hospital yesterday or day before. >> he had been hospitalized for almost a month. >> barbara the same. we'll all be looking forward to that. can't imagine a more popular choice. >> absolutely. thank you for watching "power lunch." "the closing bell" starts in six seconds. >> michelle was supposed to do that. >> she is not here. >> not here. welcome to "the closing bell." i am sara eisen in for kelly evans at the new york stock exchange. >> welcome back. i'm bill griffith. apple is the big story of the day. >> again. >> shares up 7% on the back of those blowout earnings last night. tell you what ceo tim cook told cnbc coming up in a little while. if it were not for apple, what would the dow be doing today? >> senator rob portman met with tim took in washington. they talked tax reform. the senator will join us live to

discuss that and, of course, the impact of amazon's latest move on the ohio economy, specifically cincinnati. >> i know somebody from ohio. >> our hometown. me and senator portman. jpmorgan chief jamie dimon going back to the white house this president to meet with president trump. we have details on what they'll talk about coming up. surge in apple shares. tim cook's comments on president trump's policies. josh lipton has it all for us right now. josh. >> bill, how is apple thinking about new economic policies under a trump administration? ceo tim cook telling me he is a fan of some of those policies, like cash repatriation, saying repatriation is front and center, that is very good for the country, and it is obviously good for apple as well. apple currently has some $230 billion locked up overseas. but cook is not a big fan of

that controversial border tax, saying my view is that it hits the consumer in particular, the middle class consumer and below middle class. i would be surprised if the country went down that path. and finally, on creating more employment. cook saying, i do think we need more jobs in the country, and everybody needs to do their part there, but there are a variety of ways to create more employment without creating an environment that might result in trade wars. cook reminded me that apple does already manufacture some products here, including certain components and processors for the iphone. he is opposed to the immigration order. he is pursuing legal options and asking the white house to reconsider the option. >> that's a to be continued one. to the federal reserve decision on interest rates and the statement just out an hour ago. steve liesman has the highlights and market implications.

>> the federal reserve kept rates unchanged in the january meeting and kept the markets guessing about when the next hike will come. it's forecasting three hikes. the market wonders if one will come in march. you can see what happened to the chance of that in the plunge of the two-year yield. the probability fell from 29% before the meeting to around 17% now. the decision was unanimous. fed saying the economy is expanding at a moderate pace and the gradual rate increases are ahead. all of that it said pretty much in december as well. it did express more confidence in the inflation outlook. it no longer says, for example, that inflation is a result of temporary factors like higher energy prices. it senses more persistence. the fed noted more business and consumer confidence which shot up in the wake of the election of president donald trump. the fed has not changed the economic outlook in the wake of the election, even as market have soared. the reason is the fed is playing a waiting game, waiting for more

specific policy proposals to know are there negatives on trade. deficits coming, more inflation. stimulus. what's the timing of all that. the fed a little more circumspect than your average market participant. >> that's well said. i am in awe of you. you actually found highlights into that statement today, steve. thank you very much. >> pleasure. >> see you later. he is not going there. joining our "the closing bell" exchange for this day, the first day of february. diane swong and mark luchene. steve grasso and rick santelli checks in from the cme in chicago. ladies first. diane. we all know markets, expectations and hopes since the election have been going up for greater growth, whether because of fiscal policy, whether it's lower taxes or whatever. you couldn't tell it from this report from the fed today, could

you? >> no. i think actually if janet yellen has the virtual invisibility cloak she donned it well today. she wanted to stay under the radar of not only a twitter tweet of something if they sort of stepped out of the box on this. also i think it's important for the fed right now. she is going into a valentine's day which we hope is not a massacre of valentine's day, sort of congressional briefing. i think that will be very hard on her. the congress is out to audit the fed. they are out to curb the fed's independence wings. and we have a president that has campaigned against her on the campaign trail and appears to carry his campaign techniques into the presidency as well. so the fed is walking on eggshells in terms of how they'll be handled going forward. it's also very important that the fed -- they can only react. there is so much uncertainty as steve outlined, the broad spectrum of uncertainty. inflation is picking up.

they like that. they want a gradual increase. this is uncertainty. we don't know what's going to happen next. so the fed has to be in reaction mode and not getting too far ahead of itself on rate hikes. >> the question for investors is how long does the fed continue to do that? how long can janet yellen stay out of the limelight or politics, twitter sphere of president trump as the economy continues to heal. this morning good data on private sector jobs, manufacturing and on construction of factories. >> actually -- >> i don't -- >> i'm sorry. i think. >> go ahead. >> sara, i thought you directed that to me. i don't think actually too long. the fed has been committed to being data dependent. so we know it will follow the data as it relates to employment and as it relates to some of the other high frequency items. particularly a jobs report no less than this friday which will probably be indicative of further strengthening in the economy. while we can't expect them to wait until we see fiscal action

under the trump administration that might amplify the rate of growth in the economy, i think we're seeing a pace of growth sufficient to warrant them hitting on the targets of two to three right hikes. the longer they are radio silent on activity, which basically today's minutes suggested they were as diane noted, the market becomes increasingly troubled as to what are they waiting for or will the moorkarket be surprise. the market could be caught flat-footed. >> steve grasso, what do you make of the market response such as it was? on the margins you saw a little bit here and there. it's pretty much stay the course, isn't it? >> it is. when you look at this, bill, how we were so myopic for the last four or five, six years on the fed. every time you would see one of these meetings. now we have become just as myopic on president donald trump and his tweets. i think it goes a long way in the calculus of a trader.

just think about this. you had a runup of 6% to 9% depending on whether you take the night before the election or the night of the election in the overall market. the market is just sitting here waiting to sold off. you have had every chance, every opportunity for the market to sell off. and there still becomes this great rotation. out of bonds into risk assets. i think you'll see that continue. i think you'll see, as you see the tech earnings come out, everyone thought that the new tax policy or donald trump will be the death knell to tech companies. if you don't see it happening, people have no choice but to put money to work. that's what they'll continue to do. >> rick santelli. reaction from the bond pits to the fed statement and to some of what steve just said on what was actually driving the market. a lot more on fiscal policy. >> well, you know, let's start with steve grasso's comment. the market sitting waiting to be sold, waiting for facts.

yeah. real and imagined, everything but the kitchen sink has been thrown at these policies. with regard to steve's comments, first of all, we went from 121 early to 124 and back down to 121. we had a three basis-point plunge. i think this fed has raised cautiousness to a level of world series magnitude. any of you tv buffs out there remember the first bob newhart show? janet yellen is the psychologist the way i see it. behind the two-way mirror, the fomc members and the market laying on the couch. this is their approach to central banking. making sure the market is ready, feeling it. i tell you what, when it actually happens they'll find none of this diminished the intensity of how the market will react. the market has gotten smart. they know there will be plenty of flags and will react to it then. they were behind the curve before today and are more behind it today.

