eisenhower don't expect everything to be easy. still need 60 votes to pass a lot of stuff. a lot of questions to me about the guys coming in because they know they have been on cnbc a bunch and questions about how much of that new york money is going to be coming to d.c. >> good stuff from there. thanks for watching power lunch. "closing bell" starts right now. hi everybody. welcome to "closing bell." i'm kelly evans at the new york stock exchange. >> i'm bill griffith. will this be the week? will we see dow 20,000? we haven't gotten hats back from the printer. industrial average does creep every higher getting closer to the historic level. we have money managers who say there are still opportunities in this market and we will name some names coming up a little bit here.

>> another trump tweet shaking stocks. today it is lockheed martin after the president-elect tweeted f-35 program is getting too expensive. should other defense companies be worried? the sector is down. >> and tensions between china and mr. trump are escalating after he questioned the united states position on the one china policy. we will look at what this means for people investing in china right now. and a source telling cnbc that amazon ceo jeff bezos will attend the meeting with tech ceos this week. amazon shares under performed since the election. we will look at whether you should buy tech names ahead of the meeting. let's start with president-elect trump calling out defense companies. morgan brennan has the latest on trump and lockheed martin and phil lebeau who is with us here, he looks at whether trump could threaten boeing's $16.6 billion

deal to sell planes to iran. >> the f-35 joint strike fighter program is the costliest weapon system in history estimated price tag nearly $400 billion almost double the original budget. president-elect trump called the costs out of control and warned that billions of dollars can and will be saved on military and other purchases once he takes office. in response lockheed martin saying it understands the importance of affordability. all of this as the first two f-35 were delivered to israel earlier today. lockheed derives about 20% of annual revenue from this program. it is about 17% of sales which plies about a third of the plane. this is a huge 16-year program. it involves more than 1,200

companyinizecluding united technologies. operations in 45 states, eight partner nations which helped fund the r&d for the system. for that reason analysts do not expect major changes soon. lockheed is negotiating future contracts for the planes with the u.s. government and even before this election that was a somewhat contentious process. if you look at shares of lockheed martin they are falling and giving up their trump rally gains of the past month, as well. >> defense was supposed to be one of the big winners. stay right there. with us here to talk about boeing in this multibillion deal we'll put it back in the president-elect's cross hairs or won't it? >> i'm not sure if it will or not. it is interesting that boeing is declining to say whether he mentioned the deal to donald trump when they talked after the air force one tweet from the president-elect. here is the deal that has a lot

of people saying if there is ever something we are expecting to hear from donald trump about it is this. boeing finalized the deal. 16.6 billion is the retail value. no comment yet on whether or not president-elect donald trump has any thoughts on this particular sale. we know analysts have thoughts on this. analyst with jeffreys is out with a note today. he says any effort to upset the deal opens the door for long term loss of american jobs at some level. iran can go to others for the aircraft. at some level iran can go to others. who are the others? air bus. that's who they can go to who they are negotiating purchase of 116 aircraft. if this deal is scuttled by congress or president-elect

trump you can bet the iranians will turn even more towards airbus. that's why when you saw the news announced it was positioned by boeing as thousands of people are employed because of orders like this. you kill this deal, you kill jobs. >> morgan, do you think the defense companies could make a similar argument? >> i think they most certainly could. if you look at the f 35 program it has its own website and talks about all the jobs and folks that have been employed by this project. as i mentioned, more than 1,200, actually 1,250 suppliers to this. what i would note is that analysts say that because of the breadth of the f-35 program that they really don't expect that it is going to be a glacial pace in terms of change or restructuring for it. if we were to do something like not buy some of the planes that means higher costs for allies. this becomes a much bigger political discussion on the world stage, as well.

>> senator john mccain was saying by himself a president cannot kill a deal because the funding is already out there allocated. he can scale it back down the road. >> and in this case the export/import bank is not doing the financing for this deal. there are efforts in congress from republicans saying let's block the financing on this. boeing has already said and iran said we are not doing this. who does the financing? that remains to be seen. there are a number of different places around the world if you are iran that you can turn to for financing. your point is a good point that by himself donald trump cannot say you are not selling these. he could make it difficult and we know what that is all about. >> it is all part of the negotiation. >> yes. >> the art of the deal. >> that's what this is all about. good to see you. thank you for joining us. let's get to our "closing bell" exchange with the dow up 23 points in record territory.

randy anderson of griffin capital is with us. steve grasso is on the floor of the exchange and rick santelli checks in from the cme in chicago. steve, we should mention the rally in oil today. oil stocks are the ones that are leading the dow higher today as we continue that march towards dow 20,000 here. >> seems like such a contrite move to me. >> you are so cynical. >> that's my nature. i thought weeks ago with the opec supply production cut i thought that that would leave the market obviously a little bit higher. i thought it would revert back and we did see a little bit of that. now you are starting to see this march into the middle 50s. for me 55 is the lid on oil. i do think that you are going to see hedges come on. production comes on. that is a wall of resistance.

>> that is where supply becomes an issue. >> what do you think of the moves we had here. if we do cross 20,000 it could be one of the fastest moves we have seen. >> it is very exciting. i think it is warranted in the fact that the most important fundamental right now is the trump fundamental. it is animal spirits, optimism. we have a pro-business president coming to office and people are excited. however, i think as we get through q 1 the reality will set in. we have a president who will put his foot on the gas with respect to government expenditures but tightening up monetary policy. i think we will get growth but remember the consumer makes up 70% of the economy. we are close to full employment. retail sales are high and consumer optimism is high. i think we will see a good strong run but i think we will see a little more reality of

where the economy will go. i am seeing a 2% growth and starting to get to inflationary time periods once we get to q 2. >> as we get ready for the fed meeting on wednesday the ten year march to 2 .50 continues. the dollar rally has stalled. the dxy is kind of muddling along. what do you think is going on here? >> i think the dollar index offers a variety of moving dynamics, none of which are highly correlated on any given day. we have what is going on with mario dragi, the italian banks and the germans and the ongoing policy issues and trying to interpret the last statement with is it a taper and how can they distort markets by buying corporates? all of these issues have given a bit of a rise to the euro

currency which is the reason the dollar index pulled back, not paying as much attention for the last couple of sessions on the rising rates. like stocks, rates are moving up and not giving much back. stocks are moving up and not giving hardly anything back. one can view that as an exhaustion or fundamentals are too uncertain. i continue to look at investors as the best way to quantify what lies ahead for the trump administration by looking at how investors are deploying money. i think many don't want to acknowledge the notion that all the pieces are in place to get a lot of things done. now, is that pie in the sky? maybe it might be to the media or many covering the markets. i think the reality is there is only one source that counts and that is what the close is for the dow, s&p and nasdaq and ten year note yields. >> steve grasso what would you add to that? >> i would say the first, the second guest that came on talked about the consumer. i would think tax policy which should be one of the easiest

things that trump can change as far as not having divided government will put a boat load of money into consumer's pockets. i think the real economy, everyone expects it to back track and revert. i don't think you will see that. you are going to see the market probably run first half of the year even higher than it is right now. so be careful about what you're investing in. i think any sell is a silly sale. the market is going higher. she has to catch up. chair yellen has to catch up for the first time in years. don't be afraid of the boogie man. >> we will bear that in mind. we have to go on at this point. >> we have news just breaking a few moments ago. gary cohn named head of the national council. what are the implications of the move?

