questions solidly. a very sophisticated individual. one thing that's happened in the last few minutes. mr. tillerson was asked about cuba and he says he wants to revisit whether they should go back on the state's terrorism list and he doesn't want the embargo to end, essentially. >> thanks for watching "power lunch." "the closing bell" starts two seconds ago. there will be a major border tax on these companies that are leaving and getting away with murder. our drug industry has been disastrous. they're leaving left and right. they supply our drugs but don't make them here. they're getting away with murder. obamacare is a complete and total disaster. it will be repeal and replace. it will be essentially simultaneously. i have no dealings with russia.

i have no deals in russia. president-elect, can you give us a question -- >> don't be rude. >> can you give us a question. >> i'm not going to give you a question. you are fake news. >> president-elect donald trump's first news conference since getting elected hit a lot of topics and moved markets today. welcome to "the closing bell." i'm kelly evans at the new york stock exchange. >> what a news conference. we knew it would be. i'm bill griffith. the dow was this close, within 35 points of dow 20,000. before the news conference. merck the leader. once mr. trump made comments about the drug industry everything went south. took the drug stocks with it. >> moving lower significantly. so far it's not recovering. you can see the sharp break in the chart. the index still down about 3%. we have gotten analysts who says he doesn't think trump will take any action. coming up. the volatility index spiked

briefly on the back of the news conference, getting above the 12 mark. we have since come back. it's negative again right now. right there. that's a snapshot of the kind of volatility we've had today as a result of the news conference. >> former exxon ceo and secretary of state designate rex tillerson undergoing confirmation hearings and it's been fiery. first, morin te on the news conference. john harwood was there. >> it was extraordinary. his first press conference since july. he said he stopped giving them because there was so much inaccurate news out there. let me run through a couple policy things. first of all, he said he wants the congress, once his hhs secretary tom price is confirmed, if he is confirmed, to repeal and replace obamacare almost simultaneously. he said he is going to disclose a supreme court nominee a couple of weeks after taking office. he said he was, in fact, going

to build the wall. but the most important subject at the press conference was his relationship with russia and pushing back on this idea that they have some influence on him. now, donald trump did say, for the first time, that he thinks russia was responsible for the hack of the democratic national committee and john podesta's e-mails, though he said other countries may have been involved too. but he was not looking to be very critical of vladimir putin. in fact, he said being closer with vladimir putin would be an asset, not a liability. he said that he was not going to release his tax returns to clear up questions about potential entanglements with russia. his strongest words were reserved for the members of the intelligence community who he accused of leaking information about him, in particular related to this report last night that had salacious details. it was published on buzzfeed and alluded to at other news organizations. here is what he had to say about that. it's pretty striking.

>> i think it was disgraceful, disgraceful, that the intelligence agencies allowed any information that turned out to be so false and fake out. i think it's a disgrace. and i say that, and i say that. and that's something that nazi, germany, would have done and did do. >> two questions coming out of this. first of all, in nine days he will be the commander in chief and have control over those intel agencies. it will be a very fraught relationship from the beginning. and the second, of course, is whether or not congress appoints a select bipartisan committee, as john mccain has asked, to investigate all this. it's a cloud over the beginning of his administration. could slow down his agenda, guys. >> john, stay right there. let's bring in tara palmieri from "politico" to join the conversation as well. he has laid out a number of moves that will be made and some that will not be made about the trump organization. he had a lawyer there and a stack of papers to show how many he has signed as part of the

effort to divest himself from the influence over the organization. how do you expect a lot of these moves will go over with what's been a highly critical press corps that says he has to do more to assuage the concerns. >> we expected to hear about how he was cutting ties with his business relationship. it turns out that he's not doing anything in terms of divesting assets or putting it into a blind trust. he is giving the business over to his sons and claiming he won't be speaking to them about the business, which some will find hard to believe. it's giving a lot of ammo to senate democrats who will try to trip him up at any moment and say there is a conflict of interest. they're currently hiring an ethics adviser to oversee domestic deals. they vowed to stop doing foreign deals. they said they'll move money they accrue from the foreign

entities in u.s. banks. at the end of the day donald trump is playing the president his way, and he does not want to separate himself from his business. and that's something that the american people, many of them, were aware of when they voted for him. we'll have to see how that will affect him down the line. >> john, clearly the -- >> kelly. >> go ahead, john. >> i wanted to expand on what tara said. there was something that was extraordinarily striking that he said in the news conference, which was he repeated the idea that a president, by virtue of his office, cannot have a conflict of interest. >> right. >> he talked about, over the weekend, being offered a $2 billion deal in dubai and said that, if he wanted to, he could have done that deal. so even while taking the steps that, which are quite limited, that tara was outlining, he also, in effect, claimed for himself the right to continue making deals should he choose to. he said he didn't do the deal in dubai because he didn't want to

have anybody think he was taking advantage. but he indicated that he didn't think it actually would be taking advantage and would be permissible. >> he won't be doing any foreign deals, though, right, tara? that was part of what was laid out? >> exactly. he said that he will stop doing foreign deals. but domestically his children, his two sons, will very much continue building trump organization, and every turn he takes people are going to be paying attention to how the various government organizations that they deal with, how they treat trump organization. let's not forget that he is leasing property at the post office for his trump hotel in d.c. >> right. >> do you catch how he ended the press conference? >> i sure did. >> he said he would check in with his sons in eight years or whatever it might be and if they've done a good job say good job, guys, and if they didn't, say you're fired. >> john, tara, thank you. appreciate it. see you later. >> thank you. is mr. trump the main driving force of the market right now? based on the volatility we saw

during the news conference. we'll talk about that in our closing bell exchange. meg green is with us. keith bliss. keith, it's clear headline risk. we had a pretty good rally going, within 35 points of the 20,000 level. and then it all went away during the news conference today. headline risk is still very much a part of this market right now, right? >> without question. you absolutely have to pay attention to what donald trump says either through his tweets or through his occasional press conference. you have to pay attention to what his cabinet appointees and designees and the undersecretaries are saying leading up to and after the inauguration. it will be the driving influence in the market. i think we'll get a little bit of a respite from that as we start to enter earnings seasons full swing on friday with the banks report and we'll get a breather from all the political nonsense and mum bo jumbo that's come with us the past year and

focus on fundamentals. you're right, bill, it is the main driver. all industries are subject to his whims and what he may say, and nothing is safe. nothing is protected. if he doesn't like drug prices, health care will sell off. if he thinks the banks are making too much many they'll sell off or rally at the same time. it is really something we're paying attention mostly to today. >> meg, you were looking at the nasdaq which has continued to set highs but it has a big influence in biotech stocks. does it become less appealing today? >> not close. the nasdaq in 2000 when we had the bubble is the same price as today. s&p 1400, the dow was, what, 10,500. we are sitting and waiting for the nasdaq rally for a long time. it's all about technology. what we're not necessarily looking at is, never mind what mr. trump says and the markets going up and down on a daily basis. look at the long-term trend. jobs will not come back the way they were.

