i failed a viewer. >> tom has some follow-up questions why he thought he was legitimate. >> a little bit of breather in the dow. i say get ready for more volatility. it's been a smooth ride. too smooth in recent days. "closing bell" starts right now. hello, welcome to "the closing bell," everybody. i'm kelly evans from the new york stock exchange. president-elect trump's transition seem. we have the latest on who may be in and who may be out, and which cabinet positions could be named next. one controversial appointment making waves on wall street. trump's newly named chief strategist steve bannon is rolling eyes at the banks in a presentation he gave years ago. we have the details and the present impact on the financials, coming up.

>> that will make them all pay attention. facebook has announced that it has uncovered more metric mistakes, and when it krekcorre these mistakes, some brand posts could be seeing a 56% decline. could facebook simply be a place for old material? we'll look into whether the secret filings could pose a problem for investors if they can't see the latest filings. john harwood is in washington with the very latest today. john? >> bill, it's been messy so far. we saw the resignation yesterday of mike rogers, the former house intelligence chair, who quit the transition team as well as some others who had been brought in by chris christie and been demoted. the obama administration said they're going to do everything they can to ensure a smooth

transition, and vice president joe biden backed up those words today. he had lunch with mike pence. when he was asked by the press about the turmoil within the transition, whether he was worried about it, he said, not that big a deal. >> no administration is ready on day one. we weren't ready on day one. i've never met one that's ever been ready. but i'm confident on day one everything will be in good hands and they will handle anything that comes before them. >> now, we've been expecting the announcements of two big players in the cabinet. one is the treasury secretary and steve minuchin appears to be the frontrunner for that job. the other secretary of stat-- f secretary of state rudy giuliani appears to be the other one. but they came outside trump tower and said do not expect any announcements today, guys. >> all right. i was just thinking about this for a second. it seems like the rudy giuliani

potential has caused far more disruption than so far we've heard in terms of commerce or maybe treasury at this point. is it possible that he might yet look to somebody else? how final do you think this is starting to shape up here? >> it is not final, kelly, until it comes out of donald trump's mouth. we've heard other names bandied about. john bolton, who was installed as u.n. ambassador during george w. bush's nomination. a lot of this is not very transparent, so we know that giuliani has been out there, we know he has been talking about it as if he is a secretary of state in waiting, but until we hear from donald trump, while we're hearing all the reports of discord behind the scenes, i wouldn't bank on anything. >> thank you, john. >> thanks, john. >> john harwood there. new revelations about what donald trump's chief strategist

steve bannon thinks about the role of the big banks creating the financial crisis. eamon javers has more on that. >> i want to draw your attention to some comments by steve ban n bannon. it's a 24-minute speech that steve bannon, who is now a chief strategist inside the trump white house. this is a comment he made back in 2014. this is very different thinking from what we've seen in other white houses in the past. he said wall street leaders have secularized. they no longer hold christian values and they're values have become unmoored. he also said capitalism has me t t

-- metastasized and the elite forcibly took all the benefits ahead of the 2008 financial collapse. and he said, trust me, they're going to be held accountable. that's steve bannon speaking of wall street executives. the question is, what does that mean in the trump white house? obviously most presidents have advisers of all different flavors around them, and the presidency ends up being a mix of the advice he gets from all those people. but this is one perspective that will be very close to donald trump. if you draw a straight line from that to policy implications, you might think this has implications for the department of justice, particularly in terms of anti-trust enforcement and also crack-downs on corporate fraud. bannon in that speech very adamant about the fact that no one went to jail in the wake of 2008. he thought that sent a terrible signal to american voters, guys. >> of course, he'll have to work closely with jeff hengling who runs the financial position in the house, very powerful position there. he himself is working on a

revision of dodd-frank and you wonder whether he's working on those views and what we'll come up with here. >> you get a diametrically optimistic view. what kind of white house this is going to be is an open question right now. the whole speech by bannon is worth going back and reading to understand this viewpoint. but wall street needs to pay particular attention to parts of that street that reference wall street, because that's the type of thinking i don't think a lot of people are expecting to see inside the trump white house. >> thank you very much. be sure to watch neel kashkari. he'll be on ""squawk bosqua "sq" by wait, fed chair yellen testifies in congress tomorrow. >> we'll hear from her, too.

>> let's get to the closing bell exchange on this wednesday. the dow down 40 points and in danger of losing it. jeff kleintaub from charles schwab is with us today. keith bliss and rick santelli checks in from the cnt in chicago. we'll start out and he can catch up. the nasdaq has been underperforming. it's a lot of the big tech names, and i think a lot of that is regret, if you will, with some of the tech leaders speaking out against donald trump and donald trump winning. i think a lot of that was just an emotional selling pressure on those names. you're right, while they have earned all the attention, when you think about what the trump policies will do to those particular names, if he gets them all enacted with regard to

colonization and trade and growth from the fdr. the trap on that thing has been straight up since. >> and jeff, what would you advise people to do here. is it time to get more exposure fr from. >> we interviewed investors of schwab both before and after the election. 70 to 75% both times said they aren't changing their portfolio. i think the key is that the biggest sector of the global stock market, financials are, put on potentially more, and the thern. you seem to bode well.

that's good not just for financials in the u.s., but also asia and europe. >> but do you take into account the steve bannon comments that emanuel an jovers is just highlighting here, that maybe the bank will help pay for the crisis in 2008 and what that could be for the industry. >> in smoothe last eight years, hasn't exactly been smooth sailing here, either. the big issue, the mcurve being steeper. >> the u.s. dollar being at its high since 2003. >> i think the dow was moovrdve pay attention to. the dow, anywhere above 1.33. that was the close in march of 2015. that is the area that once we

take it out, and we've been above it throughout a pretty maritime . >> i can't tell you what the speed of these moves are. this woman is going to have ramifications. it doesn't matter whether you believe in technicals. many investors have taken a hard line on their positions when we get to this point. they're off sides. it's a new type of trade. and whether there's hedges or structured finance predicated on the value of the dollar holding those levels, it's all going to be retweaked a bit. a lot of this goes back to central banks as well. i know everybody wants to make a big deal and everything is half empty when it comes to the president electricity. will he make it to the nba? we ought to watch the

proceedings when he makes these comments p but ovmaybe professo in a -- >> you've been paying attention to another index that's gone crazy here lately. we were just talking about that. >> that's right, you look at the most exclusive, ar karnl, severe, and the main driver behind it is dry ships. there is a lot of reasons that's up. dry ships was halted earlier this morning after a rally closing 70% yesterday. but the maritime. what we're seeing, global trade, global economics and faith. is that holding true as it usually does, that and some things we may see in the u.s. economy bodies well going forward.

as soon as dry ships start trading in the yen, you'll try to enforce it. unfortunately, you can't find. it's almost doubled. but jeff, i kind of related on that. what happens with interest rates here. do you have to get that right in order to invest in this climate. >>. on the steeper curves, i noted it's impossible for noefbs. money going into bonds, does it prompt you to come back out and think about he can with it i's a good movement the past serl days. but individual investors have been net sellers of our

inequities. if that doesn't turn around, it could be a long drive for the stock market. >> the dow has gone down about 40. we'll perform whatever you want. they said they had been overestimating a video, and what it could do to their advertising revenue, coming up. >> we'll discuss what a confidential ipo is and how much rick it could.

