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tv   Countdown to the Closing Bell With Liz Claman  FOX Business  January 10, 2017 3:00pm-4:01pm EST

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trish: see you again two night. will be part of bret baier's two hour "special report" 6:00 p.m. on the fox news channel. sort of at the end, tune in at 7:45. see you there. tomorrow tune in for donald trump's big news conference at 11:00 a.m. eastern. it will be his first news conference since he was elected. liz, over to you. liz: regan, claman show. see you then. liz and trish tonight on fox news with bret baier. two major stories in the final hour. the dow push for 20,000 came within 43 points of hitting that right now. down 10 for the moment. final hour morphing as we speak. nasdaq closing at a record high for 2017. still though the s&p seeing some gains. the trump rally rolls on, trump
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administration taking shape before your eyes on capitol hill right now. look what you see on your screen. as we're awaiting we've got senator jeff sessions being questioned about the executive branch privileges. that is the power donald trump will have as president. and in this hour, in 29 minutes, retired marine four-star general john kelly will take the stand in front of the senate homeland security committee. president-elect trump asked a veteran of the wars in iraq and afghanistan to be the face for some of his most controversial policies, border control, mass deportation. we could see some fireworks on both those issues. that is now in 28 minutes. of the white house, president obama getting ready to make his grandfatherwell speech tonight. adam shapiro is right there to tell us what you should expect to hear. we have two huge interviews to talk about all. a fox business exclusive. billionaire bond king, jeffrey gundlach is one of the most
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respects voices across wall street and main street. he repredicted trump presidency before the trump sewed up the republican nomination. gundlach about to predict what happens to your money during the trump presidency. dow 20,000, the fed, and about to name his favorite stock. and "the man who killed usama bin laden" and freed captain phillips, is here. rob o'neill whether general kelly is the man to protect the homeland. i laid it out for you. we have a jam-packed hour. a lot of breaking news. start the "countdown." ♪ >> let's dip in, as we show you the capitol hill picture we're watching hearings on jeff sessions and awaiting the general kelly hearings.
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why? 57 1/2 minutes away for the closing bell. we're looking at a 12th straight record close for the tech-heavy nasdaq. seeing out any move to the upside, that will close out record string of closes in nearly a year. fourth in a row. s&p 500 is six points away for closing for a record. second record close for the year for the s&p. dow, if you're a bull, it is unfor the senately falling further away from the 20,000 level. down 11 points at this hour. a lot could change at this hour. the dow transports are flying higher by nearly a full percentage point thanks to airlines. optimistic outlook for the airlines. upbeat decent operations update. airlines, choo-choos, those are upbeat. airline stocks are performing to the upside. ones on your screen, alaska air, at record high. other airlines seeing gain of
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2%. great day for delta up 3%. to washington, d.c., there is senator jeff sessions there he is still answering questions from his fellow senators at his hearing for attorney general. this has been an all-day affair. i don't know if you've watching here on fox business. frequent interruptions. people hauled out of the senate. talks about abortion, race. 30 years ago there was question how supportive or lack of support he was showing for civil rights. he worked hard to clarify that. in about 30 minutes in totally different area, capitol hill, we have retired four-star marine general john kelly in the hot seat for his senate confirmmation hearing. he is donald trump's pick to head the department of homeland security. issues we'll be talking about, they will be talking about, border control, deportation, extreme vetting. will general kelly's hearing be as fiery as jeff sessions? we have peter barnes in d.c. what is happening with the jeff sessions hearing?
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there has been some interruptions with a lot of protesters, peter. reporter: that's right. half a dozen, including some dressed in white sheets. obviously a reference to the kkk. some protesters yelling charges of racism at senator sessions. that senator sessions has been a racist. he has been going on five hours, taking all of this in stride. answering all the questions directly. he will be a pro at this. he is on both sides of these confirm make hearings in the past. as a senator, a democrats grilling him on guns, civil rights, immigration. including allegations in 1986, when sessions was up for federal judgeship, that he made racist remarks and called the naacp and aclu un-american. sessions addressed the charges head-on. >> this caricature of me in 1986 was not correct. i had become united states attorney.
