my favorite story of the day. the panda's born in the usa. they don't understand mandarin. >> conflicting reports about whether they were scheduled to be returned to china or that was never going to happen. some people have taken credit. inside joke. the guy's name is marlin per kins from mutual of omaha. >> closing bell starts right now. hi, everybody. welcome to the closing bell on this friday. i'm kelly evans at the new york stock exchange. >> and i'm mike santoli, i know who marlin pranen? i used to know who he is anyway. >> you want to share? >> a wieldeilderness tv guy. >> we hope bill is home having

chicken soup. >> president-elect trump making his big administration nominations and announcing his picks for national security adviser, attorney general nca director today. we have all the details. >> meanwhile, stocks are giving back their early gains today, but it's been quite a week for the bulls with stock inflow levels not seen in nearly two years. we'll discuss whether the record trump rally has come too far too fast. >> trump has promised to roll back regulations but would that eliminate rules? >> we begin with the president-elect's new leadership appointments. john harwood has the very latest. >> kelly, we've got some action today on the transition front. three hardline appointments by president-elect donald trump. first of all, jeff sessions, the senator from alabama, to be the attorney general of the united states. jeff sessions is someone who was -- his views on race were

too controversial. he was blocked a judge in the 1980s. he's a staunch foe of legal and tangled with big tech companies over visas. then mike pompeo, tea party congressman from the state of kansas. somebody who has proposed a very provocative step -- stance against radical islam. then you had as the national security advisor to the president, michael flynn, the retired lieutenant general. another provok ticative foe of radical islam. the rest of the national security team has yet to be filled out. we're going to see the secretary of state some time in the next couple of weeks. we have the front-runner is rude giuliani, former mayor of new york city, but mitt romney, sharp critic of donald trump is

going to meet with him over the weekend. that's considered a long shot possibility. and then finally secretary of defense where there's an array of options for president-elect trump including the more establishment types like steve hadley, the national security adviser to president george w. bush plus people like kelly ayotte who was defeated in the most recent election. we have movement on the cabinet front today. a lot of time left for this president to fill out his team about the early indications today are hardline. we'll see what the next ones are. >> i know you're saying hardline, but this was the central issue of his campaign. hard to see him choosing something that didn't represent that. >> well, presidents can go in all different sort of directions. this does vindicate and hold true to his supporters on the issue of confronting isis as well as the issue of immigration. but there are all sorts of ways to express that. and i have to say, even if you pick a hard-liner consistent

with your views, that doesn't mean that the policies you ultimately implement might not go in another direction. we've already seen, of course, that donald trump has heard other republicans tell him maybe it's not a wall across the entire southern border of the united states. maybe we're not going to deport all 11 million undocumented immigrants. that is one indication of a softening. personnel doesn't indicate that, but we'll see what the policies are. >> so -- and john you mentioned hard edge, does this just all assume that there's going to be no resistance in the senate to approval for those who need ratification here? >> no, i do not think there will be no resistance. i would expect mike pompeo to be confirmed as cia director. he's someone who was drawing praise from both sides of the aisle. notwithstanding the substance of his view, somebody who is smart, has a temperate volatility. michael flynn does not require

senate approval. i do think jeff sessions will get scrutiny from the senate. the senate blocked his appointment as a federal judge under ronald reagan in the '80s back when marlin perkins was still on del vision. in fact, chuck schumer says even though i'm a friend of sessions, we worked out together in the gym, he's not good to be exempt from tough questioning and the civil rights issue, the civil rights division will be a major focus of that questioning. >> all right, john. thanks very much. john harwood. meanwhile, the great fund rotation, out of bonds and into stocks. people have been talking about this for years. it seems to have come. but is this necessarily a good thing. bob pisani is elsewhere on the floor. >> take a look, first off, new highs on all the major indices, but that russell 2000 has

outperformed 10%. the small caps would benefit more. we've been talking about the fund flows, this is from lipper, take a look. huge numbers, into equity funds, look where it came from, effs $27 billion in inflows, mutual fund outflows. what does it mean? it means that investors are putting money into stocks but specifically into low cost mostly index exchange trade funds. etfs continue to win. investors are still dumping bond funds, doesn't matter if they're etfs or mutual funds. there were outflows from bond funds, etfs and mutual funds. seven trading days we've seen $39.4 billion go into equity funds, etfs, that's the largest seven-day inflow that is on record. here's one bit of caution, mike and kelly. a lot of people say this is

because the retail investor is back. that may or may not be true. etfs are widely used by international investors right now. individual investors tend to be a little bit late to these kinds of investment swings when they happen rather suddenly. so it's not clear all this is retail flow at all. a good part could be simply professional i mean hedge fund types that are simply moving money around right now. >> an efficient way to change their exposure to the market. within those etf flows, people have really chased the financials. a tremendous level of flows into the bank related funds. >> that's right. materials, financials and industrials have seen inflows and outflows from, for example, precious metal funds and emerging market funds. that's one of the reasons goldman sachs said next year we could see a small move in the stock market, maybe a 1% move because you get all this rotation going on and the

overall effect on the market, the big indices is fairly small. >> you have the opposing currents working against each other. sticking with the markets, let's get to our closing bell exchange. michael underhill and steve grasso and cnbc jack ver rougian. the really violent rotation we've seen from safe to riskier stocks, does the market have this right in your estimation? >> now it does. remember, before the election, it did not. in fact, none of us had it right. remember what happened. last tuesday change the entire complexion of the market. many of us, and i throw myself into the school went from wanting to sell rallies and being very defensive to buying dips. now we've had a lot of money on the sideline, a lot of money that was not committed to the market. so this first phase is really

