tv Closing Bell CNBC January 3, 2017 3:00pm-5:01pm EST
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homogenous menu, 200 to $300 for tickets. >> all of new york isn't manhattan. >> i wasn't talking about manhattan. >> thanks for watching. >> "closing bell" starts right now from boring new york city. hi, everybody. welcome to the "closing bell." it's 2017 and i'm kelly evans at the new york stock exchange. >> i'm bill griffeth. shout out to chattanooga, tennessee. happy new year. donald trump is driving the business news agenda. he's back at trump tower and he's been tweeting up a storm going after general motors, china trade issues and oake. we'll have the details and the potential impact on the market all coming up. >> welcome to trading in the new year. stocks losing steam and a big rally overseas, by the way.
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is this a sign the bull market could be coming to an end? we'll debate that coming up. also, massachusetts senator elizabeth warren wants to make it easier for marijuana businesses to use u.s. banks. as you know, many of them just refuse to do business because it's illegal federally, marijuana is. we'll have more on the potential hurdles that she faces on that initiative coming up. but we start with big news from the auto sector today. ford announcing it's cancelling plans to build a new plant in exi could e exmexico. trump is going to impose a big tax on them for making chevy cruz in mexico. >> this is a big about face for ford even though the company will say we made this decision because of slowing demand for small vehicles, make no mistake, this is a concession to what donald trump was clamoring for for months. the company is canceling plans for a new plant in mexico. it is going to be moving focus
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production, the small car that was going to a new plant, to an existing plant in mexico. however, it will be investing $700 million adding 700 jobs to a plant in michigan. here's ceo mark fields talking about why they made this decision. >> we always want to make sure that as a company we're doing the right thing for the shareholders and our business. that's the case we're doing here. also at the same time, we want to make sure that we're looking at the appropriate factors to make sure that at the same time that we have good relations with the various governments that are in power. >> and in this case with the trump administration. speaking of president-elect donald trump, he was out this morning with a tweet aimed at general motors saying general motors is sending the mexican made model of chevy cruze across the border. just so you can get some perspective, the chevy cruze is
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built in ohio and some in mexico. some were sold in the u.s. last year. overall gm has imported about 400,000 vehicles in the last year that it sold in the u.s. in response to president-elect trump said gm manufactured the che chevy cruze sedan in lordstown. they build the hatchback for global narkts mexico with a small amount sold in the u.s. the shares of general motors and ford. we're going back over the last year. look at the rise over the last month and a half, really since the election, that's the first movement we've really seen in the stocks in the last year. the bottom line for both of the automakers, they are adjusting to the reality of what's coming at the entire industry when it comes to the trump administration. it is targeting nafta, it is targeting auto production in mexico.
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one way or another changes are coming, at least in the eyes of the trump administration and today ford said, you know what, not worth it, to try and build that plant down there. >> phil, i'm wondering what the cost difference is for the move in michigan instead of mexico. >> reporter: remember, they were always going to take the small car built in michigan and move it over seas. the costs to build it in mexico are better. they're doing it at an existing plant where they have capacity. instead of building a new plant. the michigan plant where they're making the $700 million investment, it was never shutting down. it was never going to go away. they're going to be putting in a small suv and small pickup truck. now they've said we're going to make an even further investment, add another 700 jobs to that plant. >> phil, thank you for now. let's talk a little bit more about the reds institution in delhi. two experts on the auto
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industry, guys. one of the things the market is worried about. how big of an issue is this? >> it's more symbolic than anything else. it's still noted. ford is not going to build a new plant there. the real risk is the law of unintended consequences. bob nardelli, as he well knows, the big three car companies in detroit almost went out of existence for doing a series of things to please washington, to please the union, to please some of their shareholders, et cetera, et cetera, at the cost of what made good economic sense. the best protection for workers is a solidly profitable company
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that makes sound economic decisions, not decisions that are designed to please the tweets of a president-elect. >> so, bob, i mean, knowing what you know about how this industry works, it seems to me that the automakers have to do one be of two things, maybe both of them, accept smaller profits if they're going to build cars here, or raise prices in this country if they're going to build more cars here rather than overseas where it's cheaper. what do you think the automaker's going to have to do here to please donald trump and still make money at the same time? >> well, this is a very, very interesting situation. i think you cannot disagree with what president-elect trump was talking about in creating a i better economic environment here in the u.s. by growing gdp and by growing gdp you're going to grow jobs. tax reform, repatriation are all very, very positive things. now if you think about what mark sads today, mark fields over at ford, they made a very informed
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decision. it's no surprise that small car volume is down significantly year over year. when you think about $7,000 rebate, 72 month financing at no charge, the big vehicles are clearly outstripping the small at these gas prices, so trucks, suvs, crossovers are dominating the market. >> right. >> mary bower did a great interview with "sky" magazine out of delta. she said very directly she's not in a contest with president-elect trump, that she wants to cooperate. she'll make the right decision. the easy thing for gm to do is not ship hatchbacks here to the u.s. it will be quid pro quo like mark did with the ford. >> paul, what amounts to ford's response, just the scrutiny these two companies are going to be undergoing forward for any kind of -- as bill said, when
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the economics are cheaper to build overseas and sell in the u.s., what choices do you think they're going to make? >> i think they're feeling their way right now. like bob said, it's a really intriguing situation. right now they're clearly a little off balance in how to respond to all of this. what will be difficult here is there is an implied promise, again, bob allude today this. let's make it easier to repatriate profits. the tradeoff will be adding jobs here instead of overseas. it will be intriguing to see whether this implied tradeoff can, in fact, become a reality tradeoff. >> paul makes an excellent point. let's look at gm. they sell more cars in china than they do the u.s. so market focus, customer centric. you have to be in the markets you're trying to serve. now if you're able to repatriate
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profits, i guarantee you gm will repatriate. looking at fuel cells, the new bolt, the electric vehicle. so i'm convinced there's a good balance here. there's a good understanding between president-elect trump and the auto industry and what's good for the united states and they'll work through these issues in a very productive and co-op perfect ul cooperative way. >> paul, bottom line, do you think the cost -- or let me -- the cost to consumers here in the u.s. is going to have to go up either way, whether it's because of a border tax, a tariff of some kind, or because they had to keep production here in the united states? >> well, if they move small car production, which is unprofitable in the u.s. by and large back to america, it will be less profits or higher prices, one of the two, phil. so i think that's the simple
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fact of the matter. and, by the way, a lot of people who buy small cars are on the lower economic scale, lower income scale. they might get hurt by this. >> bob, we've got to go. the proof is still in the pudding. the relationship you're describing between the automakers and the president-elect makes sense until you read a tweet like this. when is it going to end? when is it going to thaw? >> you fire for effect. it does cause people to step back and look at strategic optionality. mark made a good call. there isn't a demand for the focus and others. why spend over $1 billion when you could move it to a plant that has capacity. >> right. >> and paul and i know, you have to produce at least 150 to 200,000 cars in a plant to make it cost effective. so he made a very smart decision, rather than boldly go through and move a plant that may not have proved to be profit annual not because of price but because of lower volume.