>> as you said [ inaudible ] lloyd blankfein saying we will miss gary at goldman sachs. the american people and president-elect are fortunate he ch has chose toon serve his country. lloyd blankfein giving the sort that he took it for patriotic reasons. this is the head of the nec, a significant role but not nothing as significant as treasury secretary. there is a an element that cohn was forced out and never felt to be ceo. as for who takes over it is thought that his dual title, president and ceo will be split up. the front runners would have to be david solomon and harvey

schwarz. some outsiders, the like of co-head of the securities division, martin chavez and steven scherr. the consumer part of the business and chief strategy officer. changes still to take place. we are not expecting an announcement on who is replacing cohn in the next 24 hours. >> we trust you to bring it to us. thank you so much. >> some context of this move of gary cohn. the dow is the only major average up today. >> pretty much thanks to oil stocks and oil rally today. >> the broad s&p 500 down about four or five points. nasdaq down 38 and the rustles, the small caps down 16. china's chilly response to the phone call between president-elect trump and taiwan president. we have more on the potential

impact of tensions on chinese stocks coming up after the break. also ahead another shakeup this time at chipotle mexican grill, inc. it has been struggling to bring back customers. we will have the latest developments. you're watching cnbc, first in business worldwide. 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.

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call today. comcast business. built for business. welcome back. jnj, top performer it looks like in the dow at the moment. top left of the blue chips 2.6% getting a positive mention over the weekend. the article making the case for a possible 20% rally thanks to earnings growth driven by operating improvements. it says jnj can benefit from trump's corporate tax changes and the company is less susceptible to possible cuts than its peers. about two to one advancers versus decliners. the shanghai index down around 3% after president-elect trump did express thoughts on the one china policy on fox news sunday over the weekend. >> i fully understand the one

china policy but i don't know why we have to be bound by one china policy unless we make a deal with china having to do with other things including trade. we are being hurt very badly by china with devaluation, with taxing us heavy at the borders when we don't tax them. >> chinese foreign minister responding those who seek to damage the one china principle are, quote, lifting a rock only to drop it on their feet. what impact could tensions between the u.s. and china have on chinese stocks if you are looking to invest over there? a member of the emerging markets internet. he joins us today. what do you make of this? is this a riskier time to invest in chinese stocks with this uncertainty that seems to bemerging between president-elect trump and chinese leaders. >> most investors know that

emerging markets are naturally risky. geopolitics is one major component. what we see is the u.s. or new trump administration testing some pressure points in china and china pushing back. china believes that they are a super power. they have a space program, a lot of olympic medals and money. they want to push back. they are not going to put their chin down. those islands in the south china sea are a good example. >> let me be more specific to the investment side of this thing. we import a lot of goods. what does tariffs do to the companies we might be thinking about investing? >> i'm guessing most american investors don't have access because of quotas that are not allowing foreign investors in. the real impact will probably be in someone who own as store like wal-mart. walking into wal-mart and seeing the prices go up for pretty much everything made in china will probably hit the individual

investor and consumer in the u.s. a lot more than it would impact anyone in china. >> what about a company like alibaba which struggled of late? whether they are leading e commerce name, there are plenty of ways people can get exposure and have exposure. you are talking about being a good example of that. >> that's the story of moving away from an export-driven economy to local domestic consumption. when you look at the products being sold in alibaba they are selling canadian lobster now. the point is that most chinese consumers buy chinese products because they can't afford an ipad. they will afford something made in china. it will be hard to impact the u.s. consumer. it will be hard on the u.s. consumer. the u.s. manufacturer is where you have to have some concern if there is a battle of words and

actions between u.s. and china. >> one other way to come at this is not so much political risk between trump and china although that is something out there. it is also deteriorating fundamentals in china. we see what happened with foreign reserves dropping. we saw what happened with casinos and perhaps not getting access to atms. we know january is coming up. consumers in china get to reset the $50,000 threshold to take capital out of the country for the year. so just looking at how high the debt to gdp number is there and the investment driven boom we have seen. this is a laundry list of reasons to wonder whether the chinese consumer will have an okay time over the next couple of years. >> everything you said is true. that is why the chinese and u.s. are so similar. everything around them getting more expensive.

that is true in china, too. you have a ton of people moving from rural china to urban china and not finding jobs there because they are being shipped to vietnam and saying things are getting expensive like real estate. problem in china is you can't vote for somebody else. everything you said is true, however, they are still going to consume powdered milk or whatever from alibaba, all of these internet portals will be just fine. you want to own the toll booth. you don't want to own the car. >> good to see you. thanks for joining us today. >> thank you so much. we are heading to the close. about 40 minutes left. the dow is up just 26 points. any positive close keeps it in record territory and gets us that much closer to dow 20,000. chipotle rising on major leadership change. we'll have details next. also ahead sumner redstone

and daughter called off plans to merge cbs and via com. we have that story coming up after this.

check out shares of chipotle moving higher by about 3.5%. co-ceo is stepping down. that leaves founder stevels as sole ceo. chipotle has been struggling to

win back customers since a series of food borne illness outbreaks began last year. >> in a statement this morning the company's board said and we quote given the ongoing challenges facing the company, the board felt strongly that it was best for steve to resume leadership of this company. this will ensure that his high standards for the guest experience and his unyielding commitment to the company's mission are top priorities. this will be very difficult. they have tried coupons and all kinds of things to get people to come back after e. coli scares of last year. let's take a break as we head to the final half hour of trading and see if the market continues higher. as far as the dow goes up 34 points. other major averages are lower. a leading trader will tell us what he is watching. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack.