welcome down with the dow down 40 points. target is rising on a quarterly earnings beat and increased four-year guidance. they also reported a smaller than expected decline in

comparable sales thanks to a strong back to school season. the ceo is increasingly confident that they plan to open smaller stores in college towns and will boost the company's image and footprint. shares of lowe's moving lower. they reported disappointing earnings. lowe's results reported losses in various projects. now to the faux pas. the social networking giant says it's been calculating metrics but not the one it uses for shares of advertisers. julia has more. julia? >> facebook revealing it overstated three metrics to brands. this doesn't impact its revenue as ad projects are not changed,

but the amount of people exposed to brand issues are up. they say this is unlikely to impact facebook's revenue at all, in part because facebook is dramatically increasing transparency, increasing third party verifications of its metrics, and creating a counsel with maritime agencies. they say, quote, they have made a very strong commitment toward transparency, but we want to make sure facebook moves toward accreditation with the independent media rating council. this certainly doesn't help facebook, but they tell us that advertisers are reacting pretty positively to facebook's efforts when it comes to that transparency. guys? >> do they have a choice? if it's the only game in town. you know, if you want to get on these platforms. until it's proven that facebook

literally is not delivering on the dollars spent and it's so much cheaper, i'm sure they just kind of say, all right. >> i think one of the key things here is facebook and google are the two main destinations for digital advertising. i don't think that's going to change. i think one of the reasons facebook isn't off diametrically, those are metrics that are not influencing their ad dollars. so there are 220 metrics total that facebook brings to brands. those are misrepresented higher. we have to see that the facebook is actually working, but it's certainly not good for their image. >> so we were going to pose the question. maybe you've already answered it whether this represents an opportunity for old media right now in the advertising space.

>> you know, it's interesting, i had a conversation with michael cassen today, and his firm consults to tons of big cmos and the ad agencies, and he said he doesn't think it's going to hurt facebook, but he does think it could help traditional television. we saw the traditional broadcasters had a great up front ad sales period this past year, and he thinks they are making a push to try to hold onto those ad dollars and say, yes, even though our ratings are what they used to be, we can guarantee that we're getting the audience for tune-in, especially when it comes to big events. but it's interesting, a lot is changing with broadcasting. we saw nfl ratings take a big hit. they're back this week in the wake of the election being over, but a lot of changes right now. >> all right, julia, thank you. interesting. julia borsten in san francisco. snapchat's parent company, meanwhile, snap, inc, has filed

one of these ipo files. they could be fined for 20 to $25 million. >> when they were signed into law in 2012, one of the goals was to make it easier for growth companies to raise public funds. under its provisions, companies under a billion dollars in r revenue can sign a form to go public on a confidential basis. >> let's talk about that, shall we? joining me with more on this and this confidential ipo process, this is henry lee and that would be one bob posani as well. so it's for these smaller companies to be able to test the waters without having to open their books up, but how many companies with revenue of less than a billion dollars? >> it tells all their competitors everything about them.

but sometimes they don't go public for whatever reason, market conditions, and their attitude is why should we do this if we have to, if we can get away with it until we absolutely know we're going public. otherwise we're at a disadvantage. if we don't go public, we've told everyone. the amazing thing about these new tech companies that are going public to me, it's just the employees. snapchat has 330 employees. think about this. a $25 billion market cap with 330 employees. take a look at baker hughes, which has a $25 billion market cap. it has 35,000 employees. kellogg has 35,000, allstate has 40,000. that's why a lot of these companies don't have the economic impact these old school companies do. >> they made the case of investing in these companies that have the fewest employees to revenue. exactly what you're saying here. he would recommend people do snapchat based on that alone. what about the revenue, though? in a way, does the company have

to go public pretty quick here before they hit that $100 million mark in order to do it confidentially? >> they're going to hit that fairly soon, apparently. this year we're talking about numbers, we're talking about the multiples against that valuation. they're going to hit 400 million this year, our sources tell us, and next year they're projected to hit about a billion. next year they hit that billion-dollar mark. i think also at the same time in general, like right now in the vc community, it's getting harder to raise money. they're still growing, they're still a young company, and that's part of the calculus as well in terms of this is probably a good time to go to the public market and get that investment. >> it's only five years old at this point. twitter used the same process but they revealed their publication when they tweeted it out. >> one other interesting issue about this, higher sbrainterest

rates may be a problem for these companies, because cheaper rates allow people to buy into them, but now with higher rates, it may not be feasible to do that. higher rates may force companies to go public because they can't get as cheap funding anymore. >> how much money are they looking to raise in snapchat? >> they are looking to raise $4 billion. >> $4 billion? >> yeah. when facebook went public the year before, it generated about 3.5, 3.7 billion this sales. they were a much more mature company before they hit the public markets. that's what i think makes snapchat, their entry, a little unusual. they also don't have a regular ad product right now. all their ad sales they're doing, they're handcut. they're sort of manually ordered, right? so if someone is picking up the phone or placing an e-mail to place an ad, they just released their ad product a month ago, and that allows them to sell

advertising on an automated basis the way facebook and google does now. that will give them the scale. the down side concern, however, is you see more ads, it might scare users away, and that's a problem twitter has had. >> i guess we're looking at a march ipo? >> yes, but a lot can change between now and then. the most fundamental determination of ipos is market conditions. if things keep moving in that direction, then definitely march. but anything can happen with market conditions between now and then. >> always goold to sd to see yo. 35 minutes left in the trading session here with the dow down 46 points, but the nasdaq continues higher today as it plays catch-up with the rest of the market. cisco and l brands posts their earnings after the bell. we take a closer look at what trump's energy policy could

mean for railroad company stocks and profits, after this. will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at open.com.

welcome back. the dow is down 52 points, but stocks are up in the hopes that

markets will be strengthening. small cap shipping was spiking over 2000%? some analysts warned that the small cap shippers may have shot up too far too fast. >> crazy moves. >> just officianados usually pay attention to that, but now we all are. >> railroad stocks also spiking since the election as well. no doubt the president-elect's campaign to bring back coal is responsible. morgan is at the most busy hub in noillinois. morgan? >> one of the things the president-elect talked about was coal.

president obserama promised to raise coal average. they are down from nearly half from a pre-recession peak of 140,000 car loads per week in 2008. so epa regulations around power generation have been a big part of that, but so is cheap natural gas and also a global glut of steel which has resulted in plant closures. even so, coal still represents about a third of overall rail volumes, 12% of revenue. all the major freight railroads have exposure, and rbc says the eastern rail has the most, about 17% and 19% of rails exclusively. so any kind of coal volumes could boost these amounts. the decline of coal was actually boosting these stocks. many who i have spoken to,

including many at the railroads, expect we'll get back to pre-recession glory days where coal is concerned. instead, when you speak to the railroads, the entire industry is bakesically doubling down on another business and that is the intermodal container business. as you see behind me, it's specifically focused on that business. coal could be a boon, but for this industry, the focus is on these other growth areas as well. guys? >> and the intermodal is when they take it for imports and exports, right, morgan? >> that's right. so you're talking about the containers basically moving around between train, truck, ship. you've got the international side, so all those containers that are coming in and out domestically, many of these containers packed with consumer goods that are moving around the country domestically.