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>> there are ford shares up better than 3, almost 4% today. gm is drifting a little higher. paul ingrassia and bob nardelli. john harwood has the president-elect's other tweets today. >> now we've seen some normal business here at trump tower from the president-elect. he named bob lightheiser, served in the reagan administration, was an advisor to bob dole. that will be a popular chase because of his ties to establishment republicans, but also the fact that he shares views on trade with donald trump. other than that, we've seen the extraordinary way that donald trump is using and will use twitter. let's just run through a catalog of the people that he's gone after. first of all, he went after american business. you just heard from phil lebeau going after gm for the way it produces some chevy cruze
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vehicles. he went after president obama about the release of guantanamo prisoners. he went after house republicans after they announced a weakening of ethics laws as one of the first acts of the new congress, that drew an outcry from the press, from other people in politics and then donald trump piled on and republicans withdrew that proposal. then finally he's gone after international adversaries, went after china saying its trade policies are one sided and it's not helping us with north korea. then he capitalized or added to that by talking about north korea's vow to test an intercontinental ballistic missile and said that's simply not going to happen. this is a president-elect who has not had a news conference since his election on november 8th. what he continues to communicate with the public and the world by
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twitter, it is the moment that we're in now, it's sort of easy for him to do that because he's not president yet. doesn't have responsibility for what's going on. question's going to be, do those circumstances change when people see him as responsible for problems and won't be so easy for him to lash out at others. for now it's quite a remarkable shift in style for an incoming president. indeed. john harwood at the trump tweet beat for us. thank you, john. we'll see you later. >> we have about 45 minutes to go in the session here today. dow's up 62 points. we had big gains overseas. we've kind of stalled. we'll see what happens as i head into the close here. again, the dow up 62 points. the s&p and nasdaq up half a percent. the russell up half a percent. >> looked like we were off to the races. not so much now. up next, could 2017 be the year of the bull market's big finale? we'll talk about why the clock could be ticking on the current rally which began eight years ago this march.
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welcome back. >> mr. scrooge. >> i would say more like perhaps the beginning of the end. here's the way i see the markets as we enter 2017. obviously that really bad correction a year ago and also that long flat period we had in the markets. we broke out of that to the up side. that puts the market in pretty good shape coming up to next year. a lot of the forward looking indicators say we should continue higher but i do think you have to push back for the idea with the election comes a whole restarting of the clock and a return to something like the early '80s. you do hear a lot of people talking about a rerun of the regan era. we've been going up in this market for almost eight years. the stock market, the s&p 500 is up 230% since march of 2009. it's essentially the second longest and third best post war bull market right now. so, in other words, there's a lot of gains already in the tank. i do think valuations are going
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to be a challenge. they're not there necessarily but you definitely have to justify with earnings and economic growth. i do think a lot of folks are pointing to the markets which does often cap a bull market. you do stretch the indexes higher. overheating. one of the more exciting times in a bull market. you could never exactly know. i can't remember. this is not the longest bull market we've seen. >> the bull market financially. >> they're not. that would be the longest stretch. to date, the s&p 500, only in the '90s did you get as long as
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nine years in a row. is that 302% spike that we see there? that's the 90 to 98. >> right now up 230%. >> as the stock market almanac people would remind us, the first year of a new president usually is a tough one for the stock market. >> a lot of opposing current. >> i will say on the bullish side a lot of people say, look, we broke to a new all-time high in 2014 so maybe this is a secular bull market. it's only a couple of years old. there's a lot of ways to slice and dies this multiple years ahead from here. >> since march of position 09 we've been questioning this bull market all along. >> some of us have. >> yes, i agree. let's get to our closing bell exchange. the first one for the year. joining us jeff sock with raymond james.
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cnbc steve grasso on the floor of the exchange and rick santelli checks in from chicago. steve, here we go. what do you make, first of all, as kelly mentioned, we have big gains overseas overnight and this mornings and we seem to stop that rally after the first hour. >> it's more to do if you watch the dow and the dollar and you watch the ten year on a year to year basis. that's where we stopped in our tracks, when oil reversed. when oil started to come in. oil is that global growth. it won't get much higher than this. it's going to be rampant.
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it's bullish. >> that's right. your previous guest i think was using the 20% up is a bull market, 20% down is a bear market, but secular bull markets like the 1949 to 1966 incorporate a multiple number of years. the '82 to 2000 bull market, we're into a secular bull market. you have another seven or eight years. >> rick, of more short term, the dollar took off. we've pulled back. what are your expectations? you're expecting the dollar to continue its gains. what about in the near term? >> the near term is going to be pretty much like the last week and a half has been. today we have stocks up, dollar up, rates up. they're just not up as much as they were in the first part of the trading session. and i think that makes some sense. it is very similar to the patterns we've had the last six or seven trading days.
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i think the market might be fully priced to some extent but i still say that many who are looking at the stock market, kicking it, have much less respect for where it is need to realize that elections have consequences. gee, i wonder who said that. you know, whether it's about guantanamo, whether it's about how do we treat business? how can a president have industrial policy? this is a new guy who's going to do things a lot different. i really do think that many of those that are not nearly as friendly aren't necessarily as important to the landscape for the market as they have been. the median general, i don't know who said it, press conference? who needs a press conference? we have tweet conferences every half hour. >> answer the questions, rick? >> he's got to answer them. >> there's a lot of people left, too.
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listen, to tweet with gm and ford when you know that any businessman has to weigh costs like taxes, like regulations. i just think he's giving them a heads up as to what's coming down the pike. >> jeff, i was going to ask you, and we've had that happen, this debate a lot around the turn of the year, there are people who aren't in the market, maybe they're younger people who never got in, older people got out and those who are afraid to get in. is your message, have no fear? there's nothing to be scared of? >> no. our intermediate model called this rally no matter who was elected. i must admit the trump win has excel ler rated the move. the model says we rally into late january and then we're subject for some kind of pull back, how deep it is i have no idea, but i think the dips are for buying and i think there's a lot of people that are woefully under invested. >> so, wait, steve, what are you doing right now? where do you see opportunities? >> just to tag on to what jeff had started to say. if you look at this, this is about rotation.