1600 points going before november 8th they were further behind the curve. there will be a reckoning but i don't think this mitigates how the market expresses that. diane, what do you think? march do they raise rates? >> no. that's one of my shortest answers ever to you, bill. >> the follow-up, diane, quickly. will they get in the three they predict this year? >> yes. i think they'll get at least three. i think that's one of their concerns. they will make good on the multiple rate hikes this year. what i think they're concerned about is they might have to go more than that because they don't want to get too far ahead in terms of destabilizing. even small rate changes are destabilizing on financial markets abroad as well as at home. they want to go gradual and orderly, not disorderly. >> well, they are certainly doing that right now. thank you -- >> disorderly bus left the station a long time ago.

>> moving very slowly here. thanks, guys. we have 15 minutes left in the trading session. the dow is up 23 points. i don't know. >> nasdaq outperforming again. >> still about earnings right now. that's the focus. we'll get back to that coming up in a little bit. most of fang out doing pretty well. facebook will be after the close. up next, senate finance committee member robert portman speaks with us first on cnbc in an interview to discuss his latest meeting with apple ceo tim cook and what type of tax reform we'll actually see. facebook headlining the reports after the bell. we'll tell you what to expect before that coming up on "the closing bell." you're watching cnbc, first in business worldwide. is happening before our eyes. shift in human history sixty to seventy million people are moving to cities every year.

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we have word that president trump is expected to meet with top u.s. executives on friday, and just moments ago one former ceo just officially joined the trump administration. our john harwood has the details. john, as the white house guest list continues to look like the cnbc guest list. >> exactly, sara.

we know the president likes chief executive officers. he has just gotten one. rex tillerson confirmed as his secretary of state. 56-vote majority in the senate confirmed him. watch these four democrats in the future. they voted for him. mark warner. joe man chan. heidi heitkamp of north dakota and the independent angus king of maine. those by definition become potential votes for other cabinet nominees though that's not a predictable process. the president will continue to meet with ceos this week. tomorrow he'll have executives from harley-davidson come in from milwaukee. he'd been initially scheduled to go to milwaukee. there was speculation that he canceled that trip because of the prospect of mass protests against him. of course, we saw protests in major cities over his immigration order. his white house briefing today, press secretary sean spicer said that was not the case.

>> it was easier for the executives to come here. considering the week and all of the activity that's been going on. we're concerned about american jobs, moving the economy forward and we're excited to welcome them to washington to talk about the great work they do and the many thousands of people they employ. >> now, the president also has a meeting on friday with chief executives at the white house to talk about taxes, trade and other issues. one of them is jamie dimon of jpmorgan. sean spicer did not provide detail for that meeting. he said there would be more details tomorrow. one of the things that may come up is the issue of glass-steagall. sean spicer was asked about it at his briefing. president trump's statement during the campaign that he supported a reincetution of a new version of glass-steagall. sean spicer said the president's outlook remains unchanged. they have no details because they don't have a treasury

secretary. steve mnuchin was sent without votes to the senate floor and is expected to eventually win confirmation too, guys. >> in the meantime we wait, with no treasury secretary. >> as we just showed you the man who might have been the treasury secretary, i guess if he had said yes. jamie dimon. >> our next guest met with apple ceo tim cook and talk about the tax code and helping american workers. >> rob portman. the republican junior senator of ohio. my senator. good to see you. >> sara. hello. we claim you in cincinnati. >> we're keeping her in new york. >> darn. >> apple shares up more than 7%. tell us about the meeting you had with tim cook. >> i think it was because of the meeting, clearly. ha, ha. >> nothing to do with the earnings report.

>> exactly. i stayed in touch with tim cook over the years because he is a bright guy who has a lot of good experience and views on international business and on taxes and regulations. we talked about tax reform. he has been an active participant in those discussions. we have to change our code. companies like apple have money tied up overseas. they will not bring it back at the high rates. they can't to be competitive. we have to lower our rate, which is the highest in the world, and provide the opportunity to create more jobs over here and get wages up by repatriating the profits. we talked about that and global competitiveness generally. >> put your former trade rep hat on for a second here. the number of ceos who have come out recently against the immigration executive order. the fear of the border tax. there is a debate going on right now that the growth initiatives that the president has -- is going to pursue, whether lower taxes, more fiscal spending or

whatever, are at odds with the immigration executive order and the protectionist feel to it with the border tax and all. so can you have both of those, senator, and grow the economy? can you grow the economy with lower fiscal policy in terms of taxes and have protectionist techniques as well? >> well, look, i think on the immigration order, as you know, i was one who said i thought the extreme vetting was not well vetted and they could have done a better job of rolling that out and giving people the opportunity to finish travel plans. i think now they're doing a better job dealing with that, particularly with the issue of permanent resident aliens. people can a green card who should not be detained. they're working through that. a lot of businesses were concerned about it because so many are global companies. by that i mean they rely on people from all over the world to help them become successful american companies. having people go back and forth across borders is part of that. that's something that's being

resolved. i believe with general kelly in place it will now work more smoothly. i think the vetting can be done without disrupting people's lives and causing these concerns. on the tax and border adjustability issue and the so-called protectionist aspects of the trade policy that have been talked about, i think we are heading in a good direction in the sense that i think the administration and congress alike are talking about doing things that are legal under the world trade organization so that we don't have a retaliation against us and higher tariffs which is one of the big concerns for american workers. we don't want to get into an escalation of tariffs because that would be beneficial to nobody. it would actually raise consumer prices and make us less competitive globally. so i think we are heading in the right direction, bill, frankly, to have a simpler tax code, lower the rates. broaden the base. come up with a way for us to give the economy a needed shot in the arm. >> kevin brady, the house ways and means chairman who is