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just want totell you about ophtho tech. it was downgraded several firms. the company announced negative results from two late stage clinical trials. another absolute collapse in the bio tech arena. >> yieks.

look who i found walking the floor of the new york stock exchange as we go into the final half hour. it is none other than steven sarge gillfoil. how have you been? still basking in the flow of army/navy saturday. >> as a former marine i have ties in both places. i served recently in the army. i wanted them to get a win. >> the dow rally continues. the s&p and other major averages have stalled. what do you make of this rally and how much longer can it last do you think? >> the rally is broadening a little bit. you are seeing in real estate, telecom, utilities. technology is playing catch up. financials are kind of all right. the story is that taxes are going to become very important. now, tax rates are probably going to come in in 2017. you will have a buyer strike because we are at levels where everything is pretty much technically overbought.

you may have a seller strike because who in their right mind will take large profits in 2016? >> if you can get better next year. >> absolutely. there will be violence in the market place. it will come in january. i think you will have two quiet weeks before the santa claus rally. >> do you see opportunities in any sectors right now? oil with them cutting production? >> oil got -- it was resistant today $54 which is interesting because that is a gateway. 54 is a gateway to 58 which we have to get that 54, 58 range if we are going to challenge 55. >> the s&p, very quickly, you are a guy with the levels. you are at 2,254 rith now. >> 2260 was important. we didn't hold it. we challenged it from the low twice. i thought we might make a late run at it. i don't think that is going to happen. the way i'm looking at the market we want to see them hold

2250. >> that is a broad range right there. >> you know the way the volatility has been you need a ten-point range. >> you do. >> thank you, guys. time now for a cnbc update with sue herera. >> here is what is happening. a pipeline leak has spilled tens of thousands of crude oil into a north dakota creek roughly 2 1/2 hours from canon ball where protesters are camped out in opposition to the pipeline. officials estimate more than 176,000 gallons of crude leaked. former u.s. congressman fatah was sentenced to ten years in prison for misspending charity and government grants. the judge called the crimes astonishing and gave fatah until next month to report to prison. michelle obama and ryan seacrest read the night before christmas

to the kids before answering questions like what will the president get this year. >> i sort of don't want him to know, but one thing has to do with music and another thing has to do with sports. okay. that's all i'm going to tell you. >> we'll keep you posted on what is under the tree for the president. that's the cnbc news update. >> i think that is a lot of pressure. you can basically call anybody to get anything done. >> then you have to rely on them keeping the secret. >> exactly. >> they better. interesting to see what those are. >> see you next hour. >> see you later. crude oil prices hitting highest levels today since mid 2015. >> well, we hit 5,451 but couldn't hold on. giving some of that back but still higher on the day. part of this was from the news

we got over the weekend. the producers will contribute to the cut less than 600,000 barrels. and the 1 million barrels that come off from u.s. producers in the last year and traders are saying they are optimistic that they will see the rebalance that everybody was forecasting. this is a positive step in the right direction. that's not to say that there aren't risks here. we have the fed coming up. we have a dollar that is strengthened and could go higher from here. you also have the potential that some of the opec members cheat. they don't follow through with the agreement. we won't know until after the new year. finally, of course, there is the idea that there may be a shale revival. we see these producers take advantage of the higher prices only to push the price back down. your guest before said there was resistance at $54 a barrel. he is right if we break that level and close over that level we can get past 55. some people are saying 60 is possible until we have a little

more information. back to you. >> some of those fracers will be licking their chops if they get to $60 a barrel. we have a new alert on via com. >> now it has announced that they have appointed bob backish has permanent ceo. he has been in addition to chief executive officer he is now appointed a member of the board effective immediately. this comes on the heels of earlier today national amusements announcing they are no longer encouraging the two companies to explore a potential combination. so in this press release they say that backish has maximized via com's potential as a strong growing and independent company. >> nathanson saying they think free cash flow is going towards

paying down debt. just how much room it has to maneuver will be interesting. appreciate you bringing the latest. the so-called trump rally continues as markets keep hitting new highs. the dow today moving closer to 20,000 level and while the market has had a significant surge since the election our next guest says the rally is not about mr. trump but about two other developments. >> in a cnbc exclusive we are joined by mark. welcome. do tell. >> writing this down now. >> it is really about a lot of very strong economic numbers that have been coming out of the u.s. economy that really started before this election and then it's not about trump. it's about the sweep. it's something that -- >> you are saying it is about trump and then some. the sweep happened with him as the candidate. >> that's right. kelly, i believe that given all

the news stories and volatility every time he tweets something out. i think if the senate had flipped and we had divided congress and trump was the president markets would be down, rates would be down. i think that is really the reality we would be seeing. the sweep is something that really wasn't called for. it is a very powerful moment i think for markets. >> it has been about the makeup of washington in the new year for the senate and the house. having said that, has this market overshot the expectations for lower taxes and higher infrastructure spending and all the other goodies that could help grow the economy in the future? >> we all know the political process takes time. tax reform probably isn't the first thing on president trump's list. it is probably obama care and supreme court. we are looking for some time in the third and fourth quarter it will probably be corporate

first. they don't do individual along with corporate. maybe it is 20% and then 8% repate reegz. that is a powerful move. certainly markets are reacting. if you look at areas that have really moved like the financials, for example, it could happen very quickly. all of these appointments that we are seeing -- >> they look like appointments made to gut their respective departments. >> this sort of i call it the trantrump has happened. the curve is steepening. that is positive. i think the fundamentals are getting better for some of the move. certainly it might be over. markets are forward looking. >> we can look at credit markets. equities are almost like the top of the water. tla the surface, the waves. the credit market is telling us what is going on in the water beneath it. they have been incredibly

strong. just talk a little bit about put that in context and what does that mean for the rally for dow 20,000. >> absolutely. the credit markets have been kind of handicapped by two things. one would be the regulation in the banking system. you have these banks, regional banks across the united states that are sitting on tons of reserves because the regulations mean they really can't lend that out. i think that changes going forward at some point. that is a big positive. the other thing is sentiment. high yield, for example, $39 billion of out flows. we have 7 billion of in flows. we thought that would happen. that is just starting. you think of ratios. you have almost 40 billion. you are still not there to the point where we should get that worried about the credit markets. the credit markets are very positive. high yields up mid teens. loans are up 10%. we are have ing a great year.

>> what about the fed? we have obsessed over them. do they take a back seat and what do you think they are going to do in the next year or so? >> i think we have a pivot deflation to inflation. the business cycle looks like it will extend a bit. i think the fed is in place. we are absolutely going. >> everybody is expecting wednesday a rate increase. after that how aggressive? >> the dot plots are six for the next two years. it probably could happen depending where we are with the political process, per se. the economy looks like it is in good shape. however, europe is a mess. that certainly isn't growing. >> draghi has begun tapering. >> he has. that forces them to a fiscal dynamic. central bankers are trying to hand this off to the politicians to get fiscal. i think the fed is in play. we have to think about whether

this is going to be positive growth or negative growth. i talked to a lot of investors and a lot of savers and they are sitting looking at their checking account and they have nothing in the bank so they save more. you raise rates a bit on them. they feel better about the future. they feel better about life in ageneral. i think the first move in the fed is not going to kill the market. i don't think that is the case. i guess i will leave that out there. >> it becomes you. you glowing glmpt . >> always good to see mark o'connor. >> 19 minutes left in the trading session. the dow kind of stuck right now. it's the only positive of the major averages at the moment. that puts it in record territory. >> and up next exxon mobil rising as rex tillerson tops the list of trump's picks for secretary of state up 2% today. we'll tell you more when we come back.

