well. and add that up and off strong dollar getting even stronger. watch out, multinationals in the latest earnings. doesn't seem to be affecting the dow right now, which is up 11 points. also the consumer discretionary sector, which has come to life in this trump-related rally, this idea that consumer confidence is up, animal spirits are back, and the sector as a whole has turned around from earlier in this year. lululemon a big part of the reason why today. it is up 18% after a blowout quarter, 7% comped growth. talk to the ceo. has a good outlook for this current quarter on holiday sales. and if the s&p closing at a record, carl, 16th of 2016, and the sixth since election day. over the you for "squawk alley." >> sara, thanks so much. sara eisen. good morning. it is 8:00 a.m. at twitter headquarters out west, it's 11:00 a.m. on wall street and "squawk alley" is live. ♪

good morning, guys. this postelection rally goes from strength to strength. the dow and s&p are in record territory inching higher. are we setting up for an all in, all go rally like the summer of 2016? our guests joining us now. a cnbc exclusive outlook for '17. john, waugh us throulk us throu think '17 is going to look like and specifically if all this

enthusiasm about equities is transferring to a macro view. >> certainly it does. always good to start off a morning with a little eric clapton, but the market is a leading indicator. what the market and the yield curve are saying is we're walking through a door of opportunity and certainly the equity market makes it easier to finance deals and make a lot more financial activity. i think people's expectations for tax reform certainly have made an opportunity for greater economic growth. as far as our outlook goes, business equipment, infrastructure spending is improving in the year ahead and consumer spending really solid. so, yes, financial markets are a leading economic indicator but they also make the financing of economic activity that much easier. >> ed munld, i wonder what your assessment is of the condition of this rally right now in terms of how investors are positioned, what the sentiment picture looks

like. there has not been as far as i can tell a lot of demand for downside protection, hedging after this move. where do things look to you? >> i think really if we look at today, what we see to some extent is what i would call a classic short squeeze rally. in many ways investors have been caught out a little bit by the remarkable strength of the rally. remember, before the u.s. election, a lot of investors were saying if donald trump was elected the market would be off 10%. we want to protect to the downside. and so really we're not positioned for this rally and have been trying to catch up ever since he won the election. now, going forwards, i think that probably works for the rest of the year because remember, most of the flows, exchange-traded funds, have been into bonds most of this year and out of equities and it's only really since the election we've seen somewhat of a turnaround in this story. but there's still more to come.

however, going into next year, we might see the end of the phony war, president trump being inaugurated 25th of january, then we'll start so tee cie his real color, real policies he's going to unvail. >> john, along those lines, what's going to matter more in the start of 2017? is it the policy agenda that president trump and the republican congress roll out? is it perhaps the movement's over in europe with so many important votes coming up that could send shock waves not only through europe but overseas as well? >> for us it really is followthrough. does the trump administration follow through in terms of slight easing in regulation? some element of tax cuts, some element of beginning the process on infrastructure spending. for us as the market is moved is the trump administration now going to follow on the market's action and actually confirm what the market has already told the

economy. >> john, goldman has a note out sort of on the same note that they're talking and their point is their preliminary expectation on growth effects from looser fiscal policy will be a q 4 story of '17 and the first half of '18. do we have to wait that long? >> well, i think it's going to be definitely the second half of 2017 and really 2018. remember, we talk about the kennedy tax cuts, but they were actually passed by lyndon johnson. the ronald reagan tax cuts were actually phased in. and i think larry summers has it right when he writes about the anderson bridge between boston and cambridge. off lot of permitting, a lot of issues that go into putting in infrastructure. so for us the second half of 2017 is a little better but we really think the opportunity, the big window is 2018. >> edmund, you suggested maybe between now and the end of this year this kind of reallocation

