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tv   Closing Bell  CNBC  January 12, 2017 3:00pm-5:01pm EST

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many have been sort of disfeektdisfeek disaffected and left out of the economy. >> you're an okay white man? >> tonight on "fast money" we continue to celebrate our ten year anniversary. carson's lock of muddy waters give us a medical waters device. >> "closing bell" right now. hi there. welcome. we're glad you're with us today. i'm bill griffeth. it's the "closing bell" at the new york stock exchange. >> i'm sara eisen in for kelly evans. the s&p 500 having its worst day. we are well off of our lows for the session. the dow is down 60. the major averages coming back up. let's see what happens in the final hour of trade. we'll discuss whether the trump rally is in danger of coming to an end. >> i mean, the leadership upward is the leadership downward.
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the financials have been the worst performing sectors as the banks get set to start reporting their earnings tomorrow. a lot of expectations for what those numbers are going to be about. after a red hot run the stocks have become very expensive for some people and they feel there's very little room for error when they report those earnings. we've got two analysts who will be joining us to talk about whether now is the time to maybe sell the bank stocks as a result. >> certainly taking a pause today. president-elect trump vowing to repeal and replace obamacare very quickly. that move would result in a huge under the radar tax cut for wealthy investors. we've got the details on that story coming up. but let's start with what's driving the stocks lower today. bob pasani is tracking the action at the new york stock exchange and bertha coombs. bo bob, you first. >> we are well off of our lows. now down 60. goldman was as low as $241.
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that's the big mover in the dow. look at that, it's come back at 244. still down 1.4%. haven't had any help from the industrials. same situation. move over to the right. show you caterpillar, off from the lows. not that much. we need a little more help to get us into positive territory. we had the whole problem with oil. oil stocks not responding. exxon mobil has been a laggard, a dullard. we had disappointing guidance from hess. that may be weighing on them as well. look down below here. here's another one. downgrade of pivotal research from disney. started out well in 2017. down about 2%. pivotal is very important about the general sentiment of the market. valuations of companies we covered do not appropriately reflect the environment for stocks and companies is riskier now than was the case several months ago. i think that's one of the reasons we're having problems, valuations very, very high.
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we have 20 to see the earnings. the guidance season is very important. >> back to you. >> aptly named pivotal research. >> pivotal research and pivotal guide dance. >> bob, let's go out to bertha now who is and itting by. now diverse. >> the nasdaq come 'stit is well off the lows had dipped below 55. it's at what's really dragging things lower are the small caps and chips. yesterday chips in essence were the heroes. >> what's interesting is we're seeing a bit of a reversal when it comes to biotech. biotech as we know had a rough day yesterday getting back some
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of the gains it had seen from the year after donald trump talked about negotiating prices, in his worz, pharmaceutical companies have been getting away with murder on pricing. some names yesterday hit hard and today getting bought back. one of them got a big bounce off of jpmorgan. bucking the trend is amazon. amazon maybe not bucking the trend announcing it's creating 100,000 jobs over the next 18 months. back to you. >> we're starting a game of can you top this now. >> 100,000 is a pretty big one to top. >> that's a big one. >> not like investors worry about amazon's profit margins. >> full benefits in addition to being full time as well. >> you have to wonder, these
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jobs were probably in the pipeline already. >> oh, yeah. >> it's not bad to have the timing. >> no, the new paradigm is put out a press release. make it clear. >> let's get to our "closing bell" exchange for this thursday. sandy villari, and david cashin and rick santelli joins us from the cme in chicago as well. arthur, you feel like a lot of the selling this morning came from overseas. why? >> well, i think if you looked at a couple of things, the dollar was weak right after the press conference and that began to weigh on things. the dollar weakened out this morning. i sent out a note to friends saying i think part of that indicated that international bent to the selling. sure enough, when the european markets closed the pressure began to ease and we've come back more than half of what we lost earlier. so that kind of solidifies it for me. i think some of our friends
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across the pond were getting a little bit concerned that they were getting no clarification from the administration as to the timing and scope of things like tax reform, deregulation, and/or stimulus. >> a lot of people have been citing that, sandy. it sounds like you're bullish for stocks this year and the market's only down 65 points. do you view this sideways action as healthy. >> well, it can be. >> go ahead, sandy. >> i was going to say, there's no doubt that the market's really discounting that trump is going to be able to expand return on invested capital and through deregulation and lower corporate tax rates and whether or not that happens will be pretty interesting, but on these dips, the days where you see down 180, down 200, that's when i am putting money to work. i think it's going to be a pro growth environment. i want to focus on companies i
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buy, smaller to midcap companies. that's what i'm doing, buying on these dips. >> meanwhile, rick, this has been like a super thursday for fed watchers. a lot of fed speakers today. i know steve liesman will join us on what people had to say. it hasn't moved the market. it reinforces what we've been talking about lately, that the fed is taking a back seat to the transition into a new administration, hasn't it? >> yeah. especially considering the real transition hasn't even really truly begun yet. >> right. right. >> double yes. and i'd like to build on art's always the sage one. i want to build upon it. >> that optimism has already translated into market optimism.
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the bar is rather high. the fundamental really is in a pickle. as of late a few data points have turned. i'm not saying they're going last, but that surprise when you're expecting very little has really given investors a little bit of an edge so the european side at least for the moment may look a little better especially if we are considered frothy in the u.s. i think that's a very short half-life on that dynamic. i think it needs to be acknowledged nonetheless. >> art, the sector differentiation needs to be continued. health care and pharma stocks get hammered. we have the banks reporting tomorrow leading this rally since the election. which sectors are you going to be watching to see whether it can continue? >> well, clearly we'll be watching the banks tomorrow, but the idea is, again, without any specificity from the incoming administration, what is jamie dimon going to say? he can say i'm optimistic i'm doing this, but if he had a clue
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as to what tax policy might look like, he could probably be a good deal more specific and maybe even a little bit more upbeat. so we'll be looking at the banks but we don't expect a lot of clarity because we're not getting much of it out of washington. >> sandy, before we let you go. give us some for instances of the kinds of stocks you like right now. who are you buying? >> yes, some of the smaller names is a company called to you, disruptive online education. universities are creating a digital footprint of themselves. if you get your mba at the university of north carolina. you pay a full tuition and you pay twou 40% of it. we still like a company called tasr. great cash flow to the weapons business but the body camera business is going to be really what does quite well because of the sas part, software as a
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service part. you have to download all of that data from the body cameras. chicago made it a mandate where all of their police officers will be outfitted with a body camera by 2017. this trend will continue. i like tasr and i like small caps in general. >> an interesting way to play that theme. >> yes. gentlemen, thank you. appreciate it. see y'all later. >> thank you. >> art, see you later on the floor. news alert on lowe's, the home improvement retailer. courtney reagan has that story. >> hi there, bill. we could be in for some more layoffs. lowe's will be laying off less than 1% of their work force, maybe 2850 or less. this is according to a source familiar with the matter. this is part of an employment reshuffling program. in a statement lose says, quote, while we have no announcements to share, we continually evaluate our staffing model to ensure we have our resources in
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place. now the source says that some of these workers will have the opportunity to re-apply for different opportunities within the company. again, this is according to a source familiar with the matter. there's more on cnbc.com. bill? >> courtney, one question. hasn't lowe's and home depot, home depot probably more so, been one of the beneficiaries of consumer spending and the recovery? does this come as a surprise? >> you're right, sarah. they have been some of the stand outretailers. they do attribute to the trends we're seeing in the housing market. we also know that many other folks are looking to buy bigger purchases when it comes to their homes. so maybe they're not buying a new home, doing remodeling, but they're more interested in upgrading their furniture, bathroom, in some other ways. they have been some of these bins beneficiaries. this is the time of year that we get these restructuring announcements or layoff announcements and figure out wad ways to make these more cost
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efficient. >> we were down 183 points, 74 point decline and a rare minus sign for the nasdaq today. >> yes. it's been up every day this year and coming off a five straight record closes. banks we mentioned leading the trump rally after the election. leading today's drop out of those key earnings reports out tomorrow. two top bank analysts will weigh in on which ones investors should buy, if they should be buying this at all next. also a story we've been following for the last hour fiat chrysler ceo telling cnbc in the past hour that his company is not another volkswagen. that in response to the epa accusation that fiat chrysler used deceptive diesel emissions software. sound familiar? think volkswagen. but sergio marcione says we are not volkswagen. we'll get to that story coming up.