welcome back. check out some movers today. goldman sachs shares off the lows of the session after president-elect trump named gary

cohn to head the national economic council. cohn is the third veteran of that firm to join the trump administration following treasury secretary steve mnuchin and steve bannen. shares of goldman are the laggard among the 30 components. exxon mobil is among biggest gainers citing two sources reports president-elect trump is expected to nominate rex tillerson as secretary of state although they caution that nothing is final until the official announcement is de. tillerson was schedule today retire next year. nbc news says he has notified his board about taking on this new role. analysts say he may not face an easy path to the post given relationship with russian president vladimir putin. he was awarded the kremlin's order of friendship. one more tech heavyweight

added to list of leaders expected to meet with president-elect donald trump. jeff bezos will be traveling to trump tower along with tim cook and others who have publically clashed with him sblmpt de. let's bring in internet analyst. we all know that a lot of tech executives have been ignored to this point in appointments to the cabinet and otherwise. so what do you think will be accomplished or what is the purpose of the summit on wednesday? >> i think that we are all as investors trying to figure out what comes out of the summit? we don't know. tazpertai as it pertains does it get worse or better? our view is that a lot of what trump said during the campaign was rhetoric, and does he back

off bluster. he has met with other leaders in media that that meeting did not go well. but i don't think that tas it pertains that a lot should get in the way. the other point i would make is that amazon is not an outsourcer of jobs. if anything, amazon, could be a company whose goals are consistent with trump's which is moderately skilled labor here in the u.s. amazon needs that to build out their ogistics network. i think tonally it is possible that the tech leaders and trump can hopefully find common ground at the summit. >> if i were the tech leaders that is the case i would be making. it is interesting with amazon bezos does own washington post. trump tweeted or talked about that a bunch on the campaign trail not liking the coverage out of the post. i think it might have been the post that was embroiled in the

whole thing about slander, liable. how do you think that might change the dynamics a little bit? >> the first point is just for everyone to realize that washington post is not owned in any part by amazon or amazon at all. it is owned personally by jeff bezos. there is no way that the tax structure or the reporting structure of "washington post" has bearing on amazon. so i think that trump basically has been critical of a lot of the media coverage, "new york times," cnn and "washington post." i don't think that really is going to have a bearing on the business approach for amazon given what i just mentioned nor should it have bearing on the stocks. so that's just our take. amazon has under performed but no worse than any.

you continue to see the rotation out of tech and into other areas whether it be industrials, financials, health care. probably rightfully so. there is probably some reason for that. but we think it is starting to feel a little overdone. we just come back to the core investment thesis that we have for many names. incredible growth. u.s. companies with more than 20% growth over the long term. we just happen to think that right now it's a buying opportunity for the facebooks and the amazons. >> you have 950 price target on the stock. thanks for joining us. >> thanks a lot. >> interesting to see what happens on wednesday. this programming note bill gates has announced a $1 billion fund to be focussed on combatting climate change through energy innovation investment. mr. gates speaks with our becky quick tomorrow at 8:00 a.m. eastern time live on squawk box. that should be very interesting. ten minutes to go. dow still the only positive up

30 points. s&p down three. the russell is down 15. and mr. cashen signaled a billion one to buy going into the close here. we'll see if that moves the dow any higher. a top wealth manager tells us why she thinks small caps have more room to run when we come back.

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seven minutes left the dow inching higher up 36 points. joining us here at post nine her first time on cnbc the president of wealth management out of boston. >> thank you so much for having me it's an honor. >> are your clients gleeful about the rally or nervous? >> most retail investors do the opposite of what they're supposed to be doing.

i get a lot of calls of clients that want to get into the market when it goes up and get out of the market when it comes down. and basically i try to remind them that you shouldn't panic sell but you shouldn't panic buy either. >> what in general when they say i'll do this in a smart way, where are you putting their money to work? >> for clients who have money in the market we are making sure they have a very diversified portfolio and if they want new money invested we are taking conservative dollar cost averaging approach. >> you not piling into this rally. >> we are already exposed to the stock market. we have participated and hopefully some of your viewers have participated. >> and you think small caps would be the place to go. >> well, we like a very diversified portfolio. in the past couple of weeks small cap stocks may have been overextended. we do like a very diversified

portfolio. we particularly like the banking stocks. they have moved a lot but as interest rates go up, as tax cuts come down and as regulation comes down we would be a buyer of those stocks on a dip. >> and not the telecomes, not utilities. if you think rates are going up those are not the places. >> we are not so compelled to own utilities right now. >> was that hard? you did great? >> thank you. i want to wish you a happy holidays. we're coming back with the closing count down in just moment here. why judd greg thinks china could be first priority for president trump once he takes office. you're watching cnbc, first in business worldwide.

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"closing bell" is sponsored by e trade. don't just see opportunity, seize it. just inside two minutes before we head to the close. this would be dominic chu joining me for the closing count down. >> filling in for bob pisani. it is a treat to be with you. >> always a treat to have you here. the dow is the only of the major averages to go higher. enough for a record close. we get closer to dow 20,000. >> inching towards. >> riit's a field goal.

>> you are seeing a little bit of divergence. you spoke about the small cap idea. it is notable that they are under performing significantly in today's market. the dow transportation stocks, art cashin and i earlier were talking about the idea that transportation stocks and small caps, some of those more bullish points of the market have now in today's trading been more under performing. >> this is probably why transports went down today. that would have been oil pushing it up roughly 54. now we are at 52.35. here is what the transports are doing right now as we head towards the close down 86 points off the lows. they were down 100. dollar has stalled, as well. big rally after the election. the dollar index can't get above 102. >> if you look at the stronger dollar side of things if it baits a bit you might have a bit of relief. the cheaper dollars become the

more relative smengt. the notable thing for a lot of traders was the reversal in oil. >> we'll see what that does. thank you. see you later. dow goes up up 30 points today. stay tuned for hour number two of "closing bell" with kelly evans and company. thank you, guys. welcome to "closing bell." i'm kelly evans. in the dow the only average which is higher today but enough to close at a new record up 38 points to 19,749 just about 200 points away from the 20,000 level on the dow. not the case on the other averages. s&p 500 dropped two or three points. 2,256. the nasdaq and the russell pretty hard hit. russell, small caps which have been on a tear giving some of

that back today dropping more than 1% to close at 1,373. there was certainly buying on the divs. we'll talk about that. lockheed martin closing off its lows after president-elect trump took aim at the cost of its f-35 jet program. it was down 2.5%. we will discuss whether the defense industry will come under more fire during the administration. joining me on the panel we have cnbc senior markets commentator michael santoli. chief market strategist and co director of research tony dwyer is here along with cnbc fast money trader guy adami and rick santelli stays late to check in from the cme. it is a pleasure to have everybody here. what are your thoughts on the market? >> the dow up and most of the market took a rest today. if you look at the average s&p down about a half a percent. this is the kind of reset or pullback days we have had.