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this isn't about valuation. so you can complain that the market i fully priced in. this was a trump rally. yes, it was fueled more so by trump, but if hillary was elected you would not have seen the rally that we have seen. that would have been status quo, sideways to lower. this is a rip your face off. many people are getting fwhoo it now. you still have more room to the up side because it is about rotation, not about valuation. >> jeff, would you echo that? >> yeah. and i've got the scars on my face to prove it was a rip your face off rally. >> actually, you do. guys, thank you. happy new year. good to see you all. >> you bet. >> so we've got 36 minutes left in the trading session here. we started very strong this morning. the dow was up 175 points. looked like we might be able to challenge 20,000 at some point in the near term, but then we fell back led lower by oil. the dow up 47 points right now. >> if you missed it, hedge funds
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an update on wall street. tepid start after big gains got taken out by lower oil prices. the dow up 53 points. the best gainer, interestingly, the s&p. look at that. sort of running neck and neck with the nasdaq. the russell up 1/3 of a percent. >> bridgewater ray dalio taking to linked-in to vent his frustrations about the media after a wall street journal article about the corporate culture late last month. the journal's story focused on his efforts to automate decision making across the 1500 employees. in part, it has the recordings of the meetings. in his linked-in piece dalia said the journal mischaracterizes the culture. one of the articles' writers
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discussed dalio's strategy after it was published. >> we will leave it to you to determine the merits. we would suggest you go to linked-in to read ray what is really an op ed piece. >> that's what's so interesting. >> that's the thing. >> that's what gets our attention is where he placed this. this would have been a perfect op ed in a major new hampshire. >> you have donald trump dising the media. ray dalio doing the same thing on linked-in. and -- which is, by the way, a place where a number of people, dalio himself have made a number of posts there. >> exactly. >> taking a new stance there. the newspapers will edit, condense, might not take an op ed. linked-in, you can always publish. >> social media. the day of the citizen journalist is upon us here. let's get to a cnbc news update with professional journalist sue
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herera. >> thank you, bill. hi, kelly. turkish police detaining two foreign nationals at istanbul's main airport on suspicion of links to the deadly new year's eve nightclub attack. police did not state their na nationaliti nationalities. hundreds of people joining a protest outside that nightclub in istanbul. protesters walked to the scene of the attack holding red car nations and banners condemning the violence. they also held a minute of silence to commemorate the victims. the 115th congress is now in session. at noon vice president joe biden gavelled the senate into session. the first order of business, a ceremonial swearing in of newly elected and re-elected members. four people were killed in mon's storms in rehoboth, alabama. the victims were inside a mobile home when a tree fell on it. two were related. there were downed trees, power
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lines scattered throughout the town. very severe weather there. that is the cnbc news update. i'll see you in an hour. >> thanks, sue. >> sure. >> see you later. 30 minutes left. into the last half hour. trade for the first trading day of 2017. the dow right now up 48 points. a leading trader will tell us what he's watching into the close on the first session of the year coming up. also ahead, china and north korea, we'll discuss international wild cards that could hit wall street next year. stay with us. y he ra atrmver go kocs yocusts m
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call for a free quote today. liberty stands with you™. liberty mutual insurance. welcome back. it's been a roller coaster ride for natural gas. moving sharply lower down 10.5% after weather forecasters predicted a briefer than predicted arctic blast. among the nat gas stocks that are lower, southwestern, cabot oil&gas all dropping 4 to 8%. >> tremendous volatility. joining me on the floor of the new york stock exchange, peter kosta from empire executions. happy new year. >> happy new year. >> we were talking during the break, really the dollar is calling the shots? >> the dollar is definitely. it's up significantly considering how it's been
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trading lately. what it tends to do in the beginning of a year, the dollar usually calls the shot. the people who trade the forex would understand it better. if you look back, whatever the dollar has done, that's what the market has done. >> that pushed oil down. >> yes. >> oil went down and that's what took the wind out of the stock market. >> it took the wind out of the stock market. the energy sector is still up so it hasn't followed it all the way. you know, we've been watching the financials also did really well. next thing i know they turned on a dime and the market sold off 120 points. >> crazy. >> as the first week goes, so goes the month, right? >> uh-huh. >> here we go. >> i was the first one to trot it up. >> i think we'll have a positive week. i do think we'll have a positive week. i'm actually believing we'll have a positive week. i don't think the month will though. >> i'm sticking with i told you
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last week. once the earnings start coming out you're going to start to see some money come off the table. >> see what happens. kelly? >> thank you, guys. president-elect trump taking on china and north korea via twitter responding to news that north korea is in the final stages for the launch of a ballas stick missile that could reach the united states. trump saying pretty plainly, quote, it won't happen. he used the platform to criticize china saying china has, quote, been taking out massive amounts of money and wealth from the u.s. in totally one-sided trade but won't happen with north korea. nice. joining us on how this can impact trade, let's bring in antonio martinez from frontier strategy group. welcome back. >> thank you. >> there's a lot to be unnerved about when it comes to what's happening with north korea. is it more significant it won't happen about their icbm or that he was talking about china needing to step up to the plate? >> it's always important to know that north korea can always
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disrupt relations with other countries but i think the most important is always the u.s./china relation. that's what our clients are most concerned about. it's a big part of what we see as the major events disrupters in 2017 for global business. >> corporate ceos are learning to deal with donald trump. he's not, and i use this term in the traditional sense, not pa juror rativelily, he's not diplomatic. he doesn't make nice. he goes to the heart of the problem with a lot of these tweets. how do you think world leaders will deal with this especially like a china or north korea? >> eventually they were thinking they would get someone wanting to be about negotiating a deal. it could be about north korea, trade, a number of issues and topics as we know around taiwan as well. the main focus for many multi-nationals is what about trade? what about the potential for protectionism for a trade war, kind of a trade chaos next year.
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>> i guess what i'm getting at is does the attitude he's bringing help the problem, get us to a solution, or does it exacerbate the problem? >> i don't want to speculate. i think it's too early to tell. we won't know until we actually have trump as president but i think at this point all of these executives need to develop contingency plans. whether he means what he says or an initial step towards negotiation. >> there's enough to deal with with u.s./china relationship. when you bring the north korea relationship into the fold, you have to, of course he is. how does that shift the dynamic, if it does? does that put china on the back foot publicly shaming them and saying you have to respond? how do you think they would respond? >> i think the chinese already indicating that we actually did start reacting and helping out, particularly when you look at sanctions on north korean coal
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that was agreed to at the united nations late in november. so they are right now really on a back foot in terms of how to respond appropriately. i don't think that they're moving in any direction at this point. >> not that we've ever figured him out, but what do you think kim jong-un's init engs is? >> to show unhappiness with the sanction and also to give a clear indication that north korea cannot be ignored. i think his number one priority is to simply attain that nuclear capability. >> we were just showing this, but one of the main things as you indicated is is china losing control in some aspect of the financial markets, maybe the currency, the continued outflows, especially this month. you know, the economics there are -- >> yeah. >> -- one potential problem already. and i guess i'm just wondering, you know, once he kind of says this and sayins china has to respond, do they look like they're taking orders from him? if they don't, it's also a
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problem for the international community. it's a tough one. >> it's that interplay between china's own fragility, the fragility of the market. they want to focus on stability over reform and it's something we talk about in our 2017 events to watch and our biggest what we hear from every multi-national we work with, really scared about. and when you couple that with let's just say very difficult u.s./china relationship, those are basically the two big events, disrupters every global business needs to be looking to. >> so many question marks for this year. >> yes. >> more than i think in the past. >> absolutely. >> antonio, good to see you. >> thank you. >> from the frontier strategy group. twenty minutes left in the trading session. the dow picking up pace. up 71 points at the moment. senator elizabeth warren is preparing to lend a helping hand to the growing $7 billion marijuana industry. we'll tell you what she's proposing coming up. twitter entering the year
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the stock closed at $8.73 on friday and then was adjusted to $5.75 to reflect the company's spinoff of its services unit conduent which you see trading down 7%. citing the spinoff jpmorgan has upgraded shares of xerox to overweight from neutral. $10.50 on xerox stock. far away from that. so those two stocks going in opposite directions today. >> usually takes a little while to find their footing after something like this. >> meanwhile, the growing marijuana industry has largely been a cash business since states started to legalize usage. it might be about to change. kate rogers is here. >> massachusetts senator elizabeth warren and nine others are pushing the crimes network to face it head on issuing further guidance to banks on their ability to work with
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marijuana businesses, more specifically the ancillary vendors they work with. because the drug is still federally illegal, many struggle to establish banking relationships. people in denver are glad to see action being taken. he's gone through ten banks in seven years. >> the biggest thing for the government i would think is a public safety and also the transparency. i mean, if they want transparency in this industry and know what we're doing with our money, then you'd want us to have bank accounts and that people are paying taxes, not only us, our vendors, the people that we pay money to. it just seems reasonable. >> he told cnbc it's currently reviewing the letter. warren points out as of 2014 less than 3% of the nearly 12,000 federally regulated banks and credit units serve the cannabis groups.
