around. joey, got a trade? >> i think financials. i think there's a tremendous amount of opportunity. >> apple just keep going higher. >> i wish i could short regulations. >> tlt. second day in a row. big call buying in there. rates coming back down. >> good stuff. power starts now. >> thank you very much, much more on the big interview with carl icahn plus, santa's sleigh seemed to have stalled on the road to 20 k. my bet is december 30th, folks. right on the 1230. we're going to get in on that one ahead, plu u, into the land of misfit stocks. the three sectors that made santa's nice list this year and the three stocks inside that will will be getting a big lump of coal. there may not be enough eggnog

to go around. crisis, crisis, ladies and gentlemen, that's giving everyone a giant hangover. we'll explain as "power lunch" begins now. ♪ >> welcome to "power lunch." the dow moving lower again today. take a look. the dow jones industrial arch now, it's lower by 34 points and we were roughly 95 points away from the dow 20,000 level. there are still some notable standouts in the broader market. nvidia, microsoft hitting record highs, melissa. >> here's what else is happening at the hour. freddie mac says the average rate is 4.3%. boeing says it delivered its 500 dream liner jet and a major winter storm is closing in on the plains. it could bring blizzard like conditions by christmas day. a busy two hours as we kick it

off with a news alert. >> what we're watching, shares of energy transfer partners. the big pipeline operator. they are moving higher. the brief spike just about now. on heels of dow jones headline, saying private equity firm blackstone is possibly in talks to take a stake in assets. not the whole company apparently, just assets. blackstone partners is bidding with former energy transfer equities ceo, jamie welsh and that this energy could be valued at $5 billion or more, so not the whole company of energy transfer partners. assets specially. back to you. >> more now on the big interview with billionaire investor, carl icahn. icahn saying it's dangerous to have this money dammed up in etfs. hi, bob. >> we're still looking for leadership, but i want to bring

up some of the big exchange traded funds. there are some publicly trading ones that have much of their money in etfs. wisdom tree, could see down. black rock, even opened down. near the lows for the day. of course, mr. icahn saying there's too much money in etfs. kind of a vague complaint, but you can see the effect that's having on the market. meantime, we are looking for leadership, so we can't get it. that's part of the problem. microsoft was strong this week, now, it's not doing anything. goldman sachs, early december, not doing anything. merck and united health were laggards this week, they're up a little bit. just sort of rolling around here with no clear leadership. so, the big question now, look at the markets today. where's the buyers? ? what happened? we've got a seasonal dry up in volume, but more importantly, the leadership clause. you put these two together and nothing much going on. this is the last six or seven days now here. none the less, the market internals strong.

no sign of the market going down. we wish it would drop 5 or 6% so we could buy more, but this is not the only problem for the stock market. it's going on everywhere. gold stopped going down. long data treasuries have stopped as well. the market is just sort of the moving sideways through all asset classes. one final comment about mr. icahn's comments. this is not about etfs. this whole debate is about passive investing versus active. mr. icahn is a legendary active investor. they have always disliked passive investing. that's a fair comment, but millions of other people have found the benefits of passive investing. just bring in larry from blackrock and he'll tell you he spent a lot of money on those people's wishes. >> the irony is that a lot of active managers use the portfolio in order to protect

parts of their portfolio, but in terms of the flip side, it's also worth watching the publicly traded asset management companies because those guys have been pummelled with their costs. their cost model really being under attack. >> that's right, so you've got guys lix waddle and reed. >> janice. >> much of their models are based upon funds that involve active management and they're trying to figure out a way to lower their costs to provide active management still. vanguard does this. they provide active management, but at much, much lower costs, so some of it is going to indexing and passive investing, but i don't think it's going away i think to find a way to do it efficiently. >> let's bring in a guy who knows about that. head of funds and managed accounts. welcome back. jump in here. mr. icahn seems concerned as he

has been his historically, about the volume of money into etfs earlier this year, he was particularly worried about the flows of money into high yield e the tfs and fixeded income etfs. now, it seems to have broadened out. more has gone into equities and come out of actively managed funds. continuing a trend and after the election. are you wor ared? >> not worried at all because it's part of a secular shift that's blood pressure going on for years. one of the thipgs i would say is when we look at the shift from active to passive, we have to realize two things. one when we say passive and we're referring to etfs, today's not your in a sense grandmother's etf. what we're seeing is different types. not just market weighted etfs, but alternatively weighted etf,s that could give you access to active risk. so, again, you're having a

much -- >> true of the composition of the index or the benchmark on which the product is placed. tweaking it, so it's not just the s&p. you're tweaking it by sector or market or whatever. >> there are three things, we're in this business, there are three things you can do. you can have a index that gives you an outcome, so we want a more balanced exposure to natural resources, so we design rules to give us that. think about things like small size, exposure to value, momentum. you can have an index approach that gives you exposure to those risk factors. the most recent thing is key performance indicators, so think about if you want exposure to esg or sustain bable investing. there are key performance indicators that you can bill. >> i've had one of his points is that people and certainly true of folks who buy managed mutual funds. one of his arguments is that

people don't really know what they're buying. they don't know what's in that fund. in that etf. it's a fair point. >> so,ically, it's quite the opsy. i think one of the things that people appreciate about etfs is both the simplicity and transparency. we have to make our port foal yoels trans parent and available every day. so frankly, actually, you get more transparency and an index based etf than you would in certain type of products. >> person who manages it can buy or sell something on any given day and maybe you don't know until the epd of the quarter. >> what i think you're seeing is there is for sure less understanding about e the tfs, the way they're built and traded, but some of the benefits we're seeing driving close to it. >> one of the krp, remember the day the dow opened lower by 1,000 points. so, etfs can trade all the time.

the stuff in them doesn't. because maybe the stock hasn't opened yet. there was so much huge dislocations, the people who made the most and lost the most money were in etfs that were trade, even though the stuff in the etfs weren't trading. wasn't that part of the issue? there's a wholesale exit from a particular etf, maybe the tough in it can't react as fast. sfl so, what that shows you is the etf is reflects the market structure. post chris is, we have many challenges, but two true facts. the typical investor is a long-term investor. holding the funds for anywhere three and a half, four years upwards. even the typical investor, when you rule out hedge and trading funds, the typical investment is two years and lengthening. so, this is a concern if you're trying to trade them every day, but not for long-term. >> two quick questions. do you continue to believe that

passive management will continue to outperform active management as it has in up and down markets for a very long time and what has the pressure been on the business margins on out of business because you're collect ing a lot lower fees on passive products in on -- >> well, so, it's a two part xwe. first of all, we have a broad business where we're using actively managed products and the business is causing this to evolve. i would say the shift you see in flows to quote unquote passive or index will continue, but i don't think that's bad because i think true active management, where you're talk taking on active sheer, risk, stock pickers, they will over the long-term, i believe, flourish and you'll get value in. so i don't believe the fact that you have -- >> actually, you have a percentage that have. those are the -- i think you're sighing a rightful shift away