it has been very mild. when the typical trump trade stuff, small caps, transports take a rest as they did today you had some of the yield sensitive defense doing okay. to me the big question is bigger picture is the market a little bit stretched to the upside. can we count on that late december strength and do we have to see sentiment come up. >> as art cashin indicated more than a billion dollars to buy. if a dip of 2.5 points on the s&p can bring out that interest do you think that is what is going on here? >> what happens is everybody has gotten bullish and corrections are natural, normal and healthy until they come in. once everybody gets bullish and measures that 58% are bullish according to investors' intelligence. when that has happened in the past it is the minimum amount of time before the correction has been just under five weeks. you are going to get a correction but typically takes longer to get there. >> what happens if everybody is

waiting for the correction so they can buy it? >> to tony's point everybody wants the correction until they get one. everybody says the reasons why this happened is not the ones i thought and then they move to the sidelines. everybody wawants to buy the dip until they get the dip. tony has been spot on for the last 18 months. i can't wait to hear what rick santelli has to say because i totally dig him. what stood out were two things, weakness in retailers manifested in the move by names like macy's and nordstrum. i think is still expensive. that is juxtaposed to the strength of oil names. i'm not suggesting i have been on back of this. one name i have liked for a while is apc. that thing continues to move to the upside. after they priced a secondary to buy the free port golf basically some of their properties in the gulf of mexico. i think they priced that

secondary at 56. that stock has been off to the races ever since. that is still poised to move to the upside. >> closing up 70 today. sit tight if you will. we have breaking news on boeing. phil lebeau is here with the news. >> interesting news especially in light of the iran air deal announced yesterday. boeing cutting production schedule of the 777 from seven per month to five per month starting in august of 2017. this is widely expected by most analysts although there are a few who thought i'm not sure they are going to cut the schedule next year. boeing has been sort of forecasting that this is likely to happen. boeing cutting production schedule fraup seven per month to five per month. by the way, they say that they anticipate the iran air order going through as part of this reduction. if that deal gets scuttled somehow look for the production schedule potentially to drop further. >> that is what i was going to ask.

when you read about the iran deal are these 777s part of the planes? they through are two different types? >> there are 80 planes all together. 50 of them are 737 max and other 30 are variations of 777. >> how important stht 777 program? >> they have a next generation 777 x which will start in the 2021 timeframe. you have current generation. they have a bridge to that 777 x. it was expected that we are going to see a bit of a pressure on that production schedule. now we are seeing it starting in august of 2017. >> boeing shares down about a percent and a half on this news after hours. we have a news alert on wells fargo with seema mody. >> the california insurance commissioner ordered a probe into allegations that wells fargo bankers signed up customers for prudential insurance without their permission. keep in mind this all comes

after prudential earlier today said it was suspending business with wells fargo on a whistle blower suit. this adds to concerns surrounding wells fargo and fake accounts. we will keep you up to date on this story. >> wells has been part of the rally that we have seen. this braings back headline risk for them. >> i don't think it is a surprise for anybody buying wells on deregulation. i think it is just a reminder that this will be a little bit of all hands on deck in terms of regulators. every jurisdiction will want a piece of this investigation. getting back to the markets i want to bring in rick santelli. guy had just talked about what was happening with interest rates. so, look, 2.5% on the ten year i think is a two-year high. five year is at a five-year high. are these ceilings or floors? >> i'll tell you what.

it feels good to see interest rates rise without a negative response in the equity space. it feels good market wise to see what's going on with respect to all the pieces of lining for real structural change out of the u.s. government. today case and point lmt, lockheed martin let's slow up a year to date chart. if i didn't know anything was going on i would see a double top. we have been riding underneath it. we had a bit of correction. we settle at 253 and change. that is not anything to put into an emergency box. whether it is boeing or lockheed martin or the secretary of labor i think everybody is in a tizzy. they haven't rationalized that this guy was sent there as an outsider with a mandate. all things that everybody seems

nervous about don't seem to be unanchoring the historic move. as far as interest rates this is offering a one-way street out of a jam for the u.s. federal reserve. they should probably raise 50 on wednesday but hopefully they will do their 25 and start to extricate themselves from the zone they place themselves in by keeping rates way too long and too low. >> what would you say to that? >> i think over the near term i think rates probably peaked for a little while and dollar probably peaked. you will have a reversal of the trends that we have seen. it has been an extraordinary move. just a month ago the market was down nine days in a row and we were wondering how bad it was going to get. even when it anticipated hillary clinton was going to win. here we are up 7.5% since before the election. now there is fear that the dollar will rip higher on higher rates. >> they are all applauding for you.

>> maybe it is the lion behind me. >> at least it is not a bear. we have a news alert on gary cohn being named national economic council over trump administration. david faber joins us now. >> gary cohn has taken that job and will be leaving goldman sachs. unclear who will be replacing him. it is expected to be a dual role as it has been in the past once shared in part by cohn. and david solomon is expected to be one of the two people i'm told who will be filling the role of coo at the company. he is currently co-head of investment banking division. cohn a long-time goldman employee who will be taking over a job that was originated for former ceo of goldman who in 1993 took the newly created position of head of national

economic council and he is expected to have significant power within the white house in terms of overall policy making when it comes to the economy and i'm also told that omb, for example, may report in some way through him. a significant job when it first sort of appeared on friday that he would take the job some of us were wondering given his capital markets experience is that the appropriate position? it does appear that it will be vested with a good deal of power. he is going to be able to leave it would seem as have other employees with his stock and not having to pay taxes and the vesting on unowned or unvested shares and options as is typically the case when you leave for government service. it is fully vested. so that is 206 million in stock and additional money, as well, in terms of unvested stock. not a bad pay day when you can

avoid having paid taxes. that comes up for rex tillerson if he does take the secretary of state job. typically i'm told it is a ten year vesting period. in that case it may be immediate vesting and the same treatment, of course. which is nice when you go into government you don't have to pay the taxes. >> if you take a job in government service does that apply to any kind of public service position you vest your public stock options and don't have to pay tax? >> i believe it is left up to the discretion of the company as a result feeling it is a positive sign to send when somebody in senior position decides to go into public service. i also believe it is specific to the actual jobs taken in the federal government in terms of this tax treatment. but don't take me any further than that. this is not an area i am an expert in. we can get a lot of guys in washington to fill us in on more. >> i want to ask you about the