capitulation, if you think about it. you've seen the money that's been oen that sideline waiting to get put to work. a lot is professional. now the capitulation trade is usually follow by the conviction trade. that's probably what we're going to see at the beginning of the year. this is a brave new world when we've got all three sides of congress now pretty much between congress and the presidency, this is exactly what it felt like when ronald reagan came into office. and i was there, so i remember exactly what that felt like. there is much to be optimistic about now, more so than ever before. i said a year ago when i got very defensive, i'll tell you the green light was back there. it's back on right now. >> let me follow real quick i on that. when you were trading when ronald reagan came to office, was everyone saying this is just like when eisenhower got in. that's what we hear now, everyone thks it's a rerun of three decades before. >> they were using the jfk analogy when jfk lowered

interest rates or lowered the income taxes. >> taxes, yeah. >> and everybody started to see real growth. that's really what we saw under reagan. might take a year or two. but once we saw that, 4%, 5% growth. you could see a dow at 22, 23,000 within a year. >> michael -- steve grasso, i should say, sitting over there, today we had new highs in the nasdaq at least intraday. everything else has made its levels. so hearing everything that jack was just saying, how do you expect markets to continue with all these inflows to handle and maybe attempt to continue to set new highs? >> if you're coming out of bonds, the natural progression is you go into equities, but when you see that truck trade, the industrials, the materials, biotech and the financials, financials to me have limited up side from here. now they could still move higher, kelly, but for me you're

banking on all regulation coming off. i don't think that's going to happen. what you can also say is that regionals have the best chance. that's why the kre is actually outperforming the xlf. they have the best chance to get the most regulation off the sheets for them. that's why they're outperforming. but i would be a seller of this pop in financials. i would be a seller of the pop in biotech. that's a bipartisan issue. and to michael's point, i think the brackets for federal income tax, personal income tax was 68 when ren ronald reagan came in, he slashed those in half. we won't see the huge effect that we saw when reagan came into office. but there's a tremendous tail wind when you look at what's being put back into the consumer's pockets with a trump election. >> what do you do as an asset allocator when you see this level of apparent conviction on policies that we don't really know the outlines of yet. do you follow along? does it seem to make sense to

you? >> when i take a look at what's going on in the market, you have fundamentals and you have technicals. you see the yield curve steepening, yields on bonds and major moves in the last nine to ten days. you see a steepening of the yield curve, bond markets blowing out. you are seeing a rotation not only to industrials and technicals but you're seeing is fundamental materials and energy and names like u.s. steel. you're seeing stocks like that that are benefiting from not only the potential infrastructure stimulus package but also some of the pickup on a global economic level. i think of things like materials, metals, even with timber and housing. you will start to see slow and steady housing increases as we've printed some positive numbers earlier this week. >> housing starts were great. i just wanted to go back to you, jack, on the u.s. dollar which

is the dollar index right now. what happens from here? are you concerned about that at all? >> a little bit. the velocity of the move in the dollar is the one thing i worry about because you can see this inflationary pressure start to pick up. that will tie the fed's hands. what we're doing and what the market has been doing ever since the election is celebrating the death of liberal economic elitism. it's one of the things i've been talking about with rick santelli about. understand that what we are doing right now is repricing and reshaping what the next five years are going to look like. when you start to free up capital and you go back to it, we're talking about taking the corporate tax rate and repatriating trillions of dollar. these are the things that are going to drive equity prices significantly higher once they hit. >> when do you start selling the likely outcome of this whole paradigm shift? a couple of cabinet announcements? wait the first couple years and

see how that shakes out? how long do you gibb this hope rally? >> if we don't see the types of policies that i see as pro growth that larry kudlow has been talking about time and time again, if we don't see that in this with both houses of congress. it could be a monster bull run. >> we'll mention that in months, not years. thanks to you, michael and steve. we do have red arrows across the board. the s&p is down 4 1/2 and the nasdaq down 11. >> a former acting attorney general under george herbert walker bush gives us his reaction to jeff sessions to the post. also ahead the fake news backlash may unleash a change in media ownership rules. priming shares is of old media stocks for more gains. a traditional media analyst will

weigh in on which companies could be consolidation candidates.

welcome back. take a look at shares of some of our favorite 90s retailers. abercrombie & fitch down. and gap down 15%. as of late yesterday gap reported earnings. imagine its preannouncement numbers as gross margin improve. but traffic continued to deteriorate into november and analysts say margin pressures into the first half of next year due to investment spending also sending downgrading gap shares to sell from neutral noting the

retailers continued to struggle to regain customers. >> the nomination of jeff sessions as attorney general. sessions has served in the senate for 18 years. before that he was the alabama attorney general. he's known to be hawkish on spending, tough on immigration and no fan of wall street. >> joining us acting ag under george h.w. bush. welcome. >> thank you. >> what can you tell us about jeff sessions? >> well, i think jeff is a wul selection. i was privileged to have jeff as a colleague and subsequently we became friends over the years when we served together in the justice department. and it's great to have someone whose steeped in the tradition and knowledgeable of the culture of the justice department to be at the helm. >> and i guess what would you anticipate knowing him, knowing his policy leanings would be his priorities in this role? >> well, i think what's very