process could still favor equities. now, the past two, three years we've kind of entered the new year offsides and had pretty rough januaries. do you think we're in for something like that again? >> i think the risz sk certainly there given the strength of the current rally. the more we go up now, clearly the more downside risk we're exposed to going into in 2017. aside from donald trump's inauguration on the 20th of january, another key date will be of course the new round of elections in europe. the first key one will be actually in the netherlands, in holland, where in the middle of march you'll get elections there, and there is the possibility that the far right pvv party could actually be the biggest party there and form part of a coalition government. soy think that could also introduce more volatility as we see the politics in europe swing a bit more to the extreme right. >> edmund, we talked this morning about inflation that is u.s. based and the positive

effects that could have on the european continent, whether it's trying to recapitalize banks or help exporters over there get some pricing power. how significant is that? >> well, actually, i think it's quite significant. if you look at certain countries. for me, the two key countries in europe that i would be looking very much to within the equity space are firstly sweden. why sweden? because the sweden equity market has been the most correlated to economic growth in the u.s. over the last decade. >> really? >> so, yeah. so if you think the u.s. economy does well next year, then actually sweden should benefit from it very high exposure to industrials that sell manufacturing goods into the u.s. the second country of course is germany. you know, we're thinking about cars, bmws or mercedes, clearly germany and the industrial goods in the automobile space could also be very important area of growth at a time when the euro particularly weak against the dollar. >> we don't get a lot of swedish -- >> i think edmund's got it

right. >> go ahead, john. >> i would say, yeah, i agree with germany. remember, germany, major exporter of machine tools, one of the major export markets in the united states so, i certainly see germany as a benefactor of stronger u.s. growth. sorry, carl. >> that's okay. no, we like getting a sweden comment on-in the a block whenever we can. edmund and john, good stuff. it will be fascinating to watch the new year. thanks, guys. when we come back, first it was carrier, then boeing, now the president-elect has a new target. we'll get some details on that coming up. a rare exclusive with the founder of jd.com and later why the trump rally may be a stock picker's market. we'll talk to tom lee. eas come into this world ugly and messy. enemof the way things are.they n yes, ideas are sca,

and messy and fragile. but under the proper care, th become something beautil. i'm stressedrying to figure out this complex trade at's with the dosized horse? so i brought in my comfort pony. wellyou could get support from thinkorswim's in-apphat. so you don't neea comfort pony. so wt about my motivational meeat in-apphat on thinkor.

more breaking news on the trump cabinet. let's get to john harwood at trump tower. good morning, john. >> carl, a source familiar with the transition tells me that the president-elect donald trump is expected to name andrew putzer, chief executive of cke restaurants, parent company of hardy's, as his labor secretary. it's not finally done. we don't have confirmation that the offer has been extended and accepted but we just heard on the transition call with top trump aides that he is expected to announce other cabinet appointments later today and the

source familiar says it appears that one of those picks will be andrew putzer of cke restaurants as labor secretary. >> longtime cnbc guest. talked to him about all things job related and campaign related for the last year as well. john harwood. >> and a conservative executive who advised mitt romney as well in 2012. >> that's right. thanks. forget boeing and china. in a new series of overnight tweets the president-elect is calling out unions. phil lebeau is in chicago with the latest on that. good morning, phil. >> good morning, carl. this has to do with the steelworkers union that is with the carrier plant in indianapolis, also with the rexnard plant down the road. set this up. let's go back about a couple weeks when you had donald trump talking about how many jobs would be saved by carrier stay in indianapolis. here's what he had to say. >> united technology ts and carrier stepped it up, and now

they're keeping -- actually the number is over 1,100 people, which is so great. >> the head of the steelworkers union said not exactly sure 1,100 jobs are being kept or it's not being por trade accurately. he said in an interview with "the washington post," trump lied his you know what off. he said it was actually closer to 800. chuck jones is the president of the union and he was a target of trump's tweet's last night. he wrote chuck jones has done a terrible job representing workers. no wonder companies flee country. and that wasn't enough. he followed up a short time later by saying if united steelworkers 1999 was a any good they would have kept those jobs in indiana, spend nor time working, less time talking, reduce dues. here's chuck jones talking with us last hour about what he would like to see donald trump do. >> try to do something to stave jobs at the carrier facility or one of our other plants a mile