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i supported as civil rights attorney said, major civil rights cases in my distribute, that integrated schools, that prosecuted the klan, that ended single-member districts that denied african-americans the right to hold office. i did everything i was required to do. reporter: total of six trump nominees in confirmation hearings this week. sessions and general kelly will continue their testimony tomorrow. the senate will also hear from exxonmobil ceo rex tillerson to be secretary of state, congressman mike pompeo to be the cia director. michigan businesswoman, betsy devos to be the education secretary. former bush labor secretary elaine chao to be the secretary of transportation. liz? liz: peter, thank you very much. the trump rally obviously showing some muscle for s&p and nasdaq. take a look, we do have nasdaq at the moment in record territory. as we look at numbers, the dow
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falling back by seven points. we wonder how long does this last? he's one of the few people in the entire financial world to correctly call donald trump winning the election, even before the primaries were over. there is the really neat trick. what does the future hold for u.s. markets and the economy now that donald trump is in the white house? in his first broadcast interview in the new year, one of the most followed voices on wall street and main street, joins us in a fox business exclusive, billionaire bond king and founder and ceo jeffrey gundlach. who by the way amassed more than $100 billion in assets over just seven years. thank you so much for joining us. okay, you made the donald trump prediction perfectly. well before anybody. >> it was before the primaries began actually. liz: before it even began? >> yeah. liz: what did you see that gave you the window what eventually would happen? >> he had his pulse on the kind of forgotten people, turned out
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to be rural america but middle class. it seemed quite clear that clinton, hillary clinton would be the nominee for the democratic party and i just thought she was a really weak candidate, based on the performance in '08 really. liz: were you a supporter of donald trump? >> i voted for him. i'm not really very political but i do vote. so i did vote for him. not terribly enthusiastically but i thought he was the best candidate on the ballot. >> what has been enthusiastic is the market reaction since election day. >> short of shocking really. wall street and investors really changed their attitude almost instantaneously. days before the election there were notes from major research firms talking about global depression. i think there was a major investor who said the s&p would drop 80% if donald trump won. he wasn't predicting he would win, but if he does it would drop 80%. all of sudden later in the week in the election crawlers on
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national media with the notes being written saying trump is great for stocks. it's a little bit strange how people changed their attitudes so quickly. i don't think i've seen such a 180-degree turn in sentiment ever in politics or financial markets. i wonder if it will last because you know, it's, not linear. liz: let me get to that. dow 20,000 is suddenly within somewhat striking distance. >> we're there. just rounding. we're there. we'll go to new highs on the stock market, i think. liz: how high? i don't really know. i think we'll go up moderately from here. i think the problem will come in the middle. year when interest rates, which are now dropping little bit, because the bond market is ridiculously oversold and positioned against but, ultimately i think interest rates are going to move higher towards 3% on the 10-year. liz: starting to look though very toppy for equities. i wonder is this a sucker's rally?
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what do you see, look, we're a few days into 2017. do you see any dislocations or gyrations in market metrics? >> no. the thing that strikes me how the u.s. market seems very expensive relative to global markets. i think, you know, when foreign markets do well, when emerging markets are on a tear, when europe did well like it did in the first quarter a couple years ago, when they started with some of their quantitative easing programs and the like, all of a sudden investors start falling in love with foreign stocks because they're up massively and they start to convince themselves diversification is good idea. which is really trojan horse for buying stuff a lot and maybe overvalued. we're in the opposite situation now. the u.s. market has done really well. a lot of other markets haven't done really well and they look kind of cheap. i think investors should think about diversifying, using this weakness, relative weakness in foreign markets to diversify away from the u.s. market.