clear is that the priorities for an attorney general sessions will be the priorities for president-elect trump. and i think the president-elect has made very clear that he is focused with laser-like quality on improving the u.s. economy and improving growth. and, of course, that's going to be good for business. the justice department does play a role in that in a variety of ways, but not the least of which is in reducing the burdens of overzealous enforcement, using criminal law as a tool of business regulation. we've basically created an administrative state at the federal level that makes economic growth difficult because the process is sclerotic. >> i wonder he's going to have some issues with his background, the times, the post and other papers are reporting what happened in the '80s. when he comes up this time around for nomination and otherwise, do you expect him to

be able to make it through that process and how much might those concerns dog the beginning of what he wants to accomplish there? >> well, kelly, i think that's just entirely outlandish political posturing at this point. these were the product of some off-hand remarks that were made some 30 years ago. they were thoroughly looked at 30 years ago. i think the american people will see anybody who brings that up now and tries seriously to use that to attack senator sessions as the political ploy that it is. i don't think he'll have any trouble getting through the process and being confirmed. >> even if he does get through the process, as you say, clearly, the senate majority is from his party. probably is not likely to be an issue if it gets out of the committee. however, what is the appointment from president-elect trump tell you about his willingness to sort of put some controversial candidates out there? he's clearly not attempting to

mollify opponents with some of these choices. >> well, i don't think any president can afford to make decisions to simply mollify opponents. to me, it looks like he's trying to put people with the best level of experience whom he knows and has a reason to trust and who are on his team into these positions. and i think critics, you know, will attack this at their peril. because the people know that jeff is a quality person with the requisite experience and, yes, he has principled beliefs on a number of controversial subjects. but even his colleagues on the democratic side in the senate recognize that those beliefs are indeed principled. >> the current ag loretta lynch and fbi director james comey have become embroiled in this hillary clinton e-mails problem. does that just go away once this all turns over? >> that's hard to say.

i don't know whether there's really any substance left there to be looked at. it is disturbing, as senator sessions, i believe, has noted, that the fbi was never given the power or the authority of a federal grand jury to assist in that investigation. but whether there's anything there or anything else involving former secretary clinton that deserves investigation remains to be seen. i think it is very important and one of the challenges senator sessions will face when confirmed is to restore public confidence that the workings of the justice department are being undertaken for substantive reasons, not political reasons. and i'm sorry to say that this administration has largely failed at that, particularly recently. >> george terwilliger who was acting ag under george bush, thank you for joining us this afternoon. >> thanks for having me. >> a news alert on trump

university. let's get to sue herera. >> we had heard rumors of this earlier this afternoon. now reuters citing sources says that trump university has agreed to settle the civil fraud lawsuit for $25 million. that's a little bit higher than the rumors that we were hearing earlier today. that's according to a source quoted by reuters who is familiar with the situation. the new york attorney general will recover $4 million in terms of that portion of the $25 million trump university settlement. and the law firms representing students in trump's university case will not seek attorneys' fees. they will only try and recoup the costs of the litigation. mike, back to you. >> all right, sue, thanks very much. so that was going to be perhaps a court date for the president-elect. >> right. but he's not a guy to settle. so that's what's so interesting the fact that this suit, they've chosen to settle it. obviously a huge issue going into the new term, but a change we would probably have seen

otherwise. >> no doubt about that. he went this long and if he hadn't gotten elected probably would have kept going. the dow, s&p and nasdaq holding on to slim gains. although the russell 2000 which you don't see there, is in the green. that would be the 11th straight winning day. very rare going back more an a decade. >> the stronger u.s. dollar may be great for u.s. tourists traveling abroad but for american companies doing business overseas maybe not so much. we'll run through the list of u.s. companies that stand to lose the most. >> also ahead old media stocks have shot up since the election. ironically they could have more room to run thanks in part to all the fake news that erupted during the election. alpha seems more elusive today. is it because so many go after it the same way? chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way,

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shares of under armour under pressure today. it follows comments by foot locker during the conference call. the ceo made positive comments about underarmour and the steph curry model shoes although he made a passing mention that slows were slower than previous releases to start but that also it was early days. that stock is just a little bit nervous. >> passing mention good for a 6% drop, it seems. >> no doubt. the spread of fake news on facebook getting the attention of president obama yesterday. here's what he said while speaking to the press of a visit in germany. >> because we're in an age where there's so much active misinformation, and it's

packaged very well and it looks the same when you see it on a facebook page or you turn on your television. if everything seems to be the same and no distinctions are made, then we won't know what to protect. >> facebook's recent troubles over fake news and metric miscalculations put a spotlight on traditional media platforms. >> there's the chart. now with president-elect trump set to take office cracking down on overregulation has many wondering if he'll cut broadcast regulations by appointing an fcc that will limit the number of broadcast stations that can own and with more let's bring from in the ceo of the news media alliance and analyst at fbr.