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you're watching cnbc first in business worldwide. thetreringvet ree yoprartie
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welcome back.
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dow down 72 points. mrk is the leader. they hope about mrk's immunoecology. the drug is combined. it's advanced. it's a down day. >> bank stocks lower. the earnings in banks of america. >> wall street will be watching. hey, bill. >> the rally.
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albeit to string him off. it should help. second to watch, rates. the rates could, in fact, be better than expected. fair to watch credit. general positive sentiment in the sector. the share price in the performance. the deregulations. they're in december and today's decline. bank of america.
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>> we are forever. >> no, i can't. >> oh, well. thanks, will. see you later. >> good night. so should investors buy the banks ahead of these earnings? you better hurry if you're going to. joining us is paul miller from fbr capital markets and bill smead joins us on the telephone now. paul, your feeling is that the earnings aren't going to matter. that's ancient history. you want to hear the guidance. you want to know what they're feeling about the future where the possibilities are even better. is that the idea? >> it's all about 2018, 2019. we don't really have 2019 numbers but if trump can get these policies done which we believe he can, lower taxes, lower regulation, some stimulus growth, some loan growth out there, these bank's earnings are going to go up materially. the tax cut itself is very
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beneficial. right now it is all about washington. it's also all about the commentary coming out. what do the pipe lines look like for loans. there's been some robust pipelines for loan growth. if that happens these stocks are going to move higher. we're very bullish and think this is a great buying opportunity for all these names. >> so, bill, you're a long-term thinker and portfolio manager. do you see this sort of mult multi-week explosive move in several years of underperformance in a bull market as something that has some long legs here? >> well, it does, and we kind of think about it in a little different perspective. the first thing is the vitreol and hatred for this group has been the punch line for the last seven, eight, nine years. so to break out of that slump, that seven, eight, nine years of
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purgatory and being treated terribly in every regulatory, political and psychological way, you have this explosion of improvement in psychology. you start out where they're doing so terrible that no value person wants to admit they own them and what you should end up with in 5 to 10 years is the growth, guys crawling all over each other to buy 5 to 10 years of successful earnings growth if things work. that's the continuum. we're in a camp that says they're probably a little overdone in the short run. coming off the hatred they've had, it could be a long haul to the up side. >> who do you like, bill? are you throwing darts? or are you going just for the big guys? you like the regionals only? what are you doing here? >> we're big guys. we've been invested in bank america since early '12. we've been invested in jpmorgan since the whale trade and so
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bank america is the one that still looks like it's got the most leverage because it's still trading around book value. we looked at a 25 year chart comparing the price of bank america to the price of the book of the s&p 500 and it's still way below averages, right? that doesn't include like the other gentleman said, paul said, earnings grow for a number of years. the book value will grow and you'll get the positive cycle that we really just haven't had. remember, this stock was $11 in the pit of despair in february. >> right. >> it's had a long comeback or at least a short comeback, that is. paul, based on your sort of bullish thesis where a lot would have to go right in washington, which banks do you like the best? name some names. >> well, i mean, i hate to agree with mr. snead, but i think bank of america, he's exactly right. bank of america has really struggled with the earnings growth. they've been earning between 1.40, 1.30.
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if this pro business government comes into town you're going to see their earnings probably grow the fastest. they're going to hit the biggest beneficiaries. they're not earning the cost of capital right now. when this is all said and done 2018, they could be having 12 to 13%. we think of all of the big guys, bank of america is the better pick. saying that, the whole group has been downtrodden. you talk about downtrodden. south side analysts has been hated on the banking side and now we're liked again. i think that's because people see that e growing. i'm enjoying the -- >> even your popularity has gone up. >> yeah. >> if jamie dimon was running a tech company, the stock would be trading at 60 times earnings. >> yeah. he's everybody's darling on wall street, that's for sure. >> bill, paul, thank you. appreciate your thoughts. >> thank you. >> we'll see how the numbers come out tomorrow and the guidance more importantly. meantime, wells fargo's chief operational officer john
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sh r shrewsberry will be speaking tomorrow. >> less than 40 minutes to go. we're still looking at the declines across the board. the dow is well off the lows down more than 180 at the low point. financials are by far the worst performers. energy also at the bottom even though oil is up today. fiat chrysler's chief executive offers has been defending his company in the wake of the accusations by the epa that fiat chrysler used deceptive diesel software reminiscent of volkswagen. he says that's not the case at all. we'll get the story later. >> tweet up, beat up, look at the socks that have suffered since getting into social media battles with president-elect donald trump. "closing bell" will be right back.
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was down 16% on the open this morning after the epa accused the automaker of using deceptive diesel emissions software. >> phil lebeau just spoke with fiat chrysler ceo and has the latest on how he's defending himself. phil. >> guys, the epa did not say fiat chrysler defeat devices in the diesel emissions software but it fell just short of that. basically saying, you know what, we weren't aware of what software was in these vehicles.
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as a result, it's too high. its a 104,000 vehicles that the epa says was impacted. 2004 to 2016 jeep grand cherokee and ram 1500 pickups. we're talking about the 3.0 liter diesel models. the software allows excess emissions. they say they did not know about the software in these vehicles. when we talked with sergio marchionne during power lunch today he made it clear there was no intent to deceive regulators. >> i think we have been unnecessarily maligned with a desire, a wish or an intent on our part to try and defraud anybody. we haven't. >> and, again, fiat chrysler says there are no defeat devices in these vehicles. it has been negotiating with the epa since late 2015. again, the epa says fiat
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chrysler did not disclose the emissions software. within the last hour we heard from eric schneiderman. he says i am deeply troubled by the evidence provided by the epa concerning fiat chrysler's alleged attempts to undermine our nation's clean air laws. shares of fiat chrysler was down almost 12% today has come back a little bit since then. we should point out that sergio marchionne told us his executives will be in california on monday meeting with executives from the california air resources board. they believe that they can straighten out what essentially comes down to in fiat chrysler's words as being a technical misunderstanding. far more than that according to the epa. we'll see how this plays out. >> phil, i'm trying to think about it in a broader context here. you have this fiat story. whether it's comparable or not to vw i think you just drew a strong point that it is not. exploding airbags at takata, gm faulty ignition switches.