we're in a new world. we have innovation, automation and technology. if you are not jumping on the technology band-wagon, you're going to miss something huge. it took 40 years to get to a billion personal computers. it took five years to get to a billion tablets. so the buzz word of the day is exponential. the nasdaq is made up of almost 40% of technology stocks. so i am a big tech lover, and i really do believe that, if you take a look at what the whole world is doing and look at the emerging markets, that's all technology today, you have to be able to look and see what is it that we want to invest in and how. peter lynch from magellan, years ago, said it best. he said, you invest in what you are using. and there is not a person i know, starting with my grandchildren all the way up, that isn't using multiple tablets, that isn't changing the world. automation is here. you just have to jump on that band-wagon. that's why i am very positive about the nasdaq and of course

the dow. i wanted that 20,000 today. no fair! >> speaking of the nasdaq. just a moment ago it hit positive territory. we won't attribute that to you, meg, bertha coombs is here to tell us what might be driving it. >> meg, we've had a nice reversal. you are not the only one interested in the nasdaq here this afternoon. it's led by the nasdaq 100 and that's underpinned by apple's nice reversal, hitting a fresh two-year high this afternoon. that is bringing up tech stocks. you are seeing the fang players also moving into positive territory. facebook, amazon, alphabet and also netflix as well. facebook impact today. very firmly seeing its market cap above that of exxon, making it the fifth most valuable company in the s&p. back to you. >> technology still driving the market here. holly, though -- >> it's driving our world. >> yeah. holly, the treasury market saw

tremendous volatility on a pretty important day, this ten-year note auction. but it still was a very solid auction, wasn't it? >> we had a great auction today. the best demand we've seen in the ten-year since june, which was very strong. even though meg said it's a whole new world in technology, nasdaq and whatnot. we are not necessarily seeing a whole new world in treasuries or yields. there has been a chatter recently that the downtrend we've seen in yields is over. i am not in the same space with that thought process. i think they can still go higher and not break the 30-year downtrend that we have seen. i think 2.6% would only be a little bit of a glitch in the market. but i think you can go all the way up to 3% and still not break the down trend that we have been in since the mid 1980s. you could have a little bit more flexibility before you get a new

dynamic in the ten-year yields or yields in general. even though the fed is on a tightening cycle, i don't think it will be dynamic like it was previously. i don't think they'll go from one hike a year to three, four, five, six. also, when you look at our yield -- >> let me get a clarification, holly. are you saying you would still buy treasuries if you believe the downtrend is not finished yet? >> i don't know that i would buy them at this level. i would let them back up a little bit more. i think they could go to 3% and still have the downtrend in track. i'd go to the 2.6% level where people think it's going to be broken. i don't think it will. >> thank you. good conversation today. today's crazy markets. we have 45 minutes to go in the final hour. the dow up 65. s&p up 2. transport having a strong session and the nasdaq is trying to turn positive. >> drug makers sinking after

president-elect trump says they are, quote, getting away with murder. two leading analysts in the area will weigh in on the risks and opportunities in the pharmaceutical space with mr. trump coming up in the white house. that's coming up next here. meanwhile, confirmation hearings forced to take a back seat today. secretary of state deg isnate rex tillerson overshadowed by the trump news conference but there were tense moments. you're watching cnbc, first in business worldwide. ofw

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performer in the dow today, up 2.7%. the fda agreeing to speed up the reviews of merck's immune system boosting drug, combining that with chemotherapy as an initial treatment to battle advanced lung cancer. merck says that regulators will decide whether to approve the combination treatment by may 10th. competitors in the arena, bristol myers squib and astra-zeneca, they are both trading lower. >> president-elect donald trump called out the pharma sector earlier today. listen. >> drug industry has been disastrous. they are leaving left and right. they supply our drugs but don't make them here. they are getting away with murder. pharma. pharma has a lot of lobbies, a lot of lobbyists and a lot of power. there is very little bidding on

drugs. we are the largest buyer of drugs in the world, and yet we don't bid properly. we're going to start bidding, and we're going to save billions of dollars over a period of time. >> in response, almost immediately, the pharmaceutical lobby said it will work with the trump white house to improve the market place and become what it called more responsive to the needs of patients. let's talk about this today. joining us with their take chris meekins from fbr capital markets and shamus fernandez from leering partners. good to see you. thanks for joining us. the ceo of allergan said that their interests were aligned with the trump administration. so chris, you know, mr. trump now has another industry dancing fast right now to try and keep up with his -- his interests and his intentions to try and rein in costs and be more attentive to patient needs right now. what do you make of all this? >> it's pretty popular to hit the pharmaceutical industry at this point. the health is he can't just by

executive fiats rein in drug prices. article one of the constitution is the congress not the presidency. the majority of congress do not support that. chairman of the senate finance committee was willing to take down the transpacific partnership deal over pharmaceuticals because he thought they wouldn't be protected. his designee for hhs secretary, tom price, has voted against medicare negotiating drug prices, taking hundreds of thousands of dollars from the pharmaceutical medical device industry and has been an opponent of medicare trying to rein in drug prices. i don't see how he gets it done with the congress he has and the people he is putting in place as his personnel. >> shamus, what action are you guys able to bet on at this point? are there companies you think can do well no matter how this

all evolves? >> that's a great question. some of the key factors to keep in mind, really, the last few years it's become more of a political football in large part because of a couple of bad actors. the question is do a couple bad apples spoil the bunch. talking about maintaining risk prices at a reasonable level and the industry taking net price increases so the real price realizes that most companies are getting is actual probably going to be in the range of 0% to 3% over the next five years. that's frankly not that aggressive or substantial. so overall we view this -- then perhaps something that needs to change aggressively. a couple benefits or changes that could occur, you could see greater use of things like biosimilars in the market. things like that. those would be things that we could see being a benefit. but we really like oncology

companies, rare disease companies and companies in the large pharma space that are shifting in that direction. >> chris, we already know that the automotive companies have responded to mr. trump's criticisms of production overseas by already saying they will create jobs here in the u.s. one has canceled a factory. others are talking about hiring more workers here in the u.s. wouldn't it behoove the drug industry to at least throw the president-elect a bone of some kind to let them know -- let him know that they hear him and they want to work with him on creating more jobs and bringing costs down? >> sure. no question. galacso not too far up the road from d.c. opened a new facility dealing with pharmaceutical manufacturing. so they can throw him a bone. with tax reform, i think you'll see a stop in the movement or an encouragement, whether it's the border adjustment, destination-based corporate income tax, changes that will really encourage manufacturing at home. the real reality is there aren't

the raw materials here for the pharmaceutical products in the u.s. we import more than half of the raw materials into the u.s. and as a result, i think most of the production happens here. could he make some changes at the fda dealing with inspection of facilities or really try to ramp up there? no question he could. but personnel is policy in d.c. and the people he is putting in place don't share his views on trying to rein in pharmaceutical prices because they understand that, if you cap pharmaceutical prices, you are capping innovation. and china is dramatically increasing its investment in biomedical research. i don't think the president-elect wants us to fall behind china. >> all right. very good. chris meekins. shamus fernandez. thank you for joining us today. important topic. we need a gain of about 145 to reach dow 20,000. we were up 118 at the peak, until the news conference got under way. right now we are up 70 points. the nasdaq, though, is in record

territory. any positive close there is a new record. coming up, president-elect trump did not mention tax reform during his news conference. we'll discuss the implications for corporate earnings and for the trump rally. up next, mr. trump's pick for secretary of state, rex tillerson, facing the senate foreign relations committee during his confirmation hearings on capitol hill. the latest developments of that ongoing hearing coming up.