what kind of changes do you expect here and are you feeling old hope running through the vain veins? >> if you look at this old rule preventing product broadcasters from owning newspapers that goes back to the nixon administration. a couple of things has happened since then. one, people consume more news, more hard news than ever. the audience is growing. all the statistics show that. but the other thing is the whole media environment has transformed completely. and so if you say that you're in favor of getting rid of old, bad regulation, getting rid of outdated regulation, getting rid of this ban should be the first thing you do. it's obvious. >> barton, setting us up perhaps the cross-ownership issue, a lot of things seem to be impacting facebook and some of the other media platforms here, not just a tectonic shift toward old media, big growth stocks not doing all that well, but has anything happened to sort of call into question the quality of the facebook platform and other social media platforms or is

this something that's fleeting in your mind? >> look, i think that facebook is growing and we're starting to learn more and more about what it is. and they're starting to learn more and more about what they are. and so i think these are growing pain. i think facebook has tons of the engagement. it's a unique media property. but advertisers are learning that it may be isn't the shiny light that they thought before. and i think there's been a little bit of rotation of ad money back towards traditional media, back towards tv and away from some of the digital platforms. facebook is still going great but they'd be seeing better growth but for these quality questions. >> that raises the question if old media and tv print were able to get together to leverage their own skill against digital, what kind of consolidation would you expect? >> well, first of all, on the fake news front, the answer to fake news are trusted brands. my members have been in the anti-fake news business for a

couple of hundred years. so there's going to be an emphasis on quality in a world with a whole bunch of garbage news out there. secondly with consolidation, i don't think we have to worry really about consolidation in a world with so many media properties with so much information coming at people where we have to worry about are who do we trust? who's got the history and the experience to deliver high quality news, high quality journalism? and that is the traditional legacy news media. >> right, so we're showing a couple of the broadcast names on the screen there. but walk us through the likely outcomes that you would expect if this law is repealed? >> well, one thing, it would attract further investment in print and digital news media because right now you have this artificial break between certain kinds of journalism, broadcast journalism and the print and digital journalism just shouldn't exist. it would facilitate a whole bunch more investment in real

solid journalism that is really the combatant for fake news. >> and barton, just to move to another potential regulatory issue, it's perceived that under a president trump, the fcc might be less friendly to the principal of net neutrality. maybe that's an overhang on those that use a lot of band width. is that something that will nag these stocks for a while? >> it's certainly a nagging issue. it's harder for the cable stocks, comcast. john malone has wanted forever to allow the cable companies to invest in those by extracting more of a toll and they're more about netflix although facebook is getting more video focus. it's a change in the landscape with everyone thinks the election wasn't likely to come out with trul on top, people are just starting to get kind of their minds wrapped around this idea that the net neutrality

regime that obama built up over the past eight years might be going. what does that mean? is it going to drive more vertical integration like at&t and time warner? i don't think we fully know the answers until we see who trump appoints to head the fcc. trump has populist tendencies that are at odds with the republican laissez-faire base that would be the core group of people you look at to run the fec. if he writes in an outsider, someone who wants to avoid media consolidation because trump hasn't been particularly friendly to the media, he may not want that to consolidate and might use it as a tool to block it. we have to lock at who he appoints. the odds on favorite he goes towards a republican, but that's a risk to the story that david was puing out there. >> thank you both for joining us. >> thank you. >> and across all those key posts. time for a news update with sue

herera. >> here's what's happening at this hour. acknowledging zika is here to stay, the world health organization is lifting its nine--month-old emergency declaration. it's instead shifting to a longer term approach in fighting the virus. president-elect trump is taking credit for ford motors keeping jobs in the u.s. he took to twitter to say ford will not move production of his lincoln mkc from kentucky to mexico. a spokesperson says she doesn't know when that decision was made or if trump had an impact honor that. they pulled a little girl from the rubble in aleppo's countryside. she was bleeding, covered in dust but taken to a local hospital for treatment. and we certainly hope she will be okay. and pope francis will name 17 new cardinals tomorrow. during the ceremony, the pope will place the red cardinal's beretta on each man's head. three americans in the group.

which some say is a clear signal to conservatives that they want moderate pastors at the helm of the church. back down to you. >> thank you, sue. >> sue, thanks very much. 25 minutes to go before the bell. dow, s&p, nasdaq all sitting on modest losses. that russell 2000 still looking for a green close. and mortgage rates are climbing higher yet. diana olick has the new numbers you need to hear coming up.

welcome back. less than half an hour to go in the trading session this week. i'm joined by tim anderson who is the managing director on the floor here. what do you make of the moves we've seen in stocks and bonds? >> you know, it's a continuation of what we started to see in the middle of last week. and it's probably got a lot to go. there's been a very large move in bonds. a ten-year from 1.75 all the way up to 2.35. and it's interesting that the vol tillty has increased that much. >> which some people think the vix is a dead measure of

something. there are plenty of people who think it's overdone and want to buy it? and buy -- i should say want to buy the sell-off in bond, meaning sell what's been happening in stocks? >> you could buy for a short-term trade but clearly investors are looking at -- i talked about this last week with bill -- a totally different landscape for the next four years than what they've been operating under for the last eight years. and it's a landscape that was also unexpected going into the election. so you're talking about a lot of different places that manage hundreds of billions of dollars. it could take weeks maybe months for them to realign their portfolios the way they want them for, you know, the next year, two years, maybe four years. >> all right. so we have some time to go and we'll let you get driving to michigan. you have a long trip ahead of you. thanks for joining us. tim anderson. mike? >> thanks, kelly. the nasdaq opened this morning hot hitting an all-time high, quickly cooled off.

