been ready to believe them over the last two years. >> environment we're in, etfs, black rock above 400. >> jimmy? >> blackrock, blackstone as well. 5% dividend year. >> twice. >> citi. buy more. >> thanks for being here. >> buy xli. >> whoa, there you go. >> "power lunch" starts right now. >> i'm michelle caruso-cabrera. the dow finally, finally cracks above that 20,000 milestone. since the election day, dow jones industrial average up 9.3%, 1,709-point gain. of course, the question is what's next for your money? more than $1 trillion worth of market advice. that is straight ahead. melissa? >> with 20k now in the books it's all about the earnings. qualcomm after the bell.

microsoft, intell, the list goes on and on after the bell. >> i'm brian sullivan. can trump keep this rally rolling? we are about to hear once again from white house press secretary sean spicer. we'll bring it to you live, the moment that it begins. tyler? >> brian, thanks very much. folks, i'm tyler mathisen live in chicago at morningstar headquarters. once again this year we celebrate the mutual fund managers of the year. we will talk to four individuals and find out where they are putting your money on this auspicious milestone day. "power lunch" begins right now. >> what a perfect day, tyler, at the morningstar conference. history-making day on wall street. the best team in all of business news. bertha coombs at the nasdaq.

>> 150 points to the upside right now. below our session highs right now. this march toward 20,000, it's taken a long time, as you referenced. however, we talked about the number of stocks that have move order driven things between 10,000 and 20,000. let's talk about today's action, the stocks most responsible for what's happening in today's trade, the reason why we're above 20,000. goldman sachs. not the first time we've highlighted them. most heavily weighted stocks in dow, up about 1% right now. second best point contributor, good for 15, 16 points so far today. let's swing you around from post 5 and citadel, post six. boeing, the single best contributor, about 55 points at the gain today, right to boeing right there. up by nearly 5%. i want to highlight big blue. we'll swing around here. big blue with the second or third best performing stocks is jockeying with ibm and fwoeldman sacks right now. 14, 15 points right there.

and i will highlight united technologies here at post 6 q. 1.3% to the downside means it's shading 11, 12 points off the overall dow move today. stocks really drienk the action, the responsibility for the most part goes to big names like caterpillar, goldman sachs, ibm and, of course, goldman sachs will bring you more throughout the course of the hour. that's the reason we're at dow 20k today. >> thanks so much, dom. nasdaq also on a tear, hitting another record intra-day high. bertha coombs is live at the nasdaq. bertha? >> it's taken the index seven months to go from 5,000 to 5600 since the new year. tech heavy nasdaq 100 has really fueled those games, not the small caps this time, despite a pullback we saw through the election. during that time apple, for example, has seen a really nice recovery, up 23% over the last six months or so since the composite regained 5,000, to a

new 52-wooerk high today and alphabet on deck to report earnings tomorrow is up about 16% that time and today it's at a fresh all-time high. it's on a fundamental basis the earnings story right now that is driving big cap tech. these new records this week. today it's seating technology with a blow-up quarter. surging to a two-year high. bear in mind it has a 12% short interest. that's why you're seeing that big a move. chips like micron and others strong results and, of course, microsoft. back to you. >> bertha, thank you. we are standing by, once again, for the white house press secretary. will he mention dow 20,000 or any more executive orders that might move markets? we will bring that to you as soon as it happens. in the meantime -- and it's happening right now. let's go down to the white house press briefing room. >> moved up the briefing a little today because of the

president's visit to the homeland security. as soon as he get goesing over there i'm going to wrap up. we've got a little while together. we'll make sure in deference to his remarks we wrap it up. next nomination of the supreme court, an incredibly productive conversation as you can see from the president's tweets. he will announce that nomination next thursday. the president also spoke with prime minister mody of india yesterday. i wasn't able to give you a readout during the briefing. during the call the president emphasized the united states continues to consider india a true friend and partner, addressing challenges around the world. the two discussed opportunities to strengthen the partnership between the united states and india and in a broad area, such as the economy and defense. they also discussed security in the region of south and central asia. they resolved the united states and india should stand shoulder

to shoulder in the global fight against terrorism and pr president trump looks forward to hosting president mody in the united states later this year. today, the president is focused on fulfilling one of his most significant campaign promises to the american people, by mb making america safe again, by taking steps to secure our borders and improve immigration enforcement inside the united states. the president intends to sign two executive orders after observing the swearing in of secretary of homeland security kelly. the first order is the border security and immigration enforcement improvements. it addresses long overdue border security issues and it's the first order of -- in that will be to build a large, physical barrier on the southern border. building this barrier is more than just a campaign promise. it's a common sense first step to really securing our porous border, stemming the flow of drugs, crime, illegal immigration into the united states. and, yes, one way or another, as the president has said before,

mexico will pay for it. the executive order also provides the dedicated men and women of the department of homeland security with the tools they need, tools and resources they need to stop illegal immigration from the entering the united states. under the constitution, the american people get the final say who can and cannot enter our nation and they've spoken loud and clearly through our laws. we'll create more detention space for illegal immigrants along the southern border to make it easier and cheaper to detain them and return them to their country of origin. we'll end the last administration's dangerous catch and release policy, which has led to the deaths of many americans. we'll once again prioritize the prosecution and deportation of illegal immigrants who have also otherwise violated our laws. and after these criminals spend time in prison for the crimes they've committed they'll get one-way tickets to the country of their origin and their governments are going to take them back. the second executive order enhancing public safety in the interior of the united states,

addresses the enforcement over immigration laws in the united states. and returns the power and responsibility to the dedicated men and women of the department of homeland security's immigration and custom enforcement, to help them enforce the law. these men and women want to enforce the law and we're going to help them do that. federal agencies are going to unapologetically enforce the law. no ifs, ands or buts. we're going to restore the popular and successful secure communities program which will help i.c.e. agents target illegal immigrants for removal. the state department will withhold visas and use other tools to make sure countries accept and return the criminals that came from their country. we'll ensure that these countries take those individuals back and we'll strip federal grant money from the sanctuary states and cities that harbor illegal immigrants. the american people are no longer going to have to be forced to subsidize this disregard for our laws.

reforming our immigration system has been at the top of president trump's priority since he announced his candidacy. now in just the final first week -- excuse me, just in the first week. we're not there yet. of his presidency, the last administration will enforce law and restore value our greatest asset in the 21st century. as for the rest of the day scheduled this morning, the president started off his day in the oval office, carrying out official duties. this morning, he had the honor to greet now ambassador to the u.n., nikki haley in his office after the vice president swore her in in his ceremoniaal office across the street. ambassador haley has a proven record of bringing people together despite their background or differences to better her state and now our nation. the president is pleased that ambassador haley, to the best of my knowledge, at least, is our nation's first indian american cabinet level officer.