so this is a much more consumer-oriented business versus industrial. and obviously we've seen the consumer side of the economy doing a lot better than the industrial side, so it makes sense. >> call me cynical, but it seemed too easy that we figured it out this quickly, right? it turned around that fast. >> it's just discounting. >> morgan is going to let me hang there. see you later. >> oh, i'm sorry, i couldn't hear you very well. >> that's all right. >> you know, you bring up a good point. we've got a ways to go. we've seen really what many people have called an industrial recession with industrial production down so much this year that has affected the rails. even into next year, many folks i speak to say they're expecting muted business activity and growth. so yeah, you're right, a lot of this right now, especially where trump is concerned, campaign promises and speculation that we could see a much stronger economy. >> indeed. thanks, morgan.

morgan brenner there in illinois. time now for a cnbc news update with sue herrera. >> president obama arrived in berlin, his final meeting as president. after germany, he will meet his final stop which will be peru. will rogers airport has reopened. police say lloyd dean buie likely killed michael winchester in retaliation for the attacker losing his job with southwest airlines last year. buie was later found dead in his pickup truck. senate democrats choosing charles snchumer as their minority leader. schumer announced a 10-person leadership team including elizabeth warren and bernie sanders. the swede i can academy says bob dylan is not going to go to

skomholm to pick up his nobel prize for literature. he says he wishes he could come and he's very honored, but other commitments have made that impossible. guys, there's no word on who might accept it for him, but he did say that he was extremely honored. and the academy says it's unusual they don't come and pick up the prize, but it's not unprecedented. >> is he going to do the speech? >> you mean he would write something and somebody would -- >> could be. >> maybe write a song, right? how cool would that be? >> his son is a songwriter and he plays git tthe guitar, so yo never know. we'll keep you posted. >> it's just sad he's not going to be there. i know it's his bowling night, but still, i wish he'd make the effort. thank you, sue. >> you're welcome. see you later. 26 minutes left in the trading session here. they just took that board away, but we're still down 56 points. there's a board somewhere, i know. up next, a leading trader

will tell us what he's watching into the close here. also coming up, u.s. gymnastics stars simone biles won our hearts this summer. she'll discuss what life is like after winning olympic gold. that's coming up.

shares at bank of america, capital one and fifth third bancorp was trading lower. investors should lock in gains since the election and wait for more evidence that structural regulatory changes will materialize. kelly? >> thank you, bill. i'm on the floor with steve grasso. as we have about 20 minutes left to go in the market, do you think the dow is is actuactuall to close lower or turn positive? >> i think it's healthy to see a little backfill. i don't want to overstate the fact that this is a great giveback day. >> is it earnings this morning being a little bit mixed? is it oil? is it the dollar? >> i think it's a little bit about politics for me. maybe i oversimplify it, but i do think that when you see the transition team, which is

probably totally normal, but we're for the first time hearing about it, because you have a private guy, a private businessman, becoming president of the united states, i think it's probably unusual, right? >> i'm not sure i'm following, to be honest. just the fact that there's turmoil means -- >> it turns into a little bit of turmoil, and i think the whole idea of that is going to be growth, there will be no lookbacks, it will be smooth sailing is probably put into question. >> a reality check. got it. >> but i do think look forward to that opec meeting. i think it's already in the cards. i would sell oil off, just don't get caught in that oil runoff. >> steve, thank you. 20 minutes left in the trading session with the dow down 53 approximapoints. there's plenty of drama surrounding the transition team of president-elect trump. near the center of it is his millionaire son-in-law. we'll tell you just who jared

kushner is. simone biles jumped her way to four golds. she'll tell us what life is like now. stay with "closing bell." stay tuned. help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. the medicare enrollment deadline is just a few weeks away. now is the time to find the coverage that's right for you ... at the right price. the way to do that is to explore your options. you can spend hours doing that yourself ... or you can call healthmarkets ... and let us do the legwork for you

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she's only 19 years old, but after this year's olympics in rio, she became a sensation. four gold medals, one bronze. plus her three-time world all around gymnastics championship that made simone biles america's most decorated gymnast, but it was no feat getting there. her autobiography is out, "courage to soar." she shares her ups and downs in her journey to winning gold. >> she joins us here. welcome. thanks for being here. >> thank you. >> you've been on a 36-city tour. it's about to end. you must be glad about that? >> it ended two days ago. >> no wonder the big smile on your face. by the way, with all that gold, do you pay attention to the price of gold now? >> no. i think my parents and agent do it. >> hopefully they're not going to be liquidating your medals

any time soon or something. >> i don't think so. >> one thing interesting in the book is you had a fear of the uneven bars, and you thought, maybe i'll just be a great three-event gymnast. and for anybody who has ever struggled with fear about something or not sure if they should push themselves, how did you work through that? and how do you feel about the uneven bars today? >> it's still not my favorite, but i've learned to like it, because i learned that if you don't like an event, it stresses you out and you don't want to go do it. i had to get that out of my mind because it was something i needed to work on more and more. so i did a lot of drills and got more help to have more confidence in it. >> so repetition, just to get back on the horse even if you get knocked off? >> exactly. >> there might be those who say, she's only 19 and she's written her autobiography lately. but you've lived quite the life

up to this point. we all learned about your difficult childhood. that probably gave you a lot of intesimal fortitude to do what you did, right? >> it's probably given me a lot of tenacity to do what i pursue, but that comes from my parents as well. >> there is so much pressure on athletes these days to not only get all these medals but have a zillion-start-up businesses and represent a ton of brands. how do you thuink about that portfolio going forward? >> it's an honor getting to represent everything i get to do, and when i go out there, not only am i representing my country, i'm represent mig friends, my family, anybody who has helped me get where i am. it's a blessing. >> you're only 19. you're going to train for tokyo in 2020. >> yes. >> beyond that, have you thought about what you want to do?

