thought it through and understand that there are going to be consequences and actions typically create reactions. and so you want to be intentional about it. you don't want to do things off the cuff, when it comes to an issue this volatile. chris johnson. i'm sorry, where is chris? >> reporter: right here. on lgbt rights, we've seen a lot of achievements over the past eight years, the "don't ask, don't tell" repeal. assuring marriage equality and other things. how do you think lgbt rights will rank in terms of your legacy and how confident are you that these will continue and endure under the president-elect? >> i could not be prouder of the

transformation that's taken place in our society just in the last decade. and i have said before, i think we made some useful contributions to it, but the primary heroes in this stage of our growth as a democracy and a society are all the individual activists and sons and daughters and couples who courageously said, this is who i am and i am proud of it. and that opened people's minds and opened their hearts. and eventually laws caught up. but i don't think any of that would have happened without the

activism, in some cases loud and noisy, but in some cases just quiet and very personal. and i think that what we did as an administration was to help to -- this society to move in a better direction but to do so in a way that didn't create an enormous backlash and was systematic and respectful of the fact that, you know, in some cases these issues have controversial. i think the way we handled, for example, "don't ask, don't tell," being methodical about it, working with the joint chiefs, making sure that we showed this would not have an impact on the effectiveness of

the greatest military on earth, and then to have defense secretary in bob gates, a chairman, mike mullen, a joint chiefs who were open to evidence and ultimately, you know,worked with me to do the right thing. i am proud of that. but again, none of that would have happened without this incredible transformation that was happening in society out there. when i gave ellen the presidential medal of freedom, i meant what i said. i think somebody that kind and likeable projecting into, you know, living rooms around the country, you know, that changed

attitudes. and that wasn't easy to do for her. that's just one small example of what was happening in countless communities all across the country. so i am proud that the -- that in certain places we maybe provided a good, you know, block downfield to help the movement advance. i don't think it is something that will be reversible because american society has changed, the attitudes of young people in particular have changed. that doesn't mean there aren't going to be some fights that are important. legal issues. issues surrounding transgender persons. there are still going to be some battles that need to take place.

but if you talk to young people, you know malia, sasha's generation. even if they're republicans, even if they're conservative, many of them would tell you, i don't understand how you would discriminate against somebody because of sexual orientation. that's just sort of burned into them in pretty powerful ways. april ryan. >> reporter: thank you, mr. president. long before today you have been considered a wife's president. under your watch people have said you've expanded the rubber band of inclusion, and with the election and incoming administration people are saying the rubber band has maybe recoiled and is even broken. i'm thinking back to a time when air force one going to selma, alabama, when you said your job was to close the gaps that

remain. with that, what gaps still remain when it comes to issues on the table and also, what part will you play in fixing those gaps after -- in your new life? lastly, you are the first black president. do you expect this country will see this again? >> well, i'll answer the last question first. i think we're going to see people of merit rise up from every race, faith, corner of this country. because that's america's strength. when we have everybody getting a chance and everybody is on the field, we end up being better. i think i have used this analogy before. we killed it in the olympics, in brazil. and michelle and i, we always have our -- the olympic team

here. and it's a lot of fun, first of all, just because, you know, anytime you're meeting somebody who is the best at anything, it's impressive. and these mostly very young people are all just so healthy looking. they just beam and exude fitness and health. and so we have a great time talking to them. but they are of all shapes, sizes, colors, you know. the genetic diversity that is on display is remarkable. if you look at a -- simone biles and a michael phelps, they're completely different. and it's precisely because of those differences that we have got people here who can excel at any sport. and by the way, more than half

of our medals came from women, and the reason is is because we had the foresight several decades ago with something called title ii to make sure that women got opportunities in sports, which is why our women compete better, because they had more opportunities than folks in other countries. so, you know, i use that as a metaphor. if in fact we continue to keep opportunity open to everybody, yeah, we're going to have a woman president, we'll have a latino president, a jewish president, hindu president. who knows who we're going to have. i suspect we'll have a whole bunch of mixed up presidents at some point that nobody really knows what to call them. and that's fine. what do i worry about. i obviously spent a lot of time on this, april, at my farewell

address on tuesday, so i won't go through the whole list. i worry about inequality because i think that, if we are not investing in making sure everybody plays a role in this economy, the economy will not grow as fast, and i think it will also lead to further and further separation between us as americans. not just along racial lines. there are a whole bunch of folks who voted for the president-elect because they feel forgotten and disenfranchised. they feel as if they're being looked down on, as if their kids are not going to have the same opportunities as they did. you don't want to -- you don't want to have an america in which a very small sliver of people are doing really well and everybody else is fighting for scraps, as i said last week.

because that's oftentimes when racial divisions get magnified. people think, well, the only way i'm going to get ahead is if i make sure somebody else makes less, somebody who doesn't look like me or worship the same place as i do. that's not a good recipe for our democracy. i worry about, as i said in response to a previous question, making sure that the basic machinery of our democracy works better. we are the only country in the advanced world that makes it harder to vote rather than easier. and that dates back. there is an ugly history to that that we should not be shy about talking about. yes, i am talking about voting rights. the reason that we are the only country, among advanced democracies, that makes it harder to vote is -- it traces

directly back to jim crowe. and the legacy of slavery. and it became sort of acceptable to restrict the franchise. and that's not who we are. that shouldn't be who we are. that's not when america works best. so i hope that people pay a lot of attention to making sure that everybody has a chance to vote. make it easier, not harder. this whole notion of election -- of voting fraud -- this is something that is constantly been disproved. this is fake news. the notion that there are a whole bunch of people out there who are going out there and are not eligible to vote and want to vote. we have the opposite problem. we have a whole bunch of people who are eligible to vote who don't vote. so the idea that we put in place a whole bunch of barriers to people voting doesn't make sense, and then the -- you know, as i have said before, political

gerrymandering that makes your vote matter less because politicians have decided you live in a district where everybody votes the same way you do, so these aren't competitive races, and we get 90% democratic districts, 90% republican districts. that's bad for our democracy too. i worry about that. i think it is very important for us to make sure that our criminal justice system is fair and just, but i also think it's also very important to make sure that it is not politicized, that is maintains an integrity that is outside of partisan politics, at every level. i think at some point we're going to have to spend -- and this will require some action by the supreme court, we have to reexamine just the flood of endless money that goes into our

politics, which i think is very unhealthy. so there are a whole bunch of things i worry about there. and, as i said in my speech on tuesday, we've got more work to do on race. it is not -- it is simply not true that things have gotten worse. they haven't. things have gotten better. i have more confidence on racial issues in the next generation than i do in our generation or the previous generation. i think kids are smarter about it, they're more tolerant, they are more inclusive, by instinct, than we are. and hopefully my presidency maybe helped that along a little bit. but, you know, we -- when we feel stress, when we feel

pressure, when we're just fed information that encourages some of our worst instincts, we tend to fall back into some of the old racial fears and racial divisions and racial stereotypes. and it's very hard for us to break out of those and to listen. and to think about people as people. and imagine being in that person's shoes. and by the way, it's no longer black and white issue alone. you have hispanic folks and asian folks. this is not just, you know, the same old battles. we got this stew that's bubbling up of people from everywhere. and we're going to have to make sure that we, in our own lives, our own families and workplaces,

do a better job of treating everybody with basic respect and understanding that not everybody starts off in the same situation and imagining what it would be like if you were born in an inner city and had no job prospects anywhere within a 20-mile radius. or how does it feel being born in some rural county, where there is no job opportunities in a 20-mile radius. seeing those two things as connected as opposed to separate. so, you know, we got work to do. but overall, i think on this front the trend lines ultimately i think will be good. christy parson. and christy, you are going to get the last question.

christy is -- you know -- i just -- i've been knowing her since springfield, illinois. when i was a state senator, she listened to what i had to say. so the least i can do is give her the last question as president of the united states. go ahead. go ahead. >> reporter: thank you, mr. president. it has been an honor. >> thank you. >> reporter: and i have a personal question for you because i know how much you like this. the first lady put the stakes of the 2016 election in very personal terms in a speech that resonated across the country, and she really spoke to the concerns of a lot of women, lgbt folks, people of color, many others. and so i wonder now how you and the first lady are talking to your daughters about the meaning of this election and how you interpret it for yourself and for them.