that's a big deal for indian-americans throughout this country. and now she is able to get to work representing our nation as our nation's top diplomat. in just a few minutes, the president will be departing the white house to visit department of homeland security. as i mentioned he will attend the swearing in of secretary kelly, then briefed by fema on the storm relief efforts in the southeast and conduct other related business with specific to keeping our nation safe. secretary kelly has dedicated his life to protecting our country, enlisting in the marine corps in 1970, commanding at every level from platoon commander through the corps level and combat and command. he has a sincere commitment to fighting terrorism inside our country and allowing tceasing t illegal immigrants across our border. this brings up to four total confirmations of our cabinet

level nominees and, as a reminder, the obama administration had 12 done at the end of their first week. needless to say, we believe democratic members should spend their time getting our nominees confirmed out of the senate. by speak on the phone with mississippi governor bryant, discussing storm relief and recovery efforts under way in mississippi and any help that the governor needs from the federal government. today, the president also announced the appointment of an incredibly qualified team to serve under the guidance of white house council don mcgann to discuss compliance and ethics matters, stefan pasatino, deputy council to the president, scott gast and james schultz, special assistants to the president and associate counsel. these es techlt emed lawyers have decades of experience serving senators, members of congress, congressional committees, governors and federal agencies. the appointment of a team of

this caliber at such a high level reflects the quote, unquote, importance of ethics to president trump in his administration. stefan has received the highest praise from party leaders on both sides with whom he has worked with. former gingrich said no one understands the ethics process better than stefan. the president is looking into various options to discuss voter fraud. he will travel to philadelphia for a retreat with congressional republicans. in addition to discussing his legislative agenda he will provide an update on the actions he will be taking in the next few days. finally, before you ask, because i know it's an issue that's near and dear to me. i was asked yesterday about the status of the invitation of prime minister kenny from ireland to visit the united states on st. patrick's day and i'm pleased to announce that the president has extended that invitation. it happened actually during the transition period and we look forward to the prime minister attending. with that, i would love to take

some questions. from the washington times? >> can you shed any light on this draft memo going around about interrogation practices? >> right. yes, i can lend a lot. >> when did it originate? >> it is not a white house document. and i would just urge those people who have reported on it, this is now, i think, the second day we've had a document that was not a white house document get reported on as a factual document. it is not a white house document. i have no idea where it came from. but it is not a white house document. >> has the president directed that you draft it in the first place? >> no. as i said, it is not a white house document. i'm not sure where it came from or how it originated but it is not a white house document. i don't know how much clearer i can say that. lori montenegro from telemundo. >> thank you, sean. [ inaudible ] >> signing today with regard to the wall has the administration figured out how mexico will pay

for this? do you have any guarantee from republicans in congress that they will provide all of the funding necessary to see this project come to completion? also, about two days ago you were asked about daca. >> yeah. >> and some of the dreamers, as they are known, have lots of questions regarding what is their future. >> right. >> do they continue to apply? those that have applied for renewal, will their applications be processed? and with regards to stripping funding from the sanctuary cities, what fundings are we talking about? >> thanks, lori. with respect to the last part of that, first. what the executive order does is it directs the secretary to look at ways that the -- look at funding streams that are going to these cities of federal monies and figure out how we can defund those streams. part of this is a directive to the secretary to look at those funding streams and then figure out how they can be cut off.

that's what the actual order directs them to do. the first part with respect to daca, i talked about this a couple of days. the order today doesn't specifically deal with that. we will have further updates on the rest of the president immigration agenda further in the week. but as i mentioned before, i think the president will talk about it in an interview tonight, but his priority is, first and foremost, people who are in this country that seek to do us harm. and he understands -- i mean, the president understands the magnitude of this problem. he is a family man. he understands. he has a huge heart. and he understands the significance of this problem. but he is going to work through it with his team in a very humane way to make sure that he understands and that he respects the situation that many of these children are in, that were brought here. but his priority with respect to immigration is, first and foremost, making sure that people who are in this country that are seeking to do us harm or have committed a crime are at the forefront of that. fr

francesca chambers? >> the border and the wall and has the administration figured out how mexico will pay for it? >> i'm sorry. the president is working with congress and others to figure out opportunities for that to happen. there are a lot of funding mechanisms that can be used. at this point his goal was to get the project started as quickly as possible, using existing funds and resources that the department currently has and then to move forward and work with congress on an appropriations schedule. but, you know, again, we're here at day three. it is an issue he has brought up several times with congress in terms of making sure that we understand -- that they understand the need to make sure that that's included in the appropriations process. francesca? >> thank you, sean. can you give us more of a readout of yesterday's meeting with senators about the supreme court justice nominees? how was that list received specifically by democrats? and has the president whittled it down to three names or one name as we're hearing? >> the president has not whittled it down, at least not

to the extent that he is willing to share that with us. maybe in his mind he has that going. he had a constructive and productive conversation with senate leaders yesterday about the advice and consent role that they have, getting their ideas, the principles that they expect. he was sharing with them his -- the qualities and values that he expects in a judge to serve on the supreme court. i'm not going to go further than that. i would just say it was a very productive and constructive meeting. eli stokels? >> last night. [ inaudible ] >> those tweets disappeared shortly after. did this white house have anything to do with that and is there a broader -- it's been reported, if there is a broader mandate going out to federal agencies about, you know, stopping all speech coming from those agency. >> no, nothing has come from the white house. absolutely not. i think in some cases -- in the parks service, for example, over

the weekend, somebody had -- an unauthorized user had an old password in the san francisco office went in and started retweeting inappropriate things in violation of their policy. and they directed -- again, remember, i know this happened in the epa is another example of some social media contact. the epa violated the anti-deficiency act and anti-lobbying bans a year ago during the obama administration and inappropriately marketing some policies of president obama. i think there's a couple of agencies that have had problems adhering to their own policies. and i would refer you back to them as to why those things are happening. but i know that they are taking steps in both of those two cases to address inappropriate use of social media. >> sean? >> yeah. >> thank you, sean. has the president reached ut to mayor emmanuel or any other chicago officials tha about the concerns he expressed in his tweet last night?

>> he met with mayor emmanuel during the transition. expressed to him his support for the city, the need to deal with the crime and the killings that are occurring in chicago? i think when president obama was speaking his farewell address the other day, two people were killed, the same day that the president was in his home city. and i think the president-elect at the time extended his support to mayor emmanuel to say that the resources of the federal government are here for you. to the best of my knowledge, that return call for help has not occurred. john? >> if i may ask a follow-up, please. >> john roberts. >> lynn, i will get to you. that was very enthusiastic spy appreciate it. you're getting an award today. john? >> speak up, lynn. >> for the record, i very much appreciate and respect lynn. you mentioned this morning, the president brought this up in the news again. he wants to launch an

investigation in the 2016 election. >> to be clear not just in 2016. in terms of registration, where you've got folks on rolls that -- >> sean spicer referencing the border wall with mexico, the president himself also making some comments on the wall in the first major new interview since he has taken office. here is what he told abc news. >> ultimately, it will come out of what's happening with mexico. we're going to be starting those negotiations relatively soon. and we will be, in a form, reimbursed by mexico. >> so they'll pay us back? >> absolutely, 100%. >> the american taxpayer will pay for the wall at first? >> we'll be reimbursed from a later date from whatever transaction we make with mexico. >> mks co-'s president said in recent days mexico absolutely will not pay, it goes against our dignity as a country and our dignity as mexicans. he says simply we're not paying.

>> he has to say that. he has to say that. i'm just telling you, there will be a payment. it will be in a form, perhaps a complicated form. >> all right. donald trump reemphasizing once again the wall. the wall is moving infrastructure stocks, mexican cement company that produces a lot of cement here in the united states and the prison stocks are moving as well because of the -- >> they had a weird move, michelle. he said we're going to build more detention centers along the border, two primary ones, geo and corecivic. then they said have we heard this before? they rounded out and are sort of back down again. very interesting three minutes. >> there was a lot of questions as to whether or not it would get done, under what terms. if he's the hard negotiator, what could that mean for margins for them? all these uncertainties. all these sectors on the move. >> cemex, cemento mexico.