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i'm not bearish on u.s. market. in fact i think it is going to new highs but i think it is a good time to diversify. liz: if we start to look a little rich at this point, we head into the inauguration, markets sell off into inauguration. >> there is pattern pretty predictable, after an election you see enthusiasm, good sentiment, somewhere around now, period before the inauguration or mod prattly later, maybe week or two later you do tend to see a top. liz: what is the investment warning you feel compelled to give people right now who are listening? >> i don't really have much of a warning other than, really on the stock market. i have advice that the rally that is now happening in the bond market is a good opportunity for people to think about changing their bond investments. liz: how? >> interest rates bottomed in july at 1.32 on the 10-year, and
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at that time there was really a monumental belief in treasury bonds. in fact i got together with my team and i said, i don't think i have ever seen anything quite this bad in terms of a bad bond market setup ever, in terms of people saying, headlines saying yields can never rise. well in this business when you hear the word never, it means it is about to happen. liz: 2.67% is recent high. >> 2.64 intraday. liz: how high will it go? >> we'll take a peek at 3% during 2017. the danger if we go above 3% on the 10-year which is certainly possible i think you have to from a chart perspective say unequivocally that the bond bull market is over. liz: that is the thing. people are looking at this point for a the least some are, a cushion of safety but others are really on the stock bandwagon. stocks versus bonds because donald trump will cut corporate tax rates and cut all tax rates. it is blue sky scenario.
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when do you start to see the clouds? >> all those things are possible, and if they happen they're good, the question is will they happen? that is what i mean by not necessary a linear type of a thing. certainly corporate taxes being cut is positive for stocks. but, what about tariffs on certain industries? it is all very complicated. there is supply chains that, it is not clear that just because something is manufactured overseas that it's just that country's work. liz: okay. so donald trump is really pushing a lot of companies, piecemeal, to bring manufacturing back to the u.s. even in the long run is that good or negative for the country? >> it is inflationary. if you bring, if you're increasing the cost of goods through tariffs, basically, if you're punishing china and mexico are for example, what you call dumping, what you're doing is saying we don't like the fact that you're manufacturing this stuff.
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we don't have the jobs but it is low-cost goods. think of the apparel industry where apparel is almost entirely manufactured overseas. liz: overseas. >> if you put a tax or tariff on apparel it is pretty simple thing to do, all it does is increase the cost of clothing. that is all it does. i think there is a real risk inflationary picture worsens. liz: president obama gives his final speech tonight. what kind of economy, do you see him handing donald trump? >> well he's, president obama presided over a remarkably stable gdp and inflation regime. i'm not sure he had much had to do with it. we had all these extraordinary policies. negative interest rates overseas. zero interest rates here. quantitative easing of incredible amounts yet through all the policy variation, gdp has been 2% real almost every year. last year, 2016 will come out at 2.1.
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inflation has been incredibly stable. with the trump administration will bring us a breakout of this stability. i think we're going to see maybe a short-term bump up in economic growth. i think, we certainly see signs of growing inflation. and so i really think the fed is going to let inflation rate go up. i think that interest rates will rise. and, my sense is that when we get to above three on the 10-year treasury it will start providing competition for an equity market with a pe above 20 on trailing earnings basis. that is where i see sort of the trouble coming. it is okay to own equities now. one of our favorite stocks actually is 21st century fox in the stock market. liz: well, thank you very much. >> it is just a coincidence. we were talking about it at our firm last week. you know, it has not performed well recently. actually a pretty attractive stock.
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people are worried about unplugging and skinny bundling, all that stuff, we don't think that is much of a risk for twenty-first century fox. liz: we thank you for giving thumb's up to fox business in our 10th year. jeffrey gundlach. i swear i did not prompt him to say that. while he was talking said we will absolutely see dow 20,000, the market moves higher. the dow started to go back up above the flat line. it is really struggling at this hour, down about four points. when i say it is struggling, to try to scale the flat line at the moment. the closing bell is 44 minutes away. get the entire interview on foxbusiness.com or lizclaman.com. hey, do you own american express? it is among the leaders on the dow 30 after oppenheimer upgraded it to outperform. seeing a gain of more than a buck at this hour. look again at confirmation
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hearings, live pick you are of senator jeff sessions for attorney general. off to more of a contentious start. set to face the music on capitol hill today and tomorrow, homeland security, general john kelly. that is not just today, it is in a couple of minutes. plus secretary of state nominee, rex tillerson on deck. we have a man all too familiar with our nation's security. former seal team six member, rob o'neill who heroically fought on the front line of war on terror, taking down enemy number one osama bin laden. we'll ask rob o'neill, what does he think of the president-elect's controversial cabinet picks, specifically general kelly. got to hear what rob says, stay tuned. liberty mutual stood with me when i was too busy with the kids to get a repair estimate. i just snapped a photo and got an estimate in 24 hours. my insurance company definitely doesn't have that... you can leave worry behind when
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all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. liz: facebook, just got upgrade to cowan and company to outperform and price target boost to the 15dollars a share. so -- $156 a chair. why isn't facebook higher. $124.53. we can blame europe, threat of new regulations in european union on internet privacy is slowing down big names including the social network. facebook trending down by a third of a percent.