latest with viacom. it appears the parent company doesn't want the two to combine. how do you expect this to play out? >> we saw in part how it played out today with shares down more than 9%. cbs did not have nearly as big a fall though it had been down over 5% or 6%. a silly rumor that verizon was interested came up and helped the stock. this is after hours. via com was down sharply. it will be an independent company and remain an independent company. there is belief on the part of national amusements that bob backish, newly appointed permanent ceo in the last 30 days or less he has had interim ceo job showed he had a plan in place to create value and they did not feel this is an appropriate time to be selling the company to cbs which never

made a formal offer but had indicated at least according to my sources that any offer it made would not be of significant premium. and so perhaps you have national amusements putting on its via com shareholder hat and despite the fall we think a great deal of value can be created. nothing says they won't revisit the idea but you can take it off the table for quite a while. >> of course, in the interim and maybe david can speak to this, time warner got a bid. there is a sort of very high water mark placed on what some cable assets can be worth. i don't know just take off on the point about cbs not making a big premium offer, it never seemed there was a lot of enthusiasm to do this deal. they would have pursued talks if they were instructed to. >> do you think assets at time warner were of higher quality? >> that is what the market thinks. can you get those assets to

perform better under current management so therefore you can realize some piece of the spread between via com trades. >> via com has high debt levels. how much do they have the luxury to kind of wait and look for that higher offer? >> that is a great point. they are levered about over 3.5 times. moody's may consider it a bit more tlmpt has been some concern they may have to raise capital. they seem to have a great deal of confidence and a plan that he is going to have to communicate more fully to investors some of whom abandoned the stock today for dealing with all of those things. one thing is the ratings have improved a bit. they are lapping what were very tough comparisons for a number of their networks including comedy central. they have been included on directv now platform. some say the new offerings won't be on all of them. that has not proven to be the case as of yet. he does have wind at his back.

to your point it will be important to give out that confidence. what was that furry thing behind mike? >> that's the columbia university lion. >> they were ringing the closing bell. >> even when you have a strange furry lion. >> a paw five. thank you. appreciate you joining us. two big stories developing. tony, a parting comment, what would you say to people? >> the most important thing is people are focussed on possibility of a correction. this economy was getting hot before the election. the global pmis were raising and accelerating. global industrial production lags that by two months. we will have better economic data. we are transitioning. it is not timing. it's fed policy. please, if you're outside a recession the last thing you want to do is get negative as

the market corrects. we are a long way away from a recession, still. >> that goes to what you were saying. what would you add here? >> i would add one thing. take a quick look at boeing. i don't know what is going to happen tomorrow. look where it topped out today. look where it topped out early in 2015 right around the same level. so rick santelli was mentioning a double top in lockheed martin. dig rick santelli i don't know if he is there or not. you is a similar chart formation over a longer period of time with boeing. >> we can all get used to this. >> these double tops could just be fuel for the fire. i agree with tony. i think we see rates and stocks go up a little bit more. come back by the end of the year and turn on turbo thrusters in late january. >> rick, guy, tony, really appreciate you joining us here on "closing bell." be sure to check out more of guy. the bond blood bath continuing

as the fed meeting does loom. what should you do with your portfolio? greg davis will give you his point of view. lockheed martin shares falling after president-elect trump took aim at the cost of the fighter program. we will look at how much of a red flag this could be for the industry. trump's pick for labor secretary has been in favor of automation technology replacing workers. we'll hear from someone saying automation can create even more jobs. you're watching cnbc, first in business worldwide. mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of at&t, and security that senses and mitigates cyber threats, their critical data is safer than ever.

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shares of lockheed martin falling after -- in his tweet he says the program and cost is out of control. billions of dollars can and will be saved on military and other purchases after january 20. how much of a risk is trump to the defense stocks? i hope i got both of your names

pronounced correctly. the defense stocks there was so much enthusiasm right after donald trump was elected on this idea that he wuz going to loosen the purse strings. it seems like the exact opposite is happening. how much further will he go in. >> that's hard to say. it looks like his m.o. is that he likes to use twitter as a bully pulpit and this is a political industry so if the president speaks it's definitely going to have some impact. we'll have to see how much more he wants to do. my guess is this is definitely a threat and mainly a threat for the big caps like the leaders, like lockheed martin or boeing where they have highly visible platform programs. >> and extremely expensive ones. is this all just positioning? is this all opening gambits of deal making? would you buy the dips basically? i think the safest plays are

small mid cap plays maybe in the government services area like a caci. i see government services are first to get flows of money during increases. there is going to be an increase, in my opinion, in defense department funding. so the government services are going to be first to get that money. i think that the big caps could be prone to these fluctuations. when you have a trillion dollar plus program in the f-35 that's a big program and him talking about cutting that or trying to reduce costs will cause fluctuation in the primes. the government services guys i see is where the play is. >> i wonder in terms of the field position of where some of the bigger defense began when we have gone into the period they were not just favorites. forward valuations pretty much

near the top of the ranges. how much vulnerability to due see in stocks before we get to talking about specific budget cu cuts? >> they are selling at all-time highs. it depends on how much they do. i also like the government services names, o. there are names to like that would inclut general dynamics which basically is 40% of biz jet play. we think that will turn up in 2018 as a result of new products, not as a result of cyclical up turn. you got to think trump is going to be good for biz jets. why? the stock market is up. lower tax is good for the economy. we will not have the rhetoric we had under obama. >> that's an interesting point. personal jets, business jets

offsetting government contracting work. that brings us back to lockheed where we started. what happens with that company? sure there is headline risk. i guess the real question is, is this just an early heads up that there could be severe pressures on one of the most significant programs? >> well, there could be. the government imposed the contract terms on lot nine just recently. they are in the midst of negotiating the tenth lot. they are going into negotiating a three-year block buy. they are really kind of at a leverage point. the government is not going to renegotiate what has already been done. they are at kind of a tender point where the government has leverage going forward. >> and we are going to see if the president-elect uses that to maximum effect here. thank you both for joining us. >> thank you. and two traders arrested

over alleged manipulation of more than 2,000 stocks. eamon javers will have that story right after this. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. 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, attracting many of the world's leading investors. partner with pgim. the global investment management

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welcome back. two traders arrested for allegedly manipulating more than 2,000 stocks. eamon javers joins us with the latest. >> the u.s. attorney's office in new jersey says this alleged scheme ran for about three years from december of 2013 to december of 2016. the two men who were arrested today according to the u.s.