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>> classic catch 22. it's legal in the states but federally you can't do any business. did they really think the feds would go after the banks if they did business with the companies? >> you know what, i think that these banks are so nervous that they just don't even want to dip their toes into the water because many of them, we've even featured companies on cnbc that have lost their banks days after we've done a story on them and their security operations. we're showing them how secure they are, armored cars, the whole nine yards. not enough to keep the banking relationships up. >> the obama administration said they would stand back. i wonder if the trump administration will be the same? >> this is now up to the states. we want law enforcement to focus on different things, like stopping diversion, making sure this isn't being grown on federal land. many people are nervous because of jeff sessions. they're not quite sure what the trump administration will do. he has famously said good people do not smoke marijuana. >> do you think donald trump would work with elizabeth
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warren? >> no, i don't. but on the issue itself -- >> he said leave it up to the states many times. >> exactly. her stance makes it seem like you would expect them to go the other way. >> she wants more guidance. we'll wait and see what happens. >> i'm sure you'll tell us when that happens. >> hope so, thank you. >> kate rogers. markets hanging on to some gains. in fact, moving a little higher. the dow trying to reclaim the triple digit gain. the s&p is up 15, nasdaq 34, russell 5. up next why one strategist says that history should be your guide for investing this year. that's coming up. you're watching cnbc first in business worldwide. your insurance company
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year. that's number two. number three, president-elect trump tweeting up a storm today calling out gm, china trade and obamacare all today. joining us sam stuabal from cfra and kim forest from fort pit capitol. >> do you tweet? >> we're on twitter. >> do you do tweet storms? >> not at 3:00 in the morning. >> what do you expect will happen this year? >> we're going to end up with a positive year, however, i think we've gotten a little bit ahead of ourselves at this point. when i look to earnings growth and apply inflationary expectations, it says to me we're going to see the s&p close around 2335, so a mid to low single digit price appreciation. normally we end up seeing earnings come down about 6% from the initial estimates to the actual numbers. even if we hold up at the current 12% gain, that would
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only point to about a $23.35 target price. >> kim, you're focused on nike, the dow, perhaps some places that we can see some rebounding. >> well -- >> i guess somebody liked that. i don't know. >> i guess. yeah. well, actually, you know, nike might be worth a look. disney, we don't think so much even though there was some favorable writeup from a place today. i'm still one of the people that look at their espn core and, you know, that's a big part of the value of that company, and it's not growing all that incredibly well. in fact, it's shrinking so i would do a pass on disney. but we do like retail in general. >> all right. let me just point out, i tweeted this earlier, but the new york stock exchange bell that they ring at the end of the day has been altered. they've renovated the whole area
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there. you'll be seeing that in a little while, but the crowd is now over there. it's going to be much louder, apparently, for us when they do ring the bell here. you're advocating what you call a barbell approach. barbell usually pertains to the market. you're saying the stock market. >> you're saying let the winner's ride. you have the value-oriented investors say, no you're better off buying last year's losers. there are 150 sub industries in the s&p 500. going back to 1990, if you actually invested in the ten best and the ten worst from the prior calendar year, instead of getting 7.6% which was the s&p's compound rate of growth, you ended up with 13.8% and this technique beat the market 77% of the time. of course, no guarantee it will work as well going forward, but
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if you're on a little bit of both sides, momentum or deep value, then it tends to work pretty well. >> a neat graphic. nice barbell. kim, why are you positive on the retailers? >> a little bit because of the strategy that your other guest just talked about. you know, i think that especially just after christmas people are wondering did the stores and did these retailers do as well as we had thought? the answer halfway through the christmas season was no, and we disagree. we think they're over sold. so we'd take a look at urban outfitters and vf corp. those are two of our favorites. >> all right. very good. sam stovall, kim forest, good to see you both. happy new year. >> happy new year. >> thanks for joining us today. the bell. i guess we've got a camera on it now. it used to be hidden for years and years and years. now it's front and center. >> and the muffler, so to speak, has been taken off. >> yes. >> which is why we will see just
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how loud it is in a couple of minutes. you can see behind it there's a new video screen and new electronic door for people coming in and out to ring that bell. this is the first time we've seen the whole balcony and marble. >> gorgeous. they've renovated the whole thing and returned the glory of the marble on the walls of the new york stock exchange there. >> it will spin. >> as i am told. it will be very loud. we'll come back with the closing countdown and see how that works out. >> then after that bell, the chevy cruze has become the poster card of president-elect's rule on trade. we'll talk to a hometown talking about a major selloff. can the president-elect save those jobs? you're watching cnbc, first in business worldwide.
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two minutes left in the trading session. you never know what you're going to get on the first trading day of the year. if you've been around long enough, you've seen a huge rally on the first day of the year. you've seen huge selloff. we had a little bit of everything today. big gain this morning, up 176 points on the open. here we go again, we're going to talk about dow 20,000. then the market went south and we're coming back a little bit here with that big buy on the close here, up 101 point on the dow. the ten-year yield holding steady here as we go into the new year. we'll see if it continues to
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raise higher expectations for the fed to continue to raise rates as we move on. the dollar really calling the shots today. very strong on the open this morning. then it did pull back, but we do have a pretty good gain here of more than 1%. that took a toll on oil. oil has been moving higher on expectations of these production cuts by the opec and non-opec producers. then this afternoon as the dollar moved higher, oil went lower and we finished down pretty appreciably there. boy, look at nat gas. nat gas was very strong going into the end of the year last week and today down 10%. so the volatility really picking up there on some forecasts for a little warmer weather, bob pasani. happy new year. >> happy new year to you. we had a volatile session. transports fell apart. we saw railroads weak throughout the day after ford made the announcement on the plant. mexico. then we had the nat gas problems. all the natural gas oriented.