from the if you can't provide the value, the other part you were talking about in terms of the pressures on your business models, if we're in asset management your costs have come down. >> certainly, in a sense, put pressure on the business model, but we have a responsibility to our investors, so part of that is not just to deliver run, but do it at at efficient price point, so i think that natural pressure in some ways, is good, if we believe we're delivering value in the long-term. >> have a happy holiday. >> we got a slew of economic data this morning, so we have rapid update op the economy. right to steve liesman. >> this is the great thing about rapid. all the data you put in, get back and forth. it's rapid and it's up 0.1%. we are tracking 2% good range here. 1.4 to 2.5%. this number has been as high as 2.6% during the xwaurt, so it's come down relatively, the october data was good. november was less so, that's why we're track aing it 2% and our

first look at the forecast of our economists. six of them involved there. 2.2 is the number, a pretty big range. who is where for the fourth quarter? atlanta fed at 2.5%. morgan stanley, pessimistic side. durable goods, down 4.6. business investment, that's a good number, near 1%. gain on the month. less than expected, but better number. personal income, that's the problem of the day. >> thank you, steve. like that number. >> quick holiday shopping market flash. s&p retail getting killed.

>> it's bad. let's focus on the spending number he mentioned. it's retail stocks catching a lot of the stocks today because the ticker, xrt, now down near the worst levels of the day. if you look at some of the big laggards, dillards, dick's, dollar tree. some of the reason, one survey, just wup survey out here, a report released by consumer research firm npd, they said holiday spending in the week ending december 10th according to their data was 5% lower than the same time last year and total dollar sales in the first six week of this holiday shopping season are 4% below that same comparable period last year. now, also keep in mind toy stocks like hasbro and mattel noted toy sales saw their steepest declines of the season in the week ending december 10th. down 9% from last year. if you look at the sector, the

consum consumer discretionary stocks. it's been a laggard. up . .so consumer and focus. back to you. >> thank you. donald trump pledging to expand ameri america's nuclear weapons. >> this tweet from trump is getting a lot of attention. he said the united states must greatly strenten and expand its nuclear capability until such time as the world comes to its senses regarding nukes. now, where did this come from? we know that donald trump met with a host of generals and admirals mar-a-lago yesterday. you see there, trump emerging after the meeting and shaking the hand of each of the swrens and navy admirals in the room with him. we are among who attend ed, jac weinstein. the deputy chief of staff for nuclear integration.

also there was the commander of the naval c systems command. so, it is possible that trump got an earful in that meeting about nuclear policy. in addition to what we're told it was about, now, who else is talking about nuclear policy? putin is also talking about nuclear policy today with striking rhetorical similarity. this is several hours before trump tweeted putin told a military gathering in russia we need to enhance the combat capability of strategic forces, primarily by strengthening missile complexes. that will be guaranteed to penetrate existing and future missile defense systems. putin said strategic nonnuclear forces must reach a new level of sophistication so as to neutralize any military threats that russia may fact. face thank you very much. >> next, much more on the huge interview we had with carl icahn.

plus, we're going to take you into the land of misfit stocks. three sectors that made santa's nice list this year. three stocks inside those sectors that didn't go along for the ride. "power lunch" will be b back in two minutes. seeing is believing, and that's why

we're opening more xfinity stores closer to you. visit us today and learn how to get the most out of all your services, like xfinity x1. we'll put the power in your hands, so you can see how x1 is changing the way you experience tv with features like voice remote, making it easier and more fun than ever. there's more in store than you imagine. visit an xfinity store today and see for yourself. xfinity, the future of awesome. president-elect donald trump names carl icahn as a special adviser. mr. icahn speaking with scott wapner just a short time ago. scott is here now with the headlines.

always interesting to talk to. >> unguarded. that's me. i think you were referring to me. >> unguarded. >> when it comes to that. we talk ued about the new role he's going to have in the administration. not an official role. obviously, more an informal. we talked about the stock market and the rally we've seen since election day. like the rest of us, mr. icahn sitting there with amazement. maybe grow cautious. in part he says because of a lack of selling. >> as the market's been running up like this, i've become more hedge. being that said, i still buy a lot of thing that is i think are very cheap. am i concern ed about the marke on o the short time, yeah. okay. just as sim p principle as that. >> he's been concerned for quite some time. he did remind us when he ran home and bought stock on election night trying to take care of what he thought was an absurd sell off when the dow futures were down nearly 1,000

points. we also talked about his new role when it comes to regulations that mr. icahn is going to have. there have been questions about potential conflict of interest. whether they are around his selection of an sec chair. what that could mean. for investor in that sort of a role. and also the regulations as they've pertained to the, the p epa. excuse me. because he does own a refinery stock. here's what he said. >> yeah, i know there's talks about conflicts. sure you're going to talk about that. i'll just say this. it's almost as ridiculous as saying you know, if that donald shouldn't talk to a jamie dimon or a monahan about bank regulation because they're ceos of a bank. i do own companies in every yooia, but as far as i'm concerned, i don't have any specific duties. what i'm going to be doing is

basically talking to donald as i have before. i do think it's important. extremely important for this country that this absurd regulatory environment is thrown down somewhat. i'm not against regulations at all. in fact, i sort of believe that you need a rule of law. but it's become literally absurd in many areas. >> in fact, he said guys, that some of the regulations around the epa, the epa, which i had forgotten, should be rolled back yesterday. so, you can expect i think you gather from that as the man who has been instrumental in helping choose the person who's going to lead that agency, and shape the policy that you could see some reaction fairly quickly. >> he has on more than one u occasion, complained about epa regulations on refineries. haez position on refineries. now that he has a position, one of his holdings, cvi, up 11%

today. a lot of the refiners are moving higher. >> that's right. ta sorrow. valerio. maybe the third largest holding that he has is the one that's rallying the most. >> just because of the stock is doing well doesn't he's not right about the roll back of regulations. he may benefit from it, but it could be good for the whole sfri. >> what is interesting, carl icahn is b obviously chairman of icahn enterprises, iep. and that stock is up 5% in today's session. so, the perception is that there's going to be some benefit maybe to having icahn be sitting next to trump being an adviser. >> no matter what story you pick up, it mentions the potential conflict of interest. look, i've done so many good

things for publicly traded companies and for shareholders in those companies. i should be allowed like anybody else to give advice because i know this topic bebetter than anybody else! those tr industries he knows the most about and therefore, he's more likely to weigh in. for that simple reason. >> the lack of selling i thought was interest, too, maybing the point because of regulation when it comes to taxes, tax parts could change. that people are holding back from selling and maybe that's keeping the market where it is, but you could have him come up on the other side of that. >> exactly. >> right. >> i thought that was -- what was making him nervous, this lack of selling. >> epa. >> great stuff. >> epa. >> happens to all of us. still ahead, there may not be enough eggnog to go around this holiday season. that's got michelle very worried. >> it does. >> what's behind the shortage? we got that story, next.