>> you know, every parent brags on their daughters or their sons. if your mom and dad don't brag on you, you got problems. but man, my daughters are something. and they just surprise and enchant and impress me more and more every single day as they grow up. and so these days, when we talk, we talk as parent to child but also we learn from them. i think it was really

interesting to see how malia and sasha reacted. they were disappointed. they paid attention to what their mom said during the campaign and believed it because it's consistent with what we've tried to teach them in our household and what i have tried to model as a father with their mom and what we've asked them to expect from future boy friends or spouses. but what we've also tried to teach them in resilience, and we've tried to teach them hope and that the only thing that is the end of the world is the end of the world. and so, you get knocked down, you get up, brush yourself off, and you get back to work. and that tended to be their attitude.

i think neither of them intend to pursue a future of politics, and in that, too, i think their mother's influence shows. but both of them have grown up in an environment where i think they could not help but be patriotic, to love this country deeply, to see that it's flawed but see that they have responsibilities to fix it. and that they need to be active citizens. and they have to be in a position to talk to their friends and their teachers and their future coworkers in ways that try to shed some light as opposed to just generate a lot of sound and fury.

and i expect that's what they're going to do. they do not -- they don't mope. and what i really am proud of them -- but what makes me proudest about them is that they also don't get cynical about it. they have not assumed, because their side didn't win or because some of the values they care about don't seem as if they were vindicated that automatically america has somehow rejected them or rejected their values. i don't think they feel that way. i think they have in part through osmosis and in part through dinnertime conversations appreciated the fact that this is a big, complicated country and democracy is messy and it

doesn't always exactly work the way you might want. it doesn't guarantee certain outcomes. if you're engaged and you're involved, then there are a lot more good people than bad in this country. and there is a core decency to this country. that they've got to be a part of lifting that up. i expect they will be. and, in that sense, they are representative of this generation that makes me really optimistic. i have been asked -- i had -- i have had some off-the-record conversations with some journalists where they've said, okay, you seem like you're okay, but really, really, what are you thinking? and i've said, no, i -- what i'm saying really is what i think. i believe in this country. i believe in the american people. i believe that people are more good than bad.

i believe tragic things happen. i think there is evil in the world, but i think that, at the end of the day, if we work hard and if we're true to those things in us that feel true and feel right, that the world gets a little better each time. that's what this presidency has tried to be about. and i see that in the young people i have worked with. i couldn't be prouder of them. and so, this is not just a matter of no-drama obama. this is what i really believe. it is true that behind closed doors i curse more than i do publicly. and sometimes i get mad and frustrated like everybody else does. but at my core, i think we're going to be okay. we just have to fight for it. we have to work for it and not take it for granted. and i know that you will help us

do that. thank you very much press corps. good luck! >> barack obama with his final news conference, just strikes me that in 48 hours from now he will be citizen obama. boy, i think is he ready for that. >> citizen obama attending the inauguration by the way. >> yes. >> which is one of the many topics that came up in that press conference. he touched on the chelsea manning commutation issue. he was asked about the dreamers, the wet foot-dry foot policy change. i don't want to say he hinted but he said i don't mean to refer that i'll be running for office again anytime soon. it oddly left the door open a little bit about what his future plans are. >> you can never say never. i am bill griffith along with kelly evans at the new york stock exchange. welcome to "the closing bell." despite all of the hearings on capitol hill, the confirmation hearings for the cabinet members incoming, a quiet day on wall street. the dow is down 28 points.

bringing in john harwood our chief washington correspondent outside the white house where the news -- a lot of high profile, high altitude topics to kind of wrap up the obama presidency, john. >> no question about it, bill, on the point kelly was raising a minute ago, i do not expect barack obama ever to be on the ballot for a political office again, but he did indicate that, as citizen, he is first going to take some time to read, write and think, but he laid out some categories of events in the country that would motivate him to become more involved and speak out. he talked about, if he saw something signaling systemic discrimination, if he saw something signalling the attempt to deny people's right to vote. and he went on at some length later in the news conference, calling it fake news, the idea that there is a lot of voter fraud out there, which has been used to justify some of the voter i.d. laws and that sort of thing. he said, if there were attempts to silence the press he would become more active and speak

out. he was in part talking about some of the speculation about how president-elect trump is going to handle the press. he opened the news conference by saying, your presence in this building has made it work better. that is a signal about the value of having the press in the west wing, in the brady briefing room, as opposed to moved to some other location which has been speculated about with president-elect trump. in the course of an answer about his daughters, he represented an exhortation to democrats to be more hopeful. he said they talked about the election outcome which obviously disappointed them. president obama, who wanted a democratic president to sustain his legacy was also highly disappointed in the outcome of the election. he said he had faith in the american people, he thought that, in the long run, the country was going to move ahead. he said in the simplest of terms, we'll be okay, i really

believe that. i think that is a message to fellow democrats to go out and fight and win elections and make the system better but don't be hopeless at this point. >> john, he also made comments about israel and the prospect of a two-state solution, saying at one point i think i don't see a way to keep both a jewish and a democratic state there. were you surprised by the details he added to the decision by the u.s. to abstain in the u.n. about this issue recently? >> no. i think he was trying to defend himself. he has gotten a tremendous amount of commander in chief fr criticism and he was trying to justify it by saying what we were attempting to do was to help keep alive the prospect of a two-state solution, which he thinks is the only resolution of the israeli-palestinian problem which he said concerned him a great deal from the standpoint of israel's security, the palestinians and also american national security.