>> college is in there somewhere because education is very important. so college, and then i don't know. >> i figure if you're old enough to write the book, you're old enough for us to ask this following question which we love to ask people usually once they're 56 years old. if you had to look back so far, what would you say your biggest money mistake has been? a missed opportunity, something you only kind of learned along the way? is there anything that comes to mind when you think about what you might have done differently? >> just never take anything for granted because you never know if you'll have some of these opportunities again and to just have fun and embrace the moment because it also goes by so fast. >> but you said your parents and your agent are watching over the financial situation. >> yes. >> you should do that, too, you know. >> we also have like my bankers and stuff, they help me out with that, too. >> you need to pay attention to all of that as well, right? don't you think so? >> yes, but i think they've done a very good job, and my parents

owning a business now, they've always done very good jobs, so i trust them enough until i can take it over myself, because i'm still so young. >> we mentioned you've been on tour all this time. did you get a chance to vote this time around? >> i did get a chance to vote. it was pretty cool. it was very different. >> we're not going to ask, then. >> i was going to let you. >> let's just say i voted for the very first time. >> good for you. so now the next few days, you've got a couple more appearances. >> yes. >> and then you're planning to take a whole year off. what are you going to do with that? >> i'm just taking a year off from gymnastics. >> i know you won't take a year off from life, but what will that life look like? >> still doing more appearances, doing interviews, doing photo shoots, doing any other opportunities that come my way, because it involves a lot of traveling and it's hard to train 100% while doing what i'm doing. >> and you said it hasn't sunk in yet, has it?

>> i haven't had time to think about it. i'm hoping when i go home for thanksgiving, i'll be home for two weeks, it sinks in. >> i bet it will. >> thank you for joining us, simone. thank you for all you've done for our country and congratulations. >> thank you very much. we have about 12 minutes to go into the bell here. keep an eye on markets which are kind of hold be in here except for the nasdaq which are moving on the up side about 30%. the market has reacted fairly to donald trump's victory. the banks still have room to run. we'll talk about that when we come back. [vo] quickbooks introduces jeanette.

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joining us on the floor of the new york stock exchange, our friend phil. how you doing? >> good. >> good. you think there is still room to run for the dow? >> i door, because my argument s never been about the election,

it's about cash reserves if the fed raises rates. we're spending unemployment and so on. all the indicator we see thought would push the fed are now lined up. i thought one to two raises, now they're saying three to four. but you can still get some income, pay it around. >> we have seen some large moves now, everybody is repositioning. what else do you think looks attractive here? >> i think the preferreds got really hit hard. it's a nice place to hide out. at the sector level, health care has really taken it on the chin, but their demographics are disastrous. long-term play, go there. short term, the utility market has cleaned up a little bit. you can get a little more there, but i still like materials and the infrastructure looks like there's potential late next year. you can make some money there as well. >> there's been the talk, and we've been hearing this talk for a number of years, maybe the bull market for the bond market

is over, this 30-plus-year bull market. you don't think so? >> no. >> if it were over, intrasensitive stocks would be this trouble, wouldn't it? >> the reason why we said for the economy before this, these are just okay. we're getting a gdp of 2%. maybe third quarter, fourth quarter might be better, but the u.s. gdp still two, two and a quarter at best. you don't get a massive liftoff in rates. we need a real monumental shift in consumer spending to get it there. >> could we get it with any tax change that moves us just enough? >> we've got 55 for 65 and over. the gen-exers are holding us up.

to get it, you need a real paradigm shift. we just don't have it to get us there. this is not a recession environment, but it's certainly not liftoff. why would corporations spend money when they don't have a strong consumer? we have a good consumer, not a strong consumer. >> good to see you, phil. thanks. with the dow down 60 points, we'll take a break and come down to the closing countdown, right after this. medicare coverage begins october 15th and ends december 7th. so call unitedhealthcare to enroll... in a plan that could give you the benefits and stability you're looking for, an aarp medicarecomplete plan insured through unitedhealthcare. what makes it complete? it can combine medicare parts a and b, which is your hospital and doctor coverage with part d prescription drug coverage, and more, all in one simple plan

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three minutes left in the trading session with the dow down 57 points. bob posani joining me here for the closing countdown. somebody is talking to me in my ear, guys, so you might want to change that there as i'm showing the wires here. let me see the dow going back to the previous monday. it looks like we're going to break our 7-year wind streak for the nasdaq here. >> good for the banks to go down a little bit. they've gone too far too fast. >> nasdaq is down a little bit so that's playing catch-up. we've had that backup. it got to 230 for one time. now we're at the 223 range or thereabouts. 221 range. >> good news. consolidation after a move like this, very healthy.

>> or what do we make of oil? it's incredibly volatile. one day to the next, it's the tug-of-war between what opec wants to do as far as production cuts, and yet we still have record amounts of oil coming our way here. >> what's amazing is how the market still moves on endless rumors around opec, from 42 to 45 just in a 24 to 36-hour period. >> it's not like this is a liquid market, too, right? >> this is arguably the biggest commodity market in the world here that we're dealing with. >> and the index of the day, the dry ships index. >> oh, that one. >> the one that never traded. it's been halted all day aft. after a huge increase, it's had almost a double in this past year, but much of that gain has come in the last few days here. >> it's halted nasdaq could be in the exchange itself. they wanted to know what the heck is going on and they asked the company to explain that.

this is very unusual. companies halt their stock for news pending, but they rarely hold their stock. they went up in just the last few days. you're talking about multiples of moves up. a couple things happened. they had a 1 in 15 stock split a while ago, but that was before the election. the election comes out and everything moves on the upside, but not 400, 500%. that's on the realm of could you explain this? and i think nasdaq did the proper thing by simply saying, tell us what you think is going on, and after we find out and the company explains the nasdaq, presumably it will allow the company to start trading again. >> we've gone this far in the program and we have yet to mention janet yellen's speech to the company and what she might say. >> janet yellen should be extremely happy with what's going on, because despite the criticism of president-elect trump, physical stimulus is what banks have been asking for for

ages and ages. they will raise rates and move forward with the whole thing. they should be happy. >> so the win streak is over at 7 for the dow. stay tuned now for the second hour of "closing bell" with kelly evans. see you tomorrow, kelly. all right, it's a mess up there on the platform. welcome to "the closing bell," everybody, i'm kelly evans. here's how we finished on wall street today. the dow dropping 57 points. about a drop of a third of 1%. closes back below 18,900. 18,868 in the blue chips there. s&p, 2,176. the nasdaq going the other way again. in the green today, up 19

points. 5,294 is the closing earnings there. cisco trading ahead of its first quarter results. we'll bring them to you as soon as they cross. also, donald trump, who has promised to bring jobs back to america and redo the coal industry will head to the coal country of ohio coming up to find out what miners expect from the new president-elect and whether he can deliver. joining me on the panel this hour, we have cnbc market commentator and dennis burman from the wall street journal. fast money trader guy adami is with us as well. good afternoon, everybody. mike, there's a lot happening just outside the stock market today. the dow is at 2,003. >> stock markets just trying to digest the gains. some groups got a little too far ahead of themselves like the banks, they are backing off a

little bit. but it is a big question about the dollar and whether a continuing rise in the dollar is going to be viewed as a de facto global financial tightening. the merging markets are kind of seeing it that way, the oil markets holding up. it's not so much it's disrupting the capital markets activity, but that is going to be one of those questions. to me it feels a lot like early july after the big surge of the brexit selloff. then the market kind of settled down, it lulled sideways for a while. it didn't have an oomph to get to the ultimate highs. >> how are you reading it, dennis? >> oh, it's sort of a tightening mechanism, and there's the fed itself which, by all accounts, by all market accounts, they're going to be doing the same in december. it's only a matter of time. it's almost like a draft prospect of the major league baseball or the nba. he hasn't played a game yet but his skills are wonderful. the minute he starts to play, well, maybe things aren't going to go as rosy.

