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tv   Worldwide Exchange  CNBC  December 26, 2017 5:00am-6:00am EST

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the final countdown, only four trading days left in 2017 and u.s. stocks are on a five week winning streak. wild swings, bitcoin bouncing back this morning after plunging last week. plus here is our yearly tradition, time to make invest mts predicti ment predictions we have your playbooks coming up "worldwide exchange" begins right now. welcome to "worldwide exchange."
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i'm contessa brewer. hope you had a fang taktastic holiday. let's take a look at futures we're shaping up to have a slight hely lower open. implied futures down 25 points, s&p up just slightly here at one point and the nasdaq off by five taking a look at the treasuries and ten year notaes holding steady after rising slightly on friday we're up about 2.5% yield on the day. european markets are closed today for boxing day, but taking a look at the asian equities, the nikkei is off by 0.2%. shanghai risen by three quarters of a% and the kospi has dropped by half a percent. as for the broader markets, oil down just slightly this morning. wti crude is off by 0.1%
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brent almost 0.2%. and nat gas up they now expect the north sea pipeline to reopen in early january. and that is just tempering somewhat the production cuts we've seen in russia and by he opec taking a look at currencies now, and the dollar is also holding steady this morning. down just slightly a tenth of a percent against the euro up by on 0.04% gechagainst the and down slightly against the pound. bitcoin rising in thin trading it's recovering from a celloff it fell nearly 30% at one point on friday alone. landon dowdy joining us with more what is going on with bitcoin? >> well, bitcoin mania is certainly continuing julian haas says its rapid rise isn't over yet and it could hit $60,000 in 2018.
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but of course there is a catch he says he sees a very healthy chance to buy while the price is lower, but he thinks another crash is coming. the forecast would mean a $45,000 rally in the current price right now bitcoin trading at about $15,206 and this comes after rallying to a record high of $19,800 before collapsing last week, losing a third of its value in a single day sinking below 11,000 he likened to the dotcom bubble and consolidation is likely to take place in the future bitcoin is trading up about 10% now in early trading so volatile moves here back over to you >> i see what you did there are the "game of thrones." >> i can't take the credit that is all him. but i certainly had to let that point shine. >> nailed that
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>> you know it is an interesting ride when your grandmother is talking about it and the "wall street journal" reports regulators are rushing to figure out bitcoin. no government agency has authority over the trading cftc has closest oversight, but it doesn't have the power to govern the buying and selling. meanwhile the s.e.c. is cracking down on initial coin offerings that it classifies as securities offerings. we'll have to see what happens on that front. retailers are enjoying some extra christmas cheer. u.s. holiday sales rose 4.9% up until christmas eve. e-commerce sales jumped a whopping 18.1% the new figures come from mastercard spending pulse. so this is the strongest holiday glet retail has seen since 2011. but not all retailers were seeing merry women's apparel struggled.
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joining me now is president of sw retail advisers and a cnbc contributor. great to take you to you what was really glifidriving th growth for retail? >> good morning, contessa. yeah, the retail numbers were very strong. november numbers alone were very strong as understand,we're up about 4.9% and it was across the board, but i think one of the standouts was certainly electronics. apparel was better than in previous years in terms of units, but i think the real pressure that remains out there in the apparel sector is certainly the discounting. and i would throw in as well sporting goods and footwear. we've seen a pick up in units. but again, there is this discounting out there that is not only pressuring the top line, but also gross mar beggins >> if you take a look at what is