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is this normal stream of bad news and problems? is there a quality control issue? what's going on with the automakers? >> no, because you're looking at three different scandals or potential scandals. it's too early to call what's going on with fiat chrysler as a scandal. when you're looking at volkswagen that has essentially shown to be a case where you had executives accused of hiding information from regulators. when you look at gm's ignition switch prices, that was a case of incompetence essentially. even the ceo mary barra said there was gross negligence and incompetency competence on the part of their executives. it looks like there's no control but the fact of the matter is, sara, if you look at the quality ratings and reliability, they're more reliable than ever before. the quality has improved. it's the skapd dals when they pop up or these issues when they pop up, that's when people sit there and say, how can i trust everything going on with my vehicle? >> i have similar questions but
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i want to save it for next hour. we have a few guests including a very large shareholder in fiat chrysler. get his view of all of this. that's coming up in the next hour. thank you very much. the bonds also took a hit on fiat. >> it is time now for cnbc news update with sue herrera. >> israeli prime minister netanyahu condemning an upcoming conference in paris aimed at reviving the peace process. some 72 countries are expected to attend that summit minus the israelis and palestinians. >> there are other such efforts that render peace hopeless. one of them is the paris conference. it's a rigged conference rigged by the palestinians to adopt additional anti-israeli stances. >> workers at carl's jr. and hardy's demonstrating outside the department of labor office in new york. this is to protest the president-elect's pick for labor
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secretary. the nominee, their pick is their boss, andy pezner. the workers are at odds with him for a fight over a $15 minimum wage. a study from ucla found that 47% of sushi was mislabeled in los angeles restaurants from 2012-2015. halley but the and red snapper were mostly mislabeled. all right. i couldn't resist. talk about bait and switch. >> ha ha. >> i had been warned about that. >> that's the news update. >> you never want to hear sushi mislabeled. >> if it's not the hallibut and red snapper -- >> there is something out there swim willing around in the ocean called imitation grab. >> what is that? >> it goes into a lot of
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california rolls. >> i don't think it's swimming in the ocean. >> fake sushi now. >> yeah, in l.a. of all places which has great sushi. >> thank you, sue. >> i'll keep you posted. >> very informative. 30 minutes. i'm going to hear from our producer. how did i do, rich? was that good? 30 minutes. the dow down 50 points. a leading trader will tell us what he's watching into the close coming up here. also ahead, the dire warning being sounded right now by economists on the makeup of the incoming trump administration. r . bmyouol f r tap inheim
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we've got 25 minutes left in the trading session now with the dow down 64 points. even the nasdaq is trading lower. first time, believe it or not, in 2017 that the nasdaq has been down today. joining me on the floor of the new york stock exchange is tim anderson from tjm advisor. the day before bank earnings they're leading the market lower. >> do we wait to see the whites of their eyes to see if they're good or bad? >> that will have a deal going
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forward. and i think that some of the people that got in real early on that trade are taking some profits. >> just ten days, i guess. >> yeah, sure, as they are maybe in the transportation stocks and maybe in the small cap stocks. the russell is off. >> the market's come back fairly well from its lows. we have had a number of one off events that have hit the market all on the same day. the halibut, lower guidance, the market's kind of digest all of that and we'll have to see whether or not there's any follow through on the down side tomorrow. >> lately it's been, if the market is not up, it's sideways. it's not down that much. this morning the selloff. >> we've gotten 2/3 of our losses back from the low at the midpoint of the morning. tomorrow the bank earnings will be front and center and we'll go
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from there. >> always good to see you, tim. tim anderson joining us here. sara? >> cnbc's steve liesman has written an article about how president-elect donald trump doesn't seem to be putting much stock in economists or economic data. only one economist has been named to an administration post. this doesn't bode well for the economy. joining us now is the afore mentioned steve liesman and diana roth, she is a senior fellow at manhattan institute and on donald trump's labor department leading team. steve, you know i have a thing for economists as you do, but it's not like many of them supported candidate donald trump it's part of the whole global elite society that he ran against so why would he appoint any to his team? >> i think you have it right there, sarah. i want to give the back drop to this. it's in chicago. it's the biggest meeting of the
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year, american economic association annual meeting. there's 13,000 economists there. everybody is asking each other, do you know anybody working for trump. the answer is no. they were asking me and i was asking the whole time. you're right. it's part of the anti-elitist backlash. it's business versus economist. we don't have to do this work on this, we can do it. economists have to be more careful, more pessimistic, talk about tradeoffs. i think there's concern that some of the things economists bring to the table, the understanding of tradeoffs and relationships between monetary policy and fiscal policy. this can lead to a whole lot of bad decisions and understanding the literature and understanding that's done on topics in areas that they want to do substantial reform in. >> diana, i guess your point of view is, look, we have already figured out what his plan is economically speaking. he wants to lower taxes,
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increase spending and bring jobs back to the united states. he doesn't need an economist to tell him all those things right now, is that the idea? >> well, also that he has appointed a tremendously successful group whose going to be advising him, wilbur ross who's head of the commerce department, you have the head of the national economic council gary cohn. these are people who have been successful and the market success is how much they earn, how successful they are in their own lives and a person who has run a couple of restaurants, carl icahn is going to be the regulatory czar. these people have been eminently successful and do what economists write about. he's assembled a great team. >> a guy made a lot of money in the market, is that person an expert in inflation dynamics or labor economics? i'm a little lost in using the success in one area as proof of expertise in another.
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>> well, if you have andy pasta, he's met a payroll. he knows what it's like to run a business. he knows labor economics from running hardy's and carl's jr. that's much better than a labor economist who writes about these issues such as myself. he knows about the cost of business firsthand from having run his business. that's far better than someone who's written in journals such as "the american economic review". >> steve, the s&p 500 is up 6% since the election. business confidence is so i remembering. home builder confidence is so i remembering. you've got a lot of things that are pointing to optimism coming from the business community. are economists changing their outlook? do they -- >> no. >> -- finally think a trump administration will be positive for this economy? >> no. >> they're not. >> it's first steve. go ahead, steve. >> i want to hear diana's position on this. i'm afraid the split not only continues but is widening
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between economics on the street and the business. it's a problem. look, first of all, they want to see the policies and they want to see what exactly the trump administration is proposing. they want to score t. they want to put it all into their metrics of how everything works. by the way, it's fair to say that the economists don't really model confidence very well and that's probably a short coming of the profession right there, that they don't really understand how all of that works. there may be a dynamic to the confidence that's going on right now. ultimately what they want to see are the numbers and being able to go from numbers to forecasts of what's going to happen. >> last week -- >> if you look at the federal reserve forecast, it's hardly changed since donald trump got elected. still about 2.1% growth even though he has promised to lower taxes and cut regulations. they're assuming that's going to have no affect on the economy. >> surely the fed should not be making policy on speculation. >> diana, would you change your forecast. >> you need a realistic
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forecast. >> what would you put into your model, diana. >> how much are taxes going to change? are there going to be import tariffs? >> you would put in place that there's going to be behavioral changes if you lower the corporate tax rate from 39% to 20% or 15%. >> what if know get to 27, 25, 24? why wouldn't you wait? i understand there are erasers. the fed changing their forecast is a big deal. >> you do ranges and the answer is not that we're going to have the same amount of growth. it might be between 2.5 and 3.5. you definitely do not leave it the same as before. the problem is economists look at things they can measure. many of these things cannot be measured such as change in confidence. >> i have to say, diana, i'm talking to an awful lot of investors who are starting to
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see things the fed's way. they're starting to say, maybe we ran over our skis. what we have to do is wait until the actual numbers come in before we change our forecast for profitability. >> well, we also have to -- >> i'd love to hear your response, diana. i'm way over my skis on time. we've got to go. >> sorry. >> you can talk offline. >> great debate. >> yeah, this is great. steve and diana. >> great to be with you. >> less than 20 minutes before the closing bell. the dow is off. we're hovering around this level. well off the 183 that we were down earlier in the session. >> as we all know president-elect trump's chosen form of communication is twitter. when he hits the social media app taking on companies, oftentimes the aftermath is not fun, online or off. we have that story coming up. us
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diversify its business outside of canada.