away, rexnard, 350 jobs scheduled to leave this country after the first of year. i'd be glad to sit down side by side to do something to keep these jobs in the krcountry. >> we have talked about the rexnord facility in indianapolis. it is one of the plants owned by a company based in milwaukee. we have reached out to these guys several times to see if their plans are changing at all, if they plan to engage with either donald trump or with the united steelworkers any more than they already have. we have not heard back from the company. back to you. >> phil, thank you for that. phil lebeau. despite the president-elect's attacks on the steelworkers union and the criticism of companies moving jobs in production overseas, u.s. steel ceo mario longy thinks trump's proposed economic policies are bullish for u.s. growth. this is what he said yesterday. >> i think what you will see is an acceleration of the investments that we are going to

make. we already started to do some things but when you see in the near future improvement to the tax laws, improvements to regulation, those two things by themselves may be a significant driver to what we're going to do. and you add to that, you just heard joan secretaries elect ross and the secretary of the treasury, they are validating that sustainably we can grow at at least 3.5%. and in that environment we're going to be able to do significantly more. >> on the phone to respond, united steelworkers international president leo gerard. thanks for your time. >> good to be on with you. >> it seems like you have a president-elect working toward the same mission as unions have been for a long time in this country. does it make sense to quibble with him publicly about specific numbers?

>> well, look, that question is the wrong question. you have to realize what goes on when someone loses their job. in fact, when president-elect said 1,100 people would have their jobs saved out of the 1,400 in the facility, a lot of people went home that day thinking they had a job and some security, only to find out when chuck jones, the president, went to investigate more, it was actually 730 jobs that were going to be saved. it was incumbent upon chuck to clear the record because these families went from being obviously very excited and enthusiastic to being slammed back down to the ground and wanted some real answers. in that regard, i consider what chuck did as qualified and experienced local union leader is the right thing. when the president says that they should have done their job,

the reality is carrier said it to people's face. they called them into a warehouse and said to their face, we're moving these jobs to mexico nothing personal, you make a high quality, good product, but we can go to mexico for a total of six bucks an hour. the local union went to the carrier company and said what could we do that would make you stay? and they said work for $5 an hour. now, that's how ridiculous that is. we're thankful and i've said it. i said it publicly in a letter to the president. we're pleased that the president intervened and through whatever means saved some of the jobs. >> what are you hearing at this point from the workers? >> i'm also a bit disappointed that the person who's going to have the most important job on the planet would choose to criticize a local union leader

who was only doing his job of clarifying the message to his members. sorry. go ahead. >> that certainly is an approach we haven't seen from presidents and president-elects in the past. what if anything at this stage are you hearing from the workers on the ground in terms of their feelings whether they've changed toward the president-elect, toward this effort that he made with carrier, and how it has played out on twitter and beyond since? >> i think apparently on twitter -- i'm like chuck jones. i've got a flip phone, so i don't get the trail of that stuff, but what i understand is that there's literally tens of thousands of tweeters and facebook stuff they're saying they're with chuck and being very positive and constructive because they know chuck was just doing his job. let me come back to something that the president said that i want to work with him and support. he said he wanted to get rid of

the trade deals. our union has been fighting these rotten trade deals for more than 35 years. we're willing to work with the president to replace and repair trade deals with nafta, cafta, bntr, korea. we want to work for with him. he says he wants to repair and replace or replace and repair those trade deals. we want to work with him. any company, and this is important to rexnord, boeing, and others, any companies that wants to take jobs out of america to another country to export the low -- exploit the low-wage environment is going to export those jobs back to america, he wants to slap a 35% duty on them. i think that that's something that he ought to do. we're prepared to work with him on that. but one other point that your squawk box host might relate to. one of the reasons so many publicly traded companies like to go offshore is it drives up the price of their stock, and