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happening for on tthe share pri, these have sort of been the neglected stepchildren for a while now and suddenly you're seeing macy's up in one month 24%, gap up 18%. and there again the extended trading showing this has appeal for investors no matter whether the discounting affects the top profit margins so where do we stand heading into 2018 and especially when you have to factor in today this is going to be one of the biggest shopping days of the year, one of the biggest returning days of the year >> absolutely. so these were some of the most -- this is really one of the most hated sectors and then numbers became a little better expectations were so low and then we had the tax relief and it became this feel good 20% rally in retail. so certainly the stocks reflect i believe the recovery and the
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feel good tax package for 2018 and again, i think 2018 will be same story, tlm here will be discounting, we're seeing deflation not only in apparel, but even in the higher growth beauty segment so not everybody i think in 2018 will be a winner >> and as a workingmother to 4-year-old twins, i was busy doing holiday shopping right up until the last minute. this click and collect that so many retailers recognize as being essential to their core business, did they see a return on the investment that they made in their app so that people can shop on the go and just go pick it up in the stores? >> yes, i mean click and collect will be one of the most important things to watch in 2018 because it is not the easiest thing in the world to do kohl's is talking about 40% of their online orders as click and collect, target is talking 80%
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during the holiday season on so all these people rush into the store and within two hours, they are able to click and collect. that puts a lot of pressure on the stores to potentially pick receive h. stuff o stuff off the shelves and sometimes you have out of stock. but i was impressed with target, you were able to click and collect on christmas eve up until 6:00 so if you were a procrastinator, and you had the weekend, you weren't working, that is how you win in 2018. >> and talk to me when today the importance of gift cards and how these retailers factor in returns. >> yeah, so gift cards are becoming afternoon increasing piece of the pie it is just simpler you don't have to put the fake smile on your face when you get the ugly sweater so you are seeing more people
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just giving e-gift card, it hits your inbox and it is simple. the one thing is that it is recognized when the person actually spends the gift card. so again, a lot of people wait a quarter or so or several months in order to intend it, and a lot of people lose them or never spend them so the gift card issue is again an increasing piece of the puzzle >> stacy, thank you so much. and in tech new, reportedly saying iphone x sales will come in at 30 million versus the 50 million previously reported sources saying that foxconn is no longer hiring workers at its chinese factory. and apple also reportedly told taiwan semg any ciconductor to p
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producing. there is a pair of economic reports on the wall street agenda the october s&p case shiller home price index is out at 9:00 a.m. and that is followed by consumer confidence an hour later at 10:00 a.m we're edging closer to the end of the year and that means time to talk about the big things that could shape 2018. phil lebeau has your play book for the auto industry. >> after three straight years with sales topping 17 million vehicles annually, auto business will slow down in 2018 sales are expected to fall 3% to 5% due mainly to a slight pullback in demand still trucks and suvs will remain popular picks thanks to gas prices that remain relatively low meanwhile, you can expect sales of electric cars to charge up in 2018 thanks to two high profile vehicles first there is tesla's model 3
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which will be seen around america more often as the automaker ramps up production. meanwhile gm expects sales of the volt to increase due to a full year of nationwide sales. finally, expect to see plans for self-driving cars to expand in the next year. waymo will start its self driving ride share service in arizona and grow it from there while the self-driving volt will go from the streets of san francisco to new test drives in new york and other automakers expect their programs to kick into a higher gear next year setting up 2018 to become a crucial year for an auto industry going through a technological transformation phil lebeau, cnbc business news, chicago. and you will hear more on the playbook reporting throughout the day here. still ahead on "worldwide exchange," a comeback story, we'll tell you about a $100 million life line.