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nasdaq closing on new record high with 39 minutes left. nasdaq charging up by 21 points at the moment. looking at s&p 500 though, four points away from the record close level. will it hit that by the end of the hour? go to the new york stock exchange where ashley webster is watching the s&p. >> they are indeed, liz. 40 odd minutes to get five points on the s&p. we can do it but yes, a lot of these stocks reaching all-time highs as you mentioned. comcast corporation, all-time high today. we will give you some numbers on what some stocks have done since donald trump's election. by the way, comcast up 14%. charter communications up today, hitting an all-time high, that stock is up 14%. progressive corporation, property and casualty insurer, also up some 14% since november the 9th.
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you mentioned straps -- transportation, liz, up alaska air getting a nice upgrade from b-of-a merrill lynch. southwest saying their average cost per seat went up last month because of last minute people buying their seats. airlines and transports in general doing well today. liz: i would like to see that. >> yeah. liz: you know why? airlines traditionally have been a horrible investment until past couple years. thank you, ashley, thank you very much. >> sure. liz: closing bell, we're 37 minutes away. you guys know if you have been with me all this time, i hope you have, i've actually been standing by chipotle more than a year now, eating those burrito bowls back in the day even when it want, you're standing by them. mechanic can food chain same-store sales rising nearly 15%, compared to 30% decline
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last year, because of e.coli and norovirus scandals. i have never gotten that even though i eat chipotle every single day. no i don't eat it that often. president obama expected to leave the white house in any second to board marine one, bound for chicago for tonight's farewell address. adam shapiro standing by at the white house, what we can expect to hear from the tonight. plus the man who killed osama bin laden, what does he see as the president's military legacy. we're back in a moment with that you need to hear it. ♪
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liz: we are awaiting official word that president obama will be leaving the white house for chicago where he will say good-bye to the nation in a speech he wrote himself beforehanding over the oval office to president-elect donald trump. 20,000 people are expected to be in attendance at mccormick place. that is the convention center in chicago, where the president
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declared victory over mitt romney in 2012. this is the first time that a departing president will deliver his farewell address from his hometown. adam shapiro is standing by at the white house, when they can expect to hear from president obama in a city that many say, adam, resembles a war zone with more murders than new york and l.a. combined? it has got to be a bitter sweet situation in chicago? reporter: bittersweet is probably the best way to describe it. i mean here is president barack obama, on his way to his hometown. you can hear marine one powered up as i'm talking to you right now here on the lawn in the white house. he will be heading to chicago. he will address issues, according to the white house, that look forward. he picked chicago, his hometown, as a backdrop, to show not only how his career started but the possibilities for people in the united states. the question is, will he address the problems which are plaguing his hometown? as well, as his own legacy. what happens to the affordable care act, obamacare? will he address all of that?
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we were told by josh earnest here at the white house the speech will look forward, not back. here is earnest in his own words. >> the president feels an obligation to talk about what he learned over last eight years, what he learned about the country and governing up the country and offer up his advice to the american people about the most effective way to confront the challenges that we see ahead. reporter: now, you mentioned 20,000 people in attendance in mccormick place, the giant convention facility on lakeshore drive on the south side there. one thing you know, tickets, hundreds were given out for free, are selling online, anywhere from 500 to $5000, liz. the speech itself, we are told, has had four drafts already. this is his farewell address. it will be for those who track these kinds staff tis ticks, last time he flies aboard
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air force one as air force one. liz, back to you. liz: election night 2007, was fox business's first election night. i was there with michelle nunez and our entire election team in grant park when he came out there. it is quite a moment eight years later. this speech will be widely watched and followed. people can have complete coverage. lou dobbs with special two-hour edition, and "cavuto: coast to coast," only 7:00 p.m. eastern on fox business. meantime, 29 minutes before the closing bell rings. with the dow down just 1 and 2/3 points, we're hearing this is about to begin. the senate homeland security committee is gearing up for the trump department of homeland security nominee, general john kelly. and you can see people taking their seats, walking into the room. we're going to be watching for
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fireworks. we will bring it to you. speaking of fireworks, gunfire and a lot of work. that is what the man who killed osama bin laden dealt with his entire military career. that is former navy seal rob o'neill standing by in the green room. he is coming in. we'll ask him about president obama's military legacy. what he expects from donald trump as commander-in-chief. countdown coming right back.