when their stock is going up, the ceos get to have a bigger bonus. and you'll find way too often -- and there's records now that somewhere about 80% of all profits in the last five years have been in stock buybacks. i think we have to go back to the issue that will certainly cut back on rotten trade deals and arrangements. we have to go back to the laws prior to to 1982 and make the purchase of stock buybacks illegal again. that money should be used to put back into the plants and research and development expenses and in -- >> so you mean putting strict limits on buybacks as opposed to -- >> that's right. >> is that something you expect the steelworkers to pursue seriously from a policy standpoint? >> it's one of the things we

think should be considered can. that money going back into stock buybacks would be better used in capital formation and modernizing plants and putting money into infrastructure and doing those things. i put that as one of the points that should be part of the discussion. >> if that ever came to pass that would have impacts on stockholders and employees at manufacturing plants. we hope -- >> the fact of the matter is that was the law prior to 1982 and it worked quite fine. and i'm not sure that it would be bad for the economy. the fact of the matter is a lot of that money would go back into plant and equipment and modernization and development instead of just finding a way to juice the stock price for a bonus. >> it certainly is -- last time it happened a big part of that money did, in fact, go to buybacks. your point is well taken. mr. gerard, we hope you'll come back. thanks so much. >> good to be with you. >> and when we come back, a rare exclusive with the founder of chinese e-commerce giant jd.com.

his thoughts on donald trump and a possible trade war with china next. and later in the march to dow 20,000. why stock picking might be the best strategy after all. tom lee breaks it down. wild-caught alaskan salmon.

from icy ocean waters... to your kitchen counter. pure. pristine. each one its own delicious artic prize. when you cook with incredible ingredients... you make incredible meals. fresh ingredients. step-by-step-reciepes. delivered to your door, for less than $9 a meal. get $30 off your first delivery blueapron.com/cook.

ngine revving] ♪ ♪ 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.

president-elect donald trump has made his thoughts on china's trade policies very clear, but it's not just the chinese government taking notice. retailers are too. we sat down with the founder of one of the biggest online retailers in china and joins us now. deird deirdra? >> that's right, jon. much of jd.com's success relies on billions of dollars of imported goods up to luxury items. a trade war could complicate that business model. but in an interview, the founder and ceo richard leo told us he isn't worried. >> i don't think mr. trump would be a big issue for jd.com

because we mainly focus on bringing american goods into china, and i believe through cooperation both sides can benefit. >> while liu shrugged off potential trade changes he did say china is watching closely. >> thousand is the era of a global village so i believe any major event happening in the world will affect other arias so, what happens in the united states will affect what china thinks. >> i also asked liu if he would take a page from softbank's ceo and meet with trump when he heads to new york in just a few days' time. >> we're not planning to meet donald trump this time. this time our main focus is to meet with different american brands to deepen our cooperation. >> now, major local chinese players like jd.com as well as alibaba are increase lig seen as a way for american companies to

navigate china's competitive e% market. earlier this year, walmart nearly doubled its stake in jd.com. and for other u.s. businesses and brands, investment or listing on these sites could prove to be an even more important avenue to the chinese consumer under the trump administration. liu and alibaba's founder jack ma expressed optimism shortly after the election saying he doesn't think trump will follow through on campaign threats to china. back to you. >> deirdra bow san jose sharbos. we take a break, take a look at s&p, another record high today. same story for the dow. now up 26.