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it's now up around 6%. vista outdoor another stock in focus having between 400 and $450 million in the third quarter. shares plunging more than 22% as we speak. last thing in the telecom space, at&t ceo randall had an hour long meeting with donald trump. stevenson said the pending time warner merger was not a topic of discussion with trump today but rather how at&t can work with the trump administration to increase investment and stimulate job creation. make america more competitive. shares are up about 1% on the day. sara. >> seema, thank you. that has certainly been a theme, visiting trump tower like at&t did has been a positive for
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the company's stock price. company's been targeted in donald trump's twitter feed have more often than not had a different experience. cnbc's eric chemmy has looked at the companies caught up in trump's cross hairs. >> no secret that negative tweets can sink a company's stock. we wanted to dig further. we wanted to see how the online companies respond. boeing, ford, and gm three examples. trump went after boeing, one program that same day boeing's online mention spiked 5,000%. it went from 73% positive to 68% negative according to social intelligence from brand dch walls. no difference for gm. they saw gm's mentions go up 450% becoming vastly negative. and ford's positive sentiment was cut in half on the day trump criticized it. here's the weird thing. when trump is positive about a
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company, the community reaction is different. just today trump praised l.l. bean that caused his supporters to pile on in a positive way but it brought in trump's opponents going after the company. ended up being a 50-50 split polarizing on the two extremes. the key thing is trump's twitter support brings out both sides of the argument but when trump attacks nobody is there to defend the company. obviously it's too early to tell the long-term effects on the corporate bottom lines or if he's going to behave differently once he takes the oval office. back to you guys. >> yeah, it seems like he's been president forever. he hasn't even started yet. eric, thank you very much. see you later. less than ten minutes to go here before the closing bell. the dow, s&p and nasdaq all negative. nasdaq's first negative day of 2017. well off the lows but still getting hit here. part of the selloff. up next more on the selloff today with analysis from two top money managers. stay with us. at
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stopping by so that the market on close orders show an imbalance to the buy side, $350 million. not a lot. it hasn't moved the market very much. >> no, but things have recovered. we really cut our losses from earlier in the day. >> let's talk about what's going on with the markets. joining us is courtney gibson here with us on the floor of the new york stock exchange. from luke capital, that's ron mullen camp from mullen camp and company. i've already said happy new year to you. >> you can say it again. >> happy new year. >> happy new year, bill. >> a question i posed to tim anderson. here we are the day before the bank stocks are to announce their earnings and yet we're already selling them off. >> i don't know why. i wish right now i was upstairs on my app on my phone buying some more bank stocks because i'll be honest with you, any dip in financials, i'm buying. the fundamentals i think are going to come out incredibly strong tomorrow and the long-term prospects, i'll be
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candid with you, irrespective of trump, i think the banks are going to come out doing incredibly well. you get interest rate hikes and trump rolling back dodd-frank. >> what about you, ron, do you see value there? >> why, i do. >> yes. we've had an inflection point in the last few weeks. as you know, we've had a half speed recovery from recession since '09 and three of the markers that we think gave it half speed was zero or near zero interest rates which took confidence out of a whole lot of retirees. you've seen consumer confidence jump up. on the corporate side as an employer, i've been promised for the last eight years that my taxes are going up, i know health care is going up and i know regulations are going up. we think the fear of taxes going up and regulations going up, half of dodd-frank rules haven't been written yet. >> right. >> we've reflected on that. all of a sudden you're seeing small business confidence going up. those have been three big
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inflection points. >> we have time for one stock pick from each of you. jpmorgan? >> i love jpmorgan. jamie dimon at the helm, jpmorgan will continue to crush it. >> at&t which is interesting? >> i do. i do. last time i was here bill, i told you i was buying personally and my clients are overweighting in the name. as well as financials. at&t, jpmorgan and the banks, i say load up. >> give me one from you, ron. what do you see value in? >> local company federated. they've had to waive fees because interest rates were below or near zero. as interest rates move up they'll manage to reinstitute some of those fees. >> good to see you. >> good to see you. we will take a quick break here. the dow down 60 points. we have the closing countdown. >> and the latest on fiat chrysler. you're watching cnbc, the first in business worldwide. ÷ isem riires anvetid i
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ouetin titid re entirere all right. very quickly, we're inside two minutes as we head to the close. show you the dow. wasn't close. on the open down sharply, down 180 plus points on the open this morning and then as arthur cashin points out it was around the time that the european markets started to close we started to come back. we're down 57 points.
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the bogey was the dollar. dollar index down sharply as well for much of this day, but also a slight comeback there. now bob pasani, we wait for the big earnings from the banks tomorrow. >> that's right. the key is going to be jpmorgan because jamie dimon, as i say before many times, never fails to sell the future well. he'll talk about the growing economy, he'll talk about bank loans and i think he'll be upbeat. what he will not do is give guidance for jpmorgan. what he notorious loi likes doing is giving guidance. he doesn't like giving quarterly nupgs. we're not looking for numbers for bank of america. they won't give the 2017 numbers. i'm hopeful they'll be up. i was off tomorrow, i'm coming in we have a shot at dow 20,000. >> take monday off then. >> thanks. my adviser here. bottom line is markets are holding up really well. that selloff this morning, not a lot. suddenly the selling has just e
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evaporated late in the morning. >> thank you, sir. so we're going out with a decline of 59 points on the dow and the nasdaq has its first down day of 2017. so no records there for the day. but we'll get you set up for the earnings from the banks and also the story about fiat chrysler and why it was down as much as 16% today. coming up on the second hour of the "closing bell." and welcome to the "closing bell." i'm sara eisen in today for kelly evans. bill will be joining us in just a moment here. let's take a look at how we're finishing up the day on wall street. a down day for stocks. we are closing well off the lows as bill just said. the dow finishing lower by .75. it was not the worst day. disney, jpmorgan, goldman sachs the biggest loosers. s&p 500 down a little less than a quarter of a percent. the nasdaq breaking its winning
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streak. coming off of five straight record closes. russell 2000 index had been a big winner post election got hit the hardest. down a little less than 1%. a rotation out of some of the winners. treasury yields went lower. the dollar went lower as well. shares of fiat chrysler falling today after the e.p.a. accused the automaker of secretly violating the emission standards. what it means for the company's bottom line coming up later in the hour. cnbc senior market's commentator mike santolli here. paul schatz and stephanie link from t.i.a.a. >> i thought i'd never get here. who are all these people? got a very full trading floor today on the new york stock exchange. bob pasani is out there somewhere to give us a look and bertha coombs will join us from the nasdaq. tell us about the first down day for the nasdaq composite of
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2017. bob? >> dollar lower, yields lower and stocks lower throughout the day. where lows were early in the morning here, let's take a look at dow movers. down 180 points in the early part of the morning. ended the day only down about 63 points. financials weak on the lower yield. goldman was 241 at a point. that was a major problem. tomorrow jpmorgan, we'll hear from jamie dimon. we expect him to say relatively upbeat things about the u.s. economy. not give any guide dance. caterpillar was a problem as the industrials weighed on. exxon mobil has been a big nothing. hess did give disappointing production guidance and finally disney an all-star in 2016. started 2017 very well. got a downgrade. a lot of companies concerned about valuations being a bit on the high side. you see disney down 1 3/4. what are the markets like? i it's a coiled spring.