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next story really got my attention. there may be not enough eggnog to go around this holiday. because americans have already consumed too much thus far and supply is running low. one producer telling "the wall street journal" he underestimated demand by a whopping 25% this year. it could be because these guys had something to do with it.

this is a high school students in park christian school in minnesota. they are tis pating in the annual eggnog chugging contest. who can chug a quarter the fastest and keep it down, the senior, there in the white t-shirt, he gets bragging rights this year. that is hard. >> how do you practice? >> with a lot of eggnog. >> wow. >> teenage boys can eat so much. >> it doesn't matter. >> their calorie intake is -- >> melissa doesn't like eggnog. >> yeah, i like it with a little something in it that changes it. we're going to take you to the land of misfit toys. three sectors that made santa's nice list this year and the three stocks getting a big fat lump of coal. that's straight ahead.

what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers)

what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

hi, everybody. here's what's happening this hour. the trump campaign announcing that campaign manager kellyanne conway will serve as counselor to the president in the trump administration. she commented on cnbc's squawk

box earlier today. >> i'd there to serve president trump however he sees best. much more than the glory and the prestige, you've got to have impact. that's why it took me a while to understand where i could help him best. pope francis denouncing the restris tans he's encountered. in his annual christmas greeting, he gave priest, bishops and cardinals 12 guidelines for his process. this is the third year in a row the pope has taken the bureaucracy to task. duke has suspended grayson allen indefinitely after his latest tripping incident. he stretched out his leg, tripped the man he was guarding, but this is his third tripping incident in the past year. pretty blatant. that's the news update.

back to you guys. >> thanks very much, sue. gather round, boys and girls, time to enter the land of misfit stocks. we found three sectors that made santa's nice list this year, but inside each, there's at least one stock that seems to have been on his naughty list. those current ly get ago lump o coal. first up, transports. they've been on fire this year. higher by 22%. except for delta. >> good to have you here. we launched cowz the ticker. so delta hits our screen. it's funny when if you've been an investor for a long time, airlines haven't necessarily been the darlings of the community. warren buffett has taken a position and so they made our top screen. but if you look at delta as a

company, look at the fundamentals, 20% margins. 40% roe. they raised their dividend from 12 cents to 69 cents. all of those are great, solid, fundamental underpinnings. so you're making the case people should by delta here. >> you know, i don't have a specific reason why it has been the laggard. i will tell you from the fundamental perspective, they look like they're doing everything they're supposed to be doing. >> there's another airline in there. southwest. >> that also made our screen as well for the same reason. so, when you screen for free cash flow, wh you have to understand is that market price or market value of stock has a lot to do with it. if the market value goes down, free yield goes up, so what we tend to do is buy stocks at a discount u, the whole etf trades at 14 times earnings in an environment where the market is at 22 times.

>> you ever add or subtract? >> we do on a quarterly basis! what's the difference between this then fundamentally and a mutual fund? >> not a lot of difference in terms of the turnover of the stocks, just how you get there. in other words, we're not making -- >> minute to minute in the market. zpl we trade. the etf stands for fund, so the structure is the same thing. we screen for things particular. like this one, when we take the russell 1000, you can buy it in etf, you can screen it. and so what we think we're doing is we're creating an etf that will produce excess return over time by buying high quality companies with solid fundamentals. there was a tud dionne low pe haves high and we will always be in the low because of free cash flee flow yield. >> this is new etf that launched this month.

>> we start with 2.5. you started with -- >> kicking. not those guys. >> thanks so much. >> our next sector, the financials. they have been on a tear, but the misfit inside, american express, it is positive for the year, but it's for underperforming. jamie freeman has a positive rating on the stock. good to see you. and i think what is overlooked is any rollback on dodd frank and the amount of capital they have to hold, will give a boost to axp. >> that's right. we did an analysis of preand post, if they can return to the capitalization levels they had in 2008, there was nine dollars of excess cash on the 60 plus dollar stock. that's severely overcapitalizeded. one of the most in the country.

>> do you really think the others will be rolled back to pre 2008 levels? is that your blue sky scenario for the financials in general? >> our expectation is raise the bar and i think they'll get through. not saying they'll get repealed, but i think it will be one that returns cash. >> part of the hope trade on american express, but in terms of the mund fen talls and what we're seeing now, what sort of tail wipds does axp have? >> the first thing is that it trades below its average historic multiple, which is not true of the overall. the second point, they're about to lap costco. that was an earthquake event last year. they lost their exclusivity. they made a lot of revisions. you're going to see expansions in the margin. so, our point is it's got

depressed valuation on depressed fundamentals, which are soon to reverse higher. >> you know, a lot of the payment companies actually have not done as well post election. even though the financials have soared. do you think there's investor lack of o appetite for a company like axp or mastercard? >> the first thing i should point out, they're really not a beneficiary of rising rates. you may have noticed as a viewer, you can't revolve your american express card. it's a charge card. they don't get paid more. so a lot of the movement you're seeing rate related is because people are moving into those investments that have more rate exposure. our call is more fundamental. the company's fundamentals are improving. with visa and there's a phenomenon that happen, when you use your card more, it becomes top of wallet. within the next few year, that

will the case with american express. >> thanks. >> let's rouyn out the land of misfit stocks with retail. l brands is missing out. down 28% in 2016. a hold rating on the stock. the use of the term misfit in a company that specializes in bras and bra lets feels awkward to me, but let's talk about. i know you want to get to bralettes. >> i never thought i'd say that on air. >> why has this and why am i doing that? >> have the two dudes talk about bralettes. >> i can take my costco am ex. >> they're big, right? bralettes are big? >> they're big. >> starting to sound like the grinch. throwing me under water. i think the reality is a lot of reasons why.

retail in general. before this, we're talking every day, it feels like retail's being dealt another lump of coal. whether results from mpd, regulation, doesn't matter. that's becoming the group. and what i would say for l brands as we talk about it. there's a few factors, this is a company that has among the best retail management around. brands around. always has. that comes with high market share. the reality is when things change, whether it's management related, market share, dynamic, bralette related, that comes with uncertainty. >> what have they missed? >> so, the reality they haven't missed -- >> there must have been something. >> you're seeing others grab on and you've had a management reshuffle. >> grabbing on to the bralettes. >> any eggnog? >> already had it. >> had some. >> i think what you're seeing here is you're seeing a company that has achieved a really high level. on both brands, on the

victoria's secret and bath and body works. the margins you've seen over the past serl year, really impressive results and that's caught up to itself right now. right now, you're at this period where you're on the verge where you need to get it to that next level. people need to get comfortable with the next stage. >> just give us an extra two minutes to talk about this. >> we don't know what we're going to say. >> what has it got to do to come back next year? >> i think you need to see first of all this trend. within bralettes, they're selling at a cheaper price. >> can we oversimplify this? we keep making joke, but there's a new trend in underwear bralettes. >> less structure. i cannot believe -- >> push ups with all kinds of architecture. >> this is a really --

>> just small, medium and large. >> even taking a step back, when you think about bra retail, what e commerce has done. these are all scripted. in that context, i think what you had to do is you need a barrier to entry. i'm setting you up here. you need the fact they structure in science prevents're people from joining. >> you can come back anytime. >> structure and science prevents somebody else from producing a bralette. >> imagine a t-shirt. that allows other people the access to do it as well. and with sizing, you don't need to walk into that store, it becomes a more -- >> buy it over the internet. >> yes. >> why i never did this as a gift for christmas. >> give a bralette. three sizes.