good morning. i'm sue herera. here's your cnbc news update. the european union is starting legal action against britain, germany, luxembourg and also spain for not imposing penalties against volkswagen for using illegal software to hide vehicle emissions. britain says it will strongly respond to those allegations. humanitarian organizations descending on an indonesian province to assess the full extent of damage from an earthquake there that killed more than 100 people earlier in the week. search and recovery efforts are under way. china's highest court ruling in favor of basketball legend

michael jordan over the issue of a chinese company using his name and trademark. the dispute has been going on since 2012. the court overturning two rulings from 2013 and 2015 that went against jordan. and delta is testing one of its perks -- free meals. yes, you heard that right. free meals for coach passengers on flights between new york's jfk and los angeles and san francisco airports. delta says it will weigh the results when the testing ends on december 15th. you don't often here free and airlines in the same sentence, but we thought we'd bring that to you. that's the news update. carl, back to you. >> thank you very much, sue herera. in the meantime, we are getting the close in the uk and across europe. seema mody is back at post 9. >> early christmas gift from mr. draghi, european stocks moving higher after the ecb announced it would extend asset purchases but at a modestly slower pace.

however, ecb president mario drag hip said he would rule out the prospect of additional purchases. listen in. >> if in the meantime the outlook becomes less favorable or if financial conditions become inconsistent with further progress towards a sustained adjustment of the path of inflation, the governing council intends to increase the program in terms of size and/or duration. >> a dovish taper or a market ease? markets were a bit confused how to react to the statement and that confusion well telegraphed in the euro-dollar chart. it initially surged against the dollar on the news of the ecb expanding asset purchases but swung sharply lower trading at $106 against the u.s. dollar. the german dax jumping to a new high. the banks also getting a lift,

trading at levels not seen since january. the stocks 600 banks index closing higher by more than 2%. when it comes to politics, trump, brexit, draghi said all three events were expected edee major events in the world and the markets proved much more resilient than people xwptded. if you look at the euro stocks 600 index, over the past six months which doesn't encompass those three events, it's higher. but year to date, still down nearly 4%, sharp contrast to what we're seeing in the wust the s&p 500 higher by 9.6%. >> thank you, seema. the ecb stimulus adding to global investment momentum domestically as well. the dow and s&p 500 continue their march because investors flowing to equities are turning positives after seeing outflows

most of the last eight years. that's according to tom lee, who joins us here now at post 9. good morning, tom. >> good morning. >> you've been pretty optimistic and bullish throughout this year as some others sort of fell off of that wagon. are you still feeling that way heading into 2017 or have we gone too far at this point? >> just kidding. you know, i think that people are getting pull bulish for the appropriate reasons because instead of lower interest rates and central bank easing, we're now looking more at fiscal expansi expansion, rising interest rates. that's a bullish i vent. i think policy is finally turning instead of regulatory creep on big business. it looks like we're talking about pro business initiatives. and as you mentioned, investor flows. that's a big deal. households saved $7 trillion in the past ten years. nothing went into equities. in fact, they took money out of equities.

>> they say arias to look at that are going to benefit from this environment include banks and financials, energy and materials, and technology and telecoms. now, among those groups, technology in particular has not performed so well over the past couple of months. is there the biggest potential reward there, therefore? >> yes. i think in the next five years tech will be the easiest trade to make because when you think about wage inflation, and we have to go back to the '50s to find a cycle led by wang inflation, businesses in the '50s spent a lot of money on technology to offset wage inflation. i think it's going to be the same story and so tech has a chance to really rerate, and you have to keep in mind we pay 30 times to buy toilet paper stocks and we're paying, you know, 12 times for software. so, i mean, i think technology stocks can rerate. >> you are calling for some -- i think you called it a short-term payback, right? >> yeah. >> january? another weak january? >> well, you know, i think that

the first half of '17 could end up being pretty treacherous just -- it's just fact, right so, if you look at the first quarter or the first half of the new president, you usually see a pretty big drawdown. three-quarters of the time's almost 10% so, that would be the base case. so we'd have to be lucky not to have a big drawdown. >> over the course of this year, especially when the markets got a bit rocky, you kept pointing to a couple themes, one of which is big companies that had good dividend yields. their dividend yields higher than their own corporate bond yields. this is one of those upside down situations. is that kind of trade over for the moment as we see overall yields rise being. >> we've been giving that some thought because we call that stocks are the new bonds. you're talking about companies with big dividend yields that have low payout ratios but they're positive to inflation. jpmorgan was on that list for a while this year and it's not like jpmorgan is fully valued