they are at a new 52-week high. they trade here in the united states but -- >> u.s. concrete, texas-based concrete manufacturer, ceo of u.s. concrete was a very vocal trump supporter as well. you don't know if that could be rewarded in some respect. if, indeed, people start pouring molds for a wall. >> and donald trump celebrated dow 20,000 earlier today, on a tweet. which is what's going on here today. >> dow 20,000 is a big deal. guess what else is a big number today. 200,000. that is trump's new number. robert frank is here to tell us why. >> trump organization has just doubled the membership fee that it costs to get into the m mar-a-lago resort. after the election of donald trump that fee jumps to $200,000. you have to pay $14,000 a year in membership fee as well as $2,000 a year in food and

beverage costs and the fee in 2012 actually had been $200,000. they cut it to $100,000 falling the financial fallout from the bernie madoff scandal which claimed a lot of wealthy palm beach victims. they are now going back to that $200,000 number. you know, even though it probably had been considered for some time, guys, this will add to some sort of speculation and critics that say that donald trump's family is benefiting because of the trump name. >> we don't doubt that a lot more people want to join now, right? >> of course. >> because they'll have -- >> this is the winter white house. trump has been there twice since the election and will be there several times during the winter. he loves it there. it's his favorite property. the chance to mingle with the president is clearly attractive. >> people are willing to pay up. and it is a business. >> that's right. >> business to make money. >> and there will be critics, obviously. you're buying access to the president. let's not forget, much of what a president does is raise money for either their party or their

next election. people are going to criticize this, michelle. i don't know if this is any different than somebody throwing a $50,000 a plate dinner at some manhattan skyscraper. >> or being invited to golf with the president. >> we should point out that trump has put his assets into a trust. we haven't verified that that's happened. we haven't verified what kind of trust it is and turned over management of the company to his two sons. there's no direct connection between trump profiting from mar-a-lago. his family certainly does. >> thank you very much. we appreciate that. >> sure. >> we'll go to a quick break. dow 20,000, trump $200,000. we've got the press conference, the president is going to the dhs. we may hear from him. after the break, we'll get your investment insight you need to know. this market, as wild as it is, now wildly overvalued? we'll find out when "power lunch" continues after this.

sean spicer, press secretary, is still speaking. if he makes market headlines, talks about business, gdp, dollar, trade, whatever, we'll bring you those headlines or jump back in. right now, though, let's get back to this historic day in the

stock market. kate warren, from edward jones. david nelson, chief strategist with bell point asset management. patiently waiting. dow 20,000, david. >> sure. >> big day, nice round number. here are a few other numbers for you. are you ready for this? >> okay. >> average s&p 500 stock is up 7%. trailing price to earnings ratio, s&p 500 is now 24.7. is this market still a good value? >> you're telling me you're scared? >> i'm not scared. i'm just a humble tv host. should investors be scared? and then i'm a coward. >> lot of investors, especially those long and enjoying this rally will try to market time their way around this and come back in at lower prices. >> yes, and i want to extrapolate on that a bit, too. tomorrow or tonight, usa today cover dow 20,000. i worry and wonder, will the retail investor who hasn't been in the market for years see this

and go, okay? maybe now i should buy? >> okay. well, if you're not invested at all, obviously, don't pour all the money in right now. dollar cost average your way into this market. but if you're in this market and you're going to try to finess your way out of it and get it at a lower price, that's a two-decision process. even if you get out -- this is the right time to get out. when are you going to get back in? 3%, 4%, 5%? when it's down 5%, you're going to think it's going to 10%, 10% will feel like it's going to 20%. you'll probably get back in at an all-time high again. a tactical advantage and try to trade around this market. make sure it's a rules-based approach, something unemotional. if you're sitting there with your gut, reading the tape, trying to figure out whether or not you should get in the market, you'll be a loser. >> kate, what do you think? >> i think overall dow 20,000 is important, because it reminds investors that stocks go up over time. they're supported by the

fundament als of economic growt and earnings growth and we saw better-than-expected earnings as part of the catalyst for the dow moving above 20,000 today. it's important not to overthink this. markets go up overtime. you need to be investing based on what you need to achieve long term. and that is have the right portfolio, mix of stocks and bonds and don't pay too much attention to the short-term market moves. underlying all of this is the fact that investors are expecting better economic growth helped by new policies that will be progrowth. but there will also be disappointments along the way. that's why as your other guests said, yes, there will be some pull backs but don't wait around for those. what you want to be doing is putting money to work and taking advantage of the fact that many investors don't pay much attention on a daily basis. this is good news. i just don't think it's all that important that we see some round number. stocks go up over time. but this is a reminder of that. >> there's a lot we don't know. there's a lot more, david, that we do know with trump in office right now.

>> sure. >> in terms of the pace, of what he has accomplished so far in terms of actually tackling things that he had promised on the campaign trail. is there more of a comfort level with some of the clarity that we're beginning to get, about how committed he is to actually executing his agenda? >> you know, a week ago if i was on this show i probably would have said that the trump rally is over. obviously in the last couple of days, we've proven that's wrong. the twitter tweets, the talk about, you know, the crowd size and all the stuff that's mundane. some of these are progrowth qualities. keystone or dakota going in there -- >> is there a lesson in what you're saying there right now, when people get nervous about the tweets, et cetera -- >> ignore it. >> ignore it. look at the policies and the ramifications from it. this is progrowth stuff here. >> would you chase any of these infrastructure stocks, building of the wall, cement makers, infrastructure companies moving sharply higher, some hitting new

52-week highs or all-time highs. is that a trend to follow? >> much more cautious about the infrastructure stocks than about almost any other sector. the reason is that while we're hearing a lot of news on infrastructure, it takes a long time before those projects actually get started and even longer before you see the earnings. so, if there's -- the place i would see the biggest disconnect is between the stocks rallying and the expectations that will translate into better business and better earnings. i would say overall things are positive. but, keep in mind, every one of those tweets causes stocks to move and investors really ought to be prepared for more volatility ahead. that's not to say stocks go down a lot but be aware that not all the news will be good like we've seen over the last few days. >> we like to buy cheap. is anything right now inexpensive? >> yeah. even stocks that have made a big run like huntington bank shares reported good number. real story here, real quicker

here. first, first merit acquisition, that's going to kick in. a lot of these smaller banks, 60% of the loan book is adjustable rate. that's big news in a rising interest rate environment. these companies can go a lot higher. >> warning for customers out there who have arms to look into a lock. >> adjust free mortgages not limbs. most customers probably have arms. >> thank you. >> dow crossed 20,000 today, company beating earnings, shares trading at all-time highs. a look at what's next for boeing and the sector. plus the best of the best. tyler speaks with morningstar's top rated domestic fund manager joins us next. that ride share? you actually rode here on the cloud. did not feel like a cloud... that driverless car? i have seen it all. intel's driving...the future! traffic lights, street lamps.

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welcome back. sean spicer, white house press secretary, just wrapped up his press briefing. nothing that we think would be of interest to our audience. just to let you know.

let's check in with sue herera. >> here's what's happening at this hour, harvard university expected to outsource most of its $35.5 billion endowment according to the wall street journal. the employees who run that endowment will leave. harvard's returns have trailed rival's in recent years. charged with murder in the deaths of his pregnant ex-girlfriend swore at a judge in a separate appearance. markeith lloyd uttered the expletive after the judge set the bond. no bond was set for his murder charges. blinding snow in parts of southeastern south dakota overnight. combination of snow and strong winds brought traffic to a halt and the forecast is calling for more snow. brent musburger is calling it a career at espn, 77-year-old broadcaster, lead voice for cbs

sports in the 1980s say he's leaving to help his family get a sportscast i sportscasting started. back to you. >> boegs on back ing is providi biggest boost, accounting for a third of the gain. a big leader up 16%. let's bring in howard labell. thanks for joining us. lockheed martin yesterday, that was disappointing. boeing today, a beat and the forecast was decent and the stock is trading at all-time highs. the different companies, i know, but break down what the key differences are, the important differences are between the two and why boeing is standing out today. >> i think a couple of things. one is we're looking at very nice gain in earnings and also

there's noncash charges against boeing's earnings that would adjust to $12 or so on a pe basis boeing should be trading at 15 or 16 times, which would get you to $180. lockheed on the other hand, is trading at around 20 times and has noncash earnings that are boosting its results. >> is boeing, in any way, more insulated from, perhaps, the pressure that a trump administration could put on prices for defense programs? i mean, perhaps it has a bigger commercial business and that's why there's more of an insulating effect. >> great question. i mean, boeing has been focused on market-based affordability for quite a number of years. fa team is unheralded and understated fighter that competes against the f-35 in a number of applications. i suspect what we've seen is there's going to be some changes in the budget that will favor some incremental f-18 buys.