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southwestern, cabot oil&gas. three to one advancing. not a bad close overall. not a bad stock of the year. >> they're ringing the bell. we can see the bell now. it's supposed to spin. southwest energy is ringing the bell at the new york stock exchange. ceo of nasdaq ringing it there as well. stay tuned for hour number two of the "closing bell" with kelly evans. see you tomorrow, kel. i'm going to be hearing that as i falla sleep. welcome to the "closing bell", everybody. i'm kelly evans. here's our finishing of the session on wall street. positive one today. starting the new year with the dow gaining 115 points. of course, that's well off the session highs this morning. quite a comeback from this afternoon when it looked like the indexes might turn negative. that said the s&p was an even stronger performer with a gain of .8%. it was up 18 points to close at 2257. the nasdaq up the same amount,
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5429. the russell 2000 small caps, up about .6%, 1365 there. but, again, a strong day for the dow. donald trump tweeting about various topics today from china and north korea to general motors. we're going to take a look at what the president-elect's twitter influence means for the markets and whether you should be a buyer of the companies he's singling out. joining me on the panel is cnbc michael santoli and daniel hughs of epoch investment partners. welcome to everybody. so what do you think about this rally? >> you know, i think you have to have the disclaimer that the first day of the trading year can be kind of noisy. it was noisy. i do think it's somewhat incouraging. you had i think a lot of traders clenched up into year end. everyone had the three straight bad januarys in the back of
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their mind. when we open for business today there was no deluge of selling that had been pent up. i do think that the strong close is somewhat encouraging. i do think also good economic data got lost in the mix. the ism was strong and it's a reminder that whatever you think is going to happen policy wise, it's coming on the back of pretty good upswing globally in industrial demand. >> one of the bellwether readings in the economy, 54.7. that was the reading for manufacturing, danny. kind of a gauge on everybody to invest. china's best in four years. europe as well kind of giving us a sense that maybe there's activity picking up there. that's where we saw the global markets rally into today. >> that's right. it's the numbers we're really looking at, kelly. you want to see the earnings continue to rise. that's what a lot of analysts are betting on. that's what's going to happen going sfoord. we're going to see a lot of numbers come out this week and next week. i think the battles are going to continue to rage in the beginning of this year. you've got active versus
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passive. you've got, you know, do you buy and hold or do you invest? and sell. and, you know, you've got growth versus value. so i think that's going to continue to wage war into this year. really, today is just a day. >> stocks versus bonds. >> and stocks versus bonds. that's what a lot of people are trying to figure out. >> do you want to pick a side in a lot of those battles, david? >> we're set up for a stock picking opportunity after 2 1/2 years of quantitative easing dominating the stock market where dividend stocks beat everything else. the stocks that have led happen to be the best stocks in a recovery when you have economic growth and rising rates, financials, consumer discretionary, industrials and tech are really well-positioned. by the way, they're at the biggest discounts. it is a good time to pick stocks. >> you'd still be sticking with those kind of growth sensitive cyclical parts of the market? >> yeah. now, again, you have to be selective. it really depends. is there a market for your product? so you want something like, you
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know, in technology oled which replaces lcd so there's a whole product cycle. >> let me ask you this. there's a lot of people wondering about where they're going to get income, let's say. over the last couple of years went into high dividend yielding stocks and weren't quite sure about bonds. if that's your need, where do you go in this environment? >> well, you're going to be more diversified. you used to be only utilities, a little telecom and staples. you can buy 3% dividends, financials which had lagged up until the election and they are so far below their normal profitability, even if they never get back to where they were before the financial crisis. >> right. right. >> there is up side. in the short term we have to take a breather. everyone's been very optimistic. consumer confidence is ridiculously high. there may be a better buying opportunity, but those are the groups. >> let me go back to what's
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happened in energy. art cashin was saying there are a couple of reasons for the selloff. one might be the trump tweets about protectionism. oil wasn't. it went over 55, then it dropped. nat gas was down 10%. >> pretty ugly reversal in crude oil. i do think that weighed on the market in the middle of the day. you had the crude pits close. i don't know that you're going to point to a particular headline. that's why i say, take the action on the first day with a little bit of a grain of salt. re-allocations. i do think you saw a lot of outperformance in a lot of the laggard areas. january typically has that activity go on. today look at the dow, nike, merck, stocks that did nothing or worse last year were leaders. you have to keep that in mind. in terms of the trump trade, in terms of the reflation. u.s. steel's share price up 4, 5%. again, noisy. >> i was going to say to your point as well, some of the
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financials at all-time highs. jpmorgan. >> think about financials. just a couple of short months ago and wells fargo, for example, in the beginning of september taking a very public flogging for what happened five years prior to that. if you bought the stock there and you were able to slog through the numbers you went up 27% gain. >> is that because that tide was lifting all the boats, even wells fargo's. >> it was lifting all the boats. let's take a look at what happened with the financials. everybody in their mother bought financials over the past couple of months because they're thinking about trump doing something about rolling back regulation and also interest rates rising. those two things aren't going to happen in january, let's just face it. like you were saying a little bit earlier, let's slow the roll. >> let's get back to dominic chu. general motors caught in donald
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trump's feed. dom's looking at the potential trump tweet risks. >> kelly, you were talking about this referring to the public floggings that happened. this is from the president-elect of the united states. maybe it carries some more weight. we're starting to see diminishing impact. here's what we're talking about. if you take a look today about general motors sending mexican made models of chevy cruzes to the u.s. if you look at the trading action so far today, we actually rallied on that bit of news. we've kind of finished off the highs of the session. up about a percent overall. let's rewind the tape at least a little bit to see some of the other tweets that have happened so far about companies in the cross hairs of donald trump. if you take a look, remember, at boeing, that whole air force one cost overruns, it's too expensive tweet came out. remember there we saw a bit of a dip here in that stock only to rally higher. it's been about 3% higher since
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before those tweets came out. lockheed martin. another defense contract. that was another target of donald trump. if you take a look at those tweets, the f-35 joint strike fighter, possibly too expensive of a plane. lockheed shares did dip. little bit lower overall. yes, one impact of the tweets. one that's not twitter related overall. if you take a look at the "time magazine" person of the year, it talked about the idea that drug prices had gotten way too high. he doesn't like where they are. the biotech index for nasdaq, dipped on there. it's relatively flat since then. what it speaks to, kelly, more than anything else is there's going to be a time and perhaps it's right now going forward wherein vestors and traders are going to want to see whether or not donald trump is going to enact policies or put in place procedures that will actually do something about some of these tweets. if that does happen, these tweets will have a lot more impact. for right now you are going to see a little bit more diminishing of the overall impact of some of these tweets. keep an eye on that as we go
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forward towards inauguration. >> we shall see, dominic. thank you. let's get to some breaking news on tesla at this hour. phil lebeau has more. phil? >> kelly, the numbers are in for fourth quarter and full year deliveries of tesla. these numbers are light for what many were expecting. tesla delivered 22,200 vehicles. many of the estimates i heard were expecting something closer to 26,000. and full year deliveries coming in at 76,230. remember, tesla's guidance throughout the year was delivery of at least 80,000 vehicles. so they fell, what, about 3800 short of making their guidance for full year deliveries. tesla says because of short-term production challenges starting at the end of october and then lasting all the way through the beginning of december in the transition to new auto pilot hardware, q4 vehicle production was weighted more heavily towards the end of the quarter than they originally planned.