and also, you mentioned the commutation for chelsea manning. he defended that. he has gotten a lot of criticism for that, saying that she had already served a significant sentence that was disproportionate to what other leakers have gotten, and he thought that, because she had gone to trial, been convicted, taken responsibility, that the interests of justice had been served. >> john, thank you. john harwood there with a recap of what we heard from the president's last news conference. chief janet yellen is speaking. >> janet yellen, a speech in california. saying plainly she says rates will creep higher but does not expect them to rise dramatically. she says through a series of rate hikes over the coming years she expects along with other members of the fed, 3% funds rate by the end of 2019. the current rate is just 62 basis points. so there is work to do but time to do it. the rate hike in december,

yellen says, reflects confidence the economy will continue to improve. she offered this quote. right now our foot is still pressing on the gas pedal. meaning the fed is still stimulative. as i have noted we eased back a bit. the slow productivity that we have been talking a lot about reduces the need she said for dramatic rate hikes. the fed continues to stimulate the economy to make sure the economy can withstand an unexpected shock. and it makes sense to do so as the economy nears its goals. raise rates. the economy is ner the fed's objectives. a long running unemployment that she estimates at 4.75%. inflation also, quote, inching back towards the fed's 2% goal. a couple of notes perhaps for the incouming president. she said the fed is designed to be insulated from political pressure and promises objective decisions on interest rates. the takeaway is yellen is saying

that rates will continue to rise but not dramatically. back to you guys. >> looks like it might have had a little bit of an impact on rates already, her remarks. steve, thank you. sending it over to meg terrill. >> shares completely regained losses we just saw them take just now on a report that the federal trade commission was about to file charges and an investigation about creating monopoly situation with one of its drugs. the company now completely rebounded. coming out with a statement saying we are pleased to confirm we have entered into a settlement agreement with the ftc to fully resolve the matter subject to approval by the commission. this story having just come out from the "new york post" this afternoon. reporting that martin shkreli was involved in pointing the finger at the company when he was ceo of retrophin.

saying it was already disclosed and they've reached a potential settlement with the ftc. back to you. >> i am confused. at 1:00 we get the word that they're waiting for ftc charges, and now an hour and a half later, they've settled. did the settlement talks take 90 minutes, or was somebody behind the curve on this story? >> it's unclear, bill. we haven't heard from the ftc on this about the charges necessarily, in terms of the settlement they say this has already been disclosed that the investigation was going on. they've talked about the litigation in previous filings. so perhaps this was kind of going on and the martin shkreli involvement came out today and that's what the new york post's story came out. >> thank you. 30 minutes left in the trading day. to our closing bell exchange.

today joining us cnbc contributor peter costa from empire and rick santelli at the cme in chicago. peter, clearly the market has been going sideways as we go through the transition period. what do you think the market is waiting for? >> they're waiting for next week when we are going to be in the first hundred days. the way i look at it is, you have earnings season. financials, they looked great, but the stocks didn't react that way. i think you're going to start seeing like a re -- reallocation of resources. money coming back. it's coming out of one sector into other. there will be a little bit of rolling for the next couple weeks due to earnings. i think what we'll end up seeing a lot of is a lot of volatility over the next hundred days. that i am almost positive that's going to happen. >> because so much hangs on what comes out of the white house. i was going to say, we have been talking so much about that aspect of it and less about monetary policy lately, rick. looking at what's coming out of the fed, beige book at 2:00 talked about several districts noting problems recruiting for

less skilled jobs. strong dollar. janet yellen just saying that the fed is creeping closer -- closer to its goals and rates will continue to creep hire. what is this telling us about the strength of the economy? >> well, i don't know how to take what you said about the fed and translate it to the economy, but i can tell you this. that when i look at interest rates, by the way, the ten-year is back over 240. 30-year at 3%. dollar index back close to 1.01. the president-elect will be a key factor, the inauguration, the first 100 days. i still think and i believe jamie dimon said this morning with our squawk box gang in davos, i don't think many are giving the markets enough credit for its intellect, which means that the aggregate of the intellect of the investors behind the moves, i think they understand nothing will get done overnight. i think they understand it could take most of 2017. yet, i still see these

markets -- peter is right, mostly sideways. sideways from much elevated levels, especially when you look at where rates were in july and where the stock market was in october. i don't think these are bad things. and i think, with regard to central bankers, i think you're going to find more answers overseas in 2017. whether it's inflation heating up in the uk and parts of europe and the notion that from mario draghi -- i think they'll all slowly end up becoming more policy driven like our fed, less and doing less and less quantitative easing. and i think that's going to be a big, big driver for 2017. >> all right. very good. guys, we have to move along. thank you all. peter, rick. see you later. that's than 30 minutes until the close. dow dropping 36 points, 19,790. s&p hanging on to a gain of about a point. transports rebounding. the dollar is basically doing

the mirror image of yesterday. up nearly a point. small caps higher. nasdaq up 6. fireworks on capitol hill. president-elect trump's picks to lead the health and human services department and commerce getting grilled by members of the senate. today we'll bring you up to speed on those hearings and the key controversies where the nominees go from here. netflix reports earnings after the bell. we'll tell you what numbers wall street is looking for and break down the video streaming giant's results the second they hit the tape. you're watching cnbc, first in business worldwide. now one kdi

welcome back. shares of brokerage firm td ameritrade higher after reporting a climb in revenue on higher fees. stock up 1% right now. in a first on cnbc interview we welcome td ameritrade's president and ceo. welcome back. >> nice to see you. >> what did you think of the quarter? remember, it was the quarter after the election. >> yeah. >> saw the rise in the market. the trump rally. increase in volume, volatility. i imagine it was a good quarter for you. >> a great quarter for us in terms of net assets gathered. frankly it was almost a story of two quarters in one. we had november 8th was the election.

we saw retail investors essentially go on to the sidelines up until that date. levels were down and it exploded after that. it's actually carried over into january as well. trading levels are high. >> you said it's the third best quarter overall here. how has the election directly affected your business? >> well, if you think of all financials, there has been a rising tide, but i would say that our particular sector is greatly impacted, for a few reasons. one, rising interest rates. we're interest rate sensitive. that's great. number two, then obviously lighter regulatory environment helps. number three, lower tax rate. our tax rate is around 38%. we are largely domestic, lowering in the national federal rate will certainly make an impact. something that's more unique to our particular segment is we make money when people trade. and when our president-elect says something, you know, he has -- he has made a comment on individual companies. >> right. >> on sectors and on the dollar,

which used to be sacrosanct. >> earlier today some of the "fast money" guys on their show noon eastern were talking about they have to wake up every morning and wonder if president trump will tweet something and they have to be ready and nimble to respond to the effects of that. you do too. >> same thing. we wake up every day and say hopefully he'll say something. we launched a tool called social signals. it takes the data from twitter and gives you a rating of your favorability or not. for example, that particular tool did a great job of saying the chipotle rally that you saw as a result of their revenue numbers was forecasted because the favorability rating of the people tweeting. had it rebounded back to pre their health crisis. it's a social media world and we have a social media savvy president-elect. >> who is saying he is going to keep with it. don't worry.