let's head up to the midtown exchange and check in with morgan brennan. >> the nasdaq quickly coming off those earlier intraday record high. we've seen right now coming into the close it's poised to close in the red slightly lower, about 0.1%. that being said, the nasdaq is on track to end the week about 1.7%, outperforming both the dow and the s&p and the big bright spot here has been chitmakers this week. you have the stock sem se conductor etf on track to close the week up more than 4% thap that's thanks in part to upbeat earnings including nvidia and applied materials. you can't talk about that and not talk about mega cap tech. a big sell-off in these names last week and the first part of this week. analysts saying maybe that sell-off was overblown. amazon, microsoft, google and apple. facebook the big laggard there. talking about laggards, biotech taking a breather after those

pretty dramatic moves to the up side last week. the biotech etfs both trading down on track for weekly losses. lastly, i want to point out the russell 2000 because many of those are listed on the nasdaq. 11 straight days of gains. the last time we saw a winning streak was in mid2003. we're on track for a record close there. and, of course, this is stronger dollar and it's these potential policies around deregulations and lower taxes that are helping these domestically centered names. >> yeah, morgan, that's been a very strong theme. also helping the small caps, lots of financials. >> that's right. >> versus the s&p 500. that's one of the reasons for the standout move. we've got under 18 minutes left before the bell. dow, s&p and the nasdaq, the big cap indexes sitting on small losses of about 0.1% except for that russell to the up side. u.s. dollar pushing higher. mortgages may be following suit.

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mortgage rates climbing higher still. diana olick has the details. >> just when you thought mortgage rates had settled a bit, the bond markets made life a little harder for home buyers yet again today. right before what some see as the last real weekend of house hunting before we settle into that holiday housing freeze. take a look. the average contract interest rate on the 30-year fixed, it went from 4% to 4.125 today. as the yield on the 10-year treasury which mortgage rates loosely follow surged higher. just before the election we'd been around 3 1/2. so that is significant, to say the least. now, i spoke with a mortgage broker today who said he's been on the phone a lot this week with client. he's in the boston area. and said that last weekend was pretty busy with buyers signing on the dotted line. now, you can't lock your rate

until you have a contract. so he had to explain to buyers what the differences would be in expected monthly payments. people focus on the round numbers and going from the 3s to the 4s, that's a pretty big psychological impact just in seven days and now above 4. none of his clients pulled out of deals once he did the math for them, but he added potential buyers are watching the numbers much more closely now. and i just got off the phone with another lender ten minutes ago who told me he had two first-time buyers who were very much on the margins and they lost their deals this week because they no longer qualify in the debt to income on these higher rates. >> oh, that's brutal. feel for them. diana, thank you. it's not just interest rates moving higher. the dollar index also climbing to its highest level since april 2003 on hopes president-elect will help economic growth. >> it could put a krim in u.s. corporate earnings. we're joined with a look on which companies potentially stand to lose the most. >> obviously the recent jump in

the dollar, it's good news for traveling abroad but not for u.s. companies who sell in foreign markets. donald trump has said he wants to make the dollar stronger. already this year we saw companies like kimberly clark, procter & gamble, johns johnson & johnson, dupont, monsanto, 3m, saying profits would have been better if not for currency effects. look to these companies for some weak points. but many factors go into a company's dollar exposure. inputs and outpus may not be from the same countries. cash might have to stay abroad. and companies could do a good job of terrible jobs trading currencies themselves to hedge the risks. the volatility of the trading. the industry with the most foreign avenue exposure is technology. but the least exposed are utilities. but those sectors getting hit by interest rates while the nasdaq

is setting new highs. seems that investors aren't worried about a stronger dollar just yet. >> interesting that the markets keep climbing or i guess the russell is outperforming. >> i's the highest level of dollar index since 2003. a not necessarily one for one but interesting that that's the case. technology has been underperforming as globally exposed as they are. >> eric, thank you. eric chemi. ten minutes to go to the close here. it's that russell which is in the green. everything else is still mildly lower. the dow dropping 22, the s&p dropping 3, the nasdaq down as well. >> durable, solid, reliable, those are words that could describe david and his acronym of the week. eryone gary. well, i feel pretty smart. well, we're all about educating people on options strategies.

well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade.

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steadiness going forward. first of all, s under steady, s is the saudi oil policy. end of this month is the big meeting, 171st meeting of the opec in vienna. you want to see them stabilize and not let oil drop too much. t is president trump. he has ideas, but then he has intentions. what do they really mean? and can he get those things done? that's what the market is waiting for. what was the guy's name from metro goldwyn mayer who says nobody knows anything. we don't know anything. we're picking at little straws and trying to, like the roman soothsayers looking at the entrails of birds right now, that's what we're doing. e, earnings, s-t-e, supposed to be up 13% in the first quarter. that's helping the markets. it's not just infrastructure spending and all that.

s-t-e-a, "a" for asia. they're 20% up off their lows. japan came in at 2.2% annualized up from 5% annualized in the second quarter. and china's production those numbers have been pretty steady. "d" is dollar rising. that is a key. and that can hurt oil. it can hurt exports and can hurt the u.s. dollar version of the foreign currency earnings when they bring them back home since it's worth less. you want to watch that. the dollar is up 2.7% thus far this month. so you want to be very careful on that. and "y" is yields. >> i was wrong. >> you thought it would be yellen or yen. when i was sitting there looking at it, i was thinking, yeah, yeah, yeah, yeah, yeah. no. it's yields. and there we have ten-year interest rates are up since the election, 41 basis points to