>> howard, probably a lot of new viewers that see dow 20,000, seen the markets rise, tuning in for the first time and maybe they say, okay, donald trump's been elected. he promises to spend a lot more money on defense, on the military. i should buy military stocks. is that a correct way to think about it? is that an easy thing to do right now or has that already been priced into a lot of these? >> on the defense side it's clearly been priced in. one has to forget, there are budget hawks and there are concerns over the size of the deficit. so, you can't assume everything goes up in a straight line basis. and we have to make sure that you're picking the stock or the company with the right solutions. lockheed's core business, aside from the f-35, actually had weak results. >> and, howard, i have to ask you about the pegasus program. another charge on this program, about 40% past the budget. and this is a fixed cost program, meaning any overrunning

boeing is slimimply going to ea. is there any end in sight for these overruns? >> i think so. i get the impression -- >> although boeing has said that before, that it's been on target before? >> oh, i agree. and i've eaten a little bit of humble pie on that. but it does sound like now, as you're starting to build them, you're getting a repetition in how to build it. so, the costs are then easier to project. >> all right. howard, we'll leave it there. thanks a lot for your time. howard rubel of jeffries. >> the big wall. our big wall. we have a wall. it's a wall of screens here. the big calls you need to know as the dow hits 20,000. taking a look there. first, back to tyler in chicago at morningstar's fund manager of the year awards. tyler? >> michelle, thank you very much. how would you like to own a mutual fund that not only made about 24% just last year, but that has doubled your money over the past five years? i'll introduce you to the manager of a fund that has done

just that. that's why he is morningstar's domestic stock fund manager of the year, after this.

a. hi, everybody. welcome back. let's take a look at now morningstar makes these coveted picks. >> 2016 was a little bit challenging, because we had some unexpected events. the brexit vote over the summer and donald trump's election in the fall. that changed market trends. some of the funds we were watching earlier in the year didn't necessarily do as well in the back half of the year.

a lot of our winners had exposure to financials, industrials and part of the market that did particularly well in the fourth quarter. emerging markets was another area that performed well. and on the fixed income side we saw a risk on environment, high yield did particularly well. the common thread among our winners in terms of performance in 2016 is they were all willing to take some risks. >> and now we welcome and introduce the winner of the 2016 domestic stock fund manager of the year award, david wallach of t. rowe price mid cap value. congratulations. thank you for being with us. >> thank you, tyler. >> big round number, 20,000. i imagine you woke up, threw your papers up in the air and said i'm changing everything. right? >> i would say no, that wasn't the case. >> at all? >> at all, no. >> does a milestone like this make any big difference to you as a manager? >> doesn't make any diffe at all. keep focused on the same things that i always have. >> you're known as a guy who likes to make some contrarian

picks. one reason you had the 24% return you had last year was the contrarian move early in the year into energy stocks. it wasn't so much a play on oil prices as it was a play on individual company fundamentals. >> that's right. if you think back a couple of years ago when oil prices were $100 a share, or $100 a barrel, i should say, there was a shale boom going on in north america and the oil price then began to head lower. quite a few energy stocks where you could look and say this stock is trading at $10 per barrel of oil reserves in the ground and the cost to go out into the oil field, find and develop oil is 15.

>> another contrarian area where you made a big bet or play was alca t alkermez. >> it went from 60 to 30. we said we can buy it at 30 we're only paying for the value on the balance sheet. >> so the natural question, then, becomes, as you sit here today, in late january, and you look out at 2017, where are you finding those contrarian values today? name names if you want or you can say here is where i sense they are. >> at the moment it's pretty

idiosynchratic. not a whole lot of them. the market is picked over. we're finding things to buy in things like consumer staples, real estate investment trust. still a couple of names in energy and a few other areas. >> have you materially changed your investing outlook moving from 2016 into 2017? question one, and question two, closely related. do you make anything you would describe as trump plays? >> i would say no. i don't have a market outlook, per se. i try not to focus on the macro economy, government policy. those things are important but that's outside my ability to control. and the fact we have a new president doesn't change anything. the fact that it's a new year doesn't really change anything. >> if you were to describe the characteristics of a classic stock in your portfolio, you're

not going to tell me that you think the dow is overvalued or s&p? that's not how you do business. but what would be the characteristics of a classic stock in your portfolio? what are the numbers? what are the metrics? >> sure. we look for something unique, unique service, franchise, and a company that's had a history of success. because we're buying things typically out of favor, we're looking for businesses that can recover under the capable hands of energize. hologic. >> medical. >> devices. they made a series of acquisitions. it was a roll-up. they used leverage to buy other companies, leading companies. but these were never fully integrated and with new management we have much more focused enterprise. >> there was a catalyst there? >> somebody bringing new

discipline. >> very quickly when we say mid cap stocks what is the price range and what happens when one of those mid cappers become a large? do you sell it? >> no. we have the capacity to hold on to our winners if need be. generally between 2:00 and $20 billion. >> congratulations. >> thank you. >> t. rowe price, domestic stock fund manager of the year. back to you in englewood cliffs. >> thank you. $20 billion as a mid cap, that's the kind of world we're in. president trump is at the department of homeland security. video of that momentarily. meantime, eamon javers has the headlines of what the president is saying and doing over there. eamon? >> reporter: yeah, michelle, over at the department of homeland security, the president has left the white house complex here. we're told he has now signed two executive orders and he says we've been talking about this all along. one on border security and the other one, we're told, is signing on executive action related to public safety for the

interior of the united states. in the press briefing, sean spicer, the new press secretary, said they want to make sure that federal law enforcement agencies unapologetically enforce the laws of the united states, particularly on immigration. presumably, that's what we're talking about. we're monitoring that event. we should get videotape of it shortly here in house and we'll bring it to you as soon as we have that, michelle. >> thank you, eamon. still ahead, even the dow's first day above 20,000. you probably still want to find opportunities out there. maybe more than ever. don't worry. we've got you covered. four big calls. actually, it's six today. inflation. street talk coming up next. he v? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods?