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welcome back to "worldwide exchange." let's take a look at corporate news theranos has received a $100 million loan from fortress helping the firm avoid a possible bankruptcy filing the "wall street journal"
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reports that the ceo says the loan is subject to achieving certain targets. tharanos was once one of the best funded startups, but an investigation into its practices led to federal probes, several lawsuits and the shutdown of its testing labs steven cohen is looking to make his comeback on. the billionaire investor has been banned from running a hedge fund the past two years as a result of an insider trading investigation at sac capital but the ban expires on december 31st the "new york times" reports cohen is expected to open a new firm in february it has received $2 billion to $4 billion in commitments from ib investigators, however the "times" says some pension funds and institutional investors including jpmorgan and morgan stanley aren't offering their high net worth customers the opportunity to invest with
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cohen. saudi is reportedly demanding at least $6 billion from prince al with-waleed to pm from detention it could threaten his global business echl fire he w empire. he was one of several arrested in what was billed as the crown prince's crackdown against corruption reports say al-waleed is discussing a plan about accepting a large stake in his company kingdom holding instead of cash as payment for his release. the ball is about to drop on this year and ring in 2018 in a few days we're taking a look at some of the big market theechls li themn store. here is the play book oig with the travel and leisure sector. >> a growing economy and tax reform should bode well for the world of travel. first for hotels, you could see
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a rise in occupancy rates as more americans travel domestically, but that also means competition will intensify as rivals try to attract more on travelers. and second expect your hotel room to get a tech upgrade saec investments are being considered by marriott and other operators looking to create connected rooms. but don't mean surprised if that means the room rates go up third, cruise lines will lk to china for opportunity. it is anticipated to be the world's largest cruise market by 2030 which means the race is on for kafcarnival, caribbean and norwegian to build ships that indicator to the new wave of travelers. and that was see ma mody reporting. coming up, washington watch. now that tax reform is done, what is next on the president's agenda we head to capitol hill for answers next but first, as we head to break,
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here is today's national weather forecast from bonnie schneider good morning across the country, we're watching lake-effect snow and a bitter cold arctic blast temperatures will be much colder today especially in the northern tier of the country. and all that cold air is pushing to the east. so you will feel it soon enough in new york city and boston where we had the snow yesterday and the strong winds lake-effect snow is really the big story across the great lak s because these snow bands could limit advise anld 5b89 5b89 and we could see up to 3 feet on the more intense bands so definitely wintry conditions in the final days of 2017. that is a look at your business avertrel's forecast. more "worldwide exchange" when we come back
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(daniel jacob) for every hour that you're idling in your car, you're sending about half a gallon of gasoline up in the air. that amounts to about 10 pounds of carbon dioxide every week. (malo hutson) growth is good, but when it starts impacting our quality of air and quality of life, that's a problem. so forward-thinking cities like sacramento are investing in streets that are smarter and greener. the solution was right under our feet. asphalt. or to be more precise, intelligent asphalt. by embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic.
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then that data runs across our network, and we use it to optimize the timing of lights, so that travel times are shorter. who knew asphalt could help save the environment? ♪ raphael: just fourt are brothers who hate bullies, and love this city. leonardo: woo! michelangelo: whoa! haha. leonardo: gear up guys! [lagale force winds,s absolute chaos out here! accumulations up to 8 inches... ...don't know if you can hear me, but [monica] what's he doing? [lance] can we get a shot of this cold front, right here.
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winter has arrived. whooo! hahaha [vo] progress is an unstoppable force. brace yourself for the season of audi sales event. audi will cover your first month's lease payment on select models during the season of audi sales event. good tuesday morning and welcome back to "worldwide exchange." it is 21 past the hour i'm contessa brewer. president trump is continuing his holiday vacation at mar-a-lago today republicans scored their first major legislative victory with a tax reform bill last week. now signed into law. and the administration has started looking ahead to next year's agenda. edward lawrence joins us live from capitol hill. they got this under their belt just in the nick of time to achieve the president's christmas wish list. what is next for 2018? >> reporter: there are a lot of things the president would like to accomplish in 2018.
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you have health care, infrastructure reform. however, the president you can always see his agenda laid out on twitter the same over the christmas holiday. he tweeted a lot over the holiday. one of the things that he said he believes he is not getting enough credit for his accomplishments. president trump at his mar-a-lago resort in florida gets back to business today. he set aside sometimes harsh language on twitter to send a christmas message of peace >> on behalf of melania, myself, barron and the entire trump family, god bless you, god bless america. >> reporter: still the president not backing off the fbi this past weekend pushing the idea that the clintons gave fbi deputy director andrew mccabe's wife a large campaign contribution while the fbi looked into the use of hillary clinton's personal e-mail server >> so the president is saying we need to know there are civil servants are doing the honorable thing and it is important on the american people know what
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happened >> reporter: the president also announcing a united nations cutback. the u.n.'s budget has been reduced by $285 million. it comes days after a u.n. resolution condemning the president's decision to recognize jerusalem as israel's capital and this warning >> when we make generous contributions to the u.n., we also have a legitimate expectation that our goodwill is recognized and respected >> reporter: the white house will also have to sell their new tax plan, signed into law, to the american people. democrats say it will amount to a tax increase for the middle class. the president says workers will see fewer taxes taken out on of their paychecks starting in february and when the president and congress come back to washington after their break, they have a number of different issues to resolve, including developing that infrastructure rebuilding plan which the president says the democrats would be on board for. >> edward, thank you very much let's get to the weekend box office the force was with disney again.