leading this effort on taxes, was on squawk box this morning talking about how it's going to get done. he talks about the border adjustment tax. for the record, are you for or against that tax which has become highly controversial and front and center in the republican plan? >> i talked to chairman brady about this privately and also spoken publicly before including on this program saying the idea of having a tax -- taxes consumption more is good for the economy. it could be beneficial for wage growth and helping to get the economy back on track. on the other hand, if you look at the proposals out there, including some of them that are broad and allow, for instance, the deduction of wages, i am not sure those are legal under the world trade organization system. that's a problem because, again, if it's not considered legal, then other countries could retaliate against us, including by raising their tariffs. so i think we need to be careful how it's structured and make sure it is consistent with america's role in the world which is to open markets and to

be the country that believes in fair trade. level playing field trade. so i am making some suggestions in that regard, and i think that a number of the house members are as well. hopefully we'll be able to put something together that's pro-growth, pro-jobs and will make us more competitive globally without running afoul of international rules. >> focusing on mexico for a bit. we know what's been going on there between the president and president nieto there. you have a very delicate situation there in ohio. you have a big trade relationship with mexico. so how do you think that is going to be resolved at some point, and can there be some middle ground that favors both countries without an all-out trade war of some kind? >> bill, i think you're absolutely right. by the way, for ohio, it's not just mexico. it's canada. canada is the biggest trading partner and ohio. we send about 60% of the exports to canada and mexico. mostly canada. it's incredibly important to have the agreement in place to

create jobs in ohio and maintain the jobs we have. 25% of the ohio factory jobs are export jobs. the agreement is 23 years old. the north american free trade agreement. it does need to be updated. i agree with that. we need to add some of the provisions on labor environment that are in more recent agreements. we need to put e commerce in there. there is not an e commerce chapter. i think there is an opportunity to update and improve it. both sides will want something out of it. i think we can accommodate it and end up with a stronger northerly american relationship. this is about expanding opportunity, not about contracting opportunities. we have to be careful that we don't do things that lead to fewer exports. >> senator portman, have to ask you about what john just mentioned. steve mnuchin, i believe you're part of the senate finance committee that advanced him. now he faces a vote in the senate. when is that? do you expect that he will pass

given some of the new revelations and reports from our home state about his banks, one-west role in the mortgage finance crisis and foreclosure crisis. >> he got a committee vote. the democrats did not participate. they boycotted the hearing. it will now go to the floor. as you've seen with some of the other votes we need 50 of the 52 republicans to support him. i think that will happen. he has had good answers, by the way, on the allegations that have been raised. he was in a position, as you know to help with the foreclosures because when he bought the institution it was after the crisis. there were a lot of homes in foreclosure and they were able to resolve most of those to avoid foreclosures. he has a story to be told on that. i would hope that we can move forward on all these nominees. the administration deserves to have their people in place. if you look at the obama

administration at the beginning of the first term, or the bush administration, where i served in their first term, there were many more cabinet members confirmed by this time period, more than twice as many in both cases. it would be good to start to get the coniffirmations done to giv the president the opportunity to have his people in place. >> did you have a conversation with jeff bezos on the news that amazon will spend $1.5 billion in investing in cbg? >> our airport can get a little bit of expansion. we're also concerned some of it may come from the wilmington air park, being from cincinnati, sara, you know about it. dhl pulled out and 8,000 employees lost their jobs several years ago. we were bringing some of the jobs back. we're watching that one carefully. it's a good sign that amazon believes our part of the world is a good place to invest. we want to keep the investment going in ohio. >> we'll leave it there.

senator rob portman. >> thanks, bill. great to be on with you. >> thank you, sir. we have rather odd breaking news. we are receiving word right now that president trump has left the white house on marine 1. this is an unannounced trip, and the destination has not been disclosed. we'll bring you an update as soon as we have more details on that. that's all we know right now. brexit, wilfried frost joins us on the phone. they've cleared the first hurdle? >> yes. the prime minister's european union bill which empowers her to choose when to invoke article 50 has passed what's called the second reading stage with a resounding majority. 498 votes to 114. all of theresa may's own conservative party bar one voting in favor of the bill. and the vast majority of the biggest opposition party, the

labor party, doing the same. there are still a few more hurdles through the process, including a further final vote. but this level of majority in the first vote clears up one crucial question that was outstanding, whether or not mps would try to block the will of the people expressed last june. the answer to that resoundingly is no. therefore, the uk's journey towards the european union exit door very much in process and now in theresa may's hands. and of course, she plans to invoke article 50 she said before by the end of march. guys. >> the british pound is up .5% against the dollar. expected. and a win, i would say, for theresa may. she lost the vote last time to get the parliamentary approval. >> she lost the court decision. this is clearing up whether mps

would try to block. all that sort of shock last december when we got the result of the court case now, very much insignificant. the pound high. earlier today we got a small or meaningful leg up initially when manufacturing data was stronger than expected. the further leg up as this decision became clear because it gives clarity either way and gives control to the government such that they have less obstacles going forward and will have more power, perhaps, to extract a slightly better deal for the uk if they have that freedom of operation between the uk law-making process. >> a victory for theresa may. this it is. >> absolutely. >> thank you. half an hour to go before the closing bell. the dow is up about 20 points. off the highs of the day, still hanging in there thanks in large part to apple's rally.

nasdaq up half a percent for the year. coming up how this year's biggest initial offering is faring on its first official day of trading on the big board. coming up.

welcome back to "the closing bell." we're here at the post where invitation homes debuted in the new york stock exchange. big ipo of the day. >> glenn just opened this one this morning. >> it's trading flat.

a single family rental real estate investment trust. biggest initial offering this year. price 77 million shares. $20 each late yesterday raising more than $1.5 billion. this morning we got a chance to talk to invitation homes' ceo. have a listen. >> the most exciting part for our industry is millennials have not yet entered our space. an average age of 39 years old we're still a little bit older than millennials. the apartment industry has enjoyed the uplift for some period of time. >> about 15% of invitation homes, houses in south florida. 12% in southern california. founded by private equity firm southern blackstone, cashing out here. it's the trend of home rentals. he says millennials are doing it in a way the older generation is not. they're paying for homes, getting the amenities but

leasing instead of buying. >> i think we're bearing the lead on this company, the real estate investment trust. many of them are homes that they bought at the bottom of the market. >> blackstone. >> blackstone bought. these were foreclosed homes. they bought them up in bulk and now they've turned it into a real estate investment trust by turning them into rentals. that's making lemonade out of lemons. >> home prices are rising. we asked about the prices between rentals and homes. he wouldn't comment. it's a life-style choice. goes back to the idea that the older generation, correct me if i'm wrong. found more pride in owning your own home. >> the american dream. it's not happening with the younger generation for sure right now. to a cnbc news update. tyler mathisen. >> here is what's happening at this mour.