>> that's great. >> the market's momentum has kind of flagged and there is more skepticism of what he can accomplish and a number of things haven't happened yet. does that worry you? >> we believe the rally is all priced in. there might be sideways movement. after the election we saw not so much the active traders getting into the market but the retail traders that were repositioning their portfolios on the basis of their choices of who they thought were going to be winners and losers in the new election. once that rebalancing happens, you'll see, i think, a little bit of an abatement. >> tim, we have to go. thanks for stopping by. as always, we'll see you later. tim hockey. heading into the close. 20 minutes left to go. dow still negative. all the other major averages positive. led by the russells. they had a difficult session yesterday. now up .25%. it's not a deal about

nothing. jerry seinfeld is coming to netflix. it's a big deal. future of drug pricing and obamacare very much in the cross-fire today as congressman tom price sought confirmation as president-elect trump's health and human services secretary. a live report on the hearings just ahead. stay tuned.

welcome back. 16 minutes left in the trading session. checking the movers today. american airlines trading higher. the carrier unveiling what it calls its basic economy fares which go on sale starting february 10th. among the restrictions basic economy passengers will not be able to select their own seats before check-in. they will have no access to overhead bins but will be allowed to carry on one personal item that fits under the seat. no upgrades will be allowed and they will be the last to board. doesn't that sound like fun? the stock today is higher, as we mentioned. jcpenney and kohl's with credit suisse down grading them from underperform to neutral.

credit suisse says it's concerned about deteriorating store margins at kohl's. >> tom price's appearance before the health committee today was a courtesy but the finance committee will vote on his nomination. democrats came out swinging, contentious and hammering him on issues like medicare where he has disagreed with president-elect trump. >> will you work with us so that medicare negotiates prices with the pharmaceutical industry. >> you have my commitment to work with you and others to make certain that the drug pricing is reasonable and that individuals across this land have access to the medications that they need. >> wasn't quite the answer to the question i asked. >> he kept coming back to the question of access. again and again, rather than what the aca has in terms of extending coverage. he was hit hardest when it came

to his trades on drug companies and other health care stocks while legislation was being discussed in congress. >> when you found out that your broker had made this trade without your knowledge, did you reprimand her? >> what i did was comply -- >> that she made it? did you fire her? >> what i did was comply -- >> that was just a little piece of the contentious back and forth with elizabeth warren. all of that today was really just a warmup. next week is when tom price will go before the senate finance committee, and a whole new slew of democrats likely to hammer him over the same issues, guys. >> bertha, thank you very much. from washington to the west coast we go. it's like festivus at netflix at the giant signs a deal with copp comic jerry seinfeld. julia is in l.a. with a preview.

>> comedians and cars getting coffee is moving from crackle.com to netflix. the big question when netflix reports in 15 minutes is whether this kind of investment in original content is driver subscriber growth. netflix forecast it would add 4.2 million new sub subscribers. analysts expect 35% revenue growth and 32% earnings growth. it is that subscriber number that could send the stock swinging. after the past eight earnings reports, netflix shares moved on a average 50% up or down. we'll see how it goes. >> always volatile. thank you, julia. i did subscribe to hulu this summer to watch episodes of the old seinfeld. >> netflix will stream the comedians and cars getting coffee series that he has had on the web. >> which was on sony's crackle. it was created for that. >> it's hilarious. the jay leno episode makes me

laugh out loud every time i see it. >> thanks. 13 minutes to go. dow down 22. s&p up 13. russell up 4. one veteran trader declares biotech and health care are, quote, climbing the wall of worry. he'll explain when we come back. h h n't whwhto.

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. ten minutes to go. didn't see this coming. art said the market on close orders show an imbalance to the buy side of $900 million on a day like today. >> when you look at the market and think, have we seen it. it's moved up a little bit. his point is, if it all comes through, the dow would be positive. >> not happening yet, though. >> big if. mallinckrodt. meg terrell, what more? >> just a few minutes ago the ftc saying mallinckrodt will pay $100 million to settle charges that it illegally maintained a monopoly on acfar. a court order will require they

grant a license to develop a competitor to the drug to treat the same indications, to a licensee approved by the commission. so the charges here were that quest corp. which mallinckrodt acquired, acquired a drug to compete with acfar and took it off the market to create the up monopoly. saying they repeatedly raised the price from $40 a vial in 2001 to an 85,000% increase. companies saying it reached the settlement. getting the details from the ftc. quite a day for mallinckrodt. >> imagine if a shareholder wasn't paying attention all day. >> i'm not sure it's better if they are paying attention. >> thank you, meg. joining us as we head to the close. mark lehman from jmp security.

and kevin from washington, crossing advisers, out there somewhere. we were talking sectors. those that were doing well during the trump rally, finances financials and materials and those left behind that seem to be catching up right now, right? >> huge rally in financials in the energy sector. we forgot the health care and the tech sector, some of the more dominant players of the last few years. it's time to look at them again. they've participated but not nearly to the extent we have seen the rest of the market. at jmp we looked at a couple of names in technology. one i would point out is a name that's been on your show before. they held an investor day and talked about growing revenues. they talked about doubling operating margins. if they do that, the stock will go higher. >> i thought the big news of the day was chuck e cheese would file for on ipo.

>> there are a not of animal spirits. look at just about any indicator. credit spreads have gotten tight. the stock market at $25.5 trillion is the current valuation of the stocks market. if you look at where the vix is, around 12, suggesting a lot of enthusiasm in the market and maybe a little bit of complacency. we need to see what happen from here. we need top-line growth to drive it higher. >> do you expect rates to go up and crowd the equity market? >> i think they'll go up but it wasn't be a threat. we get the growth and regulation and the dissipating of some of the regulations we have head room for the market to go higher. >> got to go, guys. we've been crowded out, speaking of which, by the press conference. glad we got on the air with as

much as we did today. thank you both for joining us. we'll take a quick break with the dow down 26 points. closing countdown. bill miller joins us for his take on the trump stock rally and ccs moving in 2017. you're watching cnbc, first in business worldwide. soarlyly . e std

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we've got about two minutes left in the trading session. i'll show you the dow first. not a lot of volatility today for any of the major averages. the dow going out with a decline of about 25 points. we saw movement in the dollar index. moving higher. after that huge decline we saw earlier this week with president-elect trump saying that the strong dollar was killing some industries in the united states. we had a pretty good gain there. the yields along the yield curve moving higher as rick santelli pointed out ten-year back above 240. at 242 right now. that continues to move higher. we get ready for earnings. tonight we've had a lot out this week, obviously. netflix will be the one we're focusing on. that one usually precedes some volatility for that stock.

as a matter of fact, bob, that's crawled out of a bit of a hole from earlier today. it's moving higher right now. >> who cares. they got jerry seinfeld. that's a big thing. bringing in seinfeld's little business. >> they'll do a couple specials. >> wonderful man. still relevant. just saw him at the beacon a little while ago. two problems. number one, they're selling stocks that have had their earnings off. doesn't matter. united health. goldman. citi group, csx. all done. first problem. jpmorgan on the upside. we've gone from the trump hope to the trump reality. instead of focusing on tax cuts and infrastructure spending and stimulus, trump is focusing on obamacare, which a lot of people think is a tough one and a bit of a quagmire as well as the potential for trade conflict. that's why the market is poising here. a lot of people are hopeful the president-elect will talk in his inaugural address about how to

get to 3% gdp. refocus the markets on the tax cuts and infrastructure spending. >> thank you, bob. a lot of trading going on here, running. oracle closing things down here at the new york stock exchange. bill miller coming up on the second hour of the "closing bell" with kelly evans and company. see you tomorrow, kell. yes. thank you, bill. welcome to "the closing bell," everybody. i am kelly evans. an interesting day today on wall street. the dow couldn't close positive, down about 20 points. doesn't look like a lot of the buy orders came in. we were discussing, it dropped .1% to 19,804. we have been running in place a couple hundred points shy of 20,000. s&p closed at 2271. nasdaq up .33% or thereabouts. and russell 2,000 making up some

of the ground it lost yesterday with a .5% gain. dollar up. transports rebounded. they also had underperformed. netflix finished the trading day higher ahead of its earnings. just turned positive. you can see there pretty much right at the close about .25% gain for netflix, trading around $133. we'll bring you their results, of course, as soon as they are out. bill miller, the chairman of lmm, joins us on his take on everything from tech, airlines, treasuries. joining me now me is senior markets commentator and columnist mark santolli. >> acid metal. >> what people do on their own time. danielle hughes from divine capital markets. and steve grasso from the floor joins us in a moment.