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"star wars" brought in another $100 million over the holiday weekend. that is according to estimates by com score jumanji debuted in second with $34 million in ticket sales. and in third place, pitch perfect 3. and check this out, nasa astronauts had movie night it was an orbital screening of "star wars." one of the astronauts tweeted this photo, you're in space watching "star wars" after a year of block buster hits and flops and a slew of major mergers, what will the new year bring julia boa julia boars has your playbook. >> reporter: we can expect more
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competition. first with disney's fox deal creating a behemoth. all the other media players are likely to scramble for scale targeting the smaller media companies such as discovery and amc. and we use see netflix buy a studio to lock in a library. all this as the industry awaits a court decision on at&t's battle to buy time warner. second, amid degrgrows concerns about cord cutting, there will be a surge of new skinny bundles. they will make grareater grainsa a sports free bundle appeals to people who don't want espn new live video offerings there amazon and apple and facebook could put a deeper dent in pay tv numbers and lastly with sexual harassment and misconduct revelations prompting an overall of the top ranks, all signs point to the entertainment industry taking the lead in
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redefining workplace conduct after years of criticism for being too white andtoo male, studios will prioritize diversity. it will help draw the broadest audience for their contents. a big night coming up on cnbc it is the premiere of the profit in puerto rico, an american crisis damage from hurricane maria left thousands of puerto ricans completely isolated. the profit, marcus has been to the island several times and found one town struggling on its own to get by. >> think what it means to be truly stranded no power no water no communication stuck. it's been weeks since hurricane maria, and the people of rio
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abajo are feeling left behind. the sign says it all camp of the forgotten. there is only one way in and it is not easy if you knew how much i hated heights. marilyn has lived here for 25 years. and now she is trapped here. too scared to make the climb down the ladder. it's a nightmare >> it is waking up the next day not having a bridge, it is horrible because this is our only entrance or exit. >> to find out more about how people are coping with the hurricane's violence after math, tune in tonight at 10:00 p.m. to see the profit in puerto rico, an american crisis coming up this morning's top stories, round up of the global markets. plus did american consumers shop or drop this holiday season?
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countdown is on, just four more trading days left in 2017 can the markets continue a winning streak your full wall street setup straight ahead a very merry shopping season, retailers cheering strong holiday sales a look coming up and is uber eats taking a bite
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out on of the taxi business? why the ride sharing company's big business might actually be food it is tuesday, december 26th, 2017 this is "worldwide exchange" on cnbc good morning welcome to "worldwide exchange." half past the hour this day after christmas. i'm contessa brewer in for wilfred frost. let's get a check on the futures this morning taking a look at how equities will be shaping up for this first trading day after the holiday, it looks like the s&p is going to open slightly higher with the dow jones implied open off by 26 and a third. nasdaq in the red by 6 taking a look at the ten year treasury yield, we saw it rising slightly on friday and this morning up just fractionally holding steady at 2.49% yield.
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it may be a quiet week ahead in washington president trump is spending the holidays at mar-a-lago congress is out of town after passing a stopgap spending bill. and tax reform last week but there will be several items they have to address when they return in the new year let's bring in founding partner ev of hamilton on play straechbltes tony, good to see you. >> good morning there frigid pittsburgh, pennsylvania >> it was a white christmas for a lot of people. so many people giving thanks for what they got accomplished this year not the least of which republicans in congress. so they head into this new year full of victim and vigor over to getting the tax overhaul in place. what is next?and vigor over to getting the tax overhaul in place. what is next >> the question is how long will the good feelings last republicans looking back on the year feel good about a couple things one was this big prize of getting tax reform done.