nation flynn putting iran on notice for testing a ballistic missile. he said the white house condemns such actions by iran. >> trump has severely criticized the various agreements reached between iran and the obama administration as well as the united nations as being weak and ineffective. instead of being thankful to the united states in these agreements iran is now feeling emboldened. as of today we are officially putting iran on notice. >> a criminal complaint was unsealed in federal court charging irs attorney jack vitianon with conspiring to distribute 500 grams of methamphetamines. he was arrested earlier today in washington, d.c. blue ivy is about to become a big sister. announcing on instagram -- that's the way to announce on instagram. the singer is pregnant with twins. in a statement they said they're

incredibly grateful. their family is growing by two. folks, i wonder what the lead will be on "access hollywood" and "extra" tonight. >> that photo was posted about the same time the fed announcement came out. >> wonder why there was no reaction to the fed announcement. >> thanks, ty. see you later. we'll take a break. about 30 -- 25 minutes left in the trading session here. a leading trader will tell us what he's watching moving into the closer coming up. details on what top advisers are telling their clients about how to trade what has been the trump rally. that's coming up when "the closing bell" comes right back. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business...

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wow. it's later than it's ever been, 22 minutes left in the session with the dow up 29 points. joining me is matt is chezla. what if they gave an announcement and nobody cared. >> we've probably been focused on what's going on in washington. the fed is relegated to third on the list. washington, earnings and third

the fed. we like it that way. i think we'll start focusing on earnings more and less on washington. it would be nice. they've been better but the bar was so low. that's concerning going forward. the bar will be raised. we'll start to talk about the pos positivity in the market. if they don't exceed in the next quarter and earnings go lower it will be a concern because we are talking about higher rates. >> indeed. the third thing. the rates. >> yeah, forgot about that one. >> thanks. >> sara. survey showing 83% of td ameritrade advisers saying the incoming administration will have an impact on client portfolios. for more on what they're telling clients about the market risks and opportunities under president trump, let's send it to michael santolli who ditched us today for sunny san diego for the td conference. mike, what's the big message? >> ditched you reduck lantly, sara.

83% saying trump policies will be a swing factor in the client portfolios. that's as many as say corporate interest and earnings were. 2,000 advisers gathering here think it will be more likely a positive effect. the optimism level among the advisers is the highest since they've taken the survey in 2009. basically 70% or so say they expect the economy and markets to be better in 2017. in fact, they want to shift client portfolios to reflect that. 53% saying they want to increase stock allocations. 70% looking to reduce bonds. it starts out at a position where investors are fairly balanced. 59% in equity. the big question has been whether there would be a true flow of money that would follow behind the optimism that's built up about trump. we have to ask the question. these guys were negative in 2009 and 2013, which were great years for the market. maybe some of this is reflected in the markets. i talked to tom nally, president

of td institutional. there is one trump regulation potentially that may or may not be implemented that really impacts their business. you can listen here. >> it's interesting. i would say that we are in uncharted territory. we don't know what the trump administration will do from a regulatory perspective. we have been having conversations with our clients that they need to be prepared as if the rule will be implemented in april as we are doing at td ameritrade. >> this is the rule to require all brokers and advisers to follow the fiduciary standard and do what's right for customers. the obama labor department passed the rule. it's unclear if the trump administration will follow through with implementation. >> thanks, mike. we'll see you at the top of the hour. an update on the whereabouts of president trump. we just received word that he took marine one to dover air force base for the arrival of the remains of a u.s. commando

killed early sunday morning in yemen. that's where the president went. we had some breaking news on january auto sales. to phil lebeau. how did they come out? >> better than expected, bill. annual rate of sales -- this is the rate of sales, not actual sales, coming in at 17.61 million vehicles. that's according to auto data, the research firm that tab ulates them. if you look at the total annual sales over the last five years, and on the far right you see we hit 17.55 million last year. at 17.6, that's a nice start to the year. keep in mind this is the slowest month of the year. january was the slowest month of the year in auto sales. we'll see if the industry continues this into the spring and march a april. that's when you look at the numbers and say here is the strength in the market. back to you. >> phil, thank you. less than 20 minutes to go before the closing bell. show you where we are on

markets. dow has added so gains in the last half hour. up 42 points. s&p 500 positive, nasdaq o outperforms on apple. tech, materials, health care in the lead. facebook releases earnings after the bell. a preview of what to expect when we come back. ...at t. rowe price... ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence.

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15 minutes until the close. stocks inching their way a little bit higher here into the close. look set to break the losing streak over the past few days. >> the man who runs the world's largest hedge fund voicing concerns with the tactics of the new president. market watchers are on that story when we come back.

art cashin stopped by. i heard a gasp by you when he said the markets on close orders showed an imbalance to the buy side of $700 million. >> we can see that. we can feel that. >> that's what we were feeling. >> facebook earnings due out shortly. jul julia boorstin joins us with a preview. >> the question for facebook is whether it can keep up growth. analysts looking for 46% revenue growth and 66% growth earnings

per share. investors will be looking for commentary on the video ads, emerging stock markets and the crack down on fake news and the impact on president trump's stance on immigration. facebook shares up about 13% year-to-date. analysts are nearly universally bullish with 46 buy or strong buys and only one under perform or sell rating on the stock. >> julia, see you later. could be a big number tonight. about ten minutes left in the trading session with the dow up 26 points. ray dalio as you know runs the world's largest hedge fund voiced concerns in a note to clients about president trump's policies, some of them saying, quote, nationalism, protectionism and militarism inclees global tensions and the risks of conflicts. for these reasons while we remain open-minded we're increasingly concerned about the emerging policies of the trump

administration. >> joining us to discuss how investors should be handling all of these big issues. brian nick from tiaa investments and jeff kelber from kkm financial. brian, big ideas, big risks. ray dalio sounding a different tune. singing a different tune than what we first heard after the election. how should investors be grappling with these ideas? >> the united states has been in a period where the rest of the world has had a lot of policy risk to reckon with. whether it was europe in 2011. china last year. we have been on an island where it's been gridlock. there hasn't been a lot on the policy front to affect markets. that's clearly changing. >> do you bet on the growth initiatives on the fiscal side or on the trade initiatives that smack of protectionism that ray dalio is complaining of. >> it's diametrically opposed. >> the sectors we like buy us towards the growth.