>> before we get any further down this path. >> b rabbit hole. >> by l brands or not? >> we have a hold. i would say wait. there's a transition. great brand, great team. but hold. >> never buying a bralette. >> yeah. >> to the bond market. rick santelli is tracking the action. >> if you look at a two day of tens, you can see it's pretty tight. we keep stopping around the 256 area. our u current high closed under 260. we're basically one base point different than we settled yesterday, but here's something interesting. tens minus twos has now put in a new steepening going back to december 1st of last year, so a little over a year as you see on the chart. there's a lot of talk about how awful january was. look at one year chart of barclays high yield.

junk. see the uptick in january and then look at how it's drifted lower. at a time where interest rates are going higher. that's very important. as a matter of fact, if you look at some indexes that look at price appreciation and your interest levels, they're having a good year. if we look at the hyg, year to date, you could clearly see. from the standpoint of it closed at 8058, it's above 86. it's up 7%. so i want to underscore, the highest level on tens, there may be a lot to be optimistic about with regard to the stable ilityd durability of the markets. back to you. >> thank you. it's not a matter of if, but when the next infectious disease strikes. question. are we prepared to handle it? look at what's being done to get ahead of the next big outbreak. that's straight ahead.

like the gates foundation to get ahead of the next big outbreak! if it seems like new outbreaks have dominated the headlines in recent years, there's a good reason. in the last decade and a half, the world has coped with middle east respiratory system, e bole la in west africa and now, zrk ika. >> we've seen emerging infek diseases forever and we always

will have them, but to have a cluster is a bit unusual. >> public health researchers say it's a certainty there will be another. so how can we be better pre paired? it's a question they've been asking since ebola erupted. >> we had a joint experience of really the tragedy that occurred in our frustration that we couldn't do more to interfeern. they were working together to produce experimental vaccines as a faster pace than ever before. >> we were able to do in seven mont months, go from mi mate studies to phase three trials in thousands of individuals in liberia. normally, that takes anywhere between five and ten years. >> trials for zika vaccine are moving at an equally fast clip,

but in both cases, the work began after the threat emerged. it's a problem no single company foundation or government agency can sol alone. there's too many potential threats and too few resources in one place. so, cepi was formed, the coalition for epidemic preparedness innovations. >> it's a novel partnership between public and private sec entities that's focused on p preparing for future threats and doing it in a way that really is is fundamentally different from previous opportunities, where the mode has been far more reactive rather than proactive. >> it has two main goals. start work now on identified future potential threats and develop new vaccine technologies to be able to respond quickly to unknown threats. whether zbl what w>> what we'd about five years is that we would have two or three of the key pathogens from the world health organization list of

serious threats. where we have now a vaccine, which can be stockpiled and we'd like those to have at least two new platform they are produced on. >> the national institute of allergy and infectious disease says these efforts are vital to protecting the world from whatever comes next! we'll continue to see outbreaks as the years go by. they're unpredictable in their frequency. we don't know if it's going to happen next month, next year or a few years from now, but inevitably, it will happen and that's the reason why we need to be better prepared. >> health officials say it's a matter of if, not when, the next one b will be. we know it's coming, just don't know what it's going to be. >> how can you prepare for an outbreak that hasn't happened if you don't know what it's going to be. >> these viruses do exist in the world and that's why they've identified them as potential threats. with ebol ark, we had seen

outbreaks before, just nothing on that scale. if we could say something else has a similar potential, they could start working on that in the lab and figure out new technologies. >> when they're at that point where it hasn't happened yet, the profit incentive probably isn't there. >> yeah, you hit the nail on the head for why something like this is important. that's why there's this collaboration between companies like gates and welcome as well as u.s. governments. >> can i can you a random question? the national association of allergies and infectious diseases? that s that new that allergies has been put into that? because my goodness, all you hear about today are people with serious food allergies in the schools and camps and everywhere. and with epipen and all of that. i hope there's a big thrust to try and figure out why so many people are having allergies and serious ones today. >> there's a lot of research

going arn and a lot of new companies. i'll have to check about when allergy was added or there the whole time. >> thaupg. much appreciated. and breaking news relateded to the trump transitioning. >> we're learning who's going to be behind the podium in the white house briefing room and they're saying it's sean spicer, who will be assistant to the president. he will be a familiar face to viewers of television stations around the world. he has been the communications director for the republican national committee for a long time. wup of the briefers who have been briefing reporters during this transition since election was active on the trump campaign toward the enof the campaign. wee also getting a feeling now for some of the other officials who will fill out the rest of the trump communications team. they're saying hope hick, a familiar face on the campaign, will be assistant to the president and director of strategic communications. jason miller who has been

briefing reporters will be assistant to the president and director of communications and sean scavino will be director of social media. that's an important title for a president who campaigned largely on twitter and who has been using it very effectively. that's the news sean spicer will be the person in the podium. >> thank you. still ahead, talk b about rolling in the deep. take you inside adele's new york city crash pad. "power lunch" will be right back.

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time for power house. today, we're taking you inside the penthouse of dallas maverick's player, darren williams. but he's not the only star who stays there. >> this $28 million penthouse sits atop one of new york city

trendiest neighborhoods and was recently adele's crash pad when she was on tour. the pop star was a guest of the apartment's owner, three-time nba all-star point guard, darren williams t. the 7200 o square foot duplex is two apartments combined into one. it includes a great room with 17 foot ceilings and a 30 window skylight that drenches the place in sun light. >> what makes it different is the amount of entertaining space you have in and out. >> sliding glass doors reveal a 1500 square foot terrace. threw the designer kitchen down massive hallway and past a grand home theatre is another 1500 square foot outdoor space. upstair, there are six bedrooms, including the master suite with an enormous closet that can hold up to 500 pairs of shoes. the stunning views from the owner's king side bed marble

covered bathroom can disappear with a touch of a button. perfect for a pop star looking for privacy. another stealthy feature that attracts celebrities to this place is down below in the paparazzi proof garage. >> private parking where you don't have to exit the building to enter the home. >> when adele stayed, she had four different sedans parked in the garage and every day, she used a different one to keep the paparazzi guessing. it worked. she managed to keep the pad a total secret from the tabloids and the broker believes that stealth garage will be a big attraction. >> parking in new york city. is a big deal. >> all right. amazon echo has been hailed as your own personal digital butler. it's always the butler who did it. new information. we'll talk about it still ahead.