interesting things in terms of the data. inflation data. ours and in the uk. economic data was okay. bank earnings. so many things to digest and janet yellen giving her final press conference. >> in the context of the prolonged pause in the indexes, we did get a bounce on the front that says, okay, inflation is quickening. the macro looks okay. janet yellen's comments today did seem to put a jolt in the treasury yield. you got some lift under there. that was when you saw the modest rally in sftocks at the end of the day. we have needed yields to go up. a faster metabolism for the global economy and yields. i still point out this is the kind of flat-line action we saw in the indexes in august and september of last year. it's about as trendless as it was back then. we needed a bit of a downside shakeout before it got moving

later in the summer. >> 67th straight day the s&p -- >> has not been down at least 1%. that might be the longest streak in about a decade. >> danny, what do you make of it? we've paused a little bit, i guess, waiting on the inauguration and seeing what policies actually happen from the trump administration. >> dramatic market moves are based on perception. we already have that, right? the perception of lower taxes, roll-backs in regulation, and a lot of other things that could help boost stock market earnings. and i think that, you know, a lot of people are right now binge-watching the confirmation hearings wondering what's going to happen next, when is the market going to go higher, what earnings are going to come out. i don't think it's going to play out like that, kelly. i think we have a long cycle ahead of us. i think it will take three to four quarters before we really see any kind of impact from anything that congress or our new president does. >> so in the first 100 days, you

are saying forget it. give it a longer leash? >> for it to become reality. we're trading on relt reality. >> steve, what do you make of the activity in the last couple days? >> you priced in a lot of the stuff, a lot of the prospective stuff that's going to go on in d.c. look how we traded off a border tax yesterday. i don't think -- >> explain that for a second. >> a border tax, donald trump said it was too complicated yesterday and maybe you were going to get a watered down version. >> right. >> the retail industry was hit off of the idea that border tax was a done deal. and then, with that little glimmer of hope that maybe it's going to be a watered down version, all of the retail stocks ran off of that. >> mm-hmm. >> so, if you just get one thing said, or a commentary, it doesn't necessarily mean that you have to have actually something get done. markets trade off of whatever the words are. look at how we're trading off of tweets. nothing is getting done off tweets but the market is

volatility. i think the market participants would like to see a little bit more volatility. when mark opened up saying the market was looking for a bit of a selloff before rushing back in, i don't know if they'll get it. >> target was especially hard hit. so was cina. >> parent of ann taylor. >> justice and some of the others. >> exactly right, steve. there are pockets of the market that are being whipped around by these clues or these comments or hints of what's to come. today, if you look at the confirmation hearings of wilbur ross, kind words with the steel industry. he used to own steel companies. those stocks flying today. in terms of retail, today really to me it wasn't about the border tax proposal or lack of it. it was about target's results. more carnage, the limited closing down. lowe's saying they'll lay off 1,000 plus people. basically, you had a make or break holiday season and a lot of them didn't quite break it.

>> macy's, kohl's. they ran up right with trump and now are falling back. the big story, really, is and has been amazon. they've been crushing it. there was a glimmer of hope, to your point, steve, that they could back, the brick and mortar idea. >> you were on a couple of minutes before i jumped on. i think today was defined by janet yellen. talking about rates. talking about a more normalized rate environment in 2019. >> did she say something that was obviously must have been a little bit different from the consensus. are people still just not quite there on the idea that there is going to be this many rate hikes or the 3% by 2019? >> the releasing of those statements, i think, made people start to realize, okay, rates can move higher. the dollar is going to move with that. you will a he see the selloff in bonds continue, see yields rise. it was more of the same that we saw in the last couple of weeks.

that was what the market took its leave from. you saw the s&p rally. >> the takeaway is, look, if she is actually -- nobody knows what will happen at the end of 2019. if you pencil in 3% in the short-term rates, that's three hikes per year and suggests she won't be looking for an excuse to go 1 or 2 instead of three. >> real quick, the shares are starting to move. just crossing. danny, on the subject of the brexit. teresa may had her may-day speech yesterday. hang on one second. julia is already ready. tell us how netflix did. >> netflix beating the all-important subscriber number. reporting the addition of 7.05 million new subscribers in the fourth quarter. the company itself forecast the addition of 5.2 million. it added 1.93 million in the u.s. exceeding its forecast by half a million subscribers. internationally the company added 5.12 million subscribers.

that's nearly 1.5 million more than expected. company's earnings coming in at 15 cents per share. two cents better than expected. revenue come nothing a hair stronger than expected at 2.48 billion versus 2.74 billion. they're attributing the growth this past quarter to some of the new, original. exclusive shows. looking forward at the forecast for q-1, the company is projecting 37 cents in earnings per share, a dramatic beat compared to the estimates of 18 cents in earnings per share for q-1. revenue, though, for -- estimates for q1, lighter than expected. looks like they might be a little bit lighter than expected. just a hair lighter than expected. but those eps numbers for q1 better than expected. in terms of subscriber growth, looking at the subscriber forecast, q1 forecast is for

5.2 million net additions. down from last year but it's a bit better than expected. the company projects it will add 3.7 million new subscribers in -- overseas alone in q1 and 1.5 million in the u.s. while it is dun from last year, it's stronger than expected in terms of forecast for q1. the stock is now up about 7%. one other key note here in this earnings report since there has been a lot of attention of how netflix will be impacted by the trump administration. hastings says any change in net neutrality laws are unlikely to impact them economically but they believe it's important for innovation and job growth. we'll dig through the letter to shareholders. >> julia, thank you. bringing in barton crockett. clearly the story is international subscriber ads here. what does that say to you? >> well, the company had a great

quarter for subscriber growth. i think our checks suggested that interest in netflix was stable to improving globally. and that's amazing. these guys are very fully penetrated in the u.s., yet they're still putting up very good subscriber growth here. and they're still executing well internationally. so my hat is off to them. i think the stock has run up in anticipation of a good quarter and they delivered. >> you have a market perform on the stock, barton. explain a little bit of why that is the case. obviously the valuation here is a huge issue, cost of content is a huge issue. >> right. >> i wonder if a sign of netflix really taking that next turn is that we stop talking about them in terms of the subscriber net ads and more traditional financial metrics. >> that's going to be the new story. they talked about this year as a year where they're going to see meaningful profit growth. we'll hear them talk more about that i think later. for us with netflix, you know, i truly have been impressed by the subscriber growth.

it's been better than i thought this year. we have liked it in the past. i thought they were nearing saturation. but they're doing better than i thought. so the secular story, consumer adopting internet for shopping and now internet for entertainment is strong and netflix is playing it wonderfully. >> bringing in the panel, guys, thoughts? >> the company, the stock, spent about a year in the penalty box. it had a huge runup to 133 at the end of 2015 and sat out all of last year. now it's being refreshed. people are saying the growth cycle internationally, it's kind of lapping when they went full on international in terms of launching. domestic is not topped out yet. it all works. it's not quite as expensive on kind of a price-to-sales basis as it was at the peak at the end of 20 a15. until something comes along to disturb it, price is okay right now, then the momentum can resume. it's not because it's a cheap stock with low expectations.