welcome back. former exxonmobil ceo now

secretary of state designate rex tillerson testifying before the senate foreign relations committee at his confirmation hearing today. >> eamon javers following the action. tell us what you know so far. >> reporter: the hearing is entering its sixth hour. rex tillerson has been testifying on issues around the world. the story of the hearing has to be marco rubio's emergence as a potential serious critic here of rex tillerson. he engaged in heated exchanges with tillerson earlier in the day and later in the day came back for a second round. here is the exchange in which marco rubio asked rex tillerson his opinion with whether or not vladimir putin simply murders his portfollitical opponents. >> are you aware people who oy pose vladimir putin wind up dead all over the world, poisoned, shot in the back of the head? do you think it's coincidental or do you think it's possible or likely, as i believe, that they were part of an effort to murder his political opponents? >> people who spoke up for

freedom in regimes that are oppressive are often at threat and these things happen to them. in terms of assigning specific responsibilities, i would have to have more information. >> so tillerson declining, really, to put a stamp on that one way or the other. he has also faced questions from democrats on the panel who are saying they would like to know more about his criticism of the obama administration's response to the crisis in the ukraine. tillerson has said he thought that was a weak response by the united states and it, in fact, invited further russian aggression. democrats pushing back and asking what specifically tillerson would do, what he has suggested is that the united states should have backed up the ukrainian military by sending defensive weapons and sending a signal to vladimir putin that more aggression would not be tolerated. russia really one of the dominant topics here on capitol hill today with rex tillerson, guys. >> just now mr. tiller son, outside -- i am reading now that

he says the u.s. must, quote, reaffirm its commitments to taiwan. and he knows of no plan to alter the one-china position. that will be a delicate issue once mr. trump enters the white house, isn't it? >> it always has been a delicate issue for the past 40 years in terms of u.s.-china policy. a question will be will this new administration change the policy. sounds like from the comments which i haven't seen, sounds like tillerson trying to thread a needle that american policymakers have been trying to thread for a long time. >> thank you, eamon. you can watch the rest of the hearing. >> six more hours coming up. >> thanks. jv here is what's happening at this hour. elaine chao on capitol hill for her confirmation hearing to be the next secretary of transportation. she called the country's infrastructure one of the most dynamic in the world but warned

it needs to be updated. >> today these gains are jeopardized by aging infrastructure, growing congestion, increased fatalities on our highways and a failure to keep pace with emerging technologies. >> volkswagen has agreed to a $4.3 billion settlement to resolve u.s. civil and criminal probes into its diesel emissions cheating. six vw executives were charged including oliver schmidt, in charge of the environmental and engineering office in michigan. a new study says increasing lots of red meat could increase risk of diverticulitis. mass general hospital looked at the diets of more than 45,000 middle-aged men and those who ate more than 12 servings of red meat a week were 58% more likely to develop that disorder.

that's the news update this hour. back to you guys. we all think it's a lot of meat. >> i was going to say, come on. we can eat red meat. more than 12 servings a week? that's excessive. >> is a serving like four ounces? sometimes one dinner can be three servings. drinking. it's like if you have two ounces it's a serving. it sounds like you're doing too much until you realize the wine glass is pretty good and doesn't seem to take up that much room and still adds up. >> is a wine glass ever too big, kelly? >> no, it's not. thank you, sue. >> going into the last half-hour of trading. dow up 71. earlier, up 118 came close to dow 20,000. doesn't look like it's going to happen today. a leading trader will tell us what he is watching into the close coming up. president-elect trump did not mention tax reform today in the news conference. we'll discuss what that could mean for the rally and corporate

earnings. stay with us. .tiouaddg

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welcome back. less than half an hour to go in the trading session today. i'm joined by steve grasso of stewart frankel. we know what happened. the press conference began. he started to call out the

biotechs. we sold off. now we're making up ground. >> i think it will be a knee jerk reaction every time he speaks with crimping margins. haggling over price. whether it's defense contracts. there is not any one on this planet, let alone in this country, who thought we were paying a fair price. you have the stories of a pen in nassau that could cost $100,000. we all know we're over paying. we know we're going to see those margins come in. >> margins that are too -- that are unjustifiably wide on government contractors need to come down. >> true. >> what about margins for general motors. >> they'll need work-around around there. what president-elect trump needs to do is speak to the corporate tax reforms that he is going to instate, the personal tax reforms that he's going to instate. >> he didn't bring it up. >> because he doesn't have the details yet. he wants to make sure that he is accurate, right.

measure twice, cut once. make sure you're accurate, so he doesn't have to go back on anything. once you come out with a finalized plan, that the tailwi is going to be much bigger than the headwind the market will catch up. the unwind of bonds into equity whys is early. expect markets to adjust. we learned today president-elect trump's business empire will be run by his two sons. robert frank is at trump tower in mid town. did you read all the files today, robert? >> almost. the central purpose of day's press conference is for donald trump to set aside those questions of conflicts of interest over his business. in trumpian fashion, before he got to that he was defiant and said, look, legally because of ethics rules i don't have to do anything. take a listen. >> i have a no conflict situation because i am president. which is -- i didn't know about

that until about three months ago, but it's a nice thing to have. but i don't want to take advantage of something. i could actually run my business and run government at the same time. i don't like the way that looks, but i would be able to do that if i wanted to. >> and because of the way that looks and because of the constant headlines, here is what trump announced today to separate himself from his companies. first of all he's stepping aside from management. his sons don jr. and eric will run the company. he'll put his ownership and the assets into a trust. we don't know whether that's an irrevocable trust or who the beneficiaries will be. it will be a separate trust. he'll have an ethics adviser sign off on things with the company. there will be no new deals overseas, but this is important. the domestic trump organization can expand and continue to do new deals. finally, he said that, with regard to the emoluments clause preventing a foreign government from benefiting the president,

he said he'll contribute revenues or profits from a foreign company that pays in the hotel to a treasury. a lot to sort through. basically he said i'm not going to run the company, it's up to my kids. when i'm done i'll come back and run it. guys, back to you. >> robert frank in mid town manhattan. during the news conference we heard a lot about mr. trump's business interests among other things, but nothing about tax reform. has that fallen off the agenda, we wonder? >> let's ask a couple of guests. henrietta trayce, from white analytics and ian mois at the "washington post"s and cnbc contributor. welcome to you both. henrietta, was it significant that it didn't come up today? do you read anything into that? >> i do. definitely. unlike trump, investors have a lot of conflicts right now. we need direction. we need to know whether trump will support and stay with his 15% tax rate that he has been

talking about at the corporate level or defer to ryan and go with the 20% plan. that small differential has huge implications for things like border adjustment, how we tax imports in this country, whether there are carveouts for specific industries. we need the details desperately. >> elon, clearly the russian issues, the leaks and all that, that crowded out a lot of time in the news conference. so it's possible it just never came up. however, we have been hearing from speaker paul ryan, from jeb hedger lynning and they've been trying to temper expectations for the ambitious agenda that it will take time to get this done. i wonder if tax reform will get lost in the sauce as they try to build a wall and do other things right now. repeal obamacare. >> i think notable that from donald trump's contract with america, the things he lists that he wants to do on day one include pulling out of nafta,

potentially renegotiating it. pulling out of the transpacific partnership. it does not include tax reform which is not up to the president, it's up to congress to do. what congress is finding that the heavy lift of repealing and eventually perhaps replacing the affordable care act will take a lot longer than they had thought, leaving less time and political capital for them to expend on corporate tax reform. this is the same problem president obama found himself in in 2015 when they tried to do tax reform after doing a fast-track authority for the transpacific partnership. they thought they could do one and then do the other. they ended up not getting both at the end of the day. >> you mentioned it's critically important to know whether it's 15% or 20%. what rests on whether it's one versus the other? >> well, a lot of the decision-making will come from the messaging. this needs to come from the top. you can't just hope your way into tax reform.