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welcome to the second hour of "power lunch." here's what we're watching this hour. the march to 20,000 stalling

today. the dow's in danger of posting its first back-to-back losses since before the election. trump's trade pick taking the u.s. on a collision course with china then alexa, are you listening? we know she is all the time. should you trust echo with your privacy? >> take a look at some movers. retailers taking a big hit. session lows on track in fact for its worst day in more than four months. aly babb bah down more than 2%. blacklist. marketplace back list, saying it's not doing enough to fight counterfeit goods. >> u.s. economy growing at the fastest rate in two years in the third quarter. but that's look iing backwards. well, the policies of the new administration keep the party going and justify the optimism we're seeing now steve?

>> thank you. a lot of wall street exists are not embracing the opt michigimi their traders or the new administration while the president-elect said their plans could lead to 3, 4, 5% growth. very few see 3% in the next two years. the average of economists, 2.3% from an estimated 1-7. then 2.5 in 2018. there's some optimism that growth gets better, but it's far below the estimates. some say we don't have enough info to make a forecast, but all point out positives and negatives to trump's policies. here's a little red light, green light. you have infrastructure, the economists like that. they like the regulation, tax cut, especially for business. they like the repatriation idea and say this could ignite animal spirit, but then over to the other side, for every action a, there's an equal and opposite

reaction. they are worried about trade policies. it could mean faster fed. of course o, there's the possibility of deficits. all that said, kellyanne conway warns this morning on box and i quote, every time people vote against trump, they are sorely disappointed and i think economically, that's true! how did the forecasts a year ago if you can remember, stack up what what's happened this year? did we do better than thought that. >> no. >> here's the story of the post financial crisis world. growth has underperformed relative to estimates. jobs have overperformed. they have overestimated growth. and underestimated jobs. >> stay with us as we bring in our guests. i don't know that we've ever had so many people gather around this table. would you pass the chicken parm? >> he's got 20 billion in assets.

mike collins at pgim fixed income. that's prudential, right? >> it is. >> 620 o billion under management and ron, a cnbc contributor. about $100. >> i think it's green light for a while. the markets aren't correctly anticipating that a lot of what trump is talking about as the incoming president is already in legislative language written by paul ryan and team. i think you can see tax cuts. the repeal means a capital gains cut and when you look t what they're trying to do with financial market deregulation, you basically kiss the rules good-bye. the cfbp, and i think that means a lot to the stock market and to a certain extent, the economy. >> but a bigger risk, if wall street, if the consensus doesn't

come up to what the markets are expecting, not meeting the hopes there. >> before you jump in, profits are expected to rise 10 to 12% from next year. if tax cuts come with that, you could add another 10%. i don't think the market has fully discounted anything but improved profits. >> all right. >> mark, how do you see it? >> well, we believe valuation is pretty full overall over the equity market, so i don't think it's a case where we're going to see performance be strong across the board, but we think the rotation from safer asset, both in fixeded income and equities and the more cyclicly oriented companies is going to continue and that's reflective of what donald trump's policies are endorsing at this point. >> i was going say to make that practical, you don't buy a spyder etf, you buy specific sectors? >> yes, financials we think are going to perform very well next

year. industrial, that's going to do well when growth move frs the stall speed we're in into 3 to 4% areas. active managers should do well next year if they get the sectors right! as we looked into the red light, a couple stand out that would have particular imr port for fixed income. one would be rising. higher than expected inflation and faster rises in interest rates. how should by thinking about my fixed income portfolio, be positioning for 2017? >> yes, so you guys are doing a great job framing out the issue here. the tails are really fat. before the election, i felt there was an 80% probability, we would be in this 2% base case and now, it feels like it's maybe 2.5% growth growth, but man, the upside is really high and the downside accordingly because those red lights is really high. if you look at what's happened

in the bond market and dollar, up until now, the stock market was kind of fuelling these higher rates. now, on the opposite end, maybe the higher rates are going to stall out the stock market and tighten financial conditions. >> when does that happen? maybe it is, the market's gone into a little bit of a doll drum here, but don't put too much importance on that. but at 2.5, 2.5, 2.f% on a ten year, are we getting at that. >> we saw the 3q number. it was fueled by the easing of financial conditions. where the dollar tanksed. rates were low. and the fed was you know, preventing stopping the and now, all of that has turned. in six months from now. >> and the market's gone up in the face of that turn though. that was tyler's point, even with that stock market has still gone up. seems to think growth is going to off set those concerns about rising interest rates and the

toll lar. >> and there is that potential, but i'm concern about the risk that the markets are pricing in a lot of optimism here and aren't pricing in those red signals. >> it depends on how far each party the baton off, right? >> i want to make one point about growth. 1% is a lot. and a lot of economists keep underscoring that to me. when you have a person, the numbers three, four, five, six and stop me when i get to double digits. you know, to go from what is believed to be an underlying growth rate of 1 prnt 7 to get to 2.7, is a heroic and fantastic achievement and we'll all live better because of it. what you have to do is other open the floodgates to much more immigration, we'll have to find a way to get better machines out there and boost productivity. that is a very large amount to do if we do that, in my opinion,

donald trump can claim victory eempb though he won't his his three, four, five. my concern is we begin to budget for 4% growth. deficits end up being better and i also worry we invest for 4% growth. >> maybe you're right, b but if it ends up being 2.5 and i was bank ong four, then we have a problem. >> from an equity market perspective, we're going to have to calculate price earnings ratios every day. what's likely to go up faster? prices or interest rates and fair value is going to be dictated by which of those is moving faster, farther and lock locker longer. you're out of 1% treasury bill rates, you have an infinite pe. when we get to the point where rates are going up, if profits don't rise, you'll run into a wall and there are other risks, but right now, i think the market's correctly sensing what's wrong. >> what is the risk to stop price is if as ron pointed out in his note, there's friction within the gop.

about tax cuts. or infrastructure spending that seems to be one of the anticipations of 2017. but there are, the gentleman who's been appointed to run omb was a real deficit hawk. didn't want to raise the debt ceiling. what happens if that long jams? >> well, you know, this cyclical change we've seen, sofrt sort of the movement, rotation among out of fixed income into ek with wiity, you may see some f that turn around, but i do believe donald trump's going to have a honeymoon period and i think it's going to be very hard to fight a lot of his policies given just his personality, the fact he may get out on twitter and throw another candidate that might run against him down the road. so i think that's going to be a hard train to derail out of the gates. so maybe the honeymoon period only lasts a year, but i think it's going to be a tough one. >> the one thing that's for sure, is that all of this stuff

is right in our wheel house. every one of these issues is the stuff that matters. >> look at the wall again over there. every one of them. >> the impact. >> we don't have a wall. >> just imagine the wall. >> imagine the wall. tax cuts. >> there it is. the next is our stuff. >> there it is. barring some major geo political events the next four years is ours. >> excellent. >> on that note. happy holidays. thank you. a noted china -- trade war with china coming. "power lunch" will be right back.