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liz: all right, hearing for department of homeland security secretary candidate general john kelly is in the preamble. you're looking at general right now. he is listening to senator ron's johnson of wisconsin, chair of senate homeland security committee. senator johnson just warned if anybody pulls off any monkey business they will be thrown out.
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we saw a lot of protesters in the earlier session for jeff sessions attorney general. but to general kelly, at 66 he boasts a 45 year military career with his final leadership post as head of southern command. why is that important? he is responsible for u.s. military activities in latin america and caribbean. that means the border between us and south america. general kelly had experience in western iraq. landing as defense secretary robert gates senior military, the fact that general kelly is set to serve in the trump administration. the question is he one best prepared to take on the role. let me bring in somebody a good judge of that. rob o'neill, the man who killed osama bin laden. rob, you're more than that as well. that is absolutely huge. two silver stars. four bronze stars. you helped rescue captain phillips from somali pirates?
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>> that's correct. liz: glad you're sitting in the chair. >> we were able to work with team doing amazing things. liz: he is team guy. always bring in the team. i want your solid opinion. is general kelly a good man? >> he was commander of southern command from. they deal with central america, south america, caribbean, drug smug leg. he will recognize the operational and financial relationships between a lot of these terrorists organizations particularly hezbollah and drug smugglers. they are working together. he realizes that. that is why the southern border is so important, not just because of undocumented workers that is a big problem but terrorists attacking schools and movie theaters. that is bigger problem. we need a wall to stop terrorism. liz: we've seen all kinds of issues in this country. close calls with law enforcement stretched, trying to figure out the best way to protect the homeland. there are a couple of issues. makes you wonder whether this
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hearing, separate from jeff sessions, very much about jeff sessions and his history and people accusing him of racism and all things like that. with general kelly, seems more about donald trump than about general kelly, and more whether general kelly is going to want to build the wall. is he going to want mass deportations, is he wanting extreme vetting? >> what is good about general kelly, he is not partisan, he is a marine. marines are problem solvers. there for 45 years. they are problem solvers. as far as president trump about the wall and some is things controversial, blunt way of saying them, general kelly speaks truth to power and he is going to tell the truth to president trump when he is president trump. building wall is unwith them. i don't think we'll get into how they will pay for it. if a wall is way to do it, general kelly thinks he is going to do it. it is not for a political party.
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but for the safety and security of americans. liz: senator claire mccaskill giving her opening statements at the moment. she is minority ranking member on senate committee for homeland security. we're talking about the southern border. you know these terrorists. if they can't get in the southern border -- >> they will go north. liz: they will pose as canadians. >> they're smart. they're always adapting. we haven't been generally adapting with them. senator from my home state, jon tester. liz: he is very concerned. >> 450-mile border in montana and wyoming and all the states across the top. will not -- they could use southern as head fake and go up to the north. general kelly is tactician. he knows how to plan and people. i'm sure that will be one of his major concerns up north. liz: president obama is about to take marine one, air force one, to chicago for the final speech.
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just about last week, i believe. he spoke before the military, who gave their traditional good-bye, the commanding forces. he brought up two of two of the events you happened to be a part of. right place, wrong time, whatever you want to look at. >> somewhere for some reason. liz: killing osama bin laden and captain phillips. saving captain phillips from the somali pirates, with your snipers took them out. >> they took the guys out because of threat they saw. nothing else they could do. they were obligated to use lethal force. that is when president obama in office for a few months. that took some guts to make that call to send us over there. liz: that is what i wanted to ask you. his legacy, having the fortitude to make very tough and scary decision. >> he did. he made tough decisions and he really used our special operations, special operators in the a lot of times, everything from intelligence that led to drone strikes in places like yemen and somalia, big mission
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in pakistan to get bin laden, capture richard phillips. very good about that. didn't increase funding. 60% of the marines, 50% of the navy unfavorable towards president obama. i talked to friends today, asking them about the same thing. they remember a couple years back, they would have to cancel training trips because of budgets, not enough fuel for the helicopters and fire certain amount of bullets. this is seal team. liz: you make excellent points. u.s., china, saudi arabia, risha, the uk, but the u.s. 600 billion a year. donald trump may spend mor he is harassing lockheed martin. >> he was good with the air force one call. i think there is a lot of unnecessary redundancy in the military. a lot of programs trying too many different things. there is some money being spent doesn't need to be spent. we need to be smarter how we're spending it. what is the best technology and how we can advance, special operations i think.