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perfection is where we're at. highs for stocks, highs for investor sentiment and consumer sentiment. high expectations for earnings. some people are talking 20% earnings in 2017. awful lot to ask of the stock market and of course we have the trump tweet risk that's constantly around us. markets despite all of these concerns still holding up fairly well. guys, back to you. >> bob, thank you. technology really dragging down the nasdaq today breaking its streak of outperformance. bertha coombs has the details. hi, bertha. >> that's right, sarah. the nasdaq closing down the first time in 2017. still up for the week, small caps were among the biggest drags. small caps negative for the week after a nice start last week. part of the issue really has been in technology, particularly when it comes to chips. chips have been very strong. strong performers today. we're seeing profit taking here today and they were among the biggest drags in tech, nvidia. some of the big jest losers
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today. when you take a look at some of the winners, there were a few technology names including amazon, and it wasn't all a down draft today when it came to the nasdaq. big caps, we actually saw a rebound particularly when it comes to biotech which yesterday got hit, trumped by the comments from the president-elect about drug makers get agway with murder and, his words, the biotech etf today making a really nice reversal with the upcoming higher after a negative start. in fact, we had some highs today in health care, biotech names including array and clovis. back to you. >> bertha, thank you very much. let's kick things around for today. what do you think, mike? a head fake by the bank stocks before tomorrow's earnings or what? >> they seem to be getting themselves into a little bit more of a neutral position. they were maybe a little bit over bought heading in. that's a net positive going into
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the reports. the market wide action was interesting. s&p 500 closed 2270. on december 13th it closed at 2271. one point in that many -- in just about a month from tomorrow. you basically had five weeks of what we now call the trump rally which was all those kind of high growth reflags trades kicking in. you've had a month of re-assessment, consolidation going sideways, working off some excessive sentiment maybe. so i don't think there's much of an impetus to break higher out of the range or as we've soon the last two days to have selling snowball. so i still think we're in that range of kind of assessing where we are in this cycle. >> paul, how do we break out of that sort of sideways action type range? what sort of signal do we need from the president-elect potentially members of congress? there's a lot built in here. >> frankly, i don't think kind of to mike's point, i don't think we're ready to break out to the up side. if we do tick down 20,000 or a little bit above it, i don't think it's a momentum things.
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we've gone sideways for a month. there's nothing wrong with that. that shows we get underlying strength. the rally has been on less stock participating the last couple of weeks. we need a little bit more consolidation, guy guestion, maybe halfway through earnings season. i'd be a seller on a run halfway through 20,000. we're going to get there, we're going to get to 21. i have no worries. it's the mean reversion trades from 2016 that are working. the treasury bonds are rallying, gold is rallying, euro is rallying. >> dollar is weakening. >> we're digesting getting our feet underneath us. i think if trump stops tweeting and let paul ryan and congress take over, we'll get some real substantive conversation going and we can hit 21,000 early -- >> it's like a gps going through manhattan. we know where we want to git there. some routes take longer than others. >> you don't want to have the big dig in boston getting your
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gps going. >> please. stephanie, this was a stock picker's dream day. you look at the banks, you look at fiat chrysler, at&t, the health care stocks, merck, what caught your attention? what are you buying right now? what do you like? >> well, there's a lot to like. i mean, i think we started the day today a little confused from what trump said yesterday. we didn't get a lot of pro growth discussion. so i get why we initially sold off and i get why the dollar sold off. that's a very crowded trade on the long side and then, of course, rates followed. but i think it's too early to make any kind of conclusion about trump and the policies and to make any kind of portfolio management decisions based on one presentation. >> right. >> and i think you're going to look at earnings. tomorrow is a very big, big day for a lot of reasons. it's not just the banks, it's the commentary about what they say and it's about what leadership is going to unfold. today you had the steel stocks and all base metals down because of a downgrade.
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he have this' been a leader. you had the airlines down after delta because they couldn't live up to expectations. they've been a leader. i think it's temporary, bill. i was buying today, buying some american express, some of the financials. i was buying some energy. williams is down 10% this week after a transaction. i was buying h.d. supply, some of the industrials. i think you can buy a lot of things out there. you can use these dips to be buying unless you want to chase. >> then there was disney, bottom performer in the dow. had been an outperformer. that pivotal no got a lot of attention. >> i like selling. >> the whole risks for media stocks. >> it's interesting. you've seen a series of downgrades from big blue chips in the dow. halftime guys are talking about this. there's an instinct to say, let's run too fast. we've had this streak. the dow has been a leader and where has it maybe kind of over promised in terms of what the companies can deliver. so i do think that's almost kind
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of a healthy situation. if clients are asking analysts what do i sell here and analysts start downgrading stocks, that's what happened, by the way, with the citigroup downgrading goldman i believe earlier this week. the citigroup note, theable lists sads, clients are asking. which of these banks do we sell? that tells you the psychology. mixed psychology is okay. in fact, if anything, we've had to work off over bullish sentiment. the market did sort of bottom right as it approached the supposed support levels, right? everybody was saying the low so far for this year was 2253. >> what are you, a skeptical technician? >> i am somebody who doesn't like when it gets too cute. >> paul schatz, second half of the year you like the utilities. i'm curious if the fed keeps rising rates and maybe even aggressively for them. >> frankly, i think the fed is going to raise three or four times. i think that's baking the cake. sentiment is becoming so defensive on the sectors. last year those stocks were
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world beaters the first six months and they were on death's doorstep the last six months. i don't think they're going to turn tail and deliver at 27%. kind of like how sentiments got frothy and working off bullishly, they're going to get beaten. i think by mid year anyone who is going to sell has sold. i think they're a second half of the year story. >> and staples. we're let willing you folks go, i think? >> yes. >> paul schatz, good to see you. stephanie link from t.i.a.a. global asset management. >> thanks, guys. meantime, we have a news alert from washington. eamon jabbers has the alert. this could be anything. >> we're getting a statement from the fbi director david comby in response to the news earlier today that the inspector general of the department of justice is going to be looking all of the decision-making surrounding comey's involvement in the 2016 election. remember, the whole saga with hillary clinton's e-mail.