>> i'd like to see also what the content budget was increased by. i think that will be a tell for the success of their subscriber growth and just the binge-watching that we all do on netflix and amazon as well. >> the cabinet hearings as you mentioned. >> just can't get enough. i wonder also about the under grandfathering of subscribers too and how people are re-upping and what's happening with that. so that is a story that i think we'll have to see. >> they have an exclusivity deal with disney. whatever benefits disney, disney is knocking the cover off the ball. they're exclusive with disney, pixar, lucas. >> marvel. >> older stuff. >> but still the older stuff will come on again and there will be an exclusive deal for them. >> barton, do i bring up the fact that their free cash flow in the fourth quarter was $-639 million.

>> that's the accounting, if you're trying to pick at something, the accounting is that these guys are amortizing their expenses slower than they're spending cash. they might need to raise more financing, which is something you could worry about if you're going to worry about something. if you're going to worry about something else, it's the first quarter guidance, while, you know, maybe better than some thought, is a meaningful deceleration against tough comps. the story was netflix is they could accelerate growth. they're doing great things. great things are expected. you could pick at the stock. but overall i think they're doing a tremendous job and your hat has to go off to them. >> market tipping its hat. 7% higher after-hours netflix shares to a new record high. they've reclaimed that having made up ground they lost last year. >> if you're john malone recently in an interview praising netflix. he has a different twist on the

content cost, the originals. he said they control it. you'd rather be in control and know what you're going to spend that be like a cable company and be at the mercy of higher content costs. i think they're playing a long game. the same debate that's surrounded amazon forever kind of surrounds this one also. if you want to about earnings here and now, internationvaluat. it doesn't work. >> reminds you a lot of amazon except maybe the free cash flow. >> they are not addressing nearly as big of a market as amazon. other companies do something similar to what netflix does, they just have a huge head start. >> used to be a negative when you think about international growth was how effective can they curate international stuff. international content. you don't hear so much of that anymore. it seems to have gone by the wayside where people look at the sub numbers internationally and say, close your eyes and press the buy button.

>> barton, thanks for joining us. danny and steve. netflix shares at a new high. coming up we'll discuss whether you should be buying the stock in the wake of the results. noted investor bill miller, an uber bull on amazon. up next, he'll tell us how much further he thinks it can rally after the 40% gain of the past year. you're watching cnbc, first in business worldwide. bo rulng abeverthcar tulyrengaru outok k

welcome back. netflix just out with its earnings. stock up 7.5%. it sets the stage for let's call it the fang stocks earnings. facebook, amazon, alphabet. joining us now in an exclusive interview. bill miller, chairman and chief investment officer at lmm lc. welcome. >> thank you. >> got a view on netflix. >> we made eight times our money on it when it became public. when it sold off, 2011. we made 12 times our money on that. >> on the short side. >> no, long. after it sold off. >> got it. >> we came in. went up 12 times in the next two years. we don't own it now. >> do you wish you owned it now? >> wish we owned it today, yeah. >> it was just being compared

with amazon. a little bit in terms of the business model that they don't rely on the traditional wall street focus. do you think that's valid? >> for netflix? >> yeah. >> i would say so. reed is trying to grow the long-term value of the business. it's a subscription based business with, you know, very little churn. it's a huge global market. it's one of the very few companies that has, in essence, part of the reason time warner sold out is they don't have global distribution and netflix does. it can green-light the projects just like amazon. >> they were talking about the brazilian 3% series that's done well and even come to the u.s. talking amazon for a second. huge year! if it were ever to validate the idea that there are still tremendous earnings potential. certainly growth potential there. this was its year. can it keep going now that it has a market cap this big? >> it's interesting. if you look at facebook and google, facebook has got a market cap similar to amazon's.

both companies, great companies, are addressing the global ad market. that's about $550 billion market. the market cap of those companies is greater than the size of the market they're addressing. amazon has a $300 billion some market cap. u.s. retail is $5 trillion. i saw jeff weeks ago and asked him about the addressable marks in aws. you said for a number of years it could be as big as retail. and -- i said how big is it? he looked at me and said trillions, trillions. >> you are talking about amazon web services? >> amazon web services, aws. >> i guess if you were to get pushback on the analogy, say facebook and alphabet don't have to grow to address that much more of the markets. they're networks. for amazon it's different. the analysts are saying, another investment cycle here for amazon.

it's been an investment cycle forever for them. is there anything about the pacing of when amazon reaps and sows that will affect this year? >> when amazon hits these so-called investment cycles -- amazon is a company as jeff said in the annual report last year, it's a great place to fail. they spend money on things they're just trying out. when they move something from in essence the experiment to where they're convinced they can dominate the market and earn good returns, the spending goes up. when you see a spending spike like you saw in the fourth quarter, again, that was the beginning, probably, of one where they're putting a lot of money in india, for example, right now. that's actually a bullish sign because it indicates they now believe they can actually address another market very successfully. >> does that mean you would agree with the west coast guy who said he thinks amazon could be the first company to have a trillion dollar market cap? >> it's hard to see how they won't if you look at far enough.

i think he said 3 trillion or something. the addressable market for what they're doing is gigantic. >> changing gears entirely. it does bring up a little bit or remind me of the issue with the incoming administration and a lot of the things that could be changing now. including fanny and freddie. they've had a big spike in performance. whether they might be privatized, the profits going back to investors and not being swept. do you get involved in that? or steer clear and let it shake out. i know you like housing broadly speaking. >> we owned fanny mie mae for 20 years and made 50 times our money from the early '80s to the early 2000s. we were the largest shareholder of freddie mac when it was seized. one of them is the legal front. what might happen in that case.

on the privatization front it's hard to see how fannie mae is wo worth this price. it has no capital. the average big bank has to have 10%, of the big banks. if they have to have 10% new capital coming in there, that would put the stock worth a dollar at the most. >> what. >> i don't think people have thought about the new capital. >> how are you reviewing financials in general? you saw the shift in sentiment toward banks. good stuff priced in? how does it look? >> a lot has been priced in in the past couple months. there are some financials where it hasn't been priced in. one financial omf is priced in. it's a terrific trump stock. the largest sub prime lender. if you want to bring jobs back and get people to work. that's good. it's trading around book value.