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stocks you need to know about. credit suisse, recent data points in the supply chain indicate overall shipments are in line with overall expectations. but recent moves into foreign exchange -- this is interesting -- could be a top line in gross margin headwind. a hit as much as 300 basis points to fiscal year 2016

estimates. also, could push price increases on the next product cycle. moving higher on this. >> all that is rolling good. i just wonder, there's no company that would be more impacted than any repatriation deal than apple. >> that's just from the sale of lost air pods. >> exactly. >> both of my calls are two-fers. you're welcome, america. upgraded by bmo capital, out perform to market perform, boosting from 52 to 60. stock was above there anyway. packaging corp same outperformed, bumping that target on 100 to 89 only about 6% upside. in this market, take what you can get. box demand remains healthy.

inventories are lean. pricing is good. an outage in a big international paper plant in florida on monday, which actually may help pricing going forward because inventories are getting even tighter. and we may see price hikes for corrugated boxes. you wonder if there's an impact on amazon for that. they sell boxes. >> interesting. >> i bought boxes on amazon and he came in a box and that's a true story. >> you bought boxes and they came in a box? >> moving boxes and the box came in a box and it was meta and i had to go have a drink. >> did you thinkv a drink before and you thought it was meta? >> strong orders, mkm raising fair value estimate to $1700. stock, of course, more that be that right now at 1800 plus. mkm says they kept expenditures flat this year. momentum going into the spring selling season and shares for nvr are fairly valued but looks for strong signs of a big sales pace. >> if you know reston, virginia,

it is boom. 50 mile suburbs. one wonders if donald trump does shrink the federal government could home builders be impacted? two-fer. gas log and capital. liquefied national gas. wells fargo upgrading both of these names, by the way. they like these stocks. keep in mind capital product slightly under 500 million cap, 485, whatever it is. point is they're optimistic about the end markets for natural gas. shippers getting a boost atwells fargo. >> log. michelle? dow is at 20,000. it's also on pace for the best weekly gain in seven weeks. will it go even higher or fall victim to the curse of the big round number? some answers perhaps from mike santoli straight ahead. will he join us. live picture from the department of homeland security where we are expecting the president to

make some remarks. we'll carry them live. so, don't move. anything worth pursuing hard work and a plan. at baird, we approach your wealth management strategy the same way to create a financial plan built to last from generation to generation. we'll listen. we'll talk. we'll plan.

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welcome to the second hour of "power lunch." i'm brian sullivan along with melissa lee and michelle caruso-cabrera. tyler mathisen is at morningstar. what we're watching this hour, making history. the dow hitting 20,000 for the first time ever. you might say it looks like we made it. we are waiting for comments from president trump at the department of homeland security and we'll take those as soon as he begins speaking. >> let's check out some of the movers right now on this historic trading day. 80 companies in the s&p 500 hitting highs along with the index. rockwell, csx, allstate and citizens financial, going back to their ipos. nasdaq at record highs and seagate is leading the charge. it was a leader in yesterday's session on its path to a record high. much higher today, by about 17%. western dig, intuitive surgical and vertexpharma.

brinker international, chili's restaurant chain, that stock is down 6.5% after missing earnings estimates and cutting its guidance. of course, we're talking about 20k so much but it is worth noting nasdaq had a new record, s&p at a new record. trifecta of new records today. >> so much focus out of washington, d.c. on economic policy for the last couple of da days. even today, talking about the wall, we see infrastructure stocks moving because of that. dom chiu. >> up near session highs, 160 points to the upside. number of traders this morning said they were looking for a few key point notice marketplace to see whether we could hold these gains. among the chief suspects, i guess, were the financial stocks.

we are still holding those gains in the financials and s&p 500. bank stocks certainly doing their part. goldman sachs, one of the biggest reasons why we are here in today's trading, adding the most points to the dow besides what boeing is doing on the yields of earnings today. also, take a look at the marketplace, getting the attention of some traders down here. that is the home building sector. take a look at some of the big home builders like pulte, d.r. horton, lennar, kb home. it's trying to recover some of those gains right now. green across the board for the major ones. take a look at one of the big etfs that tracks this market, the shb, spdr home builders, up midday. up over 1 1.25% so far. with the move over the past

couple of weeks, home builders and that etf are getting back up toward those 52 week highs. not there just yet but still a place to watch for some traders out here, guys. >> a big day. man with a great market sense and fashion sense. excellent tie choice today, dom. now that we have hit 20,000, now what? will the dow go even higher, fall victim to the curse of the round numbers? mike santoli, it's like a choose your own adventure novel. >> brian, you might not have to choose. you can continue higher yet the round number can still, down the road, serve as a curse. looking back over the long history of the dow jones industrial average at other very round number milestones. 1906 first time it hit 100. it did go up past that a little bit but actually acted as kind of a ceiling into the next couple of decades. in the mid 20s, it finally put some distance between itself and the 100 mark and went down below it in the great depression. something more recent in current

memory? 1,000, intra-day 1966. didn't close above that level until years later, 1972. thereafter it did act as a virtual ceiling on progress in the market until 1982 when the great 1980s bull market really got rolling after a minor bear market following president reagan's election. 10,000, that fair amount, first hit that mark in early 1999. it did continue higher by 15% into the year 2000. but then, as we know, it also acted as basically an upward bound for the market until about 2010. we crossed above it early in this bull market. got up above it, to stay so far, in 2010. none of this says that, obviously, we're doomed to repeat these patterns. i would point out 20,000, unlike those other numbers i mentioned, are not a factor of ten. maybe it's not really as big a deal. of course, there's no real fundamental basis for these round numbers to matter so much. >> i think it is a big deal, mike santoli.

people will pick up their phones. one thing they'll see on their headlines. to the average investor out there, homeowner out there, i think they'll be excited about it. >> is that something we should invite? >> right. >> in other words just because they get excited and interested doesn't mean that they'll overlook the fact that the market has been going up for eight years. >> i'll give you a real-world example. let's say you're contributing $300, $400 a month to your kid's 529. you open it up and go, hey, markets had a great run. you know what? we're kind of almost there. we've gotten closer. maybe now we can spend a little more money on something else. maybe you've gotten closer to your savings goals which enables you to pull money and put it into the consumer economy. the new york boat show is going on right now. i bet people there are looking at boats because the market is up. >> economists have a name for this. the wealth effect. >> yep. >> coming from the stock market. >> i call it boating. it's fun. we want to remind everyone, we are still awaiting president trump. he is going to speak at the

department of homeland security. there's the live picture. we'll bring that to you when it starts. in the meantime, let's stick with the historic rally in the market. what can take us even higher? joining us, mike ryan, with ubs management, bill stone with pnc asset management, christine short and kim kahi-forest with pitt group. guys, good to have you here. and ladies. bill stone, let me start with you. is 20,000 justified? would you add to your position here? >> yeah. i think 20,000 is justified. certainly for the dow anyway, it's a bit of a catch-up. for the year, we still feel very good about t i think in terms of the curse of round numbers i'm still worried about the february curse of a first-term president that you typically get some sort of sell-off here. it's tended to show up in february. that's not a reason not to be positive. it's usually turned around and we would expect the same thing here. >> mike, we had sam stonewall on a week ago and he said very

rarely in history do you ever not, within the first couple of months of the year, get a down year to date in the major averages. it would be very, very rare to just start out higher and never, ever have a negative year to date moment. statistically, what do you do here? do you wait for an entry point or do you add to your positions here, mike? >> i think trying to wait for those draw downs to markets that, as you say, they often come. they don't always come. to look at intrafinancials is difficult. do you think this is going to be about fundamentals, not trying to play catch-ups and draw downs in markets. it's not just about real gdp. remember, corporate profits are in nominal dollars. more pricing power, coupled with better gdp growth means we're likely to see a better earnings in 2017. the first time in the last four

years we've raised our earnings estimates for the year. 11% earnings gains this year, s&p, 132.50 per share. it will largely be the earnings that move this market. >> earnings estimates for 2017 and raising them for the first time, when did you raise them? i'm just trying to understand whether or not the street has raised earnings estimates after the election to reflect what happens happened. >> we raised earnings estimates, actually, in 2016. it was on the expectation of the following. we did see a better cyclical environment, consumers reengaging and the early signs of business improving. we're also seeing a bit of a tail wind, what will likely be a policy mix, some impact in terms of tax relief. certainly regulatory relief and even episodic infrastructure spending. they will add to nominal zbroeth