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as a result, they fall a little bit short of what their guidance was which was for delivery of at least 80,000 vehicles. tesla for the full year delivering 76,230 vehicles. kelly, back to you. >> phil, thank you. mike, the shares moving lower on this report by about 4%. >> they are moving lower. what's been fascinating to me is the way tesla stock, if you look back 2 1/2, 3 years how it has hugged the $200 a share line. it shows you that the stakes are not yet that high. we're talking about as phil said a short fall of 3800 vehicles. this stock is all about 2020. how many are you going to be delivering in 2020? how long is the market going to give them a pass in the next couple of years? i have no idea. it's been fascinating that when it sells off it finds its footing in the $200 range. >> in the release they talk about how many vehicles were in transit. >> right. >> always rolling that ball forward. >> yeah. and they also pointed out there's about 6400 vehicles that they expect to deliver that probably would have been delivered in the fourth quarter but they're going to be counted into the deliveries for the
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first quarter. we saw that start last quarter. i think we're going to see that on a pretty regular basis. >> real quickly -- >> it's kind of like the car is in the mail. interestingly, you know, you're talking about a 5% miss. the stock is off about that much, too. >> exactly. >> yeah. i mean, the problem really is that everybody who is a real manufacturer will have models in the next two years. the market hasn't really digested this. there will be five or six from merced mercedes. without the tax credits, this company is even more unprofitable than it looks today. what happens when the carbon tax credits go away? >> there's plenty of legitimate questions. yet, the shareholders love this thing. like mike was saying, they've got their eye on the future. they're sticking with that story. only down 2% after hours. we've got some breaking news on the commodity futures. jackie deangeles, what's happening? >> good afternoon to you, kelly. the chairman of the cftc, timothy massad will be stepping
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down. that's the breaking news. this was a departure widely expected. it's going to coincide with the end of the obama administration. we've seen announcements like this before. last month we heard that the chairman of the s.e.c., mary jo white, would also leave the top position. you know, massad is highlighted by implementing stricter rules so this is one of the potential roll backs that we could see as the trump administration comes into play putting its own people in. maybe there's less strictness when it comes to regulation. that's what some people are guessing. at least interim replacement right now as far as we know from the cftc will be j. christopher giancarlo. the sole republican member and he could potentially take over long term. >> more personnel and policy moves. jackie. thank you. president-elect trump says gm will be hit by big border tax if it doesn't start producing the chevy cruze hatchback next. up next the mayor of lordstown,
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ohio, talks about how bringing those jobs back could impact his city. 54% of americans have a retirement account according to new data. coming up, we'll hear from two financial planners on how to avoid putting your retirement at risk in the future. you're watching cnbc, first in business worldwide. m ths)yo theg
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welcome back. shares of ford were hopping today. up nearly 4% after stopping plans for a new plant in mexico. phil lebeau spoke to ford's ceo. he joins us with some of the highlights of that and the stock's highlights today. >> kelly, when this decision was made a lot of people thought, good, ford is going to say, okay, we're getting along with the president. we understand what's going to be changing with nafta. when you talk with mark fields, he tried to spin this as a move of ford making a decision where to build small cars in an environment where small car demand is slowing down. >> listen, over the last couple of years we've seen small cars markedly decline so every year we're looking at our capacity, we're looking at our forecasts for demand and it became very clear that we didn't need this plant and we can utilize an existing facility in mexico. >> so they will be building the
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focus at an existing plant in mexico. still moving small car production south of the border while investing $700 million in the michigan plant where the focus was built. that will eventually add about 700 jobs while this may take ford off of donald trump's radar for the time being, earlier this morning he squarely put gm on the hot seat by tweeting out this morning comments about gm and its production of the chevy cruze. general motors is sending mexican made model of chevy cruze to u.s. car dealers tax free across the border make in u.s.a. or pay big border tax. general motors, by the way, imports about 400,000 vehicles that are built at its plants in mexico and then sold here in the united states. the chevy cruze hatchback, only a small percentage of those vehicles, about 4500 vehicles last year. still, general motors made it clear when it responded to
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donald trump that his facts were perhaps a little bit off relative to what the company builds. gm manufactures the chevy cruze is he dance in lordstown, ohio. key word, sedan. all chevrolet cruze sedans are built in lordstown, ohio. gm builds the chevrolet cruze hatchback for global markets in mexico, with a small number sold here in the u.s. here's really what this all comes down to. not just for general motors and for ford, but for all automakers. they have put so much infrastructure in mexico where auto production that this year auto production will top about 4 million vehicles so, kelly, those vehicles that are built there, they're not all coming to the u.s., but a lot of them are. donald trump is saying they shouldn't be coming in tax free. >> we'll see if he takes them on one by one, phil. thank you. meantime, back in november gm announced it would be laying off 2,000 workers including 1250 at the lordstown, ohio, plant
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which is where the company manufactures the cruze sedan. joining us is arno hill. mr. mayor, welcome to cnbc. >> thank you for the invite. >> there's a lot at stake for lordstown. you have been caught in the middle of a national discussion today. are the layoffs still going to happen for the cruze sedan? what's really going on at the plant there? >> i hear the layoffs will be still going on but it may be scaled back a little bit. originally it was around 1200 for the entire plant. now i've heard that it has been scaled back. they are looking at getting all -- you know, being able to supply the market from lordstown for gm and canada. i have talked with the union reps and asked them about letting the hatchback production go to mexico and some of the people from the plant and they said that the amount of hatchbacks they anticipate would not save the third shift. >> got it. >> this isn't the first time that we've had to cut a shift
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because of car manufacturing and the demand, you know, everybody's going to suvs, crossovers, pickups. it's a real cycle. they'll be back. >> you mentioned, look, you guys have been through the recession and got through it with gm still as a major employer, but this small car recession seems to be for real. so with these layoffs, even if all of them don't happen, how much will be left in terms of cruze production at that plant? >> we'll still have two shifts. last year they sold about 190,000 cars. i believe these will still have the capacity to be able to get the 190,000 cars. so, you know, i have a lot of faith in general motors. they've been a good neighbor to mahoney valley and lordstown in particular. i think we're going to be okay in the long run. this is a speed bump that happens in the business cycles. >> is there anybody there, yourself included, the union reps, anybody blaming mexico for what happens with the car production? do you think it's shifting
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consumer preferences? do you expect those jobs to ever come back? >> i think the jobs will eventually come back. it may be a year or two. nobody's blaming it on mexico. i know when they first ramped up they did do some sedan production in mexico because the cars were selling so well, but now they're in the process of bringing the -- all the production for u.s. and canada will all be built in lordstown. we're grad for that. gm isn't the only one with small car sales decreasing. going clear across the board. we're very optimistic for the plant in the long run again. they've been there 50 years. >> is there anything you're looking to the president-elect for when he tweets singling out the cruze hatchback saying he would impose a border tax, is that the kind of policy that would help -- that would help the cruze sedan production there for you in lordstown? >> that i can't say. you know, i don't know how much the demand is for the hatchback. i know that the cruze is the best car general motors has put in the lordstown plant in 50 years.
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it's a great car. you know, i'm 6'5", i fit in it great. great for smaller car. i think we'll be okay. >> all right. mr. mayor, thank you again for joining us. >> thank you. >> that's mayor arno hill of lordstown, ohio. meantime, luxury apartment rents have been soaring. it's facing troubling headwinds. we'll get you the details. plus, another high profile executive leaving twitter. find out what that means for the company's future when we come back. rtrtactaviat wfinnd tt!
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welcome back. the brain drain is continuing over at twitter. yet another executive announcing her departure. julia boorstin is here. >> kathy chen is leaving the company after only eight months tweeting, quote, now that the twitter apac team is working directly with chinese advertisers, this is the right time for me to leave the company. twitter is banned in china but has an office in hong kong. chen is saying the company's hong kong office will remain open and twitter is committed to the market. 11 other executives leaving the company in 2016 including coo adam bing and cto adam messenger. twitter stock is down 30% in the past year. the company struggles to jump start user growth or find a
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buyer. coo jack dorsey said he's going to crack down on abuse and simplifying the platform. we'll have to see what changes are ahead and whether they impact twitter's all-important user growth. >> we've got to talk to you about the other big media station. megyn kelly joining nbc news from fox. i wonder what this means for fox? >> megyn kelly is leaving fox after 12 years to join nbc. nbc and cnbc are owned by nbc universal. >> i'm delighted to be joining the nbc news family and taking on a new challenge. i remain deeply grateful to fox news, rupert locke and james murdoch. he said in a statement out recently, we thank megyn kelly for 12 years of contributions to
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fox news. we hope she enjoys tremendous success in her career. at nbc kelly will have an in depth sunday night show. she'll play a role in nbc's political programming and other big event coverage. this follows the departure of fox news's founding chairman roger ailes and gretchen carlsson amid a sexual harassment lawsuit next year. fox offered kelly more than $20 million to stay after her contract expired. we have no word on how much nbc is paying. they may be paying less than $20 million. kelly? >> sort of weird to talk about, you know? it's sort of our business but not exactly. our company but not exactly. and in any case, one of the most well-known media figures out there. and a huge move today. julia, thank you so much. >> certainly. the rise of 401ks come as more companies get rid of traditional pensions. how you should start the new year right by planning for your future. stay with us.