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that is going to be investigated by an independent inspector general inside the department of justice. now comey reacting saying i am grateful to the department of justice's i.g. inspector general taking on this review. he is professional and independent and the fbi will cooperate fully with him and his office. i hope very much he is able to share his conclusions and observations with the public because everyone will benefit from thoughtful investigation and transparency. comey saying he's welcoming this i.g. investigation, bill. >> all right. thank you, eamon. see you later. president-elect trump promising to repeal and replace obamacare very quickly, if not simultaneously. >> within the hour he says. >> but what he didn't say is that getting rid of obama care will also give the wealthiest americans a large tax cut. we have details on that part of the story coming up. a bit of deja vu for the auto industry. if i at chrysler being accused of cheating emissions laws the
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same as volkswagen. bob lutz along with a major shareholder will be here to weigh in next. you're watching cnbc, first in business worldwide. ste k ou g ls hipa cthu hay.. ironfere, i that s? uryour t dot.thatvise
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it basically comes down to the software in these vehicles and how much did fiat chrysler disclose, not disclose. is the epa correct in saying something is not adding up here. there are 104,000 fiat chrysler models 2014 to 2016 jeep grand cherokee and ram 1500 pickups. the 3.0 liter diesel models. according to the epa there is software that allows the vehicles to exceed emission standards when they're being driven out on the road as opposed to when they're being tested. fiat chrysler and the epa have been negotiating this issue since late in 2015.
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e.p.a. says fiat chrysler did not disclose some of the emissions software but when we talked with sergio marchionne earlier, we have been clear, we are not trying to deceive anybody and certainly not trying to defraud anyone. >> the issue and we are in the process now of preventing a more complete set of control strategies that will remedy all of their concerns. so the issue could have been settled and should have been settled i think in my view in a more efficient way, in a more business like manner as opposed to elevating this to suggestions that we're trying to defraud anybody. >> as you take a look at shares of fiat chrysler which at one point were down almost 19%, we should point out that sergio marchionne said it is his understanding that the department of justice may also
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be investigating this emissions issue. guys, ultimately this comes down to what was disclosed or not disclosed, and according to sergio marchionne, they've been clear all along which also raises the question, why not? why did the epa come out and file these charges now shortly before the trump administration moves into the white house. we should point out also that fiat chrysler said today, you know what, we'll talk about this with the trump administration epa because we believe they are going to see things a little bit differently. >> yes. well, certainly if trump gets his way it could be a very different government body. phil, thank you. >> you bet. joining us to talk about this, former gm vice chairman bob lutz and here at post nine new york city's comptroller scott stringer. you have more than 8 million shares. welcome, scott. your level of concern on these allegations? >> we're very concerned.
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$95 million investment in fiat. we expect the company to act with integrity and transparency. this is not the first rodeo that the epa has had to deal with. this reminds me of volkswagen ii and i quite frankly think that sergio's a little disingenuous with saying, gee, i wish we could have straightened this out. well, there's been an ongoing investigation, violation has been issued and i think it's unfortunate that it's come down this. >> did you know that they were talking to the epa about this -- these emissions software? >> we invest in thousands of companies and that's why we rely on the board -- >> okay. >> -- to make sure that they do their due diligence. that's why i am suggesting that we need a federal investigation by the independent directors of his board. >> so i take it you're as surprised that the rest of us are that this announcement was made by the epa today. you didn't see this coming? >> no, but there's no reason to
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think that we would know about every investigation. >> i'm not picking on you. >> but i'm just saying, that's what i have trouble with. you know, when you have investigations or prosecutions, the surprise element is not the issue. >> yeah. >> the issue is what's the substance. the substance here, did this company put software in place that failed to disclose the true emissions and that's very troubling as a stock and for the people i represent. >> so, bob, what's your take? should scott be as alarmed as he certainly sounds? >> well, first of all, i'm more where phil lebeau is. nothing's been proven and i doubt very much that this is in any way analogous to volkswagen where there was very clearly emissions software installed, designed to pass only in the test and nowhere else. >> what's this software for, bob? why put this kind of software on the car anyway? >> well, in volkswagen's case it
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was very clearly to cheat. i don't think there's any proof or not even the epa alleges that chrysler installed defeat software. they just said the vehicles pass on the roads and then out in the field they same to degrade so there may have been a software error, there may have been a degradation of the emissions software, we don't know, but i will tell you i would -- knowing sergio marchionne and knowing the morality of american chief executives in the automobile business, if anything, this is an error of omission, something went wrong, somebody -- somebody didn't check something or a component wasn't up to snuff and it fails in the field or they took a certain risk, they barely passed with no margin for error. >> okay. >> a lot of the vehicles in the field don't pass, but this is not -- this is not analogous to volkswagen. you were talking about stocks to
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buy earlier. >> yes. >> i would buy chrysler stock in a heartbeat now because i think this whole thing is going to go away. it's absolutely ridiculous. >> bob, i think i recall after the volkswagen revelations came out you were suggesting that the rest of the industry was puzzled by the volkswagen results from these diesel engines. in other words, they said, it can't be done. we can't figure out how to make them in a competitive way economically if, in fact, these volkswagen emissions are true. is there anything to be gleaned from the fact that maybe it's a close call on whether the chrysler cars are also not always passing in the test? >> well, first of all, everybody agrees that larger diesel engines such as used in sport utilities and trucks and where you can recover -- where you can recover the cost disadvantage of diesel emissions equipment. i mean, general motors produces diesel trucks, ford produces hundreds of thousands of diesel
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trucks. so on larger engines you can recoup the costs and you can put in all the expensive hardware and there was no doubt in my mind that on chrysler pickup trucks and jeep grand cherokees where the pricing was up unquestionably you can afford the hardware in those. what was unusual about volkswagen is that they were able to sell a diesel engine at a competitive price in a compact car. that's what we couldn't understand. >>. >>. okay. so i think the chrysler 3 liter probably passes. maybe it's got some field problems but i refuse to believe that anybody at fca deliberately cheated on emotions. >> the idea that marchionne is there. trump ran on less regulation for business and industry. it's completely different.
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>> i think it's going to be very different and here in this particular situation when we could -- when we could have an investigation, have a finding and a continued investigation, this is in the best interests of share owners like public pension funds. i represent firefighters, teachers, police officers and when we invest in a company, we expect the corporate board to do their due diligence. bob may be right, no harm, no foul, but he might be wrong. at the end of the day maybe it's not volkswagen but it's something that should be explored and should be penalized. the people who rely on these pensions at the very least deserve real answer zblers new york city comptroller, scott stringer, thank you. bob lutz, thank you. as always, bob, see you later. >> come back and share the results of the investigation. a trio of confirmation hearings taking center stage on capitol hill.