consumer discretionary. the protectionism would do worse. >> jeff, we've been comparing notes about the volatility index, the fear index. there is no fear right now. we're near historic lows right now. >> you're absolutely right, bill. we saw the vix have a small heart attack on the fed release. down to 9.97. lowest in some time. brian brings up a good point. it's important to focus on the balance sheet bigger names. what ray dalio was saying, he runs $150 billion. one of the smartest minds out there. now discounting rhetoric out of the trump administration. ray not only is discounting the fact that it will be a negative effect. they're counting that tax reform and infrastructure spending will trump, if you will, the market. >> the dollar is coming off its

worst month since march. down 3%, near multi-month lows. >> the dow is confused. today the fed flip-flopped once again. the credibility of the fed trying to bring to the market talking about three hikes in 2017. a lot of investors in chicago are talking about maybe one. we are in a little bit of a limbo purgatory, if you will. a lot of investors out there have to focus on how cheap options premiums are. we focus with our clients on buying the options. they are so inexpensive to protect the portfolio, you have to focus there as the vix is under 12. >> you vote on growth initiatives of the what about multinationals? you have to be careful because of all this going on? >> we're outside the united states. not that we are afraid of the u.s. equity market. you're paying a high price to take the political risk. look at europe, emerging markets, that's where the risk premiums are highing.

the vix is low. look at the correlations inside the market because they've fallen so much, it's like watching a lake with a smooth surface with a lot of undercurrents. there is volatility but a lot of it is canceling itself out. >> you're absolutely right. when you compared implied volatility to the realized it's been 80 days. brian, i think what you're illuminating the fact that you are seeing the bigger names specialize in the financial. no matter what happens coming out of the administration, the financials will see an uptick and continued rally. >> thank you both. brian nick from tiaa and jeff killberg from klm financial. tesla falling short in a new crash test. we have the results and the story for you coming up. you're watching cnbc, first in business worldwide.

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with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests... or not in vests. sign up at etrade.com and get up to six hundred dollars. just under three minutes left in the trading session with the dow up 25 points. markets zigzagged today. pretty good rally on the open this morning. well off those highs right now for the industrial average. if not for apple the dow would have been lower today. look at apple. i mean a huge rally today that is pretty much held on to after those blowout earnings last night that included record sales for the iphone.

had the fed announcement today. we saw some market response as the expectations for a rate increase in march came down. you see that in the two-year note where we saw the yield come down appreciably after the fed announcement. the dollar index came off its highs for the session after the fed announcement came out at 2:00 eastern time. and when the dollar went lower, look at oil. that had a pretty volatile day as well. a couple spikes during the trading session here and it finished just off the highs for the session at $53.55. now we wait for facebook tonight. that will be the one that we'll all talk about and waiting to see what kind of a tone it sets for tomorrow, bob. >> i was a little surprised. my law, don't yell at the stocks market and the fed. they were dovish. the economy is improving. the global economy is improving. at least be a little alert to the possibility of a march rate hike. they've got so much room to cover themselves for.

deflation talk has gone away. global economy is improving and they've got what they wanted to years. talk of fiscal stimulus. central banks have said for years we can't do it alone. we need the governments to step in. fiscal stimulus? help us out. nothing in the statement now even implying that it exists. >> it's amazing. if the only thing you knew is what the fed statement said about the economy you wouldn't know about the expectations for growth with all the fiscal policy coming out of washington, the hopes for that. >> manufacturing globally. better numbers out of the euro zone. japan. in the past they have acknowledged when the global economy got worse. that's what i am saying. i was surprised they weren't more diligent. she'll give what we called the humphrey hawkins testimony. >> on valentine's day. will it be a love fest? >> two weeks from now. i am sure she'll be pressed with

questions. president trump meeting with jamie dimon and ceos on friday. maybe we'll get a timetable to move the market on friday. >> thank you, bob. more evidence today the fed is not the big focal point for wall street. 25 point gain for the dow. stay tuned for the big earnings on facebook coming up in the second hour of "the closing bell." welcome to the second hour of "the closing bell." i'm sara eisen in for kelly evans. bill will join us in a moment. how we're a finishing up the day on wall street. in the green barely for the s&p. that actually breaks the losing streak. this is the first up day in the last five sessions. the dow closing higher by a little more than .1%. 25 points. apple adding 47 points of the rally to the dow. nasdaq, the outperformer thanks in large part to apple.

up .5%. facebook closed up 2% ahead of the big results this hour. russell 2000 underperformed closing flat. busy hour for earnings. coming up, quarterly results from facebook. two insurance giants set to report. results from metlife and allstate. talking about the markets. joining us for more. michael santolli from the td ameritrade conference. we'll be joined on the set from dan hughes from divine capital along with john ford as we brace for tech earnings. mike santolli, what stood out to you? a big quarter for apple. moved the entire market. >> certainly moved the dow. i argued over the years that apple is not so much a bellwether for the overall market or even technology. mostly a bellwether of itself. you saw it today. sentiment turns on apple's prospects. i think it happened today.

the broad market is being asked to wait on a number of fronts. the fed in seemingly no hurry. earnings good enough to keep the market here but not causing an impetus to get it chasing higher. on policy we don't know what will emerge. you still have a kind of dull partn pattern with gravitation towards the growth stocks. >> wait no more. facebook's earnings are just out. back to julia boorston, how do they look? >> beating on the top and bottom line. earnings beating estimates of $1.41. ten cents better than expected. revenue beating estimates at $8.81 billion for the quarter. that's versus estimates of $8.51 billion for the quarter. also reporting stronger than expected daily and mobile -- monthly active users. 1.23 billion daily active users on average in december an increase of 18% year over year.

monthly active users increased 17% year over year to 1.86 billion. that's better than wall street had been expecting. they had been looking for 1.19 billion daily actives and 1.83 monthly. better than expected in terms of users as well as advertising revenue. average revenue per user, a key metric of the company's growth, is coming in better than expected. $4.83 per user. wall street analysts anticipated $4.70. we'll be speaking -- i will speak to sheryl sandberg, facebook's ceo shortly. we'll have a phone call. i will bring you the headlines to see what she says is driving the better than expected growth. there will be plenty of questions on the company's earnings call especially what they say about capital expenditures and how much it cost to get this kind of growth. back to you. >> thank you, julia. see you then. john forte what did you

hear? the market likes it. up 3% right now. >> apple all over again. strong on the top line. yesterday i said i would be watching. just overall growth. 8.81 number better than expected. profitability as well. the core metrics still important for facebook. monthly active users at 1.86 billion, the street expecting 1.83. the daily active users as well. you might worry about frequency of visits. but it appears people are going back day after day to facebook as well. on the call expect to hear questions about demographics especially among young people as we prepare for an ipo filing from snap, the owner of snapchat. they're in competition for the coveted younger demographic digital attention.