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they got their supreme court nominee. they replaced the fed chairman so they are feeling good about those things, but the popularity is not quite there yet and they have a very tumultuous january and spring following that coming up with big things like the budget, like what they will do with daca and the d.r.e.a.m.ers, so immigration issues. there are potentially big fights they don't know what the president yet is going to do on things like nafta. they have to reauthorize the fisa reform intelligence gathering legislation. and there are fights on these things and as i tell people, in some ways looking back at what was a few mu few, the easy part is over >> when you're talking about deficit hawks, the republican party traditionally has been full of them and yet you're looking at a spend now pay later kind of
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strategy where are these deficit hawks? this will increase long term what it costs our children and grandchildren. >> i think they are going to emerge again here as early as january. when republicans have the prize of getting tax reform done and even allowing for the $1.5 trillion in deficit in the way the bill was scored, some republicans disagree with that scoring, but there was a lot of -- there are costs in the tax bill the effort to go find some savings, you already heard spier ry speaker ryan and others talk about that from entitlement programs that will be very challenging politically. we saw it with the health care fights, the cost share and reduction costs which congress still does need to deal with this year. so finding things -- finding money for things like infrastructure for example, the president says he wants to do infrastructure spending.
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>> and he thinks that he can get the democrats to come on board and have this be, hey, this is the thing that everybody can embrace because it creates jobs in their own sdrisar oeeir own . will the democrats join republicans on the infrastructure >> i think that will be a very tough sell possible that they can get democrats, but democrats don't control the floor and they don't control the crafting of the legislation. so the likelihood of presenting legislation that democrats can support, will want to support, but democrats are not looking to give president trump any big wins because they are feeling very good about their midterm prospects. >> and we have to get to that. because we're already seeing political ads on the air, there are rich guys spending money to put ads on to impeach trump. when we're looking toward the midterms and towards politics, what do republicans learn from 2017, what do democrats learn
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from 2017 about their strengths and their vulnerabilities going into the political season? >> i think -- you're right, i think everything we look at from this point is will be in the context of mid term elections. and it seems like a long way off. they happen in november. so roughly on 10 months from now but you have republicans running in primaries this spring so as early as april you have republicans in primaries where they are facing primary challenges so republicans still have to show their alignment with president trump who still has the most intensely popular base in the republican party. so they need to do those things. so that argues against the likelihood of finding ways to collaborate with democrats >> the most intensely politically active the real question is, is trump one of those people that can inspire moderates to be
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passionate you never hear about passionate moderates, but this may be an election that changes all that >> and that's what we've seen in some of the off year elections so far, is not -- a lack of intensity from the traditional republican voters, great intensity on the democratic side president trump has not become more popular and the republican party has not become more popular even with their accomplishments that they feel good about so that puts them in a tough place. presidents traditionally lose seats. there is a fear among republicans that this could be a wave year, so they feel like they need to get as much done as responsible because there is a chance that they could lose one or both houses of congress >> tony fratto, so good to see you. happy new year >> you too retailers enjoying extra christmas cheer this year. mastercard out with new data on the record holiday shopping
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season landon dowdy joining us with the details. this was a good one. >> this was a good one there was high consumer confidence and a robust job market sales on the holiday period jumping 4.9% ver is succe jumping 4.9% ver is succeus 3.7t year, and that is the best pace since 2011 now, e-commerce sales also feeling the cheer, up 18.1%. new found boost is a relief to retailers that have struggled much of the year with a slew of store closures, but not all divisions felt the love. women's apparel lagged and did not contribute to the overall rise in sales, however the strongest energy in the past decade, electronics and appliances which grew 7.9% did you get that iphone. >> here is the real question, do i want a watch or do i want an iwatch >> and jewelry sales didn't really benefit from that one,
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but someone did. >> me neither. landon, thank you. as we end near the end of the year, what will be some of the big spending themes in 2018? robert frank has your playbook for the luxury sector. >> 12017 was a boom year for the rich 2018 is likely to see the froth grow bigger. boom times for billionaires. the number is likely to reachen a all-time high. the millionaire population is likely to hit a record 1 million. number of billionaires in the world is likely to top 2100. their combined fortunes topping $8 trillion. trophy assets, all that wealth is likely to drive stronger sales of everything from art and diamonds to super cars and luxury real estate 2018 will see a rising number of
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big deals at the very top of the market over 30 million might even see a new record for the most expensive home ever sold on. several properties on the market in l.a. for over $200 million. and the richest man, jeff bezos likely to remain the richest man in the world as amazon's do dominance grows mu and his fortune currently arounp $120 billion and his new rival will probably be mark zuckerberg who is currently worth $75 billion, but could add another 10 or 15 billion to his fortune. >> and coming up, top trends in tech we're breaking down the sector's biggest themes in 2018 stay tuned