-- growth and infrastructure growth. >> we're seeing infrastructure moves because of the executive orders to the building of the wall on the border of the southern states. do you chase those moves? >> we like energy. it isn't quite as good today. xw again, like you said, had its day in the sun more yesterday. we like the financials and small caps in terms of if you have to think about things that are involved in policy thoughts. for various reasons one is energy earnings are highly likely to look better this year. in fact, that's kind of a lock. they were so bad last year. financials are still not expensive, even though they've had a heck of a run. if you think rates are going higher, they can help there. small caps could help by any sort of corporate tax reform. at least any versions that we've heard of so far. >> mike what do you think? are there any kind of obvious trump or nontrump plays or plays that you say wow, we should

avoid these because they've gotten expensive? >> i say be careful about avoiding things. we don't know exactly what the infrastructure program is going to be. how much will be public/private partnership, how much will come through federal dollars. we'll see -- when you see tremendous moves in the infrastructure stocks you may want to fade that. what will be more durable is the financial services side, picking on something bill said, we will get regulatory relief and do expect that the fed will continue to normalize. those two dynamics are a pretty good catalyst or paracatalyst for financial company. >> bill, tell us more about the financials and what you think about them, based on what a lot of people have said. rising rates very helpful and deregulation. >> i'll go back to the valuation. think of financial services as a financial utility and put any sort of priegs cing on them, sir to what you pay for utilities, that's where you can come up with still having valuation

upside to them even after the run we've had post election. that's what i go back to. >> so that's a yes? you would buy them? >> yes. sorry. >> great. mike and bill, thanks for joining us on this historic day of dow 20,000. >> thank you. >> so what role does earnings play in dow 20k? will earnings keep pushing this market higher in which tech stocks look hot right now? christine short and kim kali-forest. christine, i'll start with you to start the earnings table. i asked mike ryan this question as to when he raises estimates, whether it or not it reflects with anything that happened with the election. overall earnings estimates have not changed since the election. >> right. >> what have you seen overall and protect specifically? >> coming into the q4 season and even 2017, these were expected to be the best quarters we've seen since q32014.

there's no surprise that earnings have been getting better. weak comparisons a year ago like they were mentioning with energy, you'll get a higher base because of how low they were last year. estimates are starting to rise going into october but specifically after the election, we saw upward revisions to industrials, to financials specifically and that pushed us up to kind of where we are right now for q4, 5.7, closer to 6% for the s&p right now, as far as earnings growth goes. >> earnings growth is great. we like it but market wants to see sales which can't be tweaked any more. >> we're about 3.7% on the revenue growths metric. so, falling a little short. >> how does that 3.7%, is that good, bad, ugly? >> revenues will never be double digit. very few times in history have we seen hot revenue. you can't buy back shares. you can't do anything with your accounting measures to really get revenues to pop. also, analysts come into this

having a better idea what revenues are going to be. earnings are the big question mark, which is why you often see those estimates so far off from what the actuals are being. >> kim, are you getting reviews from the chip sector? chips have been a sector powering the overall nasdaq 100 higher. do you have confidence in that subsecter to continue driving it? >> absolutely. they are kind of the foundation for the area that we're most interested in, which is enterprise focused technology. so last night, texas instruments had a great call. and they reported great numbers. but they're mostly in connecting the analog world to the digital world. they play a lot in the industrial space and in cars. we're looking forward, thinking, hmm, that's interesting. but there's also something else that was -- came out in that call and in other calls that i listened to. a stronger than expected europe. i mean, this is just something

that i didn't expect. and i'm going to think a lot of other people following these stocks didn't expect. so, we've got a president that likes jobs. and then maybe other parts of the world starting to improve. and i think tech really is the answer for your portfolio, because the more people that are hired, the more technology companies consume. >> are you still a microsoft fan, kim? >> i am. i am. >> you've been long and strong, and right, on microsoft for years. you were there, what was it, windows 8? >> actually, yes! but here's why. i never really saw them as a consumer-focused company. i've always seen this company as a business-oriented company. and that what propelled them to the place they are now. and i think they have a great suite of products. they're keeping their corporate customers engaged and that is why i'm right. >> and she would like to buy a vowel.

>> yes. >> kim, if it was, you would win. >> we love tech. just to follow up on kim. it's a leading -- >> are there subsectors that look stronger? >> sure. we love enterprise tech. smaller names in the space, not those sitting in the s&p 500 but semi conductors to really lead tech higher in the fourth quarter, year over year basis, internet services and software, facebook soon. we're getting ebay tonight. ebay is actually really had a great run. last quarter they turned positive on bottom line. it looks like they're about to do the same tonight. qualcomm and other semi conductors as well. >> how is biotech looking? yesterday the nasdaq hit a record high in spite of the underperformance in biotech overall. >> a darling leading health care space higher. it started to fall off last quarter. it's looking to be flat this quarter. certainly not leading the overall health care sector higher. we are looking at 7.5% earnings growth from that sector. one of the only sectors we saw a

downturn in revisions after trump was elected. a lot of this based on tweets about drug price strategizing and how he was going to go toward that and the insurers as well. a lot of volatility in those revisions. >> christine, thank you. thanks to you also, kim. >> kim, i'm sorry about my phone going off. it was sasha from microsoft. he wants to send you a soom zoom. send him your e-mail address. >> sure, i'll go back to 2008 and send him that. >> dow 20,000 the end goal or really just the beginning? should we talk dow 25,000? also, we are waiting on president trump at the dhs. we'll bring you his comments right when they happen. don't you go anywhere. cause tyler mathisen is also live in chicago. tyler? >> all right, brian. thanks very much. here, we're going to announce, just after the break, the winner of the international stock fund manager of the year for 2016. here's a hint.

brian, he's afraid you're going to tease him about his love for the green bay packers. that's one. hint number two, this is not his first rodeo here. he won this award in 2006 and he was also named international manager of the decade. "power lunch" returns with that and more in just a moment. the newly advanced gle can see in your blind spot. onboard cameras and radar detect danger all around you. driver assist systems pull you back into your lane if drifting. and will even help you brake, if necessary. it makes driving less of a production. lease the gle350 for $579 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

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welcome back, everybody, to chicago and morningstar and we're happy to announce the international fund manager of the year. >> i started the fund in 1992.

>> been there the whole time. it's now $26 billion. how much did you start with? >> couple million dollars that flowed in day one. first month or two, another five or six. >> does a day where the major markets in the u.s. set records, do you pay attention to that? or is it just sort of oh, interesting and you move on and go back to what you're doing? >> b. >> not a? >> no. what's important to us is the value level of the market. price movement doesn't tell you very much much what's instructive is the valuation of which the individual components of that market are selling that. that tells us whether there's attractiveness or not. >> what you do, like our first guest, david wallach, you look for value. last year, you found a value in the mining and trading company glen corps. up triple, 200% last year. what did you see there that made you get in, starting in 2015 and add over the year? >> right.

what we saw was a company that had two parts of its business, trading operation, good stable earning stream, 30% to 40% of the earnings come from trading and the mining operation that was suffering as a result of low commodity prices. it probably had a little too much debt. we had an analyst who did a great job ripping it apart. once they recapitalized and did things to alleviate the debt, we thought it's safe. it's really a time to buy stock. >> you still own it? >> we still own it. it's a very large position, which shows you how undervalued we thought it was. >> let's move on to a couple of other areas, talking offcamera. financial servicesa a big hunk of your fund, number one. number two, develop europe, big hunk of your fund. it's not so much that you set out to go, i like financial services or i like develop europe. it's that that happened as a result of your investing discipline, looking for the

values. right? >> it doesn't matter whether they're in a certain geographic location, whether they're in a certain industry. this is what we're known for. we look at businesses. we have a very strict discipline approach to finding value. we buy, loan, sell there. that part isn't as easy as it sounds. if something is dropping in price, people tend to run or they don't want anything to do with it. what we want to do is understand whether there's a relationship between that. >> did brexit surprise you? did the reaction to brexit surprise you? >> the event itself wasn't as surprising as the reaction. the markets went nuts. it didn't matter if it was a japanese exporter, or the european financials, outside of

the united kingdom were strongly impacted. i think that next day could have been our funds, one of its single biggest drops in history. again this was an example -- >> let's recover. >> yes, where price moved but intrinsic value moved nowhere near price did, providing opportunity. >> congratulations. i should point out you have been in the top 3% of your dpoer. not just over the past year. but the past five and ten and maybe even more. congrats. >> thank you very much. >> one more interview from morningstar's mutual fund manager of the year stars and it will be with the winners in the asset allocation and fixed income categories. stick around for that and more. meantime, back to you guys. >> looking forward to those, tyler. coming up, the good, the bad and the ugly on this historic day for the markets. also, a look ahead to which stocks could help send the markets even higher. don't forget. we are still awaiting the president at the department of

homeland security. we will bring you his remarks when he begins. don't go anywhere.