they need guidance from the president because it's going to require a lot of heavy lifting to get these, you know, for net importers very unpopular provisions enacted into law. what investors are looking at right now and there is a huge disconnect on what d.c. is preparing to move forward and invest o investors are hoping. there is a holdout for a massive 15% reduction by march. that's not an appropriate expectation. trump not even mentioning it today is an indicator of that. i think you have a lot of efforts on capitol hill to move this forward. we'll probably see legislation from at least the house of representatives in the march/april time frame. but the directive needs to come from trump. and i am not -- i am not optimistic that anything will pass, even in the house, before june, and i think that that alone will be a negative headline for investors to digest as it becomes more plain. >> wish we had more time.

we have to move on. good to see you both. thank you. >> thank you. >> see you later. 18 minutes left in the trading session right now. nasdaq, that's record territory. it's positive again. so technologies still leading the way. dow starting to move a little higher, up 82 points. call it the trump effect. a meeting and photo op at trump tower can sometimes send stocks flying. we'll have details on that phenomenon coming up. the president-elect singling out your company today like he did with cnn can send the stock tumbling. both sides of the story coming up.

our halftime report colleague josh brown offering advice for ceos taking heat from president-elect trump. >> this is what i think matters. it's the easiest game in the world to play. if you are a pharmacy ceo, go to trump tower, have a meeting, come down the golden elevator. we're going to hire 3,000 people at our plant in michigan or whatever you have to say, then you are one with of the good guys. that takes the heat off. >> well in fact. cnbc's eric chemmy looked at the companies that have taken that advice and found out the photo

op can be good for the stock price. eric. >> that's right. he had good advice. we've seen a cast of major ceos visit trump tower. here is is the most interesting thing. according to our calculations there is a noticeable pop in the stocks of these companies on the day they come in for their visit. not only are the stocks up but they outperform the market by almost a full percentage point on average. so think about that. that's a full percent beating the market for each company just on one day. a lot of value when you think about it for meeting the president. look, we don't know why this is happening but it suggests the power of the visual like josh mentioned, that a company meeting with trump can only mean good times ahead is at least what the market is saying. not surprisingly bhp went out of their way yesterday to let everybody know their ceo and chairman met with trump. guess what, their stock was up

over 4.5% versus an unchanged market. for the data we didn't include. meetings with former ceos or the large group tech gathering, just focused on the smaller individual meetings. it will be a trend to watch down the road. will it have the same effect and power once he takes the oval office. >> don't you agree. if you're not a ceo who has gone in and at least tried to have a meeting at this point -- >> it's disingenuous of the drug industry. they came out and said, our interests are aligned with the white house, and we believe in the same things they do. but i think it's -- the guest we just had on said, look, it's impossible for the president to impose price caps on the industry. that's not the answer. the answer, as josh pointed out and as you are suggesting, eric, is to go to trump tower and make nice with the president-elect. that's the game you have to play right now. have a conversation. it will help your stock for one day and maybe you'll learn something about what the other

side is thinking. dow up 85 points with 12 minutes to go. trying to get back to the high watermark from this morning. s&p up 5. transports up 95 points today, helped in large part by the airlines. doj is not pursuing an anti-trust lawsuit. nasdaq up 7. russells lagging but a little bit higher. president-elect trump's news conference, of course, the talk here at the stock exchange. two money managers will give us their reaction when we come back.

what do we have in ten minutes left in the trading session with the dow up 88 points and moving higher. art casher was telling us the markets on close balance show a buy side. we're seeing it moving into the market. >> nice rally shaping up. >> 58 points away from dow 20,000. like that's going to happen. joining us michael zin from ubs, senior vice president-elect of wealth management. sara hunt from alpine funds. headline risk. that's the story of the day here. >> that's right. >> if you're in drug stocks, you got slammed for about a half hour there during the trump news conference, right? >> that's sort of been part of

the wall of worry. and there has been a soft spot for drug prices clearly, but there is a bigger issue. that is it's cyclical stocks that have been doing better. we want to not focus ex clooufl cluesively on the political but the business cycle. that's where the economy is moving. i think health care will wind up being a good valuation bet today but may not be a strong point because of the cyclical aspect of the economy. >> sara. a lot of it hangs on how much business friendly tax reform and other reforms happen. >> i think it goes to the uncertainty of what's going on. you have a combination of economy and politics. politics says people are unsure what's going on with health care and obamacare and how that will change. they're also looking forward to stimulus spending perhaps, tax cuts for u.s.-based corporations. the places that are rallying are energy and investments. >> none of which we heard about today. any of that. having said that, what do you

like? >> we still like -- there are parts of defense we like. raytheon. also looking at some of the consumer which which has been hit. newell have made acquisitions of yankee candle. some places have decent dividends and growth. you have also places where you have seen those stocks run quite a bit. >> what are you favoring? >> favoring cyclical. we like health care based in calculation. >> consumer discretionary is tricky. it's like, if netflix and amazon do well -- >> we like the cable stocks. hard-line retailers. there is that sector of a trickier device. you have to be selective. >> still like dividend stocks? >> we run dividend funds. >> you have to like them. >> we are also looking in places for growth. a lot of things you think of as

dividend stocks you think there is not growth. we tend to overweight some of the places in dividends where we see growth. >> good to see you both. thank you for joining us. we head to the close with the dow up 84 points. closing countdown in a moment. after the bell, steve mnuchin told cnbc the trump administration will cap the mortgage interest rate deduction. you're watching cnbc, first in business worldwide. rees.ed

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three minutes left here in the trading session. once again, we begin the closing countdown, we give due to the nasdaq composite index. setting another new all-time high today. this is now the seventh day running that we have seen a positive close for the nasdaq. fourth day running at an all-time high. i want to see the charts for the rest of the markets. the dow. was up 118 points when the press conference began. and then, as soon as mr. trump made his comments about the drug stocks, down everything went. drugs leading the way. even though merck was the leading stock to the upside and stayed through the day because of some positive fda rulings on a treatment for lung cancer that

it's working on right now. there is the drug index itself, the new york stock exchange pharma index. that took a tumble. j and j. pfizer. a lot of them taking it on the chin as a result of all that. you know what else went down? the dollar index. it had been higher early in the session. as soon as the news conference got under way a lot of volatility. finished lower after being pretty positive. ten-year. we mentioned earlier, the very volatile day. what a day to be volatile because of the ten-year auction. a very important auction. it went very well. demand was very high in all the right places. 2.34%. the yield there is at 2.36. i bring bob in now. what was the shining light today besides the nasdaq, the transportation. the dow transports up 88 points right now. and you look at that chart. it didn't even budge during the news conference today. >> the important thing is the airlines have had a great run. a lot of them up 25%.

hoping business will be better. multiples have expanded. a lot of people came up to me during the press conference. why is the market down? he said this before. nothing new came out of it as far as market-moving news. yet the markets moved. dollar dropped. yields dropped. i think the market is a tightly-coiled spring. historic highs, investor sentiment is bullish, volatility is low. people are expecting big things from the stock market. slightest disappointment a major problem. i'm telling you that earnings are really big this year. there are very high expectations. they'll say bullish things about 2017 earnings guidance and i think they'll be cautious. i think we'll have a bit of a speed bump. >> we have had a sideways market for the past month in part because of a news vacuum. nothing to move the market forward. friday when we get the earnings, that's the next catalyst. >> nobody sells the future better than jamie diamond.

