mandate five years of stock performance to study before they acquire it. >> so 23% year-to-date? i mean, these guys should be making 2 and 20, contessa. there's hedge fund returns. hedge funds wish they had these returns. >> and that's with very cautious investing. they say for one thing they never go with ipos, don't go with startups. again, that long-term looking at a stock's performance over five years helps them. and they also say the diversity
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of viewpoints in that room helps them make safe, wise bets. they're in it for the long haul. they expect their stocks when they invest in something to double in five years. >> what do you think about these investing clubs? >> i think it makes sense. if you're going to invest on your own to have other people in it with you and pull your knowledge and expertise. i think the greatest advantage an individual investor has is not trying to outsmart the research analysts on wall street, trying to kind of be faster to a new idea. it's more about taking advantage of the fact as an individual you don't have to beat a benchmark, you don't have to worry about short term returns. you don't have to look at the performance every day and live and die by it. you can be patient and use that to your advantage. >> so true. they're not unlike a week by week return basis, right, contessa? they're giving us -- meet once a year, once a quarter? >> no, they meet once a month. and every month they look at a new sector. they all do research on different stocks in the sector, bring back what they have learned the next month. so they're not even making stock picks based on what's happening
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today. it's over the long haul. >> love it. thank you so much for bringing us their story, contessa. that's our contessa brewer down in george. rainy georgia, we should add. up next, hue grand whether he thinks the incoming trump administration to block his company's $50 billion deal to be acquired by germany's bayer. stay tuned.
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welcome back. with some more breaking news out of wells fargo, seema has details. >> we know how wells fargo's response to u.s. regulators declaring living defire sees for the bank say they will be able to address the concerns raised today in the march 2017 revised mission. continue to work closely with the agencies to better understand their concern so we can bring our resolution planning processes in line with their expectations. that's the update from wells fargo. kelly, back to you. >> the response to that news we just brought you. seema, thank you. shares of bayer, meantime, higher today after monsanto shareholders approved bayer's takeover. the deal worth $57 billion and bayer would pay $128 a share to monsanto shareholders. let's bring in the chairman and ceo, hugh grant, who joins us by
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phone. mr. grant, thank you for sticking with us. as we worked out those difficulties. and just first and foremost, tell us why the trump administration, the incoming administration, should approve this deal. >> well, thanks for taking the time this afternoon. we're delighted 99% of the votes cast favorable on the deal today. so that's really good news. i think the interest in this deal, the compelling thing, there is virtually no overlap. so the bayer team they bring world class chemistry. the monsanto team brings biotech trades. so the absence in an overlap makes a compelling deal and one that will be approved by regulators. >> i wonder if it's not so much the overlap, but perhaps the pushbacks, some pushback by farmers, worrying it could lead to competition and higher
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prices. >> we have seen a lot of time with farmers in the u.s., spending time personally. farmers have had four tough years, looking for better products. better products faster. and this deal promises that. so i think as we have those conversations, there's tremendous interest in getting more innovation on to farm. and that is really the hype of this deal. and i think today's vote is supporting not just for the $128, but a support for the strategic outlook the new company brings. >> and you mentioned innovation. it sounds like it's going to be a big focus of the next couple of years. next four years under the incoming administration. they want to see, you know, the types of growth it's going to help create jobs, the kind of things that will boost the economy. how is monsanto with bayer going to deliver that? >> well, this deal puts st. louis on the map. so it takes what we have been doing for the last 15 years to a
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whole new level. st. louis -- frankly, the midwest. but st. louis will become the heartland for biotech research for the new company worldwide. 15 years ago, we were spending $200 million a year. this year we'll spend $1 billion in r & d. and when you look forward to the combined company, we'll spend more in the future. so those are high-class, well-paying jobs located right here in the heartland. so i think it's good news. >> we're just about out of time. in five or ten seconds, kouts about the implications of any push back on global trade you see on the incoming white house? real quickly. >> agriculture is all about trade. america grows crops to feed herself but then feed a big piece of the world. so my assumption is despite the conversations in trade, we're going to see continued growth in trade as farmers grow crops that
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are trucked and shipped around the world from here. >> all right. hue grant, the monsanto ceo, appreciate you joining us this afternoon. thank you so much. >> thank you. mike, you've got a five-second thought? >> retail sales fed, and dow 20,000. >> thank you for joining us. michael santoli. that does it for "closing bell." "fast money" begins now. ♪ money money money money breaking news, america keeps getting richer in the stock market. the dow 90 points away from 20,000, more than 100 points today. what a run since the election. all the major indices closing at a new record high with the nasdaq the biggest winner up 12%. so the dow approaching 20,000 and stocks at a record. if you missed out on this rally like so many of you have and waiting for the pullback, what can you do right now? are there stocks you can put pressure money to work in? >> i think 20,000 is a big deal. people wake up and say, wait a second.

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