2.25ish. you want to see if that calms down that big rise in yields. what we've got this coming week is a look at the housing market. you've got a look at industrial production. and i think these -- the next thing is going be earnings, the fed and the italian referendum on the 4th and the european central bank meeting on the 8th. >> other thing we've got coming up this week, generally strong seasonal patterns around thanksgiving. but we'll see if that holds. >> happy thanksgiving, everybody. >> we'll be back with the closing countdown. >> after the bell, president-elect donald trump meeting this weekend with one-time republican foe and former nominee mitt romney to maybe discuss the secretary of state position. we'll talk to romney 2012, top foreign policy, this is a merge that could work. you're watching cnbc, first in business worldwide.

time for the entrepreneur of the week. leslie hanson is a business owner in the beautiful northern california coastal town of half moon bay. her shop, odyssey, sells products related to science and nature like geodes, terrariums and fossils. she'll be encouraging customers to shop small all holiday season. for more, watch your business sundays at 7:30. i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade

on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle and it keeps my investments fully mobile... even when i'm on the move. sign up at etrade.com and get up to six hundred dollars. two minute foss the dow. the s&p sitting right at 2180, bob pisani. it's not had the oomph to get to ta old high but everything else has. >> we talked about this, consolidation sideways certainly a good thing after the big gains. bank stocks another gain today. they're up 4% on the week. transports have done well.

you see some other sectors like semiconductors. russell midcap, the s&p midcap, there's a new high. russell 2000 up 10% in seben trading sessions. how much of regulatory reform, tax cuts and even growth is already sort of baked into the equation? i think a period of consolidation moving sideways until we get a little better answers. we like what's going on today. >> and those bond yields, you know, still lifting year-to-date increase right now. they actually ended last year 2.27 on the 10-year bond. i guess you have to wonder if there's a psychological break point. >> 70 basis points on the 10-year and not quite as much on the 2-year, obviously. but we're priced in a lot more than the 25 basis points. the good news is if the market believes we're getting real growth here, there won't be any problem with a 20 basis point. it will absorb it easily. that's the question, do we really get the real growth we've

been talking about. >> we have aes closing the bell here at the new york stock exchange. and up at the nasdaq lam research. the closing bell is here with kelly. >> thank you, mike. welcome to the closing bell, everybody. i'm kelly evans. we're finishing up the week on wall street. the dow dropping 34 for 18869 as your close. pretty consistent declines across the board. 0.2% for the s&p 500, 2182, and the nasdaq which today hit an all-time intraday high dropping nearly a quarter of 1%.

the russell 2000 posting another record high. i think the 11th straight day of gains for the small cap index. it's been on a tear. there's a look at the russell adding another half of a percent today. 1315, that's your new closing level. now donald trump's transition to the white house is moving forward. it's been a revolving door, literal a who's who of politicians. the president-elect set to speak with mitt romney this weekend. we'll hear from romney's senior foreign policy odd visor and whether the presidential candidate is up for a spot. joining me mike santoli, welcome back, along with evan newmark. and cnbc fast money trader guy adami. it's good to have everybody here. what about the fact -- there's two different narratives today. one is stocks took a pause, the other is holy cow the russell. >> they're both equally valid. the russell, that streak, now,

look, there's always a. this shows you strong the rotation into certain areas has been. leading into the weekend prior the election, the s&p 500 was down nine days in a row. that's a rare streak. it shows you how defensive, how underinvested people got. now they're back in. now the bond market sell-off has really prodded money from bond proxies into other areas. i think the leadership profile of the stock market looks pretty good with the banks, with the cyclicals, with the semiconductors. do we have enough stored up. >> and to see what happens with the yields. so again, just everybody is aware, the ten-year benchmark yield hit a high of about 2.35s are. it's a little bit below that right now. these are huge moves. >> yeah. >> the question is do they keep going? >> i think they do. i think through the year end, i think it would take something

dramatic happening for the equity market not to go a bit higher and for bond yields to go lower. the momentum right now -- >> you don't think it's gone too far too fast? >> no, i am not saying people are right or wrong about what the growth is going to be next year, but there's been a fundamental shift where consensus was the ten-year bond yield be at 2% for the rest of my lifetime. and there will be gdp growth, best case will be 2 1/2%. most likely it will be meandering around 2% and the world has no more inflation and no more job growth and no more wage growth. and there's been a revolutionary change in thinking in the last week and a half. i'm not saying it's justified. i'm not saying the economy under donald trump will grow 5% a year. i think it won't. but in terms of how investors are looking at it right now, what was a pretty widely accepted view, the consensus view, has very much been shaken.

>> guy, let me ask you because you rightly for years held fast to this don't buy into the kind of bond sell-off argument. now that it happened, do you fight it? >> evan basically said everything that i've been thinking and he said it pretty succinctly. i'm not saying that the market is right to do what it's been doing, but the market is doing what it's doing and you really can't get in the way right now. the rotation out of the bond market into the equity market, it doesn't seem to be slowing any time soon. mike just mentioned does it have enough oomph to get to the all-time highs. i think we're 12 or 13 s&p handles away. the short answer the probably yes. i have to be true to my word. one of the things that i said in order for me to believe in the equity rally, you need the russell to get above that 130 level. and here we are magically up 14, is a handles in a week and a half. >> no, i remember you counting the table on the russell when no one was looking at it. >> so i don't know if it makes

sense. i really don't know what people are expecting. it's as if the world has just flipped on a dime and all the problems that we spoke about i think correctly for such a long time have been forgotten, but i don't think they've gone away. >> one interesting thing with the dollar. here's the question for everybody. if and when the dollar and the euro hit parity or that relationship inverts, what happens then? that's going be an international event. >> we've been there before but not in most traders' memory. that was in the early days of the euro. much below 100 or a dollar. i do think we're getting a little bit ahead of ourselves and extrapolating and penciling that in. this has been an impressive move in the dollar. one of the reasons it hasn't disrupted the global markets more than it has is because year over year it's not up that much. early december last year, right before the fed increased interest rates, it was right