>> the old primereca. >> remember the old household financial, beneficial finance associates? it's that type of business. >> got you. >> on the other things, the big banks i think will have a very nice several-year run here, especially if the yield curve shifts up as we would think it would by a hundred basis points across the curve over the next year, year and a half. a lot priced in right now. but if you go back to the 1950s which is where this -- where i think -- it's analogous. you had a long bear market in bonds that began in the late 1940s. i think we're at the beginning of a long bear market in bonds that will last for who knows how long. that was a period when the banks did really well and traded at market multiples. i think you could see that. there are still three or four turn discount to the market. >> interesting, quickly. the bond bear market in the 50s kind of got rolling in a gradual way. do you see something similar? >> i think it's a benign bear market in bonds for a few years. >> got going for a while after

that. when it comes to housing and commercial real estate, do you see these things as very different? i think you told the investors podcast you think house prices are in danger of being too high. >> one of the risks to housing is house prices are too high because inventories are too low. affordability is okay. it's not great. i think that's a danger. if houses go up 4%, 5% a year in a gdp that's going up 2% to 3% real, that will begin to price people out of the market. but right now -- remarkably, the housing stocks have had not much of a move since the election. they are unwith one of the bigg fish ua -- beneficiaries of corporate tax reform. lennar is trading at nine times earnings right now. >> what's your position in twitter? >> we have a small position in twitter. hasn't been terribly successful. >> i am thinking to back when it had reached the trough.

you said facebook had a similar selloff early as a public company and regained its traction. you would have thought, if ever twitter could get traction, donald trump using it in perhaps the most successful public way possible and still nothing. what do you think about it now? >> i think they're correctly beginning to address their cost issues and realizing that they won't be growing like a facebook, for example, or instagram. i think they are experimenting with different ways to mon tiet the platform. i think they're doing it too slowly. i think they're losing share on the ad side to things like instagram. i think it's a hugely valuable platform but there is little in the near term that you can see as a catalyst. >> could you think they need to agitate for change? do they need a leadership changeover? >> i think i have said that having a part-time ceo -- if a

part-time ceo works, why not a part-time cfo, technology officer. in my opinion jack should step down and still, you know, great entrepreneur, great visionary, be on the board, a strategist. i think they need a full-time ceo there. >> one other pick that you have had that's been controversial. not that twitter has been controversial but valiant. they're doing everything they can to raise capital, shore up the debt situation. what phase are we in of the makeover and is a bold step needed, maybe selling the entire company to somebody else? >> what's interesting on vale ant. and i've been wrong on them. i bought amazon in 1999 and watched it go from 88 to 6.

with valeant, i think joe and the team are doing a lot better and faster than the market realizes. they -- in operation they have new drugs coming out this year. i think the perception and the reality of valiant. and i think it will change over the next 12 months. i don't think they need to sell the company, nor should they, unless they get a great price for it. one of the things he said when i met with him was that while they don't want to sell core businesses they'll sell anything if somebody will pay the right price. that's the appropriate way to think. >> bill, thank you so much for joining us. bill miller from lmm llc.

big day on capitol hill. the man tasked to replace obamacare under fire at a hearing today. highlights next. strong earnings reports sending netflix to a new high. we'll discuss whether it's time to take profits in the stock. still to come on "the closing bell."

president-elect trump's pick for health and human services secretary under fire on capitol hill today. bertha coombs has the highlights. >> representative tom price is a

six-term congressman. he knows a lot about hearings. he got grilled today. democrats on the health committee grilled him over issues of repealing obamacare where he has been at odds with his new boss, donald trump, mike medicare. >> can you assure this committee that you will not cut one dollar from medicare or medicaid should you be confirmed to this position? >> i believe the metric ought to be the care the patients are receiving. >> take that as a no? >> it's the wrong metric. >> it's not just that he is a staunch opponent to obamacare, the toughest questions surrounded his trading in health stocks while legislation was pending. >> congressman, do you believe it is appropriate for a senior member of congress actively involved in policy-making in the health sector to repeatedly, personally invest in a drug company that could benefit from

those actions? yes or no? >> well, that's not what happened. >> tom price says that he will be selling all of his stocks in his portfolio if he is confirmed. he'll go before the senate finance committee next week. that's the committee that actually votes on his confirmation. >> that was just a preview in some ways of that. thank you. time for a cnbc news update with sue herrera. >> here is what's happening at this hour. south carolina governor nikki haley on capitol hill for her confirmation hearings to become the nation's next ambassador to the united nations. appearing before the senate foreign relations committee, she expressed her support for u.s. sanctions against russia. >> russia is trying to show their muscle right now. it is what they do. i think we always have to be cautious. i don't think that we can trust them. >> consumers in 15 states may be entitled to a refund of up to $20 for the milk and milk products they've purchased within the last 14 years.

it's all thanks to a $52 million class-action settlement over price fixing. to smubmit a claim be quick and visit the website bought milk.com by january 31st. brenda barnes died yesterday after suffering a stroke on sunday. she caused a media sensation in 1997 when she gave up her job as head of north american beverage operationer for pepsico saying she wanted to spend more time with her young children. she was 63 years old when she passed away. that's the news update. back to you, kelly. >> sorry to hear it. sue, thank you. netflix shares rallying to a new high after strong earnings and guidance. up next, two analysts tell us how much higher the stock could go. shares of publisher pearson dropping. a look at how much amazon may be contributing to that. ..

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netflix stock hitting a record high after hours trading policy a positive report. the company announced that jerry

seinfeld's hit moves to netflix later this year. shares up 8.5% to $144 after hours. joining us is kevin landes, capital management and allen gould, the senior analyst at brain capital. welcome, guys. kevin, first to you. you have a position in netflix shares. what is it that jumped out to you most about this report? >> well, i think that netflix is kind of stepping on the gas when it comes to being a content provider. one of the things that snuck up on a lot of people was that, you know, when you first learned the netflix story, not only was it mailing dvds but it was also back catalog, the long tail in getting movies that had been out for many years. now that's shrunk and the emphasis is on getting the next "game of thrones" and having you have to come to netflix for that. i think they're only behind espn in spend on content. that's remarkable.

>> allen, part of the question is, though, how do they keep delivering the hits? is it like a theme park business where people give it a lower multiple because they're not convinced -- the movie business, i this had say, i am thinking of disney. give it a lower multiple not sure if they can consistently deliver or have they proven they know how to do this? >> i think they've proven they know how to do this. they'll expend $6 billion in programming but are adding $9 billion to the library. in five years i think they'll be adding $15 billion and then $25 billion. they have the largest global subscriber base. they're spending the most but they're the low-cost producer. add to that the data they have on the consumers. they've proven so far they have done a good job at choosing the content they're picking. >> allen, in five years you think they might be spending $15 billion a year to add to the content library?

what does that imply about what you think revenues will be in five years? >> i have got the company's revenue growth is growing. should be growing 20% to 30%. i have got the whole thing modelled out. i have the company by 2025 having 230 million global subs. versus roughly 90 million right now. doing an average of $15. eps of 11.50. pure eps, $11.50 and growing for the next five years after that. >> cagr. >> are you excited about seinfeld? >> yes. it's one of the shows i have been meaning to go back and look at. so much great content out there that you never do it. now i have my chance to easily catch up with jerry seinfeld. >> i guess it goes back to the broader conversation about what content they have.