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there's more in store than you imagine. visit an xfinity store today and see for yourself. xfinity, the future of awesome. what donald trump has said we are going to use terrorists as a negotiating tool. he's called them the biggest cheater. he's right. to force these trading partners to stop the currency manipulation. illegal subsidies, to stop the intellect yul property theft that takes $300 billion out of our economy. >> that was the new trump pick for the head of the national trade counsel. back in july here on "power lunch," he's beating the drum on china here for many years and earlier, another trump adviser, carl icahn, ratcheted up the

rhetoric even more. >> get sbo a trade war with china and sooner or later, i think we're ging to have to come to grips with that. maybe it's better to do it sooner. >> let's bring in jared bernstein and jim, economic policy analyst, also a cnbc contribute ir. jared, to you. is it inevitable that we'll have a trade war? we should get it over sooner rather than later. >> i don't think it is. i think what you're hearing here is something we better get used so, which is a kind of negotiating style that's unique to trump and his team. this is not the way former presidents would achad ocho cinco approach this. when petr and carl icahn and donald trump make these claims, talk about 45% tariffs and a trade war, they're trying to intimidate the country with whom they want to negotiate. understand what a trade war is. it means we set up this kind of

barrier that's at this height that is we subsidize our exports and our trading partners do the same. and most believe that way forward is not a positive for growth or the trade balance. >> we get this is sort of donald trump's negotiating style, jim, but is that the right style to use with the chinese? >> you know, it's fascinating. i talk with peter navarro a few years back after one of his books came out. maybe it was death by china and he actually laid out how he thought you should negotiate with the chinese and idea was that the treasure ki secretary should take a secret flight to beijing, meet in private with the chinese leaders. don't tell the press. tell them what we want them to do and work a deal out that way, but that's not what it was the trump administration is doing. they're being very vocal, including peter navarro, including donald trump. highly confrontational and we'll see if that strategy works

better than more quiet negotiations, but as far as i'm concerned, we've already lost the trade war because we've abandoneded the specific trade deal. everything after that is minimal compared to the goal we've scored against ourselves. >> we know that rest of the world does their corporate taxes in a very different way so when we ship overseas to those countries, we're almost paying a tariff. denmark tax on 25%. germany on 19. china tax on 17%. mexico tax on 16 p%. because that's how they do their back tax. they end up basically subsidizing their exports and penalizing imports. >> i think i know where you're going with that. which is because i know you know about this. the republicans and this is an idea that i believe paul ryan and kevin brady hold very high right now, are interested in a big change to our corporate tax

code. that sounds very complicated, but the relevant piece for this conversation is it has precisely the same impact you just arctic tate lathed. in fact, some suggest it wouldn't be wto compliant. now, more complicated models tell you at the end of the day, the dollar adjusts and trade balance doesn't change that much, but people are thinking along these lines! but you're acknowledging that we are at a disadvantage when we shipover seas compared to the way other countries do it. what i've just heard you say. >> i think that we are, but i think it's less of a disadvantage on the tax kid zenaida and i think peter makes a point that is relevant and true. but it's not rell vand visa vi china anymore. to make their exports cheap and ours more expensive. that's historically a bigger problem. >> listen. if wrou don't want to save money

an want to consume a lot. you're going to run a big trade deficit. now, trade policy can direct who you ran those with, but those factors are what drive our u.s. trade deficits. some tweaking of a deal or reworking of a trade deal is going to change that, it's not going to happen. >> so, i totally agree. by the way, it seems like i was going challenge something you said earlier, somehow that the trade balance is a function of these trade deals. i don't think that's the case at all. we don't have a trade deal with china for example. >> yeah. so i do, i agree with you. >> trade surpluses. if trade surpluses meant prosperity, japan, they would have had a history of prosperity over the last 20 years. they have thot. >> you don't think there's any validity to taking a stronger attitude position against china? there's nothing to be done about stronger? >> i don't know what that heins in the ab tract, but if it means talking to them b about going

after intellectual property right, that kind of thing, that's fine. but thiz tariffs, to think in tend what you're going to get is a trade balance and somehow that is going to result in prosperity, that's the fundamental economic theory of donald trump and that theory is what we need as a trade barrier. is wrong. >> has he ever articulated we had a trade balance? >> he believes in a zero sum game. >> if you're running a surplus, you are winning. >> what donald trump -- what donald trump believes and there's a germ of truth to this. more of a germ, is that our trade deficit in manufactured goods has hurt our man fufacturs and their communities. i think that's true. i don't think, i agree that if we got the trade balance, that wouldn't be some mak louse growh recipe. has hurt our manufacturing

sector and part of it is due because countries have managed their kournsys in a way that put us at a disadvantage. >> going to leave it there. thank you. >> coming up u, the good, bad, ugly in today's trade and wait until you see the play that got duke's star player suspended. miles per hour. 0 to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t.

we kick off with the good. marathon. one of the best in the s&p right now as oil is climbing higher. to the bad here. the s&p homebuilders etf, having its wos day in about two months, dragged down by bed, bath and beyond. an ugly day for red hot the stock after the company offered revenue u expectations that fell short. red hat announcing its cfo will resign. duke has suspended its star basketball player. grayson allen will sit out indefinitely after he tripped an

opposed player. clips him right out. in last night's game. after the game, coach pulled him from the dwam. allen was basically seen on the bench having a fit, a tantrum. he later re-entered the game in announcing the suspension, coach k says allen's actions do not meet the standards of duke basketball. he has been involved in two other tripping incidents during games after the second time, he received a rep remand from the atlantic coast conference, but no other punishment at first last night, guy, coach k merely asked him to go apologize to the player he fouled, which he did, but obviously, upon further review and i think pressure from the acc, he decided to suspend him. >> unsportsman like. >> it wasn't just the fact this was the third time. >> sure. if you, if somebody can get away with something over and over again, why wouldn't they keep

doing it. >> it's like a child. you have to take away the thing that matter to them. >> consequences. >> yes. that's the story on grayson allen. duke. u.s. dollar, by the way, virginia won last night. beat california by four. the u.s. dollar is up nearly, stayed up very late. 5% where the dollar will head next and what it means for your investment and it is one of the most popular holiday gift this is year. who can you trust? alexa. ♪ ♪ ♪ ♪ how else do you think he gets around so fast? take the reins this holiday and get the mercedes-benz you've always wanted during the winter event. now lease the 2017 gla250 for $329 a month at your local mercedes-benz dealer.