>> are you talking about the dollar or donald trump? >> no, i'm talking about the market's view of how great the economy is going to be in a new administration. it may well change, and it may well change for the positive, and i hope it does. but i think we're only waiting for a matter of time until something says, oh, wait, it's not going to move that quickly that fast. >> in football they say the most popular guy is the backup quarterback. the guy you have in the game is the problem, right? >> i'm going to think about that, guy. what would you do here? the nasdaq was strong today again. >> what would i do here? well, listen, the run in the banks, mike was just talking about it, the run has been historic. pete has been on top of that now for quite some time, and i think now that people are starting to take some money off the table in the banks probably makes some sense. the run in those things have been pretty interesting in a very short period of time. i thought the most interesting thing today, amongst many, was the moving target. now, we'll find out tomorrow with the walmart earnings, was

the move-in target target-specific, which i happen to think it is, or was it more broader telling about the consumer? >> target is fascinating. >> target seems to be doing a lot of things right in their company right now, and i'm interested to see what happens with walmart's numbers. not a lot different with what we're seeing at lowe's and home depot depot. my sense is you'll see it somewhere tomorrow with walmart. >> i don't think we'll see the earnings yet, but there is this idea of a fake it or make it economy, and that if everyone believes at the same time, you might be able to get growth in this economy. you might be over 2%, maybe into 3%. it's at least feasible that people might believe it and fake it to make it and it just might work. before the election, it's tracking at 3%. i do think, though, there is

more going on than just target, because kohls is up, macy's as well. you had retailers kind of left for dead. the capacity to please on the upside was there. where you're not seeing it was home depot or lowe's. >> a lot of people have been hiding out there in a sense. the fact that mortgage rates have moved up, you wonder how that plays into everything. lulu lemon had a downgrade today and there was a concern about merchandise build, but going to target, the number of shares is amazing. competition in that space is so intense. everybody seems to be trying to chase a shrinking kind of brick and mortar retail customer. so they're disciplined inventory, preserving margins. all that stuff sets the scene and if you get the slightest

whiff of consumer growth, i think the stocks can work because they did get cheap. all the ones i named got very cheap. >> interestingly, first solar is halted on news pending. some huge movers in the energy space. we were talking earlier about what's been happening on kind of the coal side. natural gas, are we now net exporters? there is some tremendous things going on here, but you wonder do solar and wind stocks get left behind. >> it's interesting, if the big rotation of the last week wasn't such a monstrous story, the move from 51 to where we are now, 33 or so, we would probably be leading shows with them. the move has been significant. you have people moving away from the opec table. you wonder, really, what's going on. is crude oil ready to make the next leg lower. i know the dollar strength hurts commodities, i get that part, but it seems to be more than just the move in the dollar. and while we're talking about the dow real quickly, six, nine

months ago, we talked about how a strengthening dow would be hurting internationals. it doesn't seem to be a whisper anymore. the strengthening dollar, though it feels good, is not good for the earnings of these multinationals. we're not going to find out this quarter but we'll find out real soon. >> cisco is out here. josh lipton has the numbers. >> they are up 61 cents. that's versus an expectation of 59 cents. 59 billion is versus expectation of 12 is.3 billion. revenue went from down 2 to down 4%. the eps of 59 cents. just turning to the products, . 7.3 billion, routing 7.2

billion. also, of course, cisco is still considered a tech bell weather so what does ceo chuck robbins have to tell us about internet spend. that call is at 4:00 p.m. eastern and we'll be on it. >> thank you, josh. be sure to check out that squawk on the street with cisco ceo robbins. >> i think it was in a tough spot coming into this report. the stock was around 2. it hasn't been as high as 34 since 2007, so you're kind of bumping up against decade highs. also the forward p.e. multiples is about as high as it's gotten in this cycle. not high, but as high as it's gotten. i don't think it was positioned for a positive reaction. >> they're down a quarter, so again, this company managed its calls, managed its company spending. it's not a growth in stock as we

perceived it even 10 years ago, it's a solid value stock at this point, especially after it ran up, i think, 15% this year. >> let's talk about that real quick. i think, listen, cisco is a great company and the last couple quarters have been very strong. i think with the yield you were getting on the dividend side with rates at historically low levels, a lot of people look to cisco for growth and yield. now yield isn't as important as rates seem to be moving highest. you take that sort of rung from the chair and you wonder, can it stand alone? i will say this. 30 or so dollars is where it bounced up against all last year and failed. we're trading around there now. it better hold basically this $30 level. i'm trying to go through the release now. i would push back and say 12.5 and 13 times forward earnings isn't cheap, it isn't expensive, so i'm curious what they say. >> i was thinking about

microsoft because i was thinking about the price it's traded and microsoft has clearly broken out after doing some important renovation. what's the analogy for cisco there? >> i don't know. i wonder if cisco is a little more like intel where it's obviously hardware, it's not as easy a transition to the subscription service type model that you might have seen with microsoft. but it's a similar situation where you have a lot more cash flow than you have growth. and you have all of a sudden a pivot toward being a yield stock which microsoft eventually did, too. yeah, they can follow that path a little bit, but intel had a much less decisive breakout than microsoft. >> let's keep in mind microsoft essentially stopped beating its head against the wall, stopped doing incredibly stupid things like buying nokia, for instance, and it sold that off. >> it can only buy nokia once. >> that was unleashed potential, that was there to be had. cisco was not as much in the offing. >> they do have competition. is that a factor, or is it simply as the internet evolves

the way people are building it out is just changing? >> obviously the white boxes that are being created by amazon and google and the like, whatever the heck that means, and maybe chuck robbins can explain that to us, there are some players to get ahold of that. i think cisco might be a leader there. >> guy, a last word before i let you go? >> my last word is brian sullivan is hosting our show for the next three days, and it's always a hoot nanny when he's here, so if you tune in for no other reason, tune in for that. >> guy, thank you for joining us. we'll let gu get ready. coming up on "fast money," brian sullivan. they start out the brand new snapchat spec tacles and see wht all the hype is about. that's at 5:00 p.m. eastern. mortgage applications are

plunging as a result of donald trump's nomination. and facebook finding more discrepancies on how it calculates metrics. we'll discuss whether it could be an opportunity for old media companies to pounce and win back advertisers. that's still ahead on "the closing bell." you're watching cnbc, first in business worldwide. what's the value of capital? 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

it might not sound like a lot, but when you're below 4% already, it is. mortgage applications' total volume fell 4% last week. real estate applications fell a sliver of a percent. there are people who can benefit given we've been at low rates for so long, but applications to purchase a home fell 6%. that might be due to uncertainty