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new war is finding county you are terrorism operations. not necessarily, depends on what happens with russia. not big armies fighting big armies. that is what we're designed to do. fighting counterinsurgency, we've proven it is difficult staff. you need specialized forces to do so. liz: rob o'neill, former navy seal, overall hero. >> thank you for having me anytime. liz: general kelly he says is the man to lead homeland security. he is a marine. he is not political. he gets the job done. rob, thank you very much. >> appreciate it. liz: closing bell ringing 17 minutes. what is wrong with the dow? neither here nor there. slightly flat. we're watching what will be the fourth record in a row for the nasdaq. another member of president-elect donald trump's inner circle looking to drop at&t and time warner's call. that person in the inner circle is joining forces. charlie gasparino, with a fox is about exclusive on that story and more. charlie breaks it next on
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"countdown."
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liz: 4minutes and two seconds ago, look to the far right of the screen. dow on unchanged line. 24 times just sips the show began at top of the hour. some real give and take back and forth action. dow punching up to positive territory. bears winning here. to time warner stock. the stock fell 1.3% yesterday, after fox business and charlie gasparino reported here on "countdown," that donald trump asked his advisors to review at&t's $85.4 billion acquisition of time warner. what we're learning now, there is yet another senior trump
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advisor voicing his concerns about the megamerger. charlie gasparino with the details. >> there you have them. liz: again. >> jared kushner, his son-in-law, now a senior advisor, unpaid senior advisor to donald trump, joining the growing list of trump advisors who appear to be against this deal. steve bannon, his other senior advisor, reince priebus, chief of staff. jared kushner, now another senior advisor. chris ruddy, who is outside advisor, head of news corp, they're all against the deal. which leads a lot of people to think, why the stock is trading off since our reporting, that the deal is not going to make it. but there is really a main player, i think there are two. whoever head of fcc will be a main player determining whether this gets, megadeal, biggest deal of the year. one of the biggest media mergers ever. sometime warner owns hbo and cnn and donald trump doesn't like cnn very much. there is fcc, i don't believe he has appointed anybody yet. there is the head of the justice
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department who runs the antitrust division that needs to get muster through him that man is jeff sessions. liz: if he gets confirmed. >> if he gets confirmed. was at a confirmation hearing today and asked about m&a deals and antitrust. listen to what he had to say. >> it would be wrong to further some other separate, discrete agenda not reasonably connected to the merger itself. so, i think we should insure that we have the highest integrity in antitrust adjudications because they can have great impact. liz: wow! sound like he is just going with the facts and not political opinion. >> it seems like he takes a very hands-off view on these things. that he wants mergers and acquisitions, unless there so obviously over the line of being a monopoly -- liz: hurting consumer. >> hurting the consumer, that it
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seems like the guy that actually has to vote on it, is for it. can twist words a million different ways. that was part of a longer answer. the longer answer didn't add that much, we reviewed it a few times the question was asked by mike lee a free market conserve at this. liz: this is president obama, at joint base andrews, heading to chicago to give his final speech. he had an fcc given a rough time to a lot of mergers some of them involving at&t. >> he approved the comcast deal. liz: eventually he didn't but his fcc did not approve comcast-time warner cable. >> good point, good point. we'll see with this. this is supposed to be a more business-friendly administration. liz: you would think they would like the at&t-time warner deal go through? >> based on session's answer,
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seems like he is looking at it differently than steve bannon, kushner, reince priebus and donald trump. now he wasn't asked specifically about the deal. but you can surmise what you want from the statement. very fascinating that that came up today, as we've been of reporting this, and i bet mike lee watches fox business. liz: great to see you. thank you very much. charlie gasparino. a lot of people are watching fox business. you know we're beating the competition now. those of you who were with us from the start. we hea you and which know -- >> we know who you are. liz: every single one of you and who you are, so thank you. closing bell, eight minutes away. time to get defensive in the portfolio. more juicy bits of my exclusive interview with jeff gundlach. the marching orders he is giving investors right now. what a look etf giant wisdom tree to defend its funds in 2017. which ones they believe you should pick now. more "countdown" on the way.