here. banks have been doing nothing for ten years so, you might want to think that there's a lot of room for these to run. >> at the turn of last year, you said don't look for fang to repeat in '16. >> fang ends with a dang. >> that was obviously smart in the first half. is that going to rebound in '17? >> it's tough. one of the things our clients are frustrated with is they're trying to go back to the playbook of 2015. they're trying to buy facebook cheap, but if this is '91 again, and remember in '91 the bull market was already nine years old, the market flipped and you have to be value oriented. you have to buy a completely new group of sectors, and i think that's financials and energy and tech and materials. >> tom, conventional wisdom has been for a while globalization is great for the stock market. there was talk of open borders

back before that became a dirty phrase. and now the tide is turning against that. how long before we see that impact in the market and will it be negative? >> yeah. i mean, i think that's a big philosophical question, you know, protectionism. and, you know, it's beyond my pay grade. but i would just observe pent-up demand is in the u.s. so if you have to say anywhere in the world where there's real pent-up demand, it's probably india and the u.s. if u.s. is going to be one of the cents of growth you want to be domestic chi focused anyways. so it's maybe good policy. >> maybe they'll still keep buying those imports, rather, in the u.s. >> yeah. that's right. >> thanks very much. >> thanks, guys. >> as we head to break, let's look at the nasdaq. as we were mentioning, tech has largely sat out the trump rally though it is surging this morning. the nasdaq is doing a little bit of catch-up. costco and apple leading the way in the nasdaq. before we go to break, rick santelli, tell us what you're watching today.

>> i'm watching yields in the u.s., hardly noticeable with regard to where they're currently trading. we had an ecb meeting today. the dollar has overtaken some ground i would's covered before so we'll talk about mario draghi, his press conference, the ecb. does he have all his ducks in a row? i'm not sure. but we has four dack snshgs a row. no matter how the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world.

call us or your advisor... t. rowe price. invest with confidence.

coming up today on "the halftime report," the s&p hit

levels that are frightening. one longtime marketer watcher, robert schiller, is saying stocks are partying not like 1999, like 1929. and why morgan stanley's may be a wild year for stocks, and what you can learn from an amazing trade jon najarian made in lieu lu lemon. see you in about 20. >> najarian has had some good calls lately. >> the lulu one is unbelievable. he's buying lunch. put it that way. >> exactly. let's get to rick santelli and check in with the "the santelli exchange." rick? >> everybody, of course, is scrutinizing what the ek second doi -- ecb is doing. yesterday we were doing "closing bell kwtsds i couldn't help but notice the dax uz up close to 2%, the ftse was strong, everything was strong, and it didn't seem to jive even with a big upday. now today maybe it's more clear.

maybe it's not exclusively that mario draghi and what he said but there's no doubt we have four dax in a row that are higher. almost exactly even though we're still a bit below the all-time high, which is several months before that point. let's go to the beginning about markets. they tell you what's going on. they divine things as objectively as any other form of interpretation. take a euro two-year today, minus 73, a euro ten-year, down 38. down six on the twos, up thee on the tens. that means we have steepened by nine basis points. steepening in this case is very enlightening as to its interpretation. the short end is going with mario draghi, his no rules needed form of monetary policy and the long end is looking at other things just like our long end is. but do keep in mind the lowest negative yield close that we had in the two jere far is the end

of november of 2015, and that was at minus 75 basis points. the interesting thing is that's the interday low pretty much spot on. today you want to pay attention to that on a closing basis. now the other issue is the mario draghi tapeer, and people are trying to finesse this taper. you can't do more and call it a taper. so what they're doing is they, traders, economists, they're saying, well, we anticipated an extension of the $80 billion euros so sfr january through september would be 720. it's a taper. 180 billion euros yes. nay, nay, i say. 80 times three is what? it was originally called the program was supposed to end in march. we're getting 60 billion euros times nine. it's 300 billion more, end of story. expectations is not what you base whether this is tapered or not. you base it on fact.