around the election, or, again, to higher home prices or the mortgage making it just that much more expensive. we were talking to real estate developer the condo king of miami. we asked him about the rise in interest rates, and he was actually very optimistic. >> we've asked for, you know, an increase in interest rates for a long time. the interest rate changes that we're seeing, i think, are going to turn in perhaps more good changes, interest rate growth of maybe 1%, 1.5%, over the next few years. i don't think that impacts real estate. we have been at an almost fictitiously low interest rate environment. i actually think banks would welcome an increase in interest rates, and i don't think it will have a negative impact. >> now, you have to remember that a lot of the buyers here in miami, which is a very international city, buy in all cash. not a lot of them are using mortgages. so not quite the impact we would see in the rest of the country,

so, again, he's very bullish on the miami market and we're standing in one of his brand new condo hotels opening up this week. kelly? >> i was just going to ask. stay with us, diana, if you would. we're going to talk more about where mortgages and the housing market are headed with fred glick, who joins us again. he's ceo of u.s. mortgage and a licensed real estate broker. fred, my hypothesis, if people really thought rates would move up, it might spur more home buying. >> yes and no. i don't really think the mortgage rates are going to have a heck of a lot of difference with people if they're going to look to buy a house. there are a lot of solutions that people can have. a lot of people don't realize if the seller pays your points on a mortgage, you get to deduct the points. so it's like the best tax deduction ever, and now it will probably get reinvigorated because people freak out it went up a few bucks a month. but if they still to want buy a house, i think they're still going to go out there and look for one. >> fred, if there isn't that

much sensitivity, in your view, to the stated mortgage rate, what are the swing factors here? it has seemed for a while now you had all the ingredients in place for the housing market to maybe accelerate a little more than it has, but it seems like it's been two steps forward, one step back. is there anything in particular holding it back? >> well, again, it's all -- for the 40 millionth time on the air, it's jobs, jobs, jobs. things have been plateauing for a little bit and i think they were creeping a tiny bit down. after the election it's a roll the dice, who knows what's going to happen. but i'm looking a little bit down the future. what's being talked about is a jobs bill that would help us build infrastructure, and that's great, but they're only temporary jobs. and yes, you're going to spur a few jobs out of those. but also the regulation rewrite from dodd-frank and maybe the absolute turmoil in the cfpb. what you're going to see is the

nodox may be creeping back. once that happens, we give in to a fresh new mentality. >> i don't agree that's coming back at all. you're not going to see the nodocs loans. they'll be less afraid of the pushbacks, they'll be less afraid of the lawsuits, but there is no learned out there who is going to say, i'm going to give a vallone nloan nowaday what happened last time. for a very small slice of the market. >> it depends who ends up running the cfpb and what they want them to do and the rewrite of dodd-frank. >> from fred's perspective, i think he raises a good point. if we can get economic growth in this country, the rate should be

somewhat incidental to what's happening out there. changes in the cfpb strike me as being pretty incidental to the main question at hand. if we can get that growth, great, mortgages will be good. that's when i got to my previous point, can this last and is it sustainable? >> you're saying, too, about the cash sales. that was such a big piece of this a couple years ago, and the first timeshare of home buyers was very low. are we seeing that now many years on, or are some conditions still the same? >> you're definitely seeing the all-cash buyer move out of the market. that was the market that came out right after the housing crash. now you're actually seeing more investors using loans to buy homes. really, when you talk about the mortgage market increasing, we need to see it loosen up a little bit. i don't think you'll see those nodoc loans again. a lot of them are illegal. it's not going to go back to wait it was during the housing boom, and nobody wants it to go

back to that because we all know what happened even if memories are short. what's really important to this market is not just jobs, jobs, jobs, but income growth, so people feel more secure about getting out of that expensive rental and getting into a home and feeling also that a home is a really good investment. that they put more into it and they'll get more out of it. >> fred, final word here. just because we have seen mortgage applications take a dive, why wouldn't you read anything into that? it looks like there has been some effect. >> yeah, there has. people get fixated on, i have to have this interest rate, when they don't look at the actual monthly payment. if the rate went up an eighth or a quarter, they're still saving 200 instead of 250. it's a mental block people have. i think it will relax itself. i think we talked in the last segment about brexit. there is sort of a weird brexit effect from the election. it will all calm down. we'll be dealing in a month with what the actual numbers are, and things will get better, i think.

>> i like the focus on jobs and income. fred glick there talking about what's really happening in the housing market. most people just know him as donald trump's son-in-law, but coming up we'll take a closer look at gary kirschner and why and how he's become one of trump's most trusted advisers. the biggest threat to humanity. why is he partnering with microsoft to expand ai research? that's next on "the closing bell." ♪ is it a force of nature? or a sales event? the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event. (bing)

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welcome back. we begin about an earnings alert on l brands. courtney has their earnings. courtney? >> they work for victoria's secret and bath and body works. bath and body work komps up 7%. the earnings for the quarter did get to 42 cents and we were looking for 40 cents. that all important holiday quarter, the earnings they're giving us is a little bit below l brands' expectation. they do have a history of being fairly conservative, so it's possible they could come in above, but those are the numbers they're giving us right now. >> shares down about 4%. >> they've been under huge pressure. this is a company going from double digit annual earnings

gains to a decline this year, only expect moderate gains next year. also still not cheap, like it never usually is, it's expensive for retail. >> i know they said victoria's secret wasn't that popular with millennials or something. president-elect donald trump sneaking out of trump tower last night to eat dinner with his family. the press wasn't too happy about it. he did make diners at the 21 club happy, though, by promising to lower their taxes. he didn't bring the press to dinner, but he did bring his family, including son-in-law gary kirschner who has become one of trump's most trusted advisers. robert is here to explain who kirschner is and why he has so much sway, robert. >> more and more sway. he's the harvard-educated sicio

who is now one of his most trusted advisers. he went from brooklyn to manhattan, buying up apartment buildings. they made $7 billion in deals just in the last nine years alone. he's worked hard to restore the family name. his father charles was one of the biggest donors to hillary clinton's 2000 senate campaign and many other races. in 2002, kushner did 18 months in prison for making illegal campaign contributions. jared bought his own newspaper. while kushner was a central force in the trump campaign, his influence has continued to grow in the transition with some crediting him for the removal of chris christie and mike rogers. people close to kushner tells me

he has been, quote, energized by the process, and he has loved traveling and he may continue to advise the president. of course, the anti-nepotism rule will keep in-laws from officially serving in the white house. >> in-laws. >> any relative whatsoever. >> what do you guys think about the role gary kushner could play? >> what, if anything, do we know about policy interpretations or what substance and guidance he might give to the incoming president, beyond personnel and beyond just kind of look and feel? >> his family was one of the largest democratic donors in new jersey. i think, like trump, he's been a pragmatist who has been commercially oriented, so you're absolutely right. we do know that he favors technology, and to have a younger person there whose technology focus is friendly. so to help bring in some other

people that are younger, more tech savvy, would help. >> didn't he write or have a big influence on the israel speech? >> absolutely. he comes from an orthodox family, so he'll bring that sensibility. you're absolutely right, nobody knows, because this has been a family business. the campaign was an extended family business, but it's still a very close family. >> the thing that comes to my mind is nothing to do about him, it's to do about interest rates. interest rates, obviously, we know are moving. we can probably expect them to move in 2017. >> i'm excited to see how you'll relate this back to gary kush ne sflrks. >> it abo's about borrowed mone and the question the media has to ask is for people who have so much at stake with their business interests. >> a big commercial developer close to donald trump, and i said to him, higher rates are bad for your business, and he said bring them on. do you think we haven't ridden out these cycles time and time