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>> the danger is that if we go above 3% on the tenure, which is certainly possible, i think you have to from a chart perspective just say unequivocally that the bond bull market is over. so investors should take this rally to reduce their interest rate risk and to move into more defensive bond investments liz: in that first said to the business world "you didn't create those jobs. the government did." and told me quote i've created 200 jobs at double line, so i didn't appreciate that. and then after our interview, he revealed some major beliefs we have right now. here's a big one. the euro doesn't survive. he would be surprised if it lasted five years, there's a
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20 to 30% chance something happens this year to ruin it. he pointed to france and the possible reelection that said she will put it up for referendum. watch out. she does not see a trade war with china. trump's just a deal guy. he'll get something out of china in exchange, possibly a promise to keep north korea in check. and says he has gone from 11% cash to 4% cash in his portfolio. by the way, it's hard to surprise gunl aworks ch. let me bring in jeremy schwartz, he's the director of wisdom tree, the etf giant, also cowrote the great bond bubble. what did you think of what he said? >> well, if he talks about rising rates and there's a lot of implications not just for the bond portfolio. he's telling people to reexamine the bond portfolio. a lot of implications are across bond portfolio. interest rate sensitive stocks, the utility sector is
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one, the evaluation is there last six or seven years, they've been going up as rates have been declining. but now rates are rising, you have to look what are you allocating towards, i would say does very well toward environments and then quality stocks within the large cap part that can grow faster better than, say, utilities. liz: okay. we should show some of those. for the small cap, you talked about the etf, wisdom tree small cap earnings eef. tell me about the holdings in that one. >> yeah. so there's two things that's going on in this process. one is it's small cap companies. two is that it's earnings weighted. so it's a lower multiple approach. the other thing people are saying and jeff said this earlier in your program, evaluation look higher than normal by waiting by earnings, you tend to tilt toward lower pe stock. so going to toward toward fidel, tilt toward cyclical parts of the market, more interest rate, sensitive part. so this is really i think one of the single best plays for rising interest rate is eef. liz: and as we show because
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you did mention the dividend stocks that pay. you guys put a whole bunch of dividend names into a basket with that etf, it's called the etf quality dividend apple, microsoft, give me your prediction overall for this entire market in equities for 2017. because we seem awfully close to 20,000. do we reach it? breach it? move on and up? or touch it and retreat? >> listen, i think the evaluation -- people say evaluations extended. that is a basket if you look at the long-term, i've done a lot of work with professor siegel. 6.5% long-term overturn. if you look at the evaluation, that's sort of what i'm expecting. 6.5 if you look at the next five years is normal evaluations. 2.5 dividend yields. you get buy backs in the 2.5 to 3% range. that should lead to better dividend growth overtime. liz: are you optimistic, though, jeremy? >> they're not overly extended, so, yes, i think it's a reasonable time. it's not overextended.
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so if you have corporate tax cuts that helps improve earnings further, that basket goes up by repatriation. i think it's a result. >> jeremy, we bump up against the closing bell. he's with wisdom tree director research. thank you so much. it is the fourth record in a row for the nasdaq. not bad. nice day for the nasdaq. 60 new highs. david and melissa. pick it up here for after the bell. melissa: all right. techs take the lead once again another record day for the nasdaq. the fourth in a row while the dow struggling for gains. i'm melissa francis. david: and i'm david asmand, this is after the bell we have you covered on stocks but here's what else we have for you this hour. trump's cabinet picks getting grilled. on the left is senator jeff sessions up for attorney general. he's been responding to charges saying he is racist potential prosecution of hillary clinton, immigration, and extreme vetting. on the right trump's pick to head the department of homeland security, general

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