attorney's office in new jersey were joseph taub. they are alleged to have manipulated about $10 billion worth of securities netting about $26 million in what the government is calling illicit profits from the deal. the way the government says this scheme was set up was the two men allegedly used dozens of different brokerage accounts, some helper accounts and some winner accounts. they traded in the helper accounts and used the momentum of those trades in order to then make profits based on the way they were tipping the trading in those particular stocks. all in all they are saying the two men face a maximum potential penalty of five years in prison. >> any idea what the stocks involved were? >> no. the complaint they don't detail

specific stocks. those are unnamed but they say the two men controlled dozens of different brokerage accounts in the names of family members and other straw holders who weren't necessarily aware the scheme was going on. >> you got any guesses in. >> 2,000 different securities so must have looked for thinny traded stocks where you can enter orders and take advantage of it. if you control a bunch of accounts you can mark a lot up. they say some firms they dealt with closed a lot of accounts. it was seen as something that was maybe fishy for a while. >> thank you. >> eamon javers in washington with the latest. time now for a cnbc news update with sue herera. >> attorney general loretta lynch visiting a mosque in virginia warning that many americans and communities are more afraid because of the rising hate crimes. she joined a large collection of faith leaders who denounce those crimes.

lots of sports news out of los angeles the rams fired coach jeff fisher after a loss to the atlanta falcons on sunday. los angeles is 4-9 this season and that is basically putting them at the bottom scoring a league-low 194 points. and the los angeles dodgers are bringing back their closer kenley jansen. agreeing on a contract. the second biggest ever for a reliever. the yankees signed chapman to $86 million deal last year. former baseball player jose canseco wants to try his hands at monetary policy tweeting the president-elect should give him the reins of federal reserve and took aim at index firms saying the decision by the s&p 500 to include retes made them an unwise investment. that is the news update. >> does he have your vote?

>> he goes on these runs of opining about economics and monetary policy in the markets. >> sometimes good runs. >> and then it stops. he goes radio silent for a while and then all of a sudden he is talking about the markets and monetary policy. it's interesting. >> i believe he might have asked for the ambassadorship to cuba. >> that i don't know. wouldn't surprise me. >> he probably tweeted it. that's the place to catch the attention for it. thank you, sue. boeing signing a nearly $17 billion deal to sell planes to iran. we'll discuss whether the incoming trump administration could end up killing the deal and whether it is a good idea for u.s. companies to be doing business with iran. many americans fear robots will one day take their jobs. we will hear from somebody who says more automation will mean more jobs for humans. ♪

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up 30%. also, the end of the current share repurchase program has ended and they said let's put together $14 billion into repurchasing shares. you have that news about the news regarding the 777 production cuts starting in august of next year. and then you have the news yesterday which many people expected. it is getting a lot of attention. that has to do with boeing and its sale of 80 airplanes to iran air. it's a huge deal for boeing. how big? retail value $16.6 billion. we have not yet heard from president-elect donald trump. what is his reaction going to be to this deal? what happens with congress? there are republican members saying we are going to block financing of this through the export, import bank. what else might you do if you are a congressional member and do not want to see iran get

boeing airplanes. what thunderstorm financing for this? they are not using the export import bank. they will find financing and if this deal is not scuttled by elected leaders in the u.s. then boeing has a very huge order. this is one of the biggest of the year and this is one of those it's a game changer. if the deal gets scuttled what happens to the 777 production schedule? >> this buyback would be 14% of current market cap. it is significant big increase in terms of capital. it is turning shares around after hours. is it an odd thing that they are grappling with production cuts while on the other hand able to increase the capital? >> i think it is the way you assert confidence in the longer term outlook and play defense on your stock and say you see and hear the noise going on but we feel confident enough to give

bigger increase and bringing yield up to 3.5% than we had earnings growth. i do think it is a attempted as gesture of confidence. >> i agree. it will be interesting to see what happens. i think everybody is looking at what is going on with the iran air order and saying will they really have it scuttled by congress or president-elect trump? you are talking about impact on jobs if it goes away. stay right there. for more on this and if that would be a good idea let's bring in a senior analyst at frontier who joins us out of london. good to have you with us. i guess from where you sit and how you see it playing out, does the boeing deal look like a done deal? does it also indicate to other companies that they could go ahead and sign their own deals with iran? >> yes. unfortunately, the deal itself although big for boeing as you

mentioned, it still represents a lot of hurdles you have to go through to do business with iran. when you look at perspectives of other multinational firms especially american firms this would be an important threshold to see the american congress and potentially the government pass in terms of allowing some companies do business with iran. it represents you have to go through licenses. you have to do a lot of political and media maneuvering. it shows there are a lot of hurdles to pass through to do business with iran. >> i wonder what -- we talked about getting financing in place with this deal. they are a huge company with a lot of levers to pull. i don't know what happens if you are a smaller player who wants to achieve significance for your own operations. how do you fund it? how do you make sure -- there is going to be litigation risk. >> a lot of people have said if

you can't go through the export/import bank who do you go through? there are sources in the middle east who iran can go through or turn to the chinese who have said if the bank goes away fine we'll come up with our own way of funding these purchases. remember, china is increasingly where boeing's future orders are located, a larger chunk of them. what are your thoughts there? >> of course. what we have seen iran try to do in the past few months is try to look for other sources of financing. and look for other banks outside of large multinational banks. the key to remember is that a lot of emerging markets banks that are planning to enter iran in this environment are quite exposed to the american financial system because of a lot of u.s. dollar clearance they have to do. china stands out to be one of the main candidates in this

environment where they want to be an international currency in terms of having their currency in the system for foreign trade but also in terms of a lot of companies have ag presence in china to be able to leverage that and expand into iran. >> so for political reasons it becomes difficult for boeing to execute on this order, it's not as if other countries are going to follow along. if iran wants to buy this many airliners it would go presumably to other places. it is not just a matter of we don't wish the west to do business with iran anymore. that whole idea is gone. >> clearly that is gone. from now on what we are going to see is more unilateral action from u.s.'s perspective. we can see over the last few months the commitment of europe, of china, russia to making sure that this deal actually is followed and investment does enter iran. what we are looking at is continued efforts by iran to

track investment from other countries. the issue there is the u.s. does present large investment location source that iran would like to attract eventually. >> thank you for joining us. phil, really appreciate you bringing us this news out of boeing. automation is gaining more and more traction with american businesses. we will hear from one economist who says robots in the work place will lead to more weth wealth, cheaper products and more jobs. judd gregg is here to discuss why he thinks president-elect trump can be on a collision course with a china crisis.