finally, the final mantra, mcdonald's corp., and i want to read this because it's hot off the presses, mcdonald's corp. just announced that they're going to create a new international holding company, domiciled in the uk, pulling out of the eurozone. what does that say to brussels? remember after the uk decided to brexit? oh, nobody was going to come back in the uk. we could see that's not the case along with a lot of market moves. i bring it up because mario draghi is nervous about the uncertainty of the political landscape. many are thinking with regard to merkel or what happens in france, but some are interpreting it in a brexit formation, meaning the establishment should be nervous and growth, growth might follow. if everything keeps on cue. just remember, the history of people being upset is much easier to calculate than whooo what's in a central banker's brain. carl, back to you. >> goldman now up a full $100 from brexit, rick. unbelievable. rick santelli, thanks so much. when we come back, why more

and more investors are betting on the dogs of the dow heading into '17. later, how one legendary group is playing the trump rally while keeping the three es in mind. that would be earnings, education, and enjoyment. don't go away. generosity is its own form of power.

you can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter? get your mind out of the gutter. mornings are for coffee and contemplation. that was a really profound observation. you got a mean case of the detox blues. don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. the dow has outperformed this year and within the index it's been unloved stocks that have led the way. dom chu is looking at that.

>> let's talk about the dogs of dow because this time of year a lot of people tend to take a look at some of these laggards from last year, the ones with really hefty dividend payments compared to the rest of the index. this year the ten highest yielding stocks in the dow from last year outperformed the dow tremendously and it was thanks to a lot of beaten-down names, some of which have arguably maybe a trump effect associated with them. caterpillar, the best performer in the dow on a total return and price basis up 49%. remember, it was a huge laggard last year, perhaps some optimism about metals and mining, infrastructure, that sort of thing playing there. oil and gas, chevron up 32% if you factor in the dividend payments. ibm, a laggard for a few year in the dow, up 24%, walmart and merck as well. those five the biggest total return gainers in this year's dogs of the dow. if you project out and things ended today, here's your ten stocks that will be next year's dogs of the dow. verizon, pfizer, chevron, cisco, ibm, exxon, coca-cola,

caterpillar, procter & gamble, and merck. among those ten tocks hypothetically, check these out, five names possibly to watch. analysts say pfizer could go up 23% this year, merck by 13%, coca-cola by 12% and after this caterpillar and ibm giving back the gains. keep an eye on those. it could be names to watch in the dogs of the dow. back over to you. one of the older and simpler ways of picking stocks but it works some years. for more on the markets let's bring in ubs director at post 9. art, let's dial back to yesterday afternoon in terms of where that rally came from. people talk about some very big orders hitting the market right after noon. we followed along with that. is there anything left behind that? >> well, i think what was happening right around that time about 11:30, the dow transportation index was approaching its all-time high and traders began to sense if

that could break through, you'd get a dow theory buy signal. it became a self-fulfilling prophecy and that's why you had a big string of buy programs that hit the floor as they ran along. and then it was the people who had been left behind, the train is leaving the station kind of routine, and they continued to rally at a near vertical pattern until about 2:00 when the buying slowed and we consolidated the final two hours. you are in a consolidation phase again today, a little trouble by what the vix did yesterday. it sold off initially which would be what you would expect on a rally, and then it reversed and rallied with the market. and that is usually a sign you're going to get a pullback in the next three days some time. >> the ecb kind of passes without much of a ripple in the markets. i get we got mostly as expected. in a week we have the federal reserve. this market has gotten in the