in a tweet this morning, donald trump calling for the expansion of u.s. nuclear capability until the world comes to its senses. during the campaign, trump suggested the u.s. expand its arsenal and said the world would be better if other companies including japan and south korea had nuclear capabilities. angela merkel arriving in berlin for meetings on the truck attack on a christmas market that killed 12 this week. germany's justice and interior ministers were part of the meeting. the syrian army says it has

retake p aleppo entirely and brought security and safety back to the city. the last group of rebels and fair families left in buses an trucks. and according to a recent report, tobacco use is very popular in video games for kids. the report by truth's nicinitiae also says at least 93% of parents are unaware that smoking is very common in the games back to you guys. >> all right. thank you very much. as we close in on the end of 2016, cnbc breaks out the 2017 playbook. looking at ways to make money in the coming year. this hour, we are going to look at the u.s. markets. here's bob pisani. >> stock rally, oil rally, everyone's bullish right now, but that's going to get tougher in 2017. here's three predictions. first, the stock rally will continue, but will hit major

head winds. the s&p 500 will hit a series of historic highs within the first 100 days of trump taking office, but that will be it. the problem, market participants are anticipating higher earnings due to tax cuts and stimulus. the actually company guidance won't match. second, the oil rally will be a bust. as oil heads towards $60, producers will ramp up production. that will keep the prices down and the much discussed agreement between opec and nonopec members to cut oil protection will collapse among charges of widespread cheating. finally, 2017 bb bwill be the here stock ownership expands. the american public has seen ke clining levels for years. only 52% of households own stocks. but rising gdp and greater optimism on the economy will finally reverse those trends in 2017 and folks who abandon the market after the financial crisis in 2008 will return and start buying stocks once again.

wouldn't it be great if that last prediction really happened? wouldn't it be nice if more households owned stock? it's become concentrated in a narrower and narrower group. 80% of stock, wouldn't be it great if the trend reversed in 2017? there's my wish for next year. >> the dmoktrization of stocks. thanks, bob. the trump rally lifting the u.s. dollar to 5% since the election and the fed plans to hike interest rates three times next year. that's given the green back a boost. are we entering a period of the super dollar? let's bring in peter. we're asking that question, one report this morning, they're talking about a suh p per dollar cycle. you believe that? >> on paper, it checks a lot of boxes. interest rate differential, hopes for better growth in the u.s. qe in japan in the europe and urk k. and talk b about dollar shortages. with all the overseas dollar

denominated debt, but a lot f of that is known and talk about an overcrowded trade. investors should start thinking about other things. if we get higher inflation, in the fed is slower in raising interest rates. >> so, not three? zwl it gets us to a one and a quarter. fed funds rate. maybe the data says they should be doing four, five, six. not saying they will. just saying they are going to be well behind the curve. that's a guarantee. >> all the dollars coming back or has that not been factored in? >> a lot of those dollars are still sitting in foreign dollars. so, when you bring it back -- >> no buying dollars. >> it's already in dollars, just parked overseas. >> what about this tax plan in the gop, which is very, very

strong dollar. they start to tax import, but not exports. >> right. because that would shrink the trade deficit, therefore lessen the dollars leaving the country. but with that these es, also, europe has had a trade surplus for a while and the euro has gone straight down the last calm of years because of quantitative easing so, the action of our central bank is going to be a key factor of where the dollar goes next year. not just this layup one way trip because again, you can guarantee janet yellen is going to be dragging her feet. >> dollar four right now. very, very strong. historically, what's the trading ban nx year? >> well, it's interesting because let's fast forward to the middle of next summer. all of a sudden, headline inflation is above 1%. people are going to say, draghi is now running to the enof qe and will have to taper soon. that could be a bid for the euro. at the same time, it has this

trade surplus. past the year, i'm positive on xhcommodities. that could be good for the aussie dollar, the brazilian rial and other currencies. >> or against a basket. >> more discriminating on what the dollar is going to rally against and what it's not. >> in terms o f a head wind for corporate profits, will we hear that the next earnings season? we've seen it in the guidance of some companies that have reported. they did take down their full year. their current full year. because of negative head winds. we're seeing it. >> carnival cruise. said their quarter was nipped by 16 cents, which is a big move for one quarter because of the strong dollar. that's going to be rampant. no matter how good of a hedger you are, the rapidity, you can't keep up with. >> you gave me a sophisticated

answer. i don't question it, but come back to freshman english. is the dollar beginning to be as strong as it is today, broadly speaking, weaker, stronger? >> i think we've seen most of this move. let's take the euro. how many times have we heard the euro's going to -- look at everything that's been thrown at the euro. massive qeric, that's being extended. negative dmoz it rates. trump economics. so, in short-term, this rally is probably towards end. >> so, you're the one person outside. i would say there are two big things we've heard since the election. dollar strong. buy the financials. and people are so in the tank on these two trades, that's what makes me nervous. when everybody's so on one side of it. >> one person that i've heard. >> i acknowledge the reasons behind it. right now u, it captures a lot of those reasons and good news.

>> all right. >> good to have you on. >> always like that. >> on deck, opportunity just for you. the big wall street calls you need to hear today. street talk next and why is the grinch handing out onions on the streets of florida? we'll explain. ♪

raymond james downgraded the stock sto a market perform on the heels of the retailer's results. for too lopg here. it's been in the midst of a multiyear program the to transform its business into the digital age with the acquisitions, but there are no indications as to when more progress will be seen. >> i like the bed and bath department. the yopd is what trips me up. the second stock. harley davidson. long bo. very bearish. their checks indicate that retail says it's going to be below expectations. that means wholesale shipments could be weak.

and that has the analysts believing there will be rocky roads ahead. >> rocky roads. next up, a huge boost on the back of its earnings and credit suisse is out to $30 a share. it sees sustainability in the current environment for d ram in 2017 and for the first half of the year. it's also seeing evidence that they're closing the gap. investors are not depreciating the curve because of trends like ai and cloud. they're focusing on storage here, but take a look at that gain. >> i don't understand man, but doi shoes. nike, googen heim calls it a buy. thinks in 2017, nike's revenue will reaccelerate and gross margin expansion will continue. resume, i should say. also, the company he says that continues on pace to 50 billion in revenue by 2020, the price target remains at $70.

nike added is a best idea for 2017. there you go. lace them up. >> let's get to zima. >> share of barclay's in focus, the u.s. is suing over residential mortgage-backed securities b and a a lawsuit filed in a federal court in new york. that according to a report from bloomberg. we are looking at shares down b about 1.5%. we'll keep you updated, but shares down 1.5%. >> thank you. if you have gift to buy, will you be able to order them online? get them in time for christmas? some sites promise you can, but do they really deliver put a cnbc test on it and if you haven't bought an amazon echo, you're out of luck, it's sold out. but if you've got one, can you trust it? we'll be right back. jooix

. the dow hitting a roadblock on the way to 20,000. markets lower across the board right now. oil market meantime, closed for the day. jackie. >> hey, good afternoon. we had gains in wti today. up about 46 cents $46 cents at .