i think he'll be upbeat about the economy in general even if he's cautious about his own earnings. we go out with the dow 58 points away from 20,000. tomorrow, who knows. up 89 points. another record for the nasdaq. stay tuned for the second hour of "the closing bell" with kelly evans and company. see you tomorrow, kell. thank you, bill. welcome to "the closing bell," everybody. i am kelly evans, and we are in another record high on wall street on the nasdaq once again today looking to close higher than 5551 to reach that level. we did it by 12 points. 5563 the new closing high for the nasdaq. a gain of a fifth of a percent. it happens after it was whacked earlier. only turned into positive territory later in the session today after trump's press conference. more than that in a moment. it was one of the weaker

performers. s&p 500 up to 2,275. just two points away from its all-time high. the dow, 19,951. 20 points shy of its record close and, of course, 49 points shy of dow 20 k. the mortgage interest rate tax deduction is a perk for homeowners. donald trump's tax plan would cap it or eliminate it outright. we'll debate the potential impact on the housing market coming up. cnbc senior markets commentator michael santoli. paul hickman here as well. rene norse from urban wealth management to talk about the markets. roller coaster ride. >> the market got its legs back after the press conference ended with president-elect trump. i think the way i view it is this is a market that's been sitting there churning for a little while, going sideways. it could used the press conference not just the comments about pharmaceuticals but just

the general tone and tenor of it, as an excuse to have one of these pull-backs. it didn't really do it. i guess you could say it shows some kind of underlying resilience. it also shows what i have thought for a while, this isn't at its core a trump rally exclusive of other things. it's not just about the path to tax cuts through congress. it's a little more about the economic fundamentals. at least for today that seemed to bear out. >> paul, you agree? >> people are looking for any excuse to sell, and there has been plenty of seemingly good excuses for it but they haven't worked. today was a case in point. we were looking today, since the election, there hasn't been a single pull-back of more than -- the biggest pull-back in the closing s&p is 1.45%. no other newly elected president since 1928 has seen that consistent and steady rise post their election. for all the uncertainty and disorganization going on people are talking about with the trump incoming administration, the market seems to like it. >> we had a guest tell us he

thought it was certainty about what direction the administration would be headed in. the problem is, now that you know the broad direction, do you need the specifics? that's what the guest was saying last hour. tell us. >> this is a complete 180 degrees of what we saw in 2009 after obama was elected. the market was down over 10% at this point. massive volatility in the market. and everyone thought it would be a horrible market. we saw what happened then. not to say that the exact opposite will happen going forward. what we have now -- the bar was set very low then. the bar has been set high now. it doesn't mean that it can't be exceeded. it's just -- there is less room for error. >> rene. what about you guys? how would you invest in this market? >> there has been so much noise, kelly. i decided to break it into three buckets. the trump bump, which we have been experiencing, the trump dump and then the trump mess. so we are experiencing the trump bump now.

small to medium sized companies are doing great. but i am concerned about the trump mess, which is that last bucket. and the aca, as an example, is the latest mess. so there are some opportunities, i think, that will be in that bucket. a lot of the medical and health care providers are going to be great companies to look at. as it was said earlier today, if someone would go to trump tower and say, look, we're going to hire 2,000 people, stock prices would go up. >> you're saying, rene, this is all a hypothetical. don't necessarily buy them today. wait until there is this further mess in the market and then it's time to kind of seize that opportunity? >> yeah. i think so. i think everything is negotiable. and as our president-elect has said, he is the king of negotiation. so there could be some great opportunities with some of these stocks that have just gotten hit really bad. they pay great dividends. in the health care sector in particular, which is the newest spotlight, still a very long-term growth industry to be

in. so yeah, i would take a little bit at a time. >> yeah. be able to ride it out. >> exactly. >> for the time being. so we had that press conference earlier today. we saw the reaction immediately in the biotech space, which was one reason we have focused on this. that dragged the nasdaq down too. it was only later in the session it came back into positive territory. it had been on a run to start the year. you had a great excuse to sell it and then it came back. >> the leadership sector for the first several days of the year. it was a beaten-down one last year. people thought it was a chance to have a catch-up trade. initially you had a good excuse for a pull-back in that sector. i still don't think, if you wanted to draw it up, having a market that is that dependent on who happens to appear in the lobby of a building on fift fifth avenue, that's the most stable thesis you want. now that the market is tight and there is not a lot of systemic

risk. i think the stock market could be okay with it for a while. >> the trump tower trade. president-elect trump holding the news conference. john harwood joins us with the highlights. john. >> reporter: it was a fascinating news conference. the top headline news, of course, was on russia. given the allegations of the last 24 hours. the president-elect, for the first time, said he thought that russia was responsible for the hack of the democratic national committee and john podesta's e-mails, though others might have been involved. but he rejected as baseless fake news the idea that russia had leverage over him. he was not eager to criticize vladimir putin, who he said having a good relationship with him was an asset, but he also got back to his message on the economy and whether it's from stopping drug companies from getting away with murder, as he called it, or stopping companies from moving manufacturing jobs out of this country. he said he was going to focus on

things that would make the average american better off. take a listen. >> pharma has a lot of lobbies. a lot of lobbyists and a lot of power, and there is very little bidding on drugs. we're the largest buyer of drugs in the world, and yet we don't bid properly. the word is now out that, when you want to move your plant to mexico or some other place and you want to fire all of your workers from michigan and ohio and all these places that i won, for good reason, not going to happen that way anymore. we're going to create jobs. i said that i will be the greatest jobs producer that god ever created. >> announcer: and finally, on that trump mess that your panel was just referring to a moment ago, he did have news on that front, saying that the repeal of obamacare and its replacement should happen either simultaneously or virtually simultaneously, perhaps even in

the same day. he said he would roll out a plan when his hhs secretary designee, tom price from georgia, is confirmed. if the republicans in congress can keep to that track we may get answers sooner rather than later but there is skecpticism that they'll be able to do that because republicans now have no consensus on a replacement for obamacare. >> it will be interesting to watch that play out. john, thank you. a few other things going on today. transports up 91 points. airlines leading the way. justice department apparently not going to pursue any collusion -- not collision -- collusion charges against them. so alaska and southwest at all-time highs. how much better can it get for the airlines? >> the market has got, even as it's gone sideways. the pro cyclical market.

if people thinks the economics of the industry are okay, oil prices are in a place where they'll work, so i feel like a lot of the stuff is working because it's working. it's working because those are the sectors that people think have a little more upward revision potential for the earnings through the year. >> this trade isn't just a trump trade. it's the economic fundamentals doing better in the economy, not only in the u.s. but around the world. we are seeing -- it's almost a coordinated, every country is seeing better data, indices are at highest levels in six months or more. >> double-edged sword. >> now what's going to happen, if this keeps up will the fed become more aggressive. >> you know how these things go. all the data comes in better than expected. when you start to revisit the benchmark and say it's much better, it starts to disappoint and we slide back down. are we at the top of that journey for the time being? >> gets back to the

expectations. once expectations get too high it gets harder to surpass them. >> rene, we are talking about health care a moment ago with you. do you have other names right now or places in the market that you think are particularly attractive? >> there has been a huge move in small to medium sized marketplace but i think that is where a lot of our growth is going to come from. if we get corporate tax reform, and we have less regulations and the fact that small to medium-sized companies are under the radar screen as far as the whole conversation about bringing jobs back to the u.s. because they're 100% domestic focused. i think they'll do exceptionally well. i like them broadly, more specifically, for example, medical device companies. they were going to be major supporters, obviously, for the excise tax, which was suspended a couple years ago. that will be permanently eliminated. i like cyber security companies, which is a fragmented marketplace. those stocks got way ahead of

themselves, hit a low point last year. a lot of them have recovered. certainly with this conversation around hacking -- >> that's for sure. >> i think we'll be back in the mix with those. >> thanks for joining us. paul as well. good to see you both. president-elect trump saying the companies shipping jobs overseas are getting away with murder and promising they'll be hit with a big border tax. also talk about capping mortgage interest rate deduction. up next, a debate over what that might mean for the housing market. you're watching cnbc, first in business worldwide. rid i i..tr