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welcome back. president-elect donald trump choosing andrew puzner as pick for secretary of labor. criticized by some for supporting automating certain jobs. here is what he told cnbc a few months ago. >> the working class needs a period of transition. we need to be able to train them and set people up for better jobs. we need to revamp the education system so people are qualified to do the jobs that exist. what is happening now is the cost of labor is accelerating at such a pace that it really moves up how fast you want toautomate. >> today the wall street journal rr has a story saying automation can create more jobs. one of the experts joins us now.

he is james bessen, thanks for joining us. >> thanks for having me. >> you think the atm is one example here. explain what you mean by that. >> the automated teller machine came along and everybody said we are going to lose lots of bank teller jobs. something different happened. the number of bank teller jobs increased and they have been growing faster than the overall work force. so what happened? why did this happen? people think about automation in static terms and the economy is dynamic. when you automate something you not only save costs you lower prices or increase product quality. that is what happened with bank tellers and happening in many other computer occupations. >> health care is one of the industries that comes up, as well, where it has been dramatically affected by technology and has continued to add more workers. is that right? >> that's right. more workers and better pay.

a lot of good jobs are being created and workers are requiring new skills and moving up the scale. the dynamics, what happened with the banks which puzzles everybody is that it made it less expensive for a bank to open a branch office. so they opened lots more branch offices, so many more that the total number of tellers went up. >> one question i have, let's talk about the fast food industry where the incoming labor secretary assuming he is nominated will be coming out of industry experience. if all of a sudden i can order from my table in mcdonald's or a menu, how do you think that the restaurant and the fast food industry specifically might be affected by automation? is it possible they won't see the types of job gains other industries have experienced? >> it very much depends on the market. so manufacturing is very clear. we are seeing lots of automation

that does destroy jobs. even in worlds where new jobs are created sometimes they are pulled away from one occupation to another. so you had automation came in for type setters in terms of desktop publishing. that meant a lot of jobs created for computer using graphic designers but the type setters lost their jobs. >> i guess the question is does it -- i guess across the board raise the necessary skill level of certain jobs? when people came off the farms, when farming was automated it helped to be able to read to get other opportunities. i wonder where we are now in terms of that process. >> it's very much about skills. it's not just education, though. i think that is an important pointfelt an awful lot of the skills that are needed don't necessarily require a college diploma but require a different way of working about things, working with things.

they do require many times person skills. marketing and sales jobs. different ways of thinking. different ways of being creative. every job is being transformed by this technology today. >> as you come to us from skype we are well awire. thanks for joining us. it has been a pleasure. president-elect trump has made it very clear he wants to cut better trade deals with china. could his rhetoric end up back firing and lead to a crisis? former senator judd gregg weighs in next.

welcome back. there is texas governor, rick perry, just spotted at trump tower. a few moments ago. of course, he's considered to be

one of the leading candidates for energy secretary in the trump administration. rick perry there. it's -- many have pointed out, the department of energy is the one he forgot during that famous debate five years ago. but rick perry gets the last laugh. >> without a doubt. it really is stating, not just that angle. going for -- maybe

here's what he said. >> i took a call. i heard the call was coming, probably, an hour or two before. i fully understand the one china policy. but i don't know why we have to be bound by one china policy, unless we make a deal with china. having to do with other things, including trade. i mean, look, we're being hurt very badly with china with devaluation, with taxing us heavy at the borders when we don't tax them. >> for more on the impact of trump, be china's stands on business, let's bring in judd gregg. welcome, sir. >> kelly, thank you for having me on. >> you have penned this piece just a couple days ago, talking about how you think this could be trump's first crisis. let me just quote, a little bit alarming, failure would lead to events twisting out of control and an exceptionally dangerous crisis. so how do you read the fact that he's kind of gone out there and already shaken the cage?

>> i reed it as just not really having thought through this whole issue beyond his political rhetoric he used in the campaign. simple fact is that china is equal in many areas, they have a billion more people, which isn't equal at all. they have a strong military and rising economy and one of our major trading partners and probably soon our major trading partner. they also have a domestic problem. they have massive unperforming loans in their banking industry. their state industries are floundering in many instances. they have a huge deficit, and they have this incredible demographic tsunami coming at them. they could become unsettled by their own domestic interests, and my concern, if they have that situation occur, they're going to look for an outside crisis. they're going to look for a way to rally their people around the government, because the government is an autocracy and needs to have popular support by rallying people around it

through either economic growth or outside crisis. so i worry that they may actually take -- may see this as an opportunity. an opportunity to rally their people. >> i wonder, what -- who should move first, and is it better to keep your enemy, if you will, or the other party on the defensive? >> yeah. the game theory of it is really difficult to pull apart at this point. obviously, we have mutual vested interests here. you don't want to completely blow up the whole relationship. what's interesting, though, is that for one thing, all this talk about labelling china as a currency manipulator is fascinating in a context where they're now being seen as trying to slow the decline. they have all these moving parts and really it's not a fully transparent debate. you have seen some reports that president obama in the conversations with president-elect trump has pointed repeatedly to north korea as a potential threat. >> absolutely. >> is that a front? >> what do you think, senator? >> i think -- i have always felt

we have underutilized the chinese leverage on north korea. they intentionally allowed north korea to basically continue to rattle their saber and threaten us. we should put that on the table aggressively. their concern, if the north korean government has changed, they'll end up with massive immigration and they don't want to have to deal with the disruchdi disruption that would occur. there are a number of issues we should put on the table aggressively, such as the manipulation of currency, such as their failure to support us in a variety of areas around the world. and i -- but i think that has to be done in a comprehensive and thoughtful way. i don't think it can be done in an arbitrary, get up in the morning, look in the mirror and felt i threw out a few lines on china. >> yeah. it sounded like there was some -- you heard what bob dole said, he was involved in making this happen. it didn't seem like this was an accident. >> the call, i don't think, was an accident. i don't think taking the call was a mistake. he should absolutely have taken

the call. no reason we shouldn't take the call. the issue of how he has -- this cavalier approach towards the one china policy, we put that in place 40 years ago under richard nixon, the call of the shanghai accord. and it's worked. we probably shouldn't just arbitrarily throw out. some of what doesn't work -- what they're doing in the south china sea, we should take them on over. >> thank you. appreciate it, senator gregg, for joining us. >> thank you. >> reports of multiple hacks of a major banking system. we'll give you this news when we come right back. this is where i trade andrs. manage my portfolio.

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♪ welcome back. i'm eamon javers in washington. a new report now from reuters about the international messaging service known as swift. reuters citing an interview with the head of global security in which that official says that since the famous bank of bangladesh hacking incident earlier this year, there have been a meaningful number of other attacks on clients' banks. banks that use the swift financial messaging system. he's also saying about a fifth of those hacking attempts have resulted in stolen funds. that's according to steven guilderdale, head of customer security program. no information on exactly how

many hacks we're talking about, which banks or how much money has been stolen. but this is obviously a significant development in this ongoing global investigation. >> but it's also -- i know we have to go. it's bank of new york lost the ability to use the system earlier. it's going to affect settlement times. a lot at stake. michael, thank you for joining us on "closing bell," as well. "fast money" starts now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. tim seymour, brian kelly, steven seymour and guy adami. it rallies on. the dow s&p hitting all-time highs. bess flight the new highs, an undercover way to beat the market. and as the dow is closer to 20,000, what will take us to the next leg of the rally? a top technician is here with the details. an