$52 and 95 cents. equities taking a pause as well. remember, dollar index moving over 103. there's optimism about opec. lots of chatter about these cuts that are going to take effect in january, but it continues to be the same old story in some senses. we're going to have to wait for the next week and a half to see that occur. but also, the positive data we got here in the u.s., gdp helping boost things a little bit. we saw natural gas see a big pop this morning and flat on the day. >> thanks very much. >> the grinch the pulling over speeders in florida. a police officer dressed as the grinch, handing out onions, a smelly reminder to slow down. definitely not as expensive as a

ticket or points on your license. >> he's cute. >> yes and you could use the onion in your christmas meal. it's december 22nd. may not be too late to order a gift online and get it in time for christmas. courtney is testing that out for us and all the procrastinators out there. >> that's right. so, if you aren't done shopping yet, you might need to head to the mall or your local cvs, that's the old fashioned solution, but amazon prime now could also be an answer if you live in one of f the 30 cities in the u.s. where it's rabl and you're a prime member paying the ut $99 fee. yesterday, i actually tested it out in new york city. trying to fulfill a wish list for a charity. so i went to buy six items, most of them i was able to get from cook ware to tools, so i placed the order just before 2:00 p.m. we had a camera at the facility

to catch that order being fulfilled, which happened within eight minutes. the earl yers window was between 4:00 and 6:00, so while i wrapped other gifts, the delivery person left about 2:45 p.m. and jumped on the subway with their items in a big orange backpack, so it got to me around 3:10 p.m., 50 minutes earlier. and about hour and a half after i ordered those items. he scanned them, thep off he went. presumably for another order or back here to this facility. many retailers are at least experiment shipping from the stores as well. so amazon, in order strorm, rent the runway, target uses insta cart and walmart is trying out grocery delivery in three city, but haven't heard much progress on that. so the fact of the matter is if you have waited until the last minute and you want delivery

you're probably going to have to look to an amazon if if not the old fashioned way. i tried to order from target and macy's. i couldn't pick them up in the store, but wasn't able to get them delivered the same day. >> i've used amazon prime with delivery in an hour. it seems very labor intensive. >> yes. >> does this even profit margins or -- good for them? >> it's right, it's only available in 30 cities, they're pretty mum about the exact cost detail, however, when we spoke to the vice president of prime now, she said it's her job b to make it as cost effective as possible. and counting companies says with those 30 city, they're covering 50% of u.s. gdp, so at least you know that those are cities that are of course densely populated with a lot of prime members and cowen estimates that it costs about $9 per delivery. amazon doesn't exactly say how many they make every day, but there's at least a little bit of

numbers. >> did i hear you say you ordered six discreet items, did all six come with that one delivery man? >> so, we tried to order six. ultimately, we were able to get five. basically, we were charity list and two gentlemen asked for cologne but only one was available. they have limited inventory of the items. but all five did come with the one delivery man. >> are you limited as to what they will deliver same day? in other words, if i wanted a 50 inch television could i have gotten that? if i wanted a 25 pound bag of cat litter could i have gotten that? >> so it's funny that you ask those questions. i have seen both a very large tv and cat litter here. this location is just the amazon prime now. this is the location that fulfills those two hour or one hour if you are willing to pay

$7.99. not everything is available here. if you want other delivery it will come. we will get you a tv and cat litter. >> my cats like to watch tv. >> amazon's echo, the run away hit of the season with 5 million sold and counting. the voice activated device does it all. it even orders pizza on command. can you really trust the echo to keep your personal data safe? ceo of the cyber security firm, it's great to have you here. if you have an echo in your home it is listening to you all the time. that is how it works. it's hearing you because it has to hear you when you say "alexa." and it is clearly connected to the internet because it is finding stuff you are asking it for. that makes me very nervous that somebody can be hearing what is

happening in my house. should i trust this thing? >> you should trust this thing right now because it is coming from amazon, a very trusted vendor. they understand security and are doing the right things to ensure that it is secure. the challenge is as the devices get older they don't get updated and vulnerabilities get introduced and you do have a listening device in your house that someone could hack. >> i'm trying to think of the hacks that could happen. the first thing is obviously just to record you but there could be other things that go on. have you worst case scenarioed this? >> we had examples in the real world. we have seen a number of attacks on u.s. government, on corporations where hackers have actually gone in and just turned on the ip phones and listened to board meetings and listened to meetings. the same way they listen to you in your bedroom or at home et cetera is the exact same technology. if they want to focus on you

they can do it. >> couldn't somebody in theory, i have a desktop computer here with a camera right in front, couldn't they hack into my camera on my desktop and watch me? >> it happens all the time. >> absolutely. >> a lot of people do it. >> painters tape, comes off easier. >> what kind of tape? >> painters tape. >> but so in theory all kinds of different devices. camera on your desktop. your cell phone where i say hey, google, it's listening to me. >> absolutely. again, the issue really is that as more and more devices get connected and then manufacturers race to get the next device out they forget about prior devices. the way we update our computers with the latest and greatest patches is not happening to

these devices and they become vulnerable. >> there might be hackers who want to know what is going on in tyler mathisen's household. they will target tyler mathisen. for most hackers out there they want scale. they want to be able to hack into a company and get a lot of credit card numbers so they can sell that on whatever you want to call it, the black market. is there scale yet to be echoed? are you thinking that makes it even bigger and bigger target? >> i think there is stale in two ways. if you are a high profile individual then you are a target. if i want to go after someone who is a high wealth individual or other things that i might want i can target that individual the same way i can target a company. we know that scale also has impact in the real world. through was what is called the ddos attack in october where millions of iot devices were

turned on and attacked a specific ip address and shut down the internet for major portions of the east coast. these devices can be used at scale today to do attacks. >> iot stands for internet of things. refrigerators. >> in my house it's the cats and the tvs. they learn all about that if alexa were listening. >> thank you very much. the dow rally stalls on the way to 20,000. power lunch will be right back. ♪ [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app,

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it's time for check please. did trump take dow 20,000 with him to florida. the the dow was up 9%. since he left for florida and his thank you tour the dow has been stuck in neutral. so the question we have to struggle with is will it not happen until he comes back to town? i don't know whether he is coming back before the new year or celebrating down there. my bet is 30th of december. we are watching retail that certainly is a pressure in the

markets overall with s&p 500 retail etf losing almost 10%. right now there is a report out saying that general merchandise was tracking if you compare this last week of sales compared to a week before. in particular they saw toys seeing steepest decline. we are seeing pressure on shares of asbreaux. earlier this morning there was donald trump comments about 5% import tax and that can hurt retailers. that is all pressure in retail today. >> what carl icahn said about china and trade. >> sooner or later we have to come to grips with that and maybe it is better to do it sooner. >> it sounded flip to me. >> so such gravity. >> there are a lot of comments that sound a little flip over the next few months and already have.

it's going to change the tenor of washington in a big way. >> this is my last day before the holidays. happy holidays. >> merry christmas. >> have a great holiday weekend. be safe. "closing bell" starts right now. hello everybody welcome to "closing bell." i'm kelly evans at the new york stock exchange. >> that would make me bill griffith. the dow is off the lows as we wait to see can we see a late day rally to push the dow above the 20,000 mark? here is a snap for you. nearly half of all americans have missed out on the so-called trump rally because they are not in the stock market. if you are looking to get in we have money managers with specific ideas o