habit of anticipating these known events and them not really doing much with them afterward. are we in the clear through year end? >> well, i think you may be in relatively good shape. the sentiment indicators, however, i find are troublesome. the unhealthy amount of people are bullish. the vix, as i say, near a low. so i would keep the alert flag trying and keep track of where things are going. seasonally, you should still be in great shape, santa and the sleigh bells are heading in, so you should make it until the end of the year. but you're also getting some multiples expanding and there are warning signs out there. >> the good news has been isms, durables, factory orders, just talking about freight traffic a few moments ago. gasoline demand is the only thing maybe that is a down side price, right? does that strike you as strange? >> it is to some degree and i think -- i don't know whether

it's the animal spirits thing but the -- to have the economic indicators pick up since the election is a little bit strange. it's as if the economy not the investors said, okay, now is the time. let's all chip in. >> is this a case of it's quiet, almost too quiet? what happened to the uncertainty, the volatility so many were talking about post election? is it perhaps around the corner and we're getting too relaxed about it? >> i agree with you on that that's a little troubling because the vast majority seem to have bought into this idea that he will be able to complete relatively early deregulation, tax reform, and they're saying, well, we had a nongrowth administration.

and they're buying in. as i said, you know, we're seeing the multiple on the s&p expand -- when you're doing 52 years, some warning signals out there. the dow and the vix up again. we'll keep an eye out. thank you very much. and as the trump rally rolls on, the retail investor is playing an ever-growing role in the march to. to the investor club next.

we take to you capitol hill, steve mnuchin, treasury secretary appointee, meeting with or rin hatch. we're not going to get any sound as he's walking away from the camera. let's listen in. >> reporter: hey, carl, mr. mnuchin just went in with chuck grassley. he didn't make any comment at all. we're in one of the senate

office buildings now, he wouldn't have any comment at all. we'll see if he wants to talk to us when he comes out. >> eamonn has been working the halls not just on the cabinet side but talking them as they make their way into the hearing yesterday, our thanks to you. we sent our kate rogers to beardsto beardstown, i willinois, to che in with an investor club riding the highs and lows for a decade now. hi, kate. >> reporter: the beard town ladies are such a big deal they have their own museum exhibit. this started with $1,600. they were hit with a scandal that same decade over inflating the size of their returns. they fell out of the public eye but that didn't stop them from continuing to meet and invest in the market. we sat down with eight of the group's 16 members including two charter members in their 80s.

we are here in middle america so the ladies weren't too surprised about the election of donald trump but are happy with the market rally that's come along with it. >> i was glad he was elected and we watched the market go down one day and it came right back up and i think we are on the committee right now and we're look i looking at stocks that will be helped by adding more to the military and the advanced stocks. >> reporter: they're continuing to watch stocks in the health care sector because of the uncertain future of obamacare. they have 17 stocks in their portfolio including shares of apple. they can't afford a walgreens or wolverines. back to you. >> kate, thanks so much for that. good to get a sense of what's he

happening in the real world. >> just fine. they've been up at a record high. >> buffett himself was a fierce critic of trump in the campaign, took him to task on the release of tax records, that he can't complain with the performance of brk since election day. >> hasn't he said my business will be fine, my portfolio will be good. >> indeed, tech stocks having an interesting run work day not working so well today but a number of stocks that are doing well, amd, we talked about quite a bit up some 9% again today. it's quadrupled which is mind-boggling. >> you heard kram they are morning suggesting it's a matter of time before they put all

those letters in one basket. >> my joke has been the reason everyone in 19th century of f fixated on dow transports they hadn't invented the semiconductors yet. that's been giving you the green light. >> we'll see what happens this afternoon. back to headquarters on "the half. are carl, thanks so much. i'm scott walker. top trade this hour, the march to dow 20,000 as stocks continue their post-election surge this week is the continued trump r rally justified or just plane crazy? with us for the hour today joe terranova, the brothers najarian, also on set is courtney gibson of luke capital, the president there, and adam parker, with us today. let's begin with the markets. stocks are extending their record run. dow s&p, nass being da, russell