again? it's good for the economy. >> he more or less relies on rents in manhattan, so people who buy apartments and pay rents in manhattan will have more money in their pockets because of tax breaks. the tax breaks will be really good, at least for jared kushner's interstate. not so great on the interstate side. >> you guys will be all over it, right? time now for a cnbc news update with sue herrera. sue? >> msnbc reporting south carolina governor nicki haley is under consideration for secretary of state in the trump administration. trump has spent the last several days reaching out to political figures who actually opposed him in the republican primary to now fill major positions. rouhani says his company remains committed to a landmark

nuclear deal in an election. on state tv he said the world is not controlled by the willpower of an individual or entity. they've captured four isis voters in eastern mosul. they surrendered after fierce fighting in the city. backed by u.s. air support, they began the offensive to retake mosul about a month ago. for decades, a job at labatt's, one of canada's two majorbreweries, came with a perk: beer for life. the president of the company said it would turn off the beer tap for the next two years. >> first they came for the collid clydesdales, then they came for the labatt's. >> they say you can't mess with

the benefits. does that go for beer? >> how much is it going to cost them to give them free beer for life if they've worked for the company their entire life? just a thought. >> see if they change their mind. maybe under pressure not to. thank you, sue. >> you're welcome, kelly. see you tomorrow. >> see you tomorrow. donald trump promising to end the so-called war on coal and bring those energy jobs back to america. coming up, we'll head to coal country to find out if it's a realistic goal. we'll be back in a minute. are moving to cities every year. at pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim

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welcome back. the dow broke its winning streak. today it dropped 55 points to close at 18,868. the s&p was at 2,176. the nasdaq closed in the green at 1864. donald trump vows to restore coal to its former glory and return to clean coal. contessa is there to talk about what the people want. contessa? >> this is what a busy around

the clock coal company looks like, the trucks and trains bringing coal in from the surrounding hillsides, loading it onto barges and sending it to power plants around the world. the industry has lost 30,000 jobs in the last five years, but donald trump's election victory is giving coal country a real shot of optimism. >> it's bringing in new hope to the area. it's making people happy and hopeful, and hopefully it does come back, and if the whole industry comes back. >> trump campaigned hard here. he promised to bring back coal, in his words, big league. locals take him at his word. >> i think it's important that they're not going to shut them down, hopefully. i don't know what's going to happen. nobody really does for sure. you have the epa, you have this, that, you know. but hopefully we'll keep jobs around here. >> though the natural gas boom and declining international demand has hurt coal, folks

around here blame barack obama's environmental rules and regulations first and foremost. what they expect is that environmental regulation will be the top of donald trump's chopping block, kelly. >> contessa, stay with us. this is such a tough one, because obviously there is huge hope in some of these areas for anybody to just come in and say, you know, i value what you're doing, your lives, your work, i'm going to try to give you a shot. it's just a tall order. >> it's about rewarding someone paying attention who at least want to halt deathe decline. let's make no mistake, a very long halt of the decline. what i find interesting, though, is the coal stocks exchange traded fund is up 110% this year, all before the election. because it's been down so much in the prior five years. the market is saying there is some life in the industry even if it's declining. >> clean coal, that's a real deal move. that's not just sort of like a green wash kind of effort. that could be one way, if they get the right investment,

perhaps, dennis. >> let's not forget the u.s. coal companies are actually exporting to germany, of all places, because they're trying to get rid of their nukes. no politician can outrun the laws of economics, and if i'm running a power plant and i can get gas for under $3, i don't want to go to the expense of putting coal in my plant. >> if you double coal in this country, i think that's 50,000 or 60,000 coal miners, that's that many more jobs. >> better than losing jobs in those areas. environmental regulations and all these different forces are affecting coal, but what about the economics of natural gas being cheaper these days? >> ceo murray rogers of murray energy says donald trump could open up 20 ports to li kwur iri

natural gas. you mentioned clean coal. right behind me you can see the steam coming out of this coal plant. the one before it was just shut down a few months ago. the one behind it is a clean coal plant. so what murray energy does is ship its cola cross the river to clean coal, and they've started the business where they're storing coal ash for its customers. it's one way to expand the business. >> wow. contessa, thank you for joining us. i appreciate you joining us from ohio. we have a news alert on first solar in the meantime. what's happening? >> first solar shares are taking a hit. they're currently down 111%. they were down as much as 15%, this after a trading at for news was lifted. they have offered now a new financial guidance. in that guidance they say that 2,017 revenues are seeing

between $2.5 billion. analysts were looking for about $2.98 billion. shares for 2017 break even to 50 cents a share. analysts are looking for $1.94, hence the big move. they've also announced certain construction charges, also jobs cut as a result of some of these. those are some of the headlines moving this particular stock lower. we know fire lor a lot of these energy companies, since this election we've seen some solar names take a hit. that's not good. back over to you. >> definitely a lot more cautious environment for a lot of these companies. >> definitely. if the amount of subsidies wasn't looking good, they certainly aren't now. >> for solar they're down nearly 11% after hours. we also have a news alert for

amgen. meg? >> relief for people who suffer from migraines. amgen reporting results of a stage 4 trial. it's an experimental drug for migraines. it's developing this along with novartus, saying in a statement the drug met the primary goal in the study of reducing the number of migraine days per month that people are facing. amgen really unchanging right now. this is one of many studies pending approval looking to potentially file for approval with the fda next year, guys. back to you. >> meg, i'm not as familiar. how important is it to get migraine treatments at this point. are there good ones out there? >> what you hear is there aren't a lot of good ones out there right now. if you look at those numbers, or 15 migraine days a month. i believe episotic migraines are only 10 migraines per month.

>> good news, perhaps, for people suffering from that. thank you, meg. facebook is under fire again. now it's miscalculated page views. will there be some old media gain? that's next. and oil prices have crushed venezuela's currency. that's coming up. you're watching cnbc, first in business worldwide. ♪ ♪ ♪ how else do you think he gets around so fast? take the reins this holiday and get the mercedes-benz you've always wanted during the winter event. now lease the 2017 gle350 for $579 a month at your local mercedes-benz dealer.

welcome back. facebook down today after reporting it's been miscalculating its metrics. the measurements are significant. for example, the measure of how many people were exposed to brands post over a month will be as much as 55% lower. it comes after fake news being circulated on social media leading up to the election. >> mike, you've been giving this some thought. what do you think? >> i have, and i think it's maybe signalling or reading between the lines here how the growth of the facebook platform -- nobody will say it's truly going to slow down. clearly they're winning the war for eyeball hours, but is it as perfectly targetable a platform as we were led to believe? has the media had something going for it in terms of measurement? and also the "i guess s" integry

of the product. >> there's been some talk after the election of people saying perhaps i should have been subscribing. >> i think there is some value of real, reportable news from a verifiable and trustworthy source. we certainly take pride in that at the wall street journal. this company still made $330 billion. we can quibble about its metrics. >> you can see the performance from the "new york times." >> facebook got caught up in a lot of -- but facebook weaker than the others such as amazon, alpha-bit. they're not seen as the new kids under the current administration. again, just that idea -- they had this perfect story of how essentially they're giving people only the information that they have proven that they want

and that it was nothing more than growth. but also the promise to advertisers that you're wasting less money. >> since they can target so well, are they gig people the option to exclude certain demographic groups. there was a policy to exclude by race, and inc. my prediction, kelly, is that before too long, whether it's trump or not, that the society, via laws, will try to rein in some of this power. it's only inevitable. >> i would also point out from an investment point of view, it gives investors one under way to play. in a way you know what was on social media is kind of crap.