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things got pretty contentious in one of them. we'll bring you the highlights of all three in a moment. >> plus, amazon working on plans to expand its services to 100,000 full-time jobs. we'll discuss how much impact mr. trump may have played in that decision coming up. y craa , , can tri the asst hemore custone yban spo.the cca selt mel
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president-elect trump's picks for defense secretary, cia director and housing and urban
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development head were all on center stage on capitol hill for their confirmation hearings today. morgan brennan, eamon jab beers and diana olik. morgan, let's start with you. defense secretary, they had to change some of the rules for james mattis today? >> that's right. that process is happening as we speak. the waiver for general james mattis to become defense secretary despite having retired from the military less than seven years ago is moving along. the senate just voted it through. the house is expected to do the same. this is necessary for the confirmation hearing. that after the retired four star marine general called russia a principle threat to the u.s. >> i'm all for engagement but we also have to recognize reality and what russia is up to and there's a decreasing number of areas where we can engage cooperatively and an increasing number of areas where we have to
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increase russia. >> president-elect trump is about to improve ties with putin. more aggressive policy against isis and a commitment to modernize the nuclear triad including the land-based nuclear program. contractors are developing this. the former head of central command took aim at the budget control act sequestration but adds he agrees with trump for getting the best bang for the buck including the f-35 which remains critical for air superiority, both for america and our allies. mattis saying he has a very, very high degree of confidence, quote, in the u.s. intelligence community. really a wide-ranging interviewer -- hearing today. you take a look at shares of defense stocks like lockheed martin, north 24r07 grumman and raytheon. >> morgan, thank you. another key member of trump's national defense on the
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hot seat, eamon jabbers following the testimony of trump's pick to run the cia, eamon. >> that's right. given everything that's going on, mike pompeo who is the pick to head the cia would have faced some very tough questions. he did. overalthough, this hearing was fairly smooth. the fact that a lot of these members knew him from his service in congress really helped pompeo navigate tricky waters. he was asked about hot button issues including the intelligence community report and enhanced interrogation. what some people call torture. start with his answer on what he made of that intelligence community report last week. >> i a fended the hearing -- the meeting which the president-elect was briefed. everything i've seen suggests to me that the report has an analytical product that is sound. >> if you were ordered by the president to restart the cia's
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use of enhanced interrogation techniques that fall outside of the army field manual, would you comply? >> senator, absolutely not. moreover, i can't imagine that i would be asked that by the president-elect or then president. >> and, guys, a lot of questions here simply presume that mike pompeo will be the next cia director. i didn't pick up on a whole lot of difficulty here for him getting confirmed at cia. >> eamon, thanks very much. we saved i don't want to say the best for last but the most interesting, fiery exchange came during the confirmation hearings of hud secretary designate ben carson. >> no surprise that it came from senate democrat elizabeth warren who pressed carson that he would put a fire wall between hud money and president-elect
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trump's real estate empire. >> if there has to be an extraordinarily good program that's working for millions of people and it turns out that someone that you're targeting is going to gain, you know, $10 from it, am i going to say, no, the rest of you americans can't have it? i think logic and common sense probably would be the best way. >> the problem is that you can't assure that hud money, not $10 varieties, but of multi-million dollar varieties, will not end up in president-elect's pockets, and the reason you can't assure us of that is because the president-elect is hiding his family's business interests from you, from me, from the rest of america. >> and dr. carson's refusal to make that promise led another democrat, senator sherrod brown, to ask him if he would report back to the community in the future if he saw any problems between hud money and president-elect trump's empire
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and dr. carson said he would. he said he'd be delighted. back to you. >> diana, thank you very much. >> it is time now for cnbc news update with sue herera. >> hi, sara. here's what's happening at this hour, everyone. turkey says its war planes struck near the turkish border, destroying shelters and buildings. targets are bombarded in that particular area. firefighters continue to sift through the debris following an early morning and deadly fire in baltimore. firefighters confirming they had found the remains of five of the six missing children. a mother and three of her other children were able to escape that blaze. cadillac has launched a program that it says is a first of its kind luxury vehicle subscription service. a member pays a flat monthly fee of $1500 and gets unlimited access to several kad lax,
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escalate. they're calling it netflix for cars. and at a white house event moments ago president obama surprising vice president biden with a presidential medal of freedom award. biden was overcome with emotion. let's take a look. [ applause ] >> biden continued to cry for quite a while until he made his remarks. it is the highest award any civilian can receive from the president of the united states. that is the cnbc news update this hour. i will send it back downtown to you. >> one of the great partnerships between a president and vice president. >> absolutely. he mentioned that in his address, that they had the same values. >> a lot of mutual admiration. >> congratulations to the vp.
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president-elect trump plans to repeal and replace obamacare and quickly, and while tax reform is taking a back seat to obamacare, repealing the health care law will actually give a huge under the radar tax cut to wealthy investors. we have that story coming up. a. r reesxper bof h hicti n? a.
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let's take a look at how we finished the day on wall street. it was a down day. not as sharp declines as we saw earlier in the session. still, the dow did finish lower by about 63 points. s&p 500 closed lower than by less than 1/4 percentage point. the nasdaq broke its recent winning streak. this is the first down day of the nasdaq of 2017. coming off five record closes. the russell index of small caps got hit the hardest. financials were the biggest losers. >> tomorrow a big day for that. you probably have heard by now the republicans took the first steps overnight to repeal obamacare and it could have a surprise benefit for the rich, it turns out. john harwood joins us with a look at how that could impact taxes on top earners. >> senate republicans have taken a strong first step toward
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repealing obamacare and cutting taxes for the wealthy jest investors. the budget resolution they passed early this morning allows them to erase obamacare's tax and spending provisions by simple majority vote which means they don't need any help from democrats. while debate has mostly centered around health insurance issues, the tax implications are substantial. obamacare relies for much of its financing on extra hospital insurance and medicare taxes on incomes above $200,000. eliminating them would mean a tax cut averaging $49,000 for households with incomes of $1 million or more. and for the top 400 u.s. earners the tax cut would average $7 million. according to new calculations by the center on budget and policy priorities. that could set up a collision with this principle offered by steven mnuchin, president-elect trump's choice to be treasury secretary. >> any reductions we have in upper income taxes will be offset by less deductions so that there will be no tax -- absolute tax cut for the upper
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class. there will be a big tax cut for the middle class, but any tax cuts we have for the upper class will be offset by less deductions. >> though mr. mnuchin was talking about a broader tax reform effort, his remarks underscore one political vulnerability of the obamacare repeal effort. president-elect trump promises to reveal his replacement plan once his pick for health secretary wins confirmation, but there's no consensus within the republican party yet on a replacement for obamacare. back to you guys. >> that is going to be the big question. thanks to john harwood for that. joining us now to talk more about this, let's bring in two washington insiders. cnbc contributor jared bernstein from the center on budget and priority policies and chris edwards. gentleman, thanks for joining us. >> thanks. >> jared, you have an interesting description here. you call this not just the usual robin hood in reverse. this is robin hood slamming the bat mobile in reverse at 100 miles an hour.
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explain. >> i think i need a better metaphor, one. >> mixed metaphors. >> okay. sorry. but, two, i think the way you teed this up is exactly right. you talk about the health carey peel on one hand and you talk about tax reform as if they're moving on completely different tracks. here they come together. by getting rid of the two taxes that john mentioned that fall disproportionately on upper income people when you repeal the aca, you administer a huge tax cut to those at the top of the scale. as he mentioned, a $7 million tax break for every one of the top 400 richest households whose income are over 300 million a piece. at the same time you're taking away the premium tax credits from 7 million moderate and low income people that amount to 4,800 bucks. so this is -- this is -- this is robin hood in reverse. >> okay. >> big time. >> chris, what do you think? >> well, i think the high earners right now under the current tax are heavily
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penalized. the top 1% pay 38% of all federal income taxes and i think that's damaging to the economy. the obamacare tax hit is a 3.8% tax on dividends and capital gains. what you have to remember is that dividends and capital gains are double taxed. corporations earn profits, they pay the 35% corporate profits tax. the money goes out to individuals in the form of dividends and capital gains and they're hit with more taxes. so there's double taxation going on here which, again, i think is bad for the economy. final point i'll make is that john harwood looked at the top 400 earners in the i.r.s. code. those 400 people are highly dynamic. the irs put data out on this b. 3/4 of those people in the top 400 are new every year so it's a dynamic group. we're not talking about warren buffet here. we're talking about individuals who have built businesses over a lifetime, they sell their business and they spike into the top 400 group once in their lifetime.