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don't let directv now limit your entertainment. only xfinity gives you more to stream to any screen. welcome back. we have an earnings alert on kb home. diana olick has the results. >> it's a solid beat for the los angeles based home builder. revenue up 21% in q 4 to $1.2 billion. 40 cents a share. backlog value up to the highest in ten years. orders up 20%. deliveries up 19%. and the average price of a kb home up 3% to $367,800. the ceo saying they're well positioned going into 2017 and

said they'll be focused on the first-time home buyer and are well positioned in where they build. mostly in the west and south. areas like colorado and here in the d.c. area and north carolina which is a hot market as well. they do seem to be well positioned going into the next year, though the home builders in general should be producing more. we talk about that a lot. kelly. >> the analysts pushing for it too. only three buys on kbb before today. thank you. president-elect trump skipped the subject of tax reform today, leaving some investors scratching their heads. the mortgage interest deduction allows bore wero borrowers to d amount paid on mortgages. >> you reduce the value of every home. let's bring in salem radio's

hugh hewitt along with the representative from the american enterprise institute. thank you for joining us. >> thanks. >> glad to be here. >> hugh, you know you're raising a contentious issue. this had come up as perhaps a way to raise revenue and the right thing to do for the housing market. why is it so important to keep the provision in place? >> well, kelly -- excuse me laryngitis. it gets better as i talk more. i had on the ways and means chairman kevin brady and the house gop leader. kevin mccarthy. they both agreed with me, they're against lowering the home mortgage interest deduction or capping it further. it's happened at a million bucks. they realize it's popular. purists want to get rid of it because of the so-called market distortion effects. two studies showed if you eliminate or increase the cap you bring down the collective value of housing across the united states. sometimes by as much as 20%. that's not the way to keep the trump bump going. i don't think you'll see it in

donald trump's plan. i was pleased to find out from brady and mccarthy today tax reform will hit the president's desk in two waves, the first the end of february, the second one shortly thereafter. >> that's news to the ears of many investors. jimmy, we're asking you to debate a guy with laryngitis. >> perfect. i prefer he completely lost the power to speak. that would be even better. >> why are you -- go ahead. >> listen, by purists and ideologues that means all economists. they believe spending a hundred billion dollars a year to subsidize high-end homes is not a great use of our country's resources. i don't think it's a debatable point. one reason the trump administration is talking about it is because they need the dough. they have a tax plan which loses a lot of money. if the border adjustment tax doesn't go through, it probably won't, they're counting on a trillion dollars from that, then

they'll need the money. they're looking to find money and that's one way. most people it would not affect. all these ideas to cap it and also include a tax credit to help lower income and middle class people. scare stories about prices dropping 20% i think are ridiculous. i think that is not going to happen. i think the weight of the evidence is that will not happen. if you're against it, the really is because of what hugh calls political realignment. you are worried it will hurt republicans if it blows up. i am concerned about getting the economy growing as fast as it can on a sustained basis and housing is a barrier to that everywhere i look. >> hugh, if we didn't have the deduction already would you be in favor of it? is it the risk of taking it away that you don't like? >> it's very much that. people don't live in theory. they live in homes. homes in which they invest over a long period of time. if you want to phase it out over

30 years, that's perfectply fine. the 100 or 200 economists you're talking about do not come close to the opinion of the 1.2 million realtors. this deduction is not going away, not just because of the high-end homes. if you reduce the value of the high-end home you reduce the value of the homes below it. it is one market. it is an idealogical purist thought to get rid of it. people want the deduction. they want to be homeowners. it's part of the american dream. again, i want to confirm what kevin mccarthy and the chairman of ways and means said today, it is not going away. this is not happening. >> great. listen, i have no doubt about the power of realtors. i am interested in getting the economy growing. isn't that what we want? we just had a financial crisis driven by housing. >> we just heard -- >> cities which people can't move to because it's too expensive. we are spending $70 billion a

year to subsidize most of it high-end homes. we can think -- >> it's not a subsidy. >> that would grow the economy faster. we want faster economic growth. >> we just heard the -- >> the trickle down, cascade effect. i don't think that's where the weight of the evidence is. this is just -- it may be good politics, but it is dreadfully food economics. >> it's not. >> i hope we have good economic p policy greater. >> the earnings report from k & b before we came on is terrific. every job in housing produces four jobs across the united states. it's the driver of the recovery, brings us out of recession. it will explode it. when you get rid of the deduction you kill the marketplace and destroy economic well-being and get people down in the dumps again. it is actually very evidence-based. >> it's interesting to have this basically protection of the mortgage interest deduction at a time when the republican tax plan, one of them, anyway, wants to remove the deductibility of

interest for companies. it shows you the power of nobody is going to go to the polls on protecting the deductibility of interest for companies. removing that as a statement of saying we don't want companies to rely so much on debt and to do a lot of financial engineering. we want them to save up and spend that out of pocket. >> hugh, don't you like the eat o -- ethos of all that? >> i want to keep the republican majority for a long period of time. i live in the reality that we live in the republican majority of 40 in the house. if you remove the mortgage interest deduction or state and local income tax deduction or charitable interest deduction the majority will be gone overnight. the interviews are transcribed. kevin brady and kevin mccarthy. this is not going to happen. only the adeal ogs want it to happen. >> the economists have to get their reputations back.

that's the problem. thanks for joining us. even with the laryngitis. a rough confirmation hearing for rex tillerson today. the secretary of state designate coming under fire from both sides of the aisle. we'll take you live to capitol hill coming up. first, donald trump accusing various media outlets of putting out fake news at his news conference today. the impact on their stocks next. p

s gs potod anym t since you're attacking us,

can you give us a question. >> go ahead. go ahead. >> not you. not you. your organization is terrible. >> you are attacking our news organization. can you give us a chance to ask a question, sir. >> go ahead. quiet. quiet. >> go ahead. she is asking a question. don't be rude. >> can you give us a question. you're attacking us. can you give us a question. >> don't be rude. i am not going to give you a question. >> can you state categorically -- >> you are fake news. >> and right after that exchange between president-elect trump and cnn reporter jim acosta the stock of cnn parent time warner had quite a drop. >> just after noon, that was where the exchange took place. the stock went down like that. not in a crooked line. what's interesting here is i looked at disney shares, competitors to time warner, it was steady right like that. essentially people -- i don't think they took a long and considered break to decide whether this was going to compromise cnn's business long term or perhaps the merger of

time warner and at&t, but it seems as if the market is skittish. when the president targets any company, the market tends to react. >> you scribbled over my fake news. >> this was the key quote. >> that was the trigger. that's right. >> there was no question -- >> while it was going on it was very clear. >> you are an investor in time warner or thinking about it. is it actually material for the future earnings power of time warner? >> i think it's fairly telling to see what happened to the stock over the rest of the day. it recovered with the market. people said it doesn't change the story. if there was doubt that time warner would be allowed to be acquired by at&t, there is already a gap between time warner trades and the value of the deal already. seems as if people said, look, this is a wiggle buying opportunity. >> it's fascinating to watch people go back and forth handicapping whether it's going to happen under the trump administration. you see is argued both ways. >> which basically was going on before this particular exchange. i think it's much more

interesting as a spotlight on trader psychology right now with regard to the incoming administration. >> the tweet risk that we've talked about. classic example with time warner. calling out buzzfeed for publishing unverified documents accusing the russian government for working with the trump organization for years. >> president-elect trump made his feelings on "buzzfeed" clear when he responded to a question from a journalist. >> i think it's a disgrace that information that was false and fake and never happened got released to the public. as far as "buzzfeed," which is a failing pile of garbage, writing it, i think they're going to suffer the consequences. they already are. >> "buzzfeed" standing by its decision to publish the dossier so that, quote, americans can make up their own minds about allegations about the president-elect that have circulated at the highest levels

of the u.s. government. cnn, which trump also called out as fake news reported that intel chiefs presented them with efforts but didn't disclose the details. cnn responded. our decision is different than buzzfeed's decision to publish unstan sha unstanitiated memos. trump knows this. trump's battle with cnn has not hurt the network. last week the ceo of cnn parent turner told me that cnn has never been stronger, both in terms of ratings and in terms of revenue. kelly. >> do you think this plays into that, julia? that in a way it might boost ratings? is it more of a risk that now as he is coming into the white house that he is choosing this moment to push cnn out? >> well, i think people are very interested in how cnn is going to cover this.