near the dollar. it's not this profound dollar. >> they do so now again -- >> to touch on what mike was saying, the bond market retraces the past year. the yields are kind of plus or minus where they started at the end of last year. so it's as if we just retwased the whole thing. the equity markets are up a bit. >> but where does that leave the u.s. dollar? does it mean it's going to be a lot higher if we're a although longer and that's totally fine? >> i believe that currencies, that should be driven by the market, by individual companies. it shouldn't be something that basically they've been all the dollar rates have been manipulated for the last ten years. really eight years by the central banks. they have not really been free floating currencies. they've been manipulated by the extreme central bank intervention in the bond markets. my own view is once they stop doing that, they'll find their natural rate and you shouldn't

get so exercised about what it will do. >> just to throw in an idea why we may be pausing. the spread between the u.s. ten-year and the german ten-year is back up to its highs. that was a restraint. that was a restraint on how high u.s. yields can go. >> right now it seems to have broken out of that. the flip side of the u.s. dollar has been in oil and gold. gold has fallen since his victory. joining us with whether or not you should buy the dip is james cordier. welcome and make your case for gold here. >> well, kelly, it's interesting, back in july when gold was trading at $165 an ounce everyone was bullish and the fundamentals simply didn't justify the market going up then. of course, we know what happened to the rally. now we're sitting around 1200.

and now seemingly everyone is bearish the market. we have a strong u.s. stock market. we have strong stock markets around the world. we have a very strong u.s. greenback at a 13-year high today. now the market seems to be falling down. it appears that the trick to trading gold is understanding what's already factored in and what is not yet factored in. and we see fundamental changes coming in 2017 that a lot of the people selling gold right now are not factoring into the market. >> by the way, that's kind of the trick for trading anything, trying to figure out the known knowns. >> james why wouldn't you find some bearishness in gold? it's been in a bear market for five years. its down 40% in dollar terms the the past five years. i'm not sure why we're talking about it as if it was just recently the best thing we could imagine and now it's come off a little bit. >> it certainly has. mike, the key to gold rallying next year is the velocity of money. for first time in as long as you just mentioned, five year, we

haven't had velocity of money in the united states. it's about to pick up. we're going to continue hearing janet yellen and all the fed governors talk extremely hawkish over the next several meetings when the cameras are on, we'll have a tightening fed, however, behind closed doors, we think they're feeling something quite different than that. the u.s., federal reserve and central banks around the world are dying for inflation. that is the one key missing ingredient right now to get the world economy moving. and once we start getting that next year, we're going to see a completely different scenario. >> guy, i don't know what gold trades off of, but it seems to me like in recent years it was -- i don't know didn't quite seem to be the velocity of money. what do you think? >> it trades off the fear of -- well, what had been until the last couple weeks, apparently, the fear of fiat currencies around the world. now everything is sort of on its ear so it's very hard to figure out what it's trading on. but to me, that's been the

reason to own gold. because the global central banks are tripping over one another to try to devalue their currency. obviously over the last couple weeks it's very hard to figure out what's going on. i'm sure everybody at home loves to hear the strengthening u.s. dollar, but i can tell you categorically, the guys and gals that work at the federal reserve are not probably all that thrilled about it. that's just fact. so they talk a big game in terms of wanting a stronger dollar. they really don't, though. >> also, james, the gold had its best first quarter in like three decades this year and that's when markets were selling off, there was panic, there was basically a flight to gold. so why would you be saying that now velocity would be the reason to expect gold to rally? >> for first time in many years we see wage inflation here in the united states. we're going to see infrastructure spending whether it's half of what president trump talks about or all of what president trump talks about, we're going to see raw materials purchased, wages going up more in the united states.

that's more dollars facing fewer goods and that equals inflation. >> i agree, just to be clear, of course that dynamic could play out and the velocity of money could pick up but why is that indicator good for gold when gold just had its best quarter when things looked their worst in the first quart of this year? >> the fundamentals of gold are reversing. we'll be talking about inflation in 2017. gold is a barometer against inflation. for the first time we'll see people talking about inflation at 2 1/2 and 3% and the federal reserve letting it run high to get the economy on very firm footing. that's the big difference between last year and this coming year. >> thanks for joining us, james cordier. quickly before we let guy go? >> really hard to trade gold. if you like gold as a hedge, i have this vanguard precious met always fund, it was down 80% up until the beginning of this year then it almost doubled, now giving a little back. it's very volatile.