welcome back to "power lunch." we are watching two things. on the left-hand side of your screen, we are awaiting president trump at the department of homeland security. second thing we're watching on the right-hand side, yes, you can see it right there, the dow is above 20,000, finally hitting that level. at 20,075. we are all over both of these huge stories. don't move. straight ahead, we'll be back after this quick commercial break.

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what is the desert? it's absolutely what you need right now. absolutely scottsdale. hi, everybody. i'm sue herera. here is your cnbc news update this hour. senator john mccain says federal law would override any executive attempt to reinstitute enhanced sborgs techniq interrogation techniques and would be defeated in court and also commented on donald trump's claim that there was voter fraud in the 2016 election. >> there's no evidence of that. those who allege that have to come up with some substantiation of the claim. siep activicientists have da large crack in the arizona desert after exploring the two-mile fissure with drone

video. they say it was formed between march 2013 and december of 2014. and nine-time olympic gold medalist usain bolt has been stripped after one of those medals after a teammate tested positive. samples were retested for the 2008 beijing games. you are up-to-date. melissa, back to you. >> thank you so much, sue herera. today, the day the dow hitting 20,000 after the opening this morning. boeing a big driver behind today's gains after a very strong earnings report. the dow, s&p 500 and nasdaq composite also hitting all-time highs. jackie deangelis is at the cnbc energy desk. jackie? >> that's right, we saw crude oil go positive after trading negative to most of the session. it couldn't hold on to those gains. we'll finish just under $53 a barrel. it was really dow 20k and the

positive energy we saw in the equity market that took us positive. but those inventory numbers this morning, very big build in gas and crude, substantial builds taking us lower. the main questions you have to think about if you're trading this commodity right now is will this pro-energy policy help or hurt? there's two schools of thought we've discussed for quite some time. does the market march higher from here, x energy and growth prospects take crude oil with it? finally, what will happen with the dollar? not trading with commodities right now but traditionally, they are correlated. back to you. >> jackie, thank you very much. early in the morning of november 9th, 2016, remember that day? donald trump took the stage as president-elect to deliver a victory speech to a crowd of supporters. he touched, as he often did in his campaign rallies on infrastructure saying, quote, we are going to fix our sbr inner cities, rebuild our highways, bridges, tunnels, airports, schools, hospitals. we are going to rebuild our

infrastructure which, by the way, will become second to none. in part of expectation of more government spending on just that. could even the president's definition of infrastructure cover a lot more than just roads and bridges? let's bring in back kathy thompson. you've been all over this story for a while. you've been early. you've been right. catherine it seems the early pickings have been done, pour gravel on a road. those stocks, everyone knows they're up. do we need to expand our definition of what infrastructure means and who may benefit? >> that's a great question. first, you have to look at the president. he has built a career on building and real estate. it's not too much of a stretch of the imagination he is going to take building to solve the problems as he sees in the u.s. >> you mean building buildings? not just paving roads or building bridges? >> not just roads and bridges but a more expansive definition of infrastructure.

what could that be? two areas where he's focused, interciti inner cities. affordable housing, schools, airports, clean water. all sorts of things that look a little more like nonres and commercial versus that traditional roads and bridges. >> assure me it's not going to be wasted federal dollars. because at the federal level historically, when we've seen infrastructure spending we don't actually get a lot of infrastructure. him being a business and real estate person, a lot of conservatives are hoping that means a lot more of sharing with private investors, making sure that there's incentives for stuff to come in on time, actually be effective. >> that's a great point. and there will be some private dollars along with that. keep in mind, under president obama, private dollars were tapped to fund long-term highway and bridge projects under the federal loan program.

there are programs, for instance, in affordable housing that could be tapped in to use private dollars to help supplement the short fall in public dollars. >> is the risk/reward there to go to this next sort of second derivative infrastructure play as to stay on the straight and narrow? >> yes. >> that are definitely within the realm of what donald trump thinks of as infrastructure? what sort of risk is there in terms of saying, you know what? maybe he means grids also, maybe he also means public housing. is it cheap enough to say i'll take that risk? >> i think you do take that risk. the short answer is yes. once again, it goes back to the basics. he wants to focus on inner cities and middle america. >> who wins? kathryn, i'm worried about the president stepping out and cutting you off. who wins? >> building product distributors, builders first source, gms, roofing, building material and house and goods and

services names like fortune, masco, american wood mark. but then wall board goes into everything that you build, residential or nonres. ego materials are another good examples. >> yesterday we saw the executive action, executive order, whatever you want to call it, on speeding up environmental review. you think that could add to the bottom line, too? it's not just making it faster but making things more profitable? >> yes, absolutely. think about it. for a new residential home, starter home, regulation adds 2 to 5% of the total cost. public construction project and the multiplier goes meaningfully higher. >> save a lot of money if they get rid of that regulation stuff? >> 5% of a couple million bucks is your kind of money. kathryn thompson. >> i misspoke. i looked quickly at beacon roofings ticker. but obviously it's a medical

device company. >> they could benefit, too. >> how expansive infrastructure is. >> i love your mention of woodmar. i played in their little league or pony league team in high school. thank you. tyler mathisen, more from the morningstar top fund manager conference. great stuff, tyler. what are you bringing to us now? >> the winners in the last two categories bond fund manager of the year and we're pleased to introduce ford o'neill and his team at fidelity total bond fund. appreciate your being here and charles poll, chairman and cio of dodge and cox, accepting on behalf of the team. you're no stranger to these awards. you win them a lot at dod dodge & cox. >> won a few of them before. >> ford, let me start with you, if i might. we're in a different kind of interest rate environment this year. tell me how you factor interest rates in to the selection of securities that you buy. you're heavily into corporates.

and how do you play that against credit selection, duration, et cetera? >> sure. happy to touch on that. total bond fund is a core bond fund. it's really driven by a top down and also a bottom up research process. our focus isn't as much bidding on interest rates but thinking about asset allocation, sectors that we think will outperform and security selection. my fixed income colleagues of which number over 100, are helping me pick securities in these sectors that we think are attractive. it's much like our equity counterparts. it's really research based and driven by our research process. >> last year, very high quality. lots of high quality corporates. anything different, evolving this year? >> last year we had a combination of high quality corporates, which did very well. we also had a little bit of high yield and also some leverage loans in there. and those two sectors, even in small size, tyler, had double-digit returns.

if you remember the ag return less than 3%. it was really a nice combination of being able to look across the entire spectrum to find opportunities and cheap securities. >> charles, tell us about dodge & cox balance. if i put ten grand into this fund about five years ago, i would have about $18,000 now in it. that is a very nice return at lower than average category risk. you're balanced which means, what, you're roughly 60% equities but you can can be -- >> up to 75. >> why is 60 the sweet spot today? >> we're a little over 60 right now. we look at the two categories, equity and fixed income, yields on bonds are still very, very low, if you take a look at the long-term historical perspective. we have concerns about inflation rising, unemployment is starting to fall to levels where you are going to get increases in wages.

and so we have concerns about the potential for real returns in the fixed income area. however on the equities side, we have been overweight the 60/40 benchmark, which contributed to good performance in 2016. but as valuations get higher, as the market gets higher, those become less attractive, too. >> what have you been doing lately? have you been redecember deucing your exposure to equities, though you are still relatively high compared to where your benchmark might be? >> yes. >> what have you been doing and why? >> we have started to become a little more conservative. >> because? >> because the valuations on the equities have been getting higher. and so, you know, higher valuations on the equities, higher starting valuations usually means somewhat lower returns going forward. >> does a benchmark like dow 20,000 serve as a signal in any way or is it the valuation you're focused on?