. >> right now google, facebook are regulated by the ftc. >> you're right, that could be a dramatic change. certainly something to watch. venezuela's economy has been in dire straits. . ja reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪

welcome back. venezuela is a country of only 30 million people. but its economic turmoil is affecting u.s. companies in a major way. eric chemi is here with that story. >> thank you, kelly. venezuela's economic implosion isn't just staying local. it's another big factor wearing

on u.s. corporate earnings. 13% have mentioned venezuela filing this year. we went through every single 10q filing to find some start willing performance facts. kellogg,mond lazy, 3 mm, kimberly clark, colgate. pepsi at the top of the list. mentioning the country over 1,000 times. its written down over $1 billion and is one of at least ten firms removing any income from venezuela on future financial statements. its rival, coke, have written down $132 million. but they can't find any sugar. so it's had to get creative, focusing more on pushing its sugar-free coke products. kellogg lost about 10 cents per share just from venezuela alone. consumer staples have been the hardest hit with 30% of companies in each sector

describing problems there. and finally, this is the most startling stat. if you took the 64 companies that mention venezuela and put them in one portfolio basket, you would have lost 37% relative to the s&p 500, most in the last couple years. just that one factor, if you said, if somebody mentions venezuela, i want them out of my portfolio, you could have gained an extra 37%. >> some creative ways of dealing with the sugar shortages, as you mentioned. i guess the hope, it's gotten so bad, maybe it can't get any worse. maybe they'll start to turn a corner, including these companies which i guess have written down the operation. >> some do the write-downs and still suffering losses after the fact. it's not necessarily a one-time thing if they don't do it properly the first time. >> i guess i wonder -- first of all, shows you the limits of even a tremendous company's influence to try and have a work-around. only 30 million people? that's almost as big as canada. >> almost as big as california. >> yeah and it would be a big deal if california went offline. >> exactly.

and you realize how multinational all these companies are. so a lot of -- it's either a sugar problem or sales problem o the money is stuck, though they can still operate the business. a variety of problems that come up. >> it reminds me of the globalization, too. you can be -- i'm assuming pem see's market share must be bigger than coke's. you're going in and winning some of these markets and end up losing as a result. >> i like contemplating the object verse of this problem. let's say there is tax reform in 2017 and multinationals can bring their stranded cash back to the u.s. it's going to be fascinating to see what they choose to bring and what they choose not to. >> >> do you think the decision to expand overseas is because they feel like it's more economical than expanding at home? >> you know, you go where the growth is. as we know, the u.s. and western europe is pretty much a low to no-growth world. so you're expanding in southeast asia and asia and for a time, latin america and south america. >> and we mentioned the consumer staples companies. a whole bunch of sectors. >> energy, for example.

halliburton, they have been a big company that's been hit because they provide energy services to effectively the state oil operation. without getting paid on over $100 million. eric, thank you. something to keep an eye on. elon musk may be singing a different tune when it comes to artificial intelligence. one of his startups teaming with microsoft and the development of ai. those details, next. i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out

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welcome back. elon musk's nonprofit artificial intelligence company open ai is teaming up with one of the country's biggest tech companies, microsoft's flagship cloud service assigned an agreement to run most of open ai's experiments. it also plans on working with the company to advance research in the field. the nonprofit was created last december and says its purpose is creating ai that augments human capabilities. musk has long expressed concerns over the future of ai and its threat to humanity. i remember he was on the show once talking about it. you would think sort of technologists like himself would embrace all of these trends but on this one more aware. >> he has. maybe it's because he's in the habit of thinking so many steps ahead. he thinks this is going to go in a not good place and that's why his backup plan is everybody

goes to mars. >> or works for microsoft. so that partnership -- did that strike you as interesting? >> i don't think this is meaningful really at all. they may have some partnership. but each of these companies is going to be husbanding its really resources for ai. i agree with elon in this way. we think jobs are an issue in this country right now. just wait until ai and automation truly take over? >> are you on the bandwagon too? >> do you understand? do you understand what's going to happen to this country? >> yeah, it's going to replace a lot of jobs people currently have, and i have faith they will have new jobs. >> and what might those jobs be? >> you never know. >> you would have said 200 years ago i would have a job like this? >> when i was at barrons in the late '90s, we did a cover story called the disappearing secretary. voicemail was sweeping across america. maybe it's going to be more dramatic and have a greater depth in terms of cutting into, you know, high-skill jobs. but i don't know. >> i use this example. there are 6 million truck drivers in the united states. 15 years from now, how many will

be employed? 10% of them? >> maybe 10%. and listen, we've had actually a lot of people express their concern about what happens to employment. and i totally get it. and if they need, you know, support in the near-term, fine. my point is, fundamentally, you're supposed to continue to upgrade technology and replace people's current jobs with better ones. >> i would argue, in the future, the gains will go to a very small group of individuals and companies. amazon, microsoft -- >> amazon didn't even exist 25 years ago. >> the gains they're building from their investments are going to accrue. than to the regular -- >> the broader concern isn't the gains will go to few companies, but the gains go to very few people. >> agreed. >> we're supposed to be checking on cisco here. >> don't worry about this ai partnership. >> checking on cisco whose conference call started at 4:30. down about 4% after earnings. is this going to be a drag on the nasdaq tomorrow? >> could be. the dow, as well, potentially. i think it should be -- look, it's $1.27, only going back to where it was several weeks ago. i don't think it's a disaster.

but you do want to hear what's on the call, plus the morning. >> in a word, dennis? >> when secretary of state nikki haley is named. >> you had to drop that in there. >> this is a report from nbc. we have no idea what will happen yet. >> short term rates. that's the important thing to look at. dennis, mike, thank you guys so much. >> "fast money" begins now. yes, it does, kelly. live from times square, brian sullivan in for melissa lee. welcome to the aforementioned "fast money." your traders are pete, golden gopher that jairian. dan quaker nathan and guy number one, because you're older, not because you're better adami. tonight on "fast money," shares of cisco shrinking after hours. the stock reported their numbers. we're going to hear from the ceo on what drove the quarter and what's ahead. plus, president-elect donald trump promising to cut taxes. so our traders show you how to make even more money from your tax cut. and