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ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online. welcome back let's talk tech. here is josh lipton with the 2018 tech playbook >> tech is the best performing sector in the s&p 500 this year and with new products and increased competition expected in 2018, here are three things to watch first, retailers rush to microsoft and google cloud as retailers decide to move to
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cloud computing, some are writing big checks to microsoft and google and avoiding amazon which makes sense. why send millions of dollars to your most serious rival. so growingekroger, walmart and t have all decided that the trend will being a be se see accelera 2018 and apple will reach a $1 trillion market cap. since the initial public offering, its market value has surged more than 63,000% this year alone, it skyrocketed up more than 45% to around $900 billion. the stock needs to touch $194.77 for apple's market cap to hit that $1 trillion mark. it will get there in 2018 as tim cook's company benefits from a wave of global upgrades to the iphone 8 line and iphone x
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third, fewer private tech companies take the public market plunge so far this year, there have been 25 tech ipos, five more than in 2016 but get ready for a drop next year a few unicorns are rumored to be considering a public debut such as potspotify and drop box, but startups are still right sizing. and what many now consider unjustifiably high valuations. and some very well-known companies that did go public this year like blue apron are trading well below their ipo prices and let's talk more about the top themes for the tech sector heading into 2018 joining me is dan ives, chief strategy officer great to talk to you one of the biggest tech merger deals that we've been talking about in most recent weeks is this disney/fox deal what it does with netflix and hulu, weigh in a little bit
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about what we're likely to see in 2018. >> this is the shot across the bow at netflix iger going dead straight at netflix here on the streaming side, i think hulu is the golden jewel here. how disney sort of crossing the contents will be interesting but it is all about the 2019 stand alone service. this is really about content and now iger finds himself at the top of the heap. net flex spending 8 build. th billion. this is a race and i think that this could significantly change the streaming race i think netflix has an iron grip around that consumer side, but i think how disney takes this and howing a agre ing a greaggressi pound into hulu will be interesting. >> as we see, the grip is not maintains its hold if there is another viable cost effective option >> that's why this is so important pop disney was the one -- this was the opportunity. you look at the fox acquisition,
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this was really their opportunity to really become a big player potentially in streaming. and that's why they made such an aggressive move. i think now this is something netflix is closely watching. you have $10 billion being spen across the contents. so right now i think this is an arms race and disney could significantly change the landscape. >> let's talk about apple trying to get into contents and when you're trying to rein-vernts yourserei reinvents yourself, we saw that they have revised sales estimates down what is next for apple >> even reports today it is bro about what the tail looks like but the trillion dollar market cap, they need to reinvent themselves on the software services side and that's where the big question is. with the repatriation for tax,
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$200 billion alone for apple, to they finally on a content side aggressively look to acquire there, do they go into content and put their hat in the ring. and that is why that is a big thing for apple, we start to look in 2019, 2020 in terms of other growth areas >> meanwhile amazon moved from shopping to content and now it is moving beyond content as well it may make a apply play in eure >> and that is something where you look at amazon trying to get further into the consumer. we saw with whole foods, i think you could start seeing on the banking side in europe i think the big thing here is them getting more into pharmacy, health care. they got to expand that sort of prime membership, expand that sort of consumer landscape and that is what bezos is doing. and so the next step, whole foods i think is just tear first
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step >> dan, great to see you happy new year we're approaching the top of the hour, so that means the team getting ready for "squawk box. andrew ross sorkin has a look at what is coming up. how were your twins on christmas? >> you know, twins had a great time sydney had her first christmas so what did you guys do? >> there was a lot of playing paw patrol my twins are slightly younger than your. >> and we'll talk a lot about retail what was the best present as told to by the young ones? >> they had asked santa for the lookout tower which is new school paw patrol andlincoln logs which is very old school toy. both were huge hits in my house. you? >> we got a switch do you know about a switch, a nintendo switch? >> no. >> it's supposed to be a -- it's like a ds meets an xbox is how
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my son describes it. so we had that and then legos. architecture are not so easy by the way. the birch khalifa is a very tall building they are really not meant for -- >> i heard you asking the play go oig head honcho like how do you get those blocks apart nothing like getting a big time executive into figure out how to take blocks apart. >> these are the real issues that our viewers are contending with anyway, a huge show. by the way, probably the biggest issue, we'll talk retail which is doing terrifically well we'll talk about whether that will keep up merry christmas a day later. >> nice to see you, andrew everybody is talking about it today. coming up, four trading days left in 2017 so make them count your investing playbook is coming up.