facebook powering higher on the metric side. we'll see how investors embrace this after hours and beyond. >> it's stunning revenue growth, danny hughes. you are long this stock. this is a company that told us in november that the revenue growth would slow in 2017 as they try to reduce ad load. not yet. >> i would like to see what management says going forward. they said 2017 will be an investment year. i think that that will answer that question for us, sara. if we can kind of take a look back at their fourth quarter year over year growth from, you know, on the earnings side from 2013 through 2016. in 2013, fourth quarter growth was about 2.58 billion, going to the next year, 3.85 billion. 5.84 billion. and now 8.8 billion. that's massive earnings growth. same thing for eps. if you are a shareholder of facebook and you see how they have infiltrated your life -- we

talked about a little over $4 per user. that's not me. i think i am spending more than that or they're spending more than that on me. i think from the beginning -- even before facebook went public i knew we had to own it. this is the company you want for long term. want to see what management says going forward. we are looking really good. >> mike santolli, you said in the past you don't think apple is the bellwether it might have been it's all about apple. what about facebook. where do you place it? >> i think facebook is basically following something like the path that google did after its ipo, being a bellwether for the advertising side of the market. it's got a leadership position, market company wise, within the nasdaq and s&p. it fits the bill more than apple does because it has that kind of platform effect and a cyclical

nature due to advertising demand. the stock was into an interesting spot into the report bumping up against the all-time highs from back in october, a little over $1.33. i think you have a lot of people on the technical side who think this is another leg higher for the stock and the fundamental folks saying you can't argue with the results. valuation is not really an impediment to getting involved in facebook. holding the gains tomorrow will be the key to see if the market looks on the bright side. >> another question, john, they might get on the call, they continue to say, facebook, that they are a video first company. we get news tidbits like yesterday that they're working on an app for tv set-top boxes. how fast is it moving for facebook and what kind of profit source will it be? >> they're deliberate about these kinds of moves. remember how long it took for them to actually launch advertising inside instagram. they haven't been that explicit

about their plans for whatsapp monetization. they like to announce details on their own schedule. but that is another area that facebook has to power growth. one of the things that has to have you encouraged as an investor, not only are they monetizing well the users they had before, but the fundamental numbers continue to move in their favor in terms of monthly active users and daily active users. mobile very strong. 84% of that overall traffic that they are seeing coming from mobile. that's a healthy number because we know that smartphones are so much a big part of what -- where the digital traffic and the advertising market is going, sara. >> danny, mark zuckerberg found himself testifying in a courtroom not too long ago. he ended up sort of revealing his strategy for virtual reality. you want to go back to julia?

>> more on facebook's earnings? >> no. not on earnings, bill. this is on the verdict in the lawsuit facebook was sued by a company called zenamax over the oculus technology. it's a 90-page verdict. we are going through it now. facebook has lost and will have to pay $500 million. they'd been looking for $2 billion but the judge has ruled that facebook will pay $5 million to settle this lawsuit about oculus technology and whether some of it had been taken or there was inaccurate use of a nondisclosure agreement by one of facebook's oculus executives. back to you. >> did i hear you say $5 million or 500 million? >> $500 million. facebook -- they were trying to get $2 billion but the settlement is for $500 million. >> it doesn't look like it's having a huge impact on the stock, still popping 2.7%. was this unexpected?

>> it was hard to tell. some people in the courtroom said it seemed like the judge was on facebook's side and was going to rule in favor of facebook. $500 million is not a massive amount of money for facebook. it looks like the stock is more reacting to what's going on with the earnings and the bead on the top and bottom line as well as on the user numbers. >> danny, a shareholder, i saw you flinch when you heard the $500 million number. >> that's a lot of money. i think to facebook this is something, they probably have it. it's been reported, i am sure it's been in all their financials and they most likely -- this will be a blip. as you can see, i don't think it's made a difference in the after-market trading. we'll see once we digest everything that's come out. >> facebook posted ad revenue for the quarter of $8.63 billion. >> right. >> the consensus was 8.3 continues to be a blowout on revenue growth. monthly average user growth. you wonder how high that number can get. >> yes. let me point out on this

verdict, if it stands as-is -- i don't know if there will be appeals. $500 million is a lot of money for this kind of a case. not long ago we talked about a billion dollar verdict for apple versus samsung being a lot of money. those companies have a lot more money than facebook does. on a relative scale basis, half a billion dollars is a big judgment. the fact that facebook is still moving higher, i think, again, speaks to the fact that this is not a mature company in terms of its growth prospects, and it continues to beat on its numbers. remember how expensive many people thought $2 billion was for oculus when facebook made the purchase. i think it goes to how much we're all talking about virtual reality as potentially being the future. people are like, well, another half a billion dollars in for oculus, why not. >> they actually paid $3 billion. >> as he revealed during the testimony. >> exactly. >> that was the question i was

going to ask you. how do you view virtual reality as the future for facebook, which he revealed in that testimony is very high on his list here? >> i think that it shows the commitment that facebook has. it shows the foresight and the long haul that facebook has with this technology and how they believe that it will take over the market. i was going to say virtually take over the market, but that people will eventually use this technology in everyday use like we do with mobile. this will become the new mobile. >> i think it's also, mike, a reminder that facebook has a lot of levers to pull here when it's looking for growth. i mentioned the high monthly average users number and the dependence on advertising. they have vr and some of the other acquisitions as well including instagram. >> let me extend my metaphor with google. google has been about its core product, search, since its ipo. facebook is basically about its

core network plus instagram in terms of generating revenues from its user base, yet it's also trying a lot of things on the side as google did. i think you're still going to ask the question over time does facebook have a competitive advantage in the new areas like virtual reality that almost every other big tech company is also making a priority. i think there is both upside and downside to the idea that facebook does have its hands in a lot of emerging areas as well as very, very good core business. >> the stock is reacting well to the report. it is at a record high following that earnings, up almost 3%. mike santolli, thank you. danny hughes, nice to see you. john fortt. >> too bad you're slumming it in san diego. somebody had to do it. >> facebook shares popping as we have been reporting the earnings. two top analysts weigh in on the results coming up. plus, as you heard, sheryl

sandberg speaks exclusively to cnbc before she speaks to investors. we'll bring you those comments as well. first, ronald reagan was the first to use the campaign slogan "make america great again." he that's not the only thing from reagan that president trump put his own spin on. reaganomics versus trumponomics. the debate de jour. yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird.