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tesla shares are falling after hours. the automaker delivered 76,000 vehicles last year. less than 80k target the automaker said it would deliver and because of short-term production challenges, citing that as part of the reason for the short fall. the shares down less than 2% after hours. it's time now for cnbc news update from sue herera. >> hi, kelly. here's what's happening this hour. moments after being sworn in as speaker of the house, paul ryan began his first order of duty, swearing in the entire house of representatives on the house floor. the incoming freshman class is made up of 53 representatives. the gop will have control of both the house and the senate. house republicans have reversed a decision that would have weakened the independent office of congressional ethics. the move was met with widespread outrage including president-elect donald trump tweeting his criticism. surveyors plunged a pole into the sierra nevada snow pack
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and took the first measure of the season as california is facing a possible sixth year of drought. the water content was half of normal but storms are expected to dump four to five feet of snow through thursday in that region. and researchers have classified a brand-new organ inside our bodies known as the mesentery. the new organ is found in the digestive systems and is long thought to be made of fragmented separate structures. recent research has shown that it is actually one continuous organ. i don't know what the organ does, that's the only thing, kelly, but it is in the digestive system so -- i know, i felt the same way. i get real queasy. >> yeah, me, too. >> which goes along with the digestive system so there you go. >> true. we'll have to learn more. all right. thank you. >> sure. >> see you later. if you don't have a retirement savings account, you're into the alone. according to data in 2013, only half of u.s. households had one.
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54.7% in fact. in an era where employee pension plans are few and far between, what does that mean? let's bring in rainy braxton and with us here at post 9 is jonathan clemons, editor of "humble dollar.com. jonathan, this is highlighted in the journal where they're talking about how the creators of the 401k regret the changes that happened. it's not as if the pension system was all that perfect to begin with nor is it today. so what should people on their own be doing to make sure they've saved enough for retirement? >> there are a couple of key things that everybody should be doing if they have a 401k plan. not everybody does. if you have the 401k plan, you should make sure that you're contributing at least 10 to 12% every year. get a 3% match, maybe you should be putting in 9% yourself. second, if you don't know what you're doing in terms of investing, see if the plan has a target date retirement funds. it will give you broad diver
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diversificati diversification. it may not be the optimal choice. if you don't know what you're doing, it's probably better. >> like most of us. >> luzetta, what is tbiggest hurdle? >> sometimes they just don't understand the value of keeping that automatic enrollment. the other part of it, which we don't really see in the workplace is really how they're controlling their cash flow. so you're saying save 9%, but if your expenses are so high that you can't afford that, what do you really do in terms of just encouraging them to put it aside and say you won't miss it? >> yeah. a lot of people think 9% of what, mike? >> exactly. to me, that is "the herd"le. not having any savings at all. not really the vehicle availability. i think what jonathan said is broadening the availability of these types of plans and auto enroll people and essentially take it out of their hands.
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>> what we've seen since the 1990s is essentially an ambition of failure. back in the 1990s you give people an investment choice, give them materials and let them do the right thing. guess what? they didn't. now they're trying to modify a 401k plan by having auto enrollment, automatically escalating it, limiting the investment options. most importantly, by changing the default investment options, it is the retirement funds, that way you overcome the inertia a lot of people have. that alone doesn't seem to be enough. we need to improve the 401k plan further. >> luzetta, we need financial literacy. a lot of people don't hear that until it's too late or don't understand compound interest, for example, so if anything, since the '90s it feels like we've gone the other direction. there's very little effort being made, especially at a young age, maybe to people who don't have english as their first language. so what more could be done here
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just to kind of spread the word? >> financial education. allow the employees to take time during the day, during the workday to have structured programs. you're asking them to work and be productive and we know financial stress is a huge issue as to why employees are not productive. so educate them. let that be a part of their workday. provide those programs during the workday. >> that's interesting. what were you going to say some of the changes need to be made, jonathan? >> well, i think we should further limit the number of choices. for instance, we should maybe go down to having a single target date retirement fund for each employee. second, we should force people to contribute. second, to expand the 401k plans. a huge number of people aren't covered. we need to make them universal so everybody gets the chance to save for retirement. if we don't, we're going to end up with the situation we're approaching where a lot of
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people are retiring without nearly enough money. >> i'm not sure what the option is going to be in that. it sounds like we're laying the groundwork for some kind of, you know, resurrected pension-type system funded, i don't know, at the federal level? what do you think the alternative is if we don't get people educated enough and involved enough to pay for their own retirement? >> i think what we're going to see is a lot of pressure to keep social security where it is and that's an issue for the federal government and republicans. i think we're going to see the pressure to make 401k plans more universal. make the federal savings thrift plans available. all of those will be great changes but they need to come soon. we have a lot of people who are facing a personal financial crisis and it may be too late. >> let it be a wake-up call. jonathan and luzetta, thank you both. >> thank you. luxury rentals coming down and that could be coming to an end. high-end apartments could be up
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this is a republican cut from the same cloth we've seen republicans cut from in the past 10 to 15 years in the trade policy. he's not. hire's the bioto give you a sense. he was a deputy umpt s. trade representative under reagan. he was an advisor to dammartin-en-goele. he's a partner at skadden, arps. on trade he is much more like donald trump than he is like the rest of the party. here's an op ed piece that he wrote back in 2008 at a time that he was concerned the party was adopting a pre-trade policy too extensively. he called it the party of the grand old protectionists. free trade has long been popular with liberals, and it remains so with liberal elites today. always understood that trade policy was merely a tool for building a strong and independent country with a prosperous middle class making the argument that not necessarily was it the right
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thing to be a free trader and then look at this op ed from 1999 in "the new york times" strikingly similar in tone. he's writing, if free trade is to serve its intended purpose, we must ensure it does not ensure a result in a race to the bottom or lead to global government that threatens our sovereignty. clearly lighthizer has been concerned for a long time. there's also been some question now whether wilbur ross or lighthizer or this new trade council is going to be in charge of a trade policy in a trump administration. i'm told, however, by people familiar with this that the person who's going to be in charge of trade policy is donald trump himself. so watch for trump to send all the signals and everybody else to sort of fall in line behind that. >> eamon, thank you. joining us for more is fred malic. former advisor to four presidents and former george h.w. bush campaign manager in 1992. former ceo of marriott hotels in the northwest and founder of thayer lodging.