>> how long have you held it? >> the fund i had through ups and downs, but i had a very small piece left. but watching that small piece lose 75% of its value. then this year it doubled in the space of nine months. very volatile, very speculative. i don't recommend putting a large chunk of your money in it. >> what about you, guy? >> i'm always a gold -- you have to understand something. that's how i grew up on wall street was as a gold trader. hard to get me off that fence. my view all along has been maybe $10 moves, $20 moves, the real move on gold will happen any given day and i don't know what the catalyst will be, but you walk in and it will be up a couple hundred. i can't tell you why, but clearly the world change a lot from when i used to do this. shout out to brian sullivan. doing an unbleebable job. tune in. >> that's a great tease. catch guy and the rest o of the crew coming up on "fast money"

with john mcnabb who helped deliver north carolina to trump last week. that's next hour. mitt romney called donald trump a fraud and trump called romney a choke artist. the two are set to meet this weekend and it could be maybe a job interview. could romney really be on the short list for secretary of state in trump's administration? we'll hear from romney's former senior policy adviser next and for-profit colleges haven't made the grade under president obama. would trump reverse regulations that have been crushing this industry? that's still to come. the greatest population shift in human history is happening before our eyes. sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications of long term megatrends

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president-elect donald trump is meeting with mitt romney this weekend reportedly to discuss the job of secretary of state. romney was no fan of donald trump during the campaign. take a listen. >> donald trump is a phony, a fraud. his promises are as worthless as a degree from trump university.

he's playing the members of the american public for suckers. he gets a free ride to the white house and all we get is a lousy hat. >> donald trump didn't have kind words for romney either. here's what he said on the very same day. >> i backed mitt romney. i backed him. you can see how loyal he is. he was begging for my endorsement. i could have said, mitt, drop to your knee, he would have dropped to his knees. he was begging. >> joining us now is brian hoke who was candidate mitt rommy in's foreign policy adviser in 2012. welcome and thanks for being here. >> thanks, good to be with you. >> just first and foremost, do you think he's rumors that this is about the secretary of state job have any merit? >> i think this is a really smart move by president-elect trump to reach out to mitt. it's hard to know whether this meeting is for show or whether it's a serious job interview. i hope it's the latter. i think bringing somebody like governor romney into the trump

administration makes a lot o sense. it helps to unify the party, helps to unify the country because a lot of people like mitt romney, they respect him. it gives a chance for donald trump to be magnanimous, which is always a nice thing to show after you win. you just showed a lot of videotape. they had a very ugly primary. so did hillary clinton and barack obama and so did reagan and bush. it's very natural for party leaders to come together after an ugly battle and try to find common ground. i suspect that's what's going to happen this weekend. >> brian, it's evan newmark. do you think the trump cabinet will have what i call "a" type players like a mitt romney? or will they go for people who are kind of -- i don't want to say second tier because i'm sure jeff sessions thinks he's a totally first tier kind of guy. but is trump comfortable enough putting somebody of the stature of a mitt romney or a jamie dimon in his cabinet and willing to live with that and the fact

that they may be strong pernts? or do you think he just doesn't have it in him? >> we certainly know he lines to be surrounded by people who are loyal and he also as president is going to have to be vo surrounded by people who are exceptionally qualifiied and really good at what they do. there's enough common ground between a lot of people opposed him in the primary to see if there's overlap. they look at the team model from loin done. and i don't think a president wants to be surround by a lot of yes men and women. so i hope it's a mixture of people that he trusts and respects and admires. >> one thing i don't understand for this position specifically secretary of state is that he and mitt romney seem to have diametrically opposed views on russia which will probably be one of the core important relationships. if somebody like mitt romney who obviously wants to stand for what he said up to this point

would he just kind of toe the trump administration's line? would he insist that his views be respected? how would that even work? >> my experience having worked in the white house for a president is good presidents like to have a range of views. i also worked at the state department for the secretary of state and i've never encountered a president as secretary of state who agree on everything. i think that trump and romney both take a very realistic view of the world. i think that they both want to advance american interests. they both care about jobs and allies to promote prosperity. i would expect this weekend they're going to be discussing and exploring areas of overlap. certainly on russia there's been a very strong disagreement. i think if you're president, you want to have, you have a decision about what to do with a bilateral relationship, it's good to have somebody in there. i think mitt has called russia pretty correctly about the geopolitical challenge it presents. >> and syria, too, which is the

sort of collateral damage here also that's got to be -- we heard from bashar assad comments to the effect that he could work with donald trump or that their interests might be aligned when it comes to defeating terrorists. is that a dangerous situation or is that just a realistic one? >> campaigning and governing are two very different things. once they get inside the oval office and get the daily brief from the intel community and get fully read on to all the challenges around the world, i think presidents grow in office. and i would think that on issues like syria that you just mentioned, he is going to be looking at a much sort of different matrix of challenges and threats. and i'm hopeful that he'll have people around him who i think have diverse views so that he can make a fully informed decision mgts we'll see what comes out of the weekend. brian hoke, thank you for being

here. julia boorstin, what's happening? >> hey, kelly, facebook announcing in eight pages filed that its purchases up to $6 billion of its class "a" stock. it will go into effect at the first quarter of next year without a fixed expiration. the program will be executed consistent with its capital allocations strategy and prioritizing investment to grow the business over the long term. facebook shares trading up over 1.5%. >> what do you make of this? >> just to scale it a little bit, a little under 2% of facebook's market value. it's significant. it obviously shows that facebook's thinking more like a mature company and has the capital usage. facebook pays about $1.8 billion annually in stock-based compensation. this could soak up three years worth of what they hand out to employees. >> you generally support this? >> yeah, i do. not just with facebook but with a lot of these companies sitting on a lot of cash, next year's

going to be, if president-elect trump allows for a big repatriation program into cash, what are they going to do with it? companies like facebook have too much cash to really invest, so they'll buy back shares. >> a $6 billion buy back, shares is at 1%. president-elect trump promising to lower taxes for corporation and citizens. what type of impact that will have on the economy and wall street. sequels and spin-offs didn't fare too well at the box office. whether the harry potter spin-off, fantastic beasts, can reverse that trend and score a victory for warner brothers.