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joining us now, michael f r farr great to see you today we are coming offer five week winning streak for wall street tell me where you see things going this last week of trading heading in to a new year >> happy holidays. hope you had a good one too. >> it was great. >> the market has baeen -- it wa great here with palm trees even. this is the first time i've done christmas with palm trees. it is not bad. very different from the cold markets have had an amazing year up over 20% for the s&p 500, up over 30% since donald trump was elected. the trend is higher and it looks like markets will continue up, but i think investors have to know that this market is
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expensive and i think risk is building and i'm feeling -- i'm hearing those beginning strains of irrational exuberance >> where do you see risk >> i see risk any guess people who are becoming a bit too callused about the elevated levels of the market as i listened to the shows over the eekend, people were saying well with all of the tax cuts and we've had rebates and year end gifts, these $1,000 gifts from corporations going to lots of workers, it could drive prices higher. people taking their estimates for the s&p 500 much higher. people calling for 20% earnings gains for the s&p 500 this year. all of that could happen, there is this sort of bar the door, nobody worry about a down side, this thing is only going higher, so we have to by it. when you start to hear that exuberance, that is where i see
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risk so i think balance sheets matter more now than ever and when we talk to clients, we want to ask them how will you feel if you go up 20% from here and how will you feel if you go down 20% from here and the scowl that comes across the face when you say go down 20% is most telling with those clients. so if you don't think that you can go down 20%, you really need to make some very careful decisions about how your portfolio is invested. >> but when you look at the numbers, if you have $300 billion of repatriated money coming back from a handful of companies and they will use that to buy back shares, to reinvest in their companies, mergers and acquisitio acquisitions, how do you not look at it and think well, there is money on to be made here? >> i get it. i really get it. and there is if all of that happens and if it all happens the right way. but you know, we have these other things going on in north
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korea, we have a government that is still really can't get along that is really venomous in washington which is where farr miller and washington is based we could have a government shutdown in january. so i think that there are risks out there. i'm coming out later today with my top ten stocks for 2018 on the halftime report. it will be published on the cnbc blog site. so i'm going to stay fully invested but the selection of where you invest and how you even vest i think is really important. caution needs to be your watch word.invest i think is really important. caution needs to be your watch word >> if that is not a tease for half time report, i'm not sure what is. we'll tune back this have a great morning and that is it for "worldwide exchange." "squawk box" is next
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what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
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2017 rally hitting a five week winning streak, but futures slightly lower looking to pause at the open. but the crypto craze continues bitcoin bouncing back this morning. the latest ahead and police tax reform is done, so what is next on the agenda? i think a big bipartisan infrastructure thing where everybody comes together and works together is likely that is a new year's resolution. it is tuesday, december 26
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don't hold your breath "squawk box" begins right now. i'm not breathing. >> don't hold your breath. ask for mr. blue >> welcome to "squawk box. we're live at the nasdaq market site in times square a day after christmas. hope everyone had a great day. i know the sorkins did >> but we have to keep it going because it is blake's birth day. >> yes >> big birthday, too >> this is frightening 18 what an accomplished beautiful young adult.

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