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all right. more earnings. seema modi, tell us about them. >> disappointing earnings from shutterfly. missing street expectations. $2.63. consensus was for $2.84. revenue below wall street consensus at $561 million versus 584. q 1 guidance below estimates. 2017 guidance is mixed. in the press release the company is saying there is a new focus on four strategic areas supported by its 2017 restructuring plans. shutterfly announcing four areas of strategic focus, making purchasing personalized products simple, expanding the range of products, pivot to mobile and leverage of the manufacturing

platforms. shares down more than 15%. back to you. >> ouch! >> yeah. >> that's not good. thank you. we'll check back. am so looking forward to this segment. trump elected president riding a wave of nationalism and economic reform. those two messages had some recalling ronald reagan's rise to the white house. mr. trump's america-first battle-cry has the likes of ray dalio who runs the world's largest hedge fund saying he is increasingly concerned about the emerging policies of the trump administration. >> so we are wondering, is trumponomics the new reaganomics or something completely different. joining us we have the perfect duo. david stockman, author of "trumped, a nation on the brink and how to bring it back." joining us of course, cnbc senior contributor larry kudlow author of "jfk and the reagan revolution." >> i feel like i'm in a

budget -- >> you have to finish it. who was economics deputy to david stockman at omb. you need to put that in. >> the two winderkins who went who the white house with ronald reagan. >> in his first book he said jerry jordan and larry kudlow -- look at that picture. haven't changed a bit. david said jerry jordan and i were the only honest economists in the government. [ laughter ] >> you guys are the authorities here to answer this question, larry. trumponomics, how closely does it resemble reaganomics? >> there are similarities, particularly on tax reform and rolling back regulations. reagan wanted to lower marginal tax rates. in those days bigger problem was individual rates at 70%. these days i think it's business rates, frankly. trump has both. they both believed in the incentive model of growth by

lowering tax rates. one more quick one. they both wanted to roll back regulations. reagan deregulated the price of oil first day in office. trump has a whole laundry list. we didn't get what we wanted with david stackman. those two. taxes and regulations. very similar. >> david, for you the big concern is debt accumulation. that's what worries you most about trumponomics. >> yeah. this is not the second coming of ronald reagan. i wish him well, but the world today is night-and-day different from what it was then. we had $930 billion in debt, not much. clean balance sheet at the federal level. >> relative to the size of the economy. >> 30% of gdp. today it's $20,000,000,000,106% of gdp. we had a big surplus. today we have $10 trillion more of debt on top of what we have.

1981. taxes 19.5% of gdp. we had high inflation and we were not indexed. taxes were headed to 24% of gdp. we could cut the prospective increase and it would have been good for the economy. last year taxes were 17.8% of gdp. no inflation. they're indexed and going nowhere. so the idea that we'll have some fig trump fiscal stimulus is so wrong. the market is so delusional. we're' going to have a fiscal blood bath because there is no room for a huge tax cut funded by borrowing like we had in the mid 1980s. this is a different world. >> okay. >> we're out of balance sheet. we are out of runway. >> i acknowledge it's a different world. there is a stagnant growth, so that's similar. we don't have the double-digit inflation. >> different point in the cycle. >> this term "fiscal stimulus" troubles me. i'm going to argue on lower tax

rates and rolling back regulations. this is the supply-side policy from trump, just as reagan had a supply-side policy. nobody believed us then. nobody believed reagan then. nobody believes trump now. i have taken the brunt of a lot of the criticism with steve moore and many others. my point is, if trump gets his lower tax rates, particularly business and rolls back regulations, the economy's potential to grow is going to be fantastic. but where they differ -- i want to put this in -- reagan was basically a free trader. not perfect but basically. mr. trump is making a lot of protectionist sounds. and reagan was in favor of a strong and steady dollar. president trump is undermining the dollar. those are two big issues and differences. >> he did put quotas on japanese cars. >> he was imperfect. we lost a couple. >> ari and art -- >> i'm all for supply side.

the economy desperately needs less regulation and lower rates, but we cannot afford a 6% of gdp deficit from huge tax cuts in defense buildups like reagan had. reagan was the biggest accidental cainsian in history. >> how do you grow the economy, david? >> very slowly. >> isn't that what we've been doing? >> tough slog. i agree we should try to reform corporate taxes but you pay for it with a border adjustment tax or loophole closing, okay. >> oh, oh. >> what does that do to the economy and supply chain? >> the point is you are not going to pay for it by borrowing. we are already facing trillion dollar deficits one or two years down the road based on what's built in already. back then the baby boom was entering the labor force, now we're retiring at 10,000 a day. back then they were still starving in the rice paddies in china from the famine.

today a huge part of our industrial base has been offshored. the idea that we will have a sudden boom is wrong. it will be slow, slow going. >> here is the thing. i think, david, continues to underestimate the power of growth. i love him. he is a great man. he continues to underestimate the power of growth. that's my basic response. i don't want 1% to 2%. i think growth solves so many problems. we will grow our way out of these budget deficits. just as we did in the '80s and '90s. >> not a chance. we didn't. we didn't. >> let me make this point. >> let's get the history right. ronald reagan inherited $930 billion of debt from 39 presidents and 190 years. he added $1.8 trillion in eight years. >> the economy was spectacular! >> the economy was -- >> spectacular. >> no, it wasn't. we had three or four years of good growth from the canesian

deficits. then we had the fed printing money for years. we're not doing that anymore. i am sorry. >> my response. reagan launched a two-decade economic boom. and towards the end of that two-decade economic boom we actually saw balanced budgets and even surpluses for a while. my key point is a simple point. i want a steady dollar. i am a free trader. i disagree with president trump. however, he and reagan are on target together with lower marginal tax rates and rolling back regulations. the power of growth will overwhelm everything. that's the part -- >> i do think you have to bring up the fed. it was a very different time. reagan let volcker do his thing. it was a different policy. >> the other thing, please, that's important, we are in 92 months of expansion. okay. this recovery is long in the tooth. we are not going to go 10 or 20 years without a recession. you build that, and you're --