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>> all the points he made after that. i think that investment is far less sensitive than what he does to these tax rates. what i would like to hear conservatives address is this dynamic of returning millions, hundreds upon billions when you turn it up to those at the top at the expense. we heard on these very stations. in other words, the idea that somehow you're going to hold harmless the people that you're digging with this tax change just flies in the face of all the numbers we're looking at. we can argue about the tax code, but this redistribution upward
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completely violates what donald trump claims to be standing for on behalf of these working class folks. >> especially, chris, when you consider mr. mnuchin and others are trying to provide better relief for middle class americans rather than just the top oern ners out there. how are they going to do that? >> but the tax code has become so biased towards nailing the rich it's almost impossible to cut taxes in washington unless you cut taxes on the highest earners. i mean, again, this tax is on dividends and cap 258 tall gains. they all have lower rates on dividends and capital gains than a regular tax rate. >> using mr. mnuchin's moniker, you reduce the deductions. what would that be? >> i r i would repeal the tax exemption that goes to the very highest earners. i would repeal the state and local tax deduction and i would at least put a cap on the mortgage interest adoption for the largest home and for people
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with the highest incomes. so i'm quite happy to trade deductions and exemptions at the top end for lower rates. i'm just saying that the high rates are very damaging and every other country has lower rates on dividends and cab tall gains because they're so damaging. >> jerry, you would like to respond. i have to go. we're out of time. >> okay. i appreciate your raising the topic. thank you. >> you've got it. thank you both for joining us today. >> thank you. >> never enough time. donald trump promising to approve the keystone pipeline and bring back clean coal jobs but the president-elect didn't address his energy spending plans at his news conference yesterday. what that could reveal about his actual agenda next. and amazon saying it will now create 100,000 full-time jobs over the next 18 months with most of the jobs located in the united states. was this their way of staying out of the president-elect's tweets or cross hairs?
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that's coming up.
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increasing infrastructure spending especially in the energy sector was as we know one of donald trump's big campaign promises last year, but it wasn't a topic that he touched on at yesterday's news conference. jackie deangeles joins us with a look at where those plans may fall on the prekt's to do list. >> all along the campaign trail, and the contract with the
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american voter. president-elect trump has talked about spending this money on infrastructure companies. now in the october statement trump said he'd allow the keystone pipeline to move forward and he would do that immediately. he said the american energy and infrastructure act would spur $1 trillion in infrastructure over ten years. not saying how much would be allocated to different sectors. plans would be certainly vital to energy companies which have suffered in a low environment in the last years. the projects have stopped and capital expenditure plans paired back. there was optimism immediately with the s&p 500 ennench gi sector seeing a sharp pop but as the optimism waned stocks gave back those gains moving lower. the decline could partially be coming from the fact that there's lack of detail on this infrastructure spending. analysts were hoping to hear more on this. the topic wasn't covered. the concern said with health
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care, tax reform in the center, this may be falling lower on the totem poll. at this point we just really don't know what exactly he's going to do because he hasn't really given us an update or concrete plan. that's the concern that the stocks might have moved a little bit ahead of themselves. back to you. >> jackie, thank you. we'll wait for any word. amazon higher today after promising to hit 100,000 full-time jobs by 2018. what is the company's bottom line and for the retail sector at large next. >> the question coming up. by the way on "fast money", ricoh executive weighing in on apple's days behind it and what the tech giant needs to do to make a comeback. stick around for that coming up just moments from now on cnbc. ar nk alclc.
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liberty mutual insurance. president-elect donald trump certainly sparred with each other throughout the campaign trail but the president-elect may be happy to see that amazon today has announced plans to create 100,000 jobs in the u.s. by next year, the company saying those jobs will be full time and include full benefits. >> so is this move trying to make friendly with mr. trump. let's talk about it shall we? he runs an online etf that includes amazon along with yousef squally. >> we're sort of in a can you top this mode right now, employers falling all over themselves to announce job creation. what do you make of this? >> i think you said it, that's exactly it.
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it's a great press release talking about hiring that we've seen out of amazon ever so i think it's going to serve as a way to mend fences. that said from a real kind of employment standpoint if you look at amazon's historical track record they've grown their ftes full time employees anywhere between 35 to 45%. you gets it to you around 36%. nothing really changed. >> so he doesn't get credit that is president-elect trump for this announcement from amazon? >> well, he may not get credit but i'm sure he'll take it, right? brilliant move by amazon. the nasdaq for the first time of the year finished down today, yet amazon stock rose about 1.8%. brilliant move here. attempt to mend fences. it wasn't more than a year ago
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that besos would say donald trump to space if he wanted. this is going to help amazon going forward with the trump administration. >> yousef, even if this hiring pace does not represent an acceleration, amazon's been doing, is there still a sense that amazon is entering into heavier investment phase going into this year in. >> i think 2016 was probably the heaviest year ever. they've opened up some 26 distribution facilities, compared that with 2015 where they opened up 14. i think 2017 they haven't announced it yet. we're going to have some more color but we suspect that 2017 would look similar to 2016 where they're going to keep the level of investment pretty high
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considering that they're investing 2 plus billion dollars in india, they're trying to double down in china and western europe and the u.s. continue to be heavy investment areas, both for skmee commerce and for aws as well in addition to everything else they're doing, the book store, they're doing all the offline stuff as well. >> even before they were doing all that, they're have been questions all along about the profitability problems now they want to create that many jobs and they continue to grow at a pace. do you worry about their profitability issue? >> i don't worry about it. we've seen the trust overtime has paid off. we're looking at returns of over 1,400% in amazon stock. but i do think being a provider of an online retailer, i do think people are saying, who's the next amazon? what other companies or areas could have that type of growth because at some point amazon
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just can't continue to grow areas like their cloud computing business and they're going to have to take risks in machine learning in drones and other types of technologies. >> we got to go. thank you both. appreciate it. >> he owns a business there so he should be there sometimes. >> it was an investment cycle. >> bank of america, j.p. morgan and chase all report their earnings tomorrow. >> wells fargo ceo will way in on those results on a first on cnbc interview right here on tomorrow, "closing bell" eastern time. we'll be right back.
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. wells fargo, j.p. morgan all reporting earnings tomorrow morning. >> quite the run-up since the election almost 35%. i mean expectations have been very high here. >> the consensus forecast have not come up that much so i think it's going to be how much they beat by. >> they just want to hear good things about the next year. >> so it's not clear that you're
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going to get the message that it's we're going gangbusters here. they're going to be it's a matter of how much and how the trading line looked and what the environment seems to be for deals. >> it all comes down to the guidance from jamie tomorrow. see you tomorrow. thank you for stopping by. >> that's it for "closing bell." "fast money" starts right now. live from the nasdaq markets. "fast money" starts right now. the 10 is year anniversary week rolls on. tonight on fast apple shares taken a dive as advisor to donald trump says it's run is over. and what she thinks apple needs to do to make a comeback. could the at&t/warner deal be in trouble because

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