by the way, there has been such a proliferation of these different services, obviously we know the competitors. hulu, amazon. does it cause everybody else to have to increase their spending significantly in order to be part of the conversation? what impact does the increased competitive landscape continue to have on netflix, do you think? >> well, you know, what strikes me here is that we've gone, in the course of our lifetimes, certainly mine, from programming being sort of this art and kind of a black art of i think this will be a hit or that will be a hit, to being more of a big data exercise. so i mean, i think netflix knew i was going to love narcos before they even brought it out. they knew somebody else would enjoy the unbreakable kimmy schmidt. that's what's got them on such a roll. it's hard to imagine there is a

formula out there for kind of wr wresing the mantle from them. >> they're about to hit your price target. do you raise it? >> i'll assess that tonight. the. >> raise it! >> the key driver is subscribers. they hit 7.2 million subs. the street was looking for 5.2. they beat on domestic and international for 4q and expectations globally. >> what's your price target, kevin? >> i own a lot of it. so please, for goodness sake. raise your target. >> all right. kevin landes and allen gould. thank you, guys. >> thank you. congressman scott pruitt and wilbur ross grilled today. shares of pearson education plunging today, down 28%. we'll tell you what's behind the drop coming up. e morequirl e ney yo

two more trump picks on the hill today. wilbur ross answering to the senate commerce committee and scott pruitt was in front of the environment and public works committee. eamon javers following ross' confirmation and jackie has the latest on pruitt. eamon, how did it go? >> it was about the easiest questioning of any of the trump nominees i've seen so far. looks like wilbur ross is likely to sail through based on the

tenor of today. he thinks the u.s. can get back to 3% economic growth. he talked about nafta saying he thinks that nafta will be one of the first issues that the incoming trump administration has to deal with. he says that tariffs are a useful tool for the administration and particularly a deterrent. he was addressing questions there from republicans who are fairly skeptical about 35% tariffs on various countries around the world. he seemed to be suggesting that some of that rhetoric can be a negotiating ploy, if you will. but democrats wanted to ask him really about the difference between the way he has handled his divestments from his billions of dollars of assets and the president-elect donald trump has handled his. here is how that exchange went. >> shouldn't the president of the united states do the same? >> well, as i understand it, the ethics rules that apply to senate approved nominees do not apply to the president. >> but simply as a matter of

appearance and morality, for that matter, you were able to do it. why not the president? >> i am not familiar enough, senator, with the exactitudes of his holdings to have any judgment as to how easy or hard it would be. >> in essence, wilbur ross ducked the question saying he is not familiar enough with what donald trump's assets are to figure out whether or not he could divest in any reasonable time frame or in any reasonable way. clearly from the tenor, kelly, it seems like wilbur ross will be confirmed here. a lot of the senators showing him deference today on capitol hill. >> thank you. jackie, you were monitoring scott pruitt's hearing. >> oklahoma attorney general scott pruitt on capitol hill answering those questions central to paving the way for his confirmation as the head of the epa. the hearing is being described as contentious and was interrupted at times by protesters. pruitt is known to be skeptical

about climate change but took a more neutral tone at the hearings today. still, it's believed that he is going to follow through with trump's campaign vows, rolling back regulations to help promote industry. as ag in oklahoma pruitt sued the epa more than a dozen times. he said he would recuse himself from ongoing cases against the epa if there was an ethical requirement to do so. trump has said he would refocus the epa. that wouldn't mean abandoning everything but it would mean getting rid of some of the obama administration initiatives. a point of contention with pruitt as many trump nominees have seen -- we've seen in the different hearings, industry ties. he has made the case to answer one specific question that he represented the industry as a whole, a key to his state's economy, but not individual companies. now, it was interesting to watch this one because it wasn't necessarily as contentious as what we'll see, and all eyes, of course, will be on rick perry's

hearings and his potential confirmation as well. kelly. >> yep, to lead the energy department. from the energy desk. thank you so much, jackie. shares of pearson education were also sinking today on a sales warning. what that means for the future of the company and beyond that for the future of the education sector. that's next. coming up on "fast money," mr. wonderful is getting political. kevin o'leary explains why he is throwing his hat into the ring to become the next prime minister of canada at 5:00 p.m. eastern. 00 y abeavpll li s sst bs.oueve.be a iti sln?e bhm 00 y abeavpll li

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welcome back. take a look at shares of education company pearson 30% after the company warned of a big fall in sales in its u.s. education business. the question is, what's happening right now?

is about it students opting to rent textbooks through amazon? we know there's been a space here but this feels like big step off the cliff. >> kind of a gradually, then suddenly. it has been one of these that has been throughout a while about textbook publishers. it is not so much about the k-12 business. you have a fairly predictable cycle. it is not all that much but you have people buying new textbooks for higher education. and pearson has been slower to go digital. thing like renting the digital versions, you have a comp out there. they were down about 2.5%. mcgraw-hill publishing is owned by private equity. they have an ipo filed has been deferred. >> so pearson didn't exactly fall off. they are looking to sell random

house, the actual book imprint. it is not pure lay textbook publisher. that's been a problem. >> you mentioned one of the that he can laters, they were talking about the population of students in these higher education places isn't as high as they thought. and they mentioned community college as well. is it demographic? you can predict demographic trends. what else is it that's changing? is it hitting them that hard? >> i think there was a bulge in college attendance when the economy was bad and people were sitting out of the job market. they couldn't find job they wanted and they went back to school. there was this artificial surge in attendance. you saw with it the for profit colleges. it's the same sector bubble that has been throughout and now you've seen a decline. >> which might explain, it is not as if it was a one to one. they happen to be getting it right. it seems like they weren't participating. >> it is a small side line for amazon.

you have some shared textbook entrepreneurs throughout, amazon and others trying allow people to have a secondary market. everybody who has been to college realizes, it is maddening how they supposedly try on force to you buy these books. >> we'll have more next. and coming up on worldwide exchange tomorrow -- >> we are live here in davos, switzerland. coming to you from the world economic forum. >> looking forward on talking on james gorman, the ceo of morgan stanley. >> coverage kicks off again at 5:00 eastern. >> are you going to be this tall again? >> if they give me this tall of a box. we're equal height in switzerland. llwhtsts y abig e n

welcome back. more earnings after hours. kindleder morgan. >> that's right. kinder morgan with 8 cents a share. the revenue falling about 7% year over year. the company citing lower crude oil prices and lower volumes. and the company saying port year, we substantially reduce our debt, further positioning

kinder morgan for creation shares. not doing a lot after hours. but so far this year the stock is up about 6%. >> thank you. as we know, this is one of the spaces has done much better since the election of donald trump. but it is because it is all about, it depends on the price of the commodities as well. >> it does. natural gas was doing okay for a while. i don't think anyone sees crude oil blasting off. it has been the environment where bits do you expect exploration production to ramp up with new regulations? >> precisely. which goes back to the confirmation hearings. the point about oil prices, something we haven't emphasized as much. but they're still a big factor in the market. now it is a $52 line. they go to the plays. they go to 52, 50. it is part of people's expectations. when you see it weakening. >> i think it would have to weaken maybe down toward the mid 40s to get people really urgent

attention. right now it is in this comfortable zone. whether it is bond yields or inflation or all these things that are rising. so right now it is supporting high yield debt, for example. >> they are so strong. we talked about this briefly. the. a issuance so far, it is enormous. it is hard to be really bearish on the stock market when they're so much bigger and doing that well. >> i do think if you look at junk bonds. it could be overlobbed. and maybe it is overstated, how strong it's been. until it really has a bit of a hiccup, i think it is okay. >> i can't remember precisely. but it returned 20%. hit a huge year. it is hard to see it keep going and yet these things have a way of doing so. what about tomorrow? we did have the industrial production data. >> we're going to get to more

bank earnings. bank of new york. i think you want to get a critical mass to decide, were expectations too high or too low or just right? >> thank you so much. that does it for closing bell. now it's time to hear from the next prime minister on "fast money." "fast money" starts right now. tonight, check out shares of netflix up 8%. we've got full team coverage as that conference call kicks off right now. julia is listening to the call. the red phone made it all the way to san francisco. neil is manning the infamous red phone. he'll have instant