according to what turner ceo said, that it's only driven -- interest has only driven ratings. we've seen it across the spectrum. trump has criticized the "new york times" and called it a failing organization, but the "new york times" is actually added many, many subscribers in the wake of the election. added about 130,000 subscribers just in the couple of weeks after the election. so all of trump's criticism does not seem to be having an impact. >> now i am worried about the "new york times" because he praised them today for their handling of this news story. thank you, julia. time for cnbc news update with sue herrera. >> this is what's happening this hour. iraqi forces make new advances against isis in northeast mosul, fighting the militants in areas near the tigris river. facing fierce resistance from isis fighters and driving suicide car bombs and using drones to attack the forces advancing in that city. the world animal health body says there has been a second

european bird flu outbreak in as many years. it's causing the slaughter of hundreds of thousands of birds in southern france. but it says the outbreaks are a coincidence and not a sign of worse things to come. flood waters have breached a v levy in california. >> dunkin' donuts is recalling 8300 glass tumblers after reports of them cracking and breaking posing burn hazards. so far no injuries have been reported. that's the news update. back to you. >> sue, thank you. sue herrera. president-elect trump doubling down on his threat to hit companies with a huge border tax if they move corporations overseas. larry kudlow joins us to discuss whether it leads to a job boom and if there is a risk of trade

partners retaliating. rex tillerson under fire during his confirmation hearing today. we have the contentious highlights later on "the closing bell."

welcome back. here is how we finished today on

wall street. modest gains but a couple significant things. markets turned around after dropping when president-elect trump had his news conference in which he at the beginning singled out pharma stocks. that lowered the nasdaq and the russell 2,000 small caps and the dow. merck on outperformer for other reasons. the dow closed higher. the s&p adds .25%. the nasdaq hit a fresh record close with a gain of 11. a 5,563. russell up a couple points at 1,373. president-elect trump has been an active user on twitter. pressuring companies to manufacture their products here in the u.s. if they don't, trump is threatening to hit them with a border tax, and he doubled down on that call in his news conference today. >> there will be a major border tax on these companies that are leaving and getting away with murder. and if our politicians had what it takes, they would have done

this years ago. >> joining us now, larry kudlow, cnbc senior contributor and informer adviser to donald trump along with terry haines. head of political analysis at evercore isi. is the border tax thing viable in your opinion? >> well, look, it's in the house plan. it's not in the trump plan. is it viable? that's a very difficult question to answer. i mean, i think he makes a good point, without hanging numbers on it. you've got this tax and tariff arbitrage going on. american companies move to mexico, okay. and on their sales operations, they are going to pay the vat tax, which is gone from 5% to 16% over a period of time. mexico said they wouldn't. but then they can sell goods in the united states duty-free. so our imports to mexico -- our exports to mexico.

-- mexican imports will be charged 16%. mexican exports, which are our imports, duty-free. something has to be done about that. i would prefer greatly that mexico lower its value-added tax which would help their economy and help create a level playing field. the details are inescapable. if terry has more info on that, i have been working on this ever since i landed from the airport. >> terry, have you run through how something like this might work, especially how to might garner the political support to pass? >> i am trying to get over being deferred to by larry kudlow. i'll get past it quickly. >> it doesn't happen often. >> i'm savoring the moment. the question is, i would agree with much of what larry says. at the same time it's very much an open question about whether the house is -- part of the house's consumption based tax system on border adjustability is the same thing as the border tax or not. and you know, we know publicly

that trump advisers met with speaker ryan and his senior people on this. in part, i guess, to try to figure that out. but speaker ryan has continued to say, look, we're not going to make major tariff adjustments, what we are doing here is trying to come up with a very different tax system that reverses a lot of the inequities that larry already described. i think that -- i think that the president-elect has a sales job to do on a border tax in congress. and that hasn't even really started yet. >> right. >> there are very difficult consequences, you know, for consumers and families, people who shop in walmart and big-box stores, who use a lot of imports, not just from mexico or canada, china, whatever. >> exactly. >> they're going to pay a higher tax. no question. could be 20% price increase for them. american businesses will have a higher tax because of this border adjustment. now, the other side, we haven't

even gotten to. this is even more complicated. but all i'll say is this. i believe in speaker ryan's plan and chairman kevin brady's plan. american exports would be singled out for very special favors. in other words, if you produce goods and services for export -- >> right. yeah. >> -- for export, you will pay no domestic u.s. taxes. none. zero. as i understand it, terry, correct me if i am wrong. so what you're trying to set up is the government is trying to help exports and hurt imports. i see this mish mash. i don't like the economics of it. i don't like the complexity of it. i'm not sure i like any of it. we have a business tax reform. 15% across the board, repatriation. and immediate expensing. why don't you just go there. just get that done! >> larry, i think that's what people are hoping happens. terry, i was going to say too, there is the marty feldstein

argument which is the reason this is happening is to raise a significant amount of revenue and then increase the dollar and hope it's a net-net, not a hit to consumers while helping businesses. if he is right, then mr. feldstein, they're threading the needle here. >> i think that's true, kelly. they're doing it for two reasons one of which larry described very well which is the kind of reversing the streams to quote that great political movie ghost busters, the other one is what marty feldstein argues for. he and i have been in touch on this, which is that it's a major revenue raiser. this is one of the reasons why speaker ryan always says that, look, we can get to a 20% corporate tax rate, but we've got to do it on a consumption based system in a way that uses the border adjustability provisions to raise a lot of revenue. you know, whether or not the senate will end up in that position or whether or not the

president-elect and his administration follow through with that, we're very much in the first inning of. >> you have to go back, if this can't happen, does it mean we can't have 20% corporate taxes? >> it does not mean that. it does not mean that. really, these estimates are not reliable. marty feldstein is a great man, a great economist and a great american, but one of marty's points, i have to put this in here, he says we can have a currency adjustment to offset the imports. so you have a 20% -- if you have a 20% -- i don't know what they're going to call it -- corporate sales tax on imports, the dollar would have to go up 20% from wherever it is. now, i ask you, kelly, do you want a big pop in the dollar, 20%? i am for king dollar, but that's a lot. how will that affect china and the rest of the world and emerging markets? >> yep. >> this thing just somehow -- i got to work on this, but it doesn't hang together. and i am glad to hear that terry has some mixed emotions about it

also. >> calling a spade a spade. glad to hear it. larry, thanks for joining us. terry as well. really appreciate it, guys. donald trump saying meantime at his news conference this morning that he has started to distance himself from the company as the inauguration draws closer. we'll break down the process and what still needs to be done next. also, wells fargo still working to rebuild customers' trust. the details on how it's overhauling its pay plans coming up. you're watching cnbc, first in business worldwide. own thct no esca s th own thct no c , , he..anoute

welcome back. president-elect donald trump was joined by his lawyer, sherri dillon at higgs news conference to discuss how he's distancing himself from various businesses. robert joins us with how this will play out. >> reporter: let's talk about what trump is doing. first of all, he'll step away from the trump organization. his sons, eric and donald jr. will run the company. his ownership and assets will be placed in a trust. the company will not do any new overseas deals or launch any new overseas partnerships. the company will, however, continue to do business and grow in the united states. all of that is an effort to separate himself from his companies. did he go far enough? we spoke to ethics attorney richard painter, who had this to say about trump's plan. >> he cannot retain ownership interest in the business and say that he is free of conflicts of interest.