>> we're really focused on the valuation and long-term outlook for the companies we're invested in and not on a particular index. >> charles and ford, congratulations. we want to thank the president for not interrupting us here. i didn't think we were going to get it all in, frankly. guys, we did. congratulations and keep up the good work. congratulations. >> appreciate it. >> thank you. >> you bet. that will wrap it up for our coverage out here at the morningstar mutual fund awards. congratulations to the winners and congratulations if you're one of the shareholders. >> mary tyler moore has passed away at the age of 80. for those of us in the news business, her in the newsroom, producer, dealing with ted baxter, we all loved watching it. she is going to be missed. mary tyler moore dead at the age of 80. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders?

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welcome back. just as a reminder, we are awaiting the president at the department of homeland security. right now, though, it is time for trading nation, dow 20,000. should you buy in now if you haven't been buying stocks already, or beware? gina sanchez, boris schlasberg.

gina, you are here to tell us this is the most important day in the history of the stock market. are you not? >> this is not the most important day of the history of the stock market. >> you're going to tell us why you don't care about dow 20,000. >> that's right. look, dow 20,000 is perhaps an emotional point. but it doesn't necessarily mean anything. much of what we're seeing right now is momentum that's been built up from a second positive earning season stacked up against last season and continued positive earnings momentum. so, i think that that could probably continue. but let's be clear. we still don't know what direction we're going in. this is all rear view mirror stuff. i think at this point we have to follow what trump is doing in terms of future policy. >> all right. boris schlasberg, gina says it's just emotional but it means nothing at all. but it's huge.

it matters because it's a headline. does it maybe not get people's attention? it makes headlines the browns are still playing. that kind of thing. >> listen, whenever an index makes a fresh record high you do not ignore it. it's an important point. you should pay attention to it. i think definitely a lot of continuity here in the dow just for the near term. i think this trade is buy near term but sell intermediate term. it's definitely going to run out of juice going forward. meantime, as gina said, if trump gets ahold of the economic narrative, if he can get on message and start talking about deregulation, tax cutting and all the infrastructure spending he is going to put into place that, by itself, will provide enough stimulus to push the dow to maybe 20,500 before we run out of steam as we go forward. >> not 25,000? >> no. >> 20,500. >> i misspoke. >> we got it. boris schlossberg remains mildly optimistic. gina says it's all about the

emotion. thank you so much. trading nation.cnbc.com for more information. meantime dow component apple is up 9% since the election. that helped, of course, make dow 20,000 possible. what needs to happen now to send apple and the dow even higher? that is next on "power lunch."

we are still waiting. president trump is at the department of homeland security. as soon as he comes onto the podium, we'll bring you his comments. apple in the spotlight today. it's one of the best performers on the march to 20,000. josh joins us with more on this. >> tim cook's company has only been a dow member for less than two years. replacing at&t in early 2015.

the company's recent performance has been note worthy. in the green so far this year and up 25% in the past six months. since october 2009 when the dow index first closed above 10,000 after the financial crisis apple has gained more than 340%. since march 1999, the first time the dow closed above 10,000 the stock surged more than 9,000%. apple is by far the best performer among the current blue chips over that time frame. there have been bumps along the way. stock is off 10% from the all-time high of 135 back in april 2014. where does the stock go from here? much depends on how investors think about the health and future of the iphone franchise. skeptics will argue the smartphone market is saturated and apple's most recent quarterly report said it sold 2.5 million fewer iphones than

the prior year. there are millions around the world relying on older models and waiting for the upgrade and tim cook and the company did enrich the platform with a.i., investors could have a better idea about who is right in the debate with apple next reporting results on tuesday. back to you. >> thank you very much. back to the department of homeland security. we're expecting the president to come out at any moment. here he is. let's listen in. >> thank you very much. thank you. wow. you love your job, don't you?

thank you. first i want to congratulate secretary john kelly and his wife kathleen. where is kathleen. she is here someplace. john brings the skills, the leadership, background, the experience, strength and definitely that determination that you have to have to get the job done and to get it done correctly. he will deliver for you. he will deliver for the country. he will deliver for the american people like you've never seen before. [ applause ] we also just finished a briefing with the acting administrator of fema, and we discussed the

terrible storms that struck the southeastern united states. our nation sends its thoughts and prayers to everyone impacted by this incredible tragedy. i have instructed fema to do all they can to help those suffering and affected. already we've approved georgia and mississippi, and others are rapidly on their way. so fema has done an incredible job of speed, and they need speed. homeland security is in the business of saving lives. that mandate will guide our actions. the department of homeland security has many, many different divisions. but one of the most important missions of dhs is its law enforcement mission. this is a law enforcement

agency. [ applause ] but, for too long your offices had agents who haven't been allowed to properly do their jobs. you know that, right? do you know that? absolutely. but that's all about to change. i'm very happy about it, and you're very happy about it. from here on out, i am asking all of you to enforce the laws of the united states of america. they will be enforced and enforced strongly. [ applause ] because people are surprised to hear that we do not need new laws. we will work within the existing

system and framework. we are going to reinstall the rule of law in the united states. before we go any further, i want to recognize the i.c.e. and border patrol office in this room today and to honor their service and not just because they unanimously endorsed me for president. that helps. but that's not the only reason. i also want to acknowledge two individuals in the audience who will play a very, very important role going forward. i would like to recognize brandon judge, the president of the national border patrol council, and chris crane, two friends of mine. president of national i.c.e. council. you guys are about to be very, very busy doing your job the way you want to do. where are they? where are those guys?

thank you, fellas. thank you. [ applause ] we're in the middle of a crisis on our southern border. the unprecedented surge of illegal migrants from central america is harming both mexico and the united states, and i believe the steps we will take starting right now will improve the safety in both of our countries. going to be very, very good for mexico. a nation without borders is not a nation. beginning today, the united states of the america gets back control of its borders, gets back its borders. [ applause ] thank you. i just signed two executive orders that will save thousands of lives, millions of jobs, and billions and billions of

dollars. these two orders are part of an immigration reform we outlined during the campaign. i want to emphasize that we will be working in partnership with our friends in mexico to improve safety and economic opportunity on both sides of the border. i have deep admiration for the people of mexico, and i greatly look forward to meeting again with the president of mexico. we'll be doing that shortly. we will discuss close coordination on many, many important issues between our countries. this coordination includes the miss mantling of cartels and keeping illegal weapons and cash from flowing out of america and into mexico, out of our country, out of the united states, and it goes right into mexico. they have to stop it. we have to stop it. we are going to save lives on

both sides of the border. and we also understand that a strong and healthy economy in mexico is very good for the united states. very, very good. we want that to happen. by working together on a positive trade, safe borders and economic cooperation, i truly believe we can enhance the relation between our two nations to a degree not seen before, certainly in a very, very long time. i think our relationship with mexico is going to get better. here is a brief summary of what actions are contained in my executive orders. the secretary