>> from the jfk reagan back. tax cuts and king dollar. that's all i ask. >> i have to be the adult and say we have to stop at this point. this was as fun and informative as i knew it would be. we'll bring you guys back. >> did you see the pictures again? >> that was great. we'll have you sign them, larry. there he is. there he is. thank you, both. a lot of fun. we have -- they're shaking hands. no. you don't want to shake his hand. oh, yeah. facebook chief operating officer sheryl sandberg. julia, what did she have to say? >> the first question i asked her was about a judge ruling this afternoon that facebook will have to pay $500 million to settle a lawsuit over its oculus technology. sandberg selling me that they're disappointed about sern elemece elements of the ruling, considering the possibility of appeal. she also said it's not material to financials. we'll hear more questions about

this in the upcoming call. asked her what drove the better than expected results in terms of revenue and earnings. she said it comes down to three main thingsment o. strong user growth, monthly and daily users. two. business making the shift to mobile and instagram. 5 million small businesses are using instagram business profiles. three, a strong year for product announcements. facebook does not break down advertising by product but she noted the strength in video. more advertising opportunities there. and also the success of instagram stories. this is a feature that many people say is similar to snapchat. she talked about how -- when i asked if there were issues of competition with snapchat, of course, we're expecting snap inc. to file its public s-1 filing for the ipo any day now. she said that they're part of a huge shift to mobile and social and it's part of a growing -- sort of a growing industry as a whole. i also asked her what to make of

the report that facebook may be working on a standalone video app that would just feature the videos but be designed to watch on television screens. she did not comment specifically but said they're committed to a great video experience across platforms which indicates that something like that very much could be in the works. facebook's call is coming up at 5:00 p.m. eastern and we'll be listening to that as well. guys. >> clearly the verdict, rather unfortunate timing. that's going to crowd out part of their conference call, don't you think? >> yeah. i think it will certainly play a role in the conference call. it was interesting that she said rather definitively it will not impact their financials. i am sure that's something that they'll repeat on the call. >> everyone is trying to figure out what president trump means for big-cap technology. sheryl sandberg broke her silence in the last few days about some of the big issues, including the immigration ban. any sense of how they're managing that communication, taking a stand but then also,

you know, speaking about what impact it will have on the business, like tim cook did. talked about the positives like tax reform on last night's call. >> i know that sheryl sandberg just yesterday did comment publicly on facebook about this immigration issue. mark zuckerberg, facebook's ceo, has also commented on facebook very much against trump's immigration policies. so i -- you know, facebook is certainly among its peers, all of these tech companies, the internet companies, seem to be very much against trump's immigration policies, but it will be interesting to see if they provide any more detail on the conference call about what the new president's policies will mean from a practical standpoint for their revenue, for anything like that in terms of tax policies, et cetera, going forward. i didn't get any more from that in our conversation just now, but i would expect to hear more on the call. >> oh, yes. >> trade policies, the whole works. julia, that was great. thank you. >> great picture of her great great grandmother.

tesla trading lower after falling short in a crash test. up next, what other luxury electric vehicles did not make that grade. what the automakers are doing to fix it. what impact we are seeing in the markets. one of the richest men in china has been seized in hong kong. we have details on this bizarre case coming up. over 100 years ago as a benchmark for average. befo . with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks.

both tesla's and bmw's electric vehicles missing the mark of a top safety pick in

crash tests that was conducted by the insurance institute for highway safety. phil lebeau joins us with the details. phil, what happened here? >> sara, this is a case where each of the vehicles missed a crucial test. it doesn't mean they failed the test. they just didn't get the top rating possible. starting with the bmw i 3. it didn't get the top safety pick because of the results of the rear crash test. bmw tells cnbc that it exceeds global safety standards. the tesla model s also was not designated as a top safety pick by the ihhs. it fell short on the small overlap frontal crash. you see -- the front right corner, he meant to say, is collided with a barrier. in a statement to cnbc tesla said one of the improvements introduced in january 2017 specifically addresses the

acceptable or second highest rating of the model s achieved in the small overlap frontal crash test and we expect new tests to yield the highest possible rating in the crash worthiness category. shares of tesla, pointing out they expect to have the tests done with the changes made to the model s done in the next few months. anytime you see crash tests, guys, it gets a lot of attention. >> it does anymore. thank you, phil. time for a cnbc news update with sue herrera. >> the gop senate confirming rex tillerson as secretary of state. senators voted 56-43 largely along party lines. the former exxon ceo had close ties with russia and his stand on sanctioning moscow has been a point of contention. delaware prisons put on lock-down following a hostage taking at the state's maximum security facility in smyrna. a spokesperson described the

situation as an isolated incident with no threat to the public. former president george h.w. bush and his wife barbara, fresh out of the hospital, will handle the pre-game coin toss at the super bowl this sunday. a spokesman for the bushes says the two were honored by nfl commissioner roger goodell's invite. finally, americans are eating so much bacon that reserves have hit a 50-year low according to the non-profit ohio pork council, demand for the frozen pork belly is outpacing supply. as a result the price has increased 20% in january alone. that is the news update. back to you guys. >> very troubling news. very troubling. >> it is if you are a bacon lover. >> 26% of it has gone overseas. the demand is from overseas. >> have to put a stop to that. >> thank you, sue. >> you are welcome. >> they do love our bacon. executives at companies

ranging from starbucks to apple have spoken out against president trump's immigration executive orders. that's caused some supporters to call for boycotts of those brands. >> some companies are taking their discontent to the super bowl ad air waves. we'll look at some ads leaning into political territory and whether it could hurt bottom lines and business later. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle and it keeps my investments fully mobile... even when i'm on the move. sign up at etrade.com and get up to six hundred dollars. companies across the state are york sgrowing the economy,otion. with the help of the lowest taxes in decades,

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so facebook hit record highs in -- the stock did after reporting earnings. >> let's bring in james chuckmuck and michael graham. first word on the earnings. 51% revenue growth. you've got a hold. do you upgrade? >> i can't say that now. we still have to do the call at 5:00. >> you want to hear what they have to say. >> yes. >> clearly they look like blowout numbers. >> the numbers were 2% or 3% better an expected. you have to look at the trajectory as it relates to the impression growth with the app load coming down next year as well as engagement concerns and the pricing growth. are they getting the increases as they shift to mobile as well as video. we'll see how it plays out and

tweak our model as we see fit. >> still some questions. michael, what's your reaction? >> i think the numbers were quite strong. i think the attractive thing about facebook, it has a multi-level growth story. monetization of each user is improving. james makes a good point that ad load will be coming down in 2017. our view is that the rest of the revenue drivers can keep the revenue growth fairly high as we head into next year. >> what