he is not. and they're going to continue to be serious legal problems as well as national security problems connected with his business empire. >> painter and others have called for donald trump to sell entirely all of his companies in order to separate himself. but his attorney is saying today, trump's attorney saying, look, he should not have to destroy the company he spent his life building just because he became president. guys, back to you. we know there will be continued questions about his company as he becomes president in nine days. >> let's explore some of them. stay with us, robert. bringing in jay wechsler, a law professor at boston university. jay, what are your thoughts about the plan that's been laid out? >> well, what i can say is that we still are going to have a -- may very well have a very serious problem under the constitution. even with what president-elect trump did today, we still have the risk that on day one when he takes office he will be in

violation of the emoluments clause of the constitution. and that is something that is unprecedented in our history. >> are you talking about the emoluments clause, jay? i like saying emoluments because it makes me sound smart. >> it is fun. i've said it like a hundred times a week lately. it's made my life much more pleasant. yes. the answer is emoluments clause, right. >> jay -- >> kelly -- >> good, robert. >> let me jump in here, kelly. his attorney answered that. or she said she did answer it by -- provision. if foreign governments stay at a trump hotel, trump will contribute the profits from those funds to the treasury in the form of charity. now, again, the word is "profits" and "values in kind services" for trump services, specifically the hotels. she said, look, we don't believe we're in violation.

insofar as there is the appearance of violation, here is what we're going to do. >> michael. >> i was going to build on that point. she seemed to advance a little bit of a legal theory that said if somebody pays fair market value for a service and it happens to be owned by the president that doesn't violate the emoluments clause. i presume she is just proposing that as a potential theory. i wonder what the mechanism would be for someone to test whether or not the president were in violation of the emoluments clause. >> the first part of your comment about fair market value is something that we just don't know. it's nothing the framers have ever talked about or come up, whether if the president gets fair market value for services whether that's an emolument or not. on the second question, the -- there really is no process, certainly no judicial process for determining that the president has violated the

emoluments clause. this is the kind of thing that's really up to the congress. the only potential remedy or a violation of the emoluments clause is impeachment. and that's something that is entirely within the ambit of the house and senate. they would have to make the investigation themselves. >> jay, one final question. the spirit of this clause. do you think it's meant to prevent businessmen from, you know, becoming president or serving a function like this? in other words, if it's interpreted too strictly, could it actually prevent the very type of thing that overall, you think perhaps they would like to see achieved, which is that any citizen, any businessman, can become president? >> well, let's be clear. he could still be president even though he was a very successful businessman. as long as he were to now liq d liquidate all his assets. so business people can still run for president and be president, but they can't continue,

arguably, and i think there is a pretty strong argument that he would have to liquidate his assets. they can't continue to have the big business with tentacles all over the world. he is not taking over the position of a small-town mayor. he is the president of the united states. he is the most powerful person in the world, and if that means he might have to lose his business, that's what the constitution may very well require. >> well, it could be billions of dollars that he would be losing, jay, and not be able to then return to that position. if anything, it would make him more reliant on government service instead of being able to serve and then go back to the private sector. >> i am sure he'll do fine when he goes back to the private sector. >> on the speaking circuit, doing the thing that all the government officials do. all right. robert frank, thank you. jay wexler, thank you. >> emoluments. like to say it. rex tillerson facing tough talk on capitol hill today. the latest from the former exxonmobil, secretary of state confirmation hearing next. coming up on "fast money,"

former viacom ceo tom freston and shane smith weigh in on the

rex tillerson did get grilled on the hill today. eamon javers has the highlights. is it still going on? sf >> yeah, it is. this is the 7th hour of this system. and you do sort of on a physical human level really feel for these nominees when they go t e

through all day hearings. but the senators get to come and go but the person testifying is locked in there. tillerson has faced some hostile questioning, but not as much expected from marco rubio who really went after tillerson in some of the early rounds this morning. one of the questions that he was asking is what tillerson thought of vladimir putin the leader of russia on whether or not you putin might be a war criminal. here's what he said. >> is vladimir putin a war criminal is this. >> i would not use that term. >> what is publicly in the record, are you still not prepared to say vladimir putin have violateded the rules of war and conducted war crimes in allepo? >> those are very serious cha charges to make and i would want more information. >> i find it discouraging your inability to cite that which i think is globally accepted.

>> another interesting area was the discussion of nuclear weapons. he was asked whether or not he agrees with donald trump's statement that it might be beneficial for other nations to acquire nuclear weapons. till eerson says he doesn't agr that sauwed other countries migt help the global picture. >> and there is a life shot of the hearing still going on. and jeff sessions continues today and i heard that it's pretty the rare for a sitting congress made to actual i do that. >> it is rare. in fakct unprecedented for one senator to testify against another senator. the senate, in body is just is the oldest of old boys clubs. senators tend to get along with each other even of opposite

parties. we're seeing some of those norms breaking down. and today was no different. senator sessions saw something that no other senator has seen when being nominated to one of these type of positions. >> a new normal. thanks so much. and wells fargo work to go recover and retain customer after its fake account stand dal. what is changing at local branches next. etedtiof re rend as edadveatn o

welcome back. wells fargo is unveiling new compensation plans for employees as tries to recover from last year's scandal. big branch employ he es will be given incentives based on customer service. >> if there was a smoking gun, it was those goals number of products, that mattered a lot more than the overall value of a customer relationship. >> i don't know about the business model going forward, but i can tell you i think i noticed this firsthand. here in the city, walked into a wells fargo branch and was greeted by a greeter. very nice, said welcome to wells fargo, how can i help you. and i went into line. the line was very short.

and in and out. i'm not sure -- she didn't need to help me with anything and perhaps if i had said something different we would have had a different interaction -- >> didn't try to sell you other products? >> no, just welcome and have a nice day. >> they're trying. i think culturally they have a battleship to turn. because the stock is not lifted relative to the other banks. it's underperformed bank of america by more than 25%. >> and i wonder if that person is not the selling me something, how do you justify the return on equity or investment. >> at a time when branch banking is not high profit. >> and we will hear you will fr all the big money center banks. anything in peculiar you think people should be watching out for? >> the one piece you never really know is how they did on the trading line and what their pipeline looks like. so if we're talking about the jpmorgans and goldman sachs,

that's where the hope is built up. >> economics may be better long term for the smaller ones, but trading numbers- -- >> and volume numbers have been good. >> that does it for "closing bell." "fast money" begins now. drug industry has been disastrous. they are leaving left and right. they supply our drugs but they don't make them here. and they're getting away with murder. phrma has a lot of lobbyists and power and there is very little bidding. we're the largest buyer of drugs in the world and yet we don't bid properly. and we'll save billions of dollars over a period of time. ♪ money, money, money the words from