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thanks for making time for us. >> glad to be with you. >> what do you think of this pick of lighthizer as u.s. trade rep? >> it's consistent with the other kind of picks that donald trump has made. if you look back a few months, 65% of the country was evidenced they wanted to vote for change. they were tired of the direction of the country. and this is a change election and you have to change the administration and i've never seen a cabinet put together more in keeping with the will of the electorate than this one. all of these people are agents of change including bob lighthizer. look, here's a guy who has got great experience on the ground as a practitioner, great experience in the government as a deputy str under reagan and he has thought provocatively about how we can make free trade and fair trade. i think he's a great pick. >> how do you think that approach is going to be received by his counterparts from other countries who seem to be much more of the mind of, you know,
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negotiating these regional multi-lateral trade agreements and not necessarily making it seem as if, look, this is a negotiation with each country trying to get the better end of the deal? >> well, i think this could be a little bit of fear. there could be a little bit of a feeling of, hey, there's a new sheriff in town. we better watch our step. and i think that's exactly what we need. i think that's what donald trump wants to see. it's not that we're going to be against free trade. we're going to be for free trade but we're going to be for fairer trade. we're going to cut better deals. the kind of deals you can see cut on trade are going to put first and foremost the american worker, the growth of the economy, creating more jobs. and that always hasn't been the fact in the past. >> mr. malic, how do you expect all of these different people to work together? he has peter navarro taking on some of the trade duties. he's indicated wilbur ross will direct some from commerce. the trade rep is supposed to work with congress and that's
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lighthizer and as eamon indicated, the policy will be driven by trump who will have a very full plate. so what do you think in practice this is really going to look like? >> boy, that's a great question. i think you've sort of put your finger on it. it is going to be a trump-driven policy. trump really does feel that the trade system is broken. he feels that we've been getting conned, we've been getting the short end of the deal and that we need better deals in place. so i think he's going to be the one that sets the direction of policy and people like wilbur ross and bob lighthizer, they're going to execute it. i see no reason why they can't execute it in conformity with his plans and in cooperation. you have a really strong economic team up there now and they have extensive experience doing this in the private sector. they know all the tricks that are going to be played at them and they're going to be ready for action. >> by the way, what is your own point of view on this free trade debate? you know, some would argue it's the single most important thing for continued growth of the economy. you've had extensive business
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experience. >> you know, if you ask a thousand people in this country do you think our trade policies are fair, particularly do you think the policies with china are fair, 950 of them will say no. if you ask 100 top business people the same question, probably 60 or 70 of them are going to say no. most people i talk to and know and myself included think that we've gone too far to accommodate the interests of others, not far enough in accommodating the needs of our own population. we really have to do something to stimulate growth for the working class and middle class. i think this is an opportunity to do that. >> it is a new era and, fred, thank you for joining us. >> very welcome. >> fred malic. we're just three days into 2017. it's already not looking good for luxury rental properties. up next, why the boom may be coming to an end this year. and you can already order household staples using amazon's
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welcome back. the luxury apartment market may be coming to a halt. it's not due to the lack of demand, it's a supply glut. 88,000 new units, 50,000 were rented. the gap could widen this year. joining us is the man behind the report jay parsons from npf. also is josh altman. welcome to both of you. jay, how bad is it in terms of this apartment glut? >> well, if you're urban and luxury, building new apartments
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right now, you're facing a lot of challenges. what's really interesting is that we're seeing this all across the country. not isolated to a few cities. it's not happening just in new york and san francisco, but also to smaller cities all across the u.s. everyone is urban luxury sector. and we're building in those downtown sub markets the fastest we've built since world war ii. >> there are like double the number of apartments coming online in new york. can you define luxury for us? are we defining it by price point? >> typically by price point. the market will bear what the market will bear. when the economy requires apartments being built today, it has to be at a high enough rental to justify the investment. >> from an economywide perspective, the big question is, is this a market unto itself? or will it bleed into other rental properties? and maybe even the ownership market? or is this something that we can
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shrug off and say it is an imbalance at the upper end? >> i think it can be argued either way. i think 2017 will be the year of the inventory for sure. you have places like downtown los angeles that have over 220 project that's are either being built right now or going through city to be built. when you have that much inventory, you will see the prices drop. this whole thing that they're talking about with land lords giving free rent for a month or two or three or a free parking spot, we've been doing that a long time. i have land lords who are not worried about this. it is a steady rise. every once in a while you will see a glitch in the system but it will continue on rise. >> let's go further down that line. great. i would love to negotiate a deal on a beautiful new apartment that maybe could i get at a better rate. how much do you think land lords would have to budge? >> well, look. i think your typical luxury apartment rental will be, let's say, in one major city, will be $3,000 a month.
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they will now see dips to about $2,200 a month. but at the same time, you know, they have to, they have to move these. these are not developers that are just looking to sell right away. they prefer a lot of times to rental for ten years so they don't to have deal with the, i'm sorry. they don't to have deal with getting all these buildings and the -- sorry, guys. i'm losing you there. >> no problem. >> no problem. i'll go to jay. is this also a demand issue in the sense of a lot of these millennials growing up in the urban quarter are moving to the suburbs now and starting families? how much does the demand play in at all? >> i think it is strong but not enough for the supply. we are building in some of the downtown cities. you can walk a short distance and find 12 new properties and they're all offering concessions. so yes. there are people moving out to
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the suburbs and we think that's the most undervalued sector. particularly high income suburbs with jobs. that's a whole different story. but downtown, i think it will be challenged. remember, even as the oldest millennials move to the suburbs, you have a lot of people in that early adulthood stage coming into the apartments. it is the mismatch of supply and demand in the short term. particularly 2017. >> and you have a lot of these cities like tennessee that are, they're going to have triple the. a inventory. dallas will have triple the. a inventory over the next year. a lot of people have a lot of choices. and i'm not too concerned as far as for my land lords. they're going on hold. and you're talking about in places like west hollywood when a tenant leaves, we celebrate. they are places with rent control. >> we know a little about that in new york, too. thank you both.
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>> maybe some good news for renters there. and the smart home is about to get a lot smarter thanks to amazon teaming one whirl pool. and coming up at 5:00, one of the biggest of last year is pulling the rains to start the new year. and today's stock market action could be the final warning sign. tony dwyer explains what has him so worried. pa reinesis
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welcome back. whirl pool announcing earlier this year, new smart appliances will launch across the portfolio of brands and they'll feature voice control capabilities through alexa enabled devices. it is being show cased this week in las vegas. do we like the feature? >> i don't know if this is as big a quantum leap. this is a company that makes ovens and washers. you'll be able to change the setting or the cycle. but you won't necessarily be able to have somebody else come led to washer or do any of the physical stuff. >> it's not rosie. >> not rosie the jetson's robot.
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good responsive voice commands but definitely used the futuristic appliances that they had. >> i've got some security concerns. i'm sure i would like to think that the security features of this will be incredibly tight, fire walls, amazon, i'm sure is all over this. but when we saw it, what happened with the fake we had on the internet late last year using i think people's home video cameras. the nanny cams to attack internet. all of these internet enabled devices. is it too crazy to say in a couple years' time, someone will say here's how i hacked into your washing machine and flooded your whole apartment. >> perhaps. i think you have to be concerned about the weird individual acts of sabotage if there is motivation form. i guess i'm more come placent. the problem is that i have those enemies, not that they have the
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tools to get at me. there are probably clever ways to knit all these together and create vulnerabilities whenner they didn't exist before. >> plenty of people will love the cool factor and the convenience factor. it is a lot to constantly be crisscrossing the house dealing with different appliances and things when you could tell each one to keep going. is it too much of a tradeoff? we know how vulnerable these parts of the internet currently are. >> i guess it creates the possibility of more mischief and we've shown they can respond to a voice on the television. i think you have to have voice imprints. maybe they only respond to individuals. it is interesting that the amazon will be private labeling this technology out there. that's kind of interesting. >> so alexis starts watcher. >> start spin cycle. alexa, can you put it into the dryer? probably not. >> but this could be a huge new line of business.
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if this is the way people are interacting and amazon has it. >> the front end. >> crazy. in any case, we should talk briefbly the markets the rest of the week. a lot more date headed our way. >> it will be interesting to see if the markets respond to the data as opposed to the policy and the beginning of the year flows. >> that does it for us. "fast money" begins right now. >> right now, overnew york city's times square. tonight, two of the big winners in the dow tray last year's big losers. disney and nike coming out stront. are they about to make a major comeback? a top technician explains. plus, one of the biggest on the scene. tony dwyer. he calls for a rally. he is here to say why he sees trouble ahead. and one stock that has been on the major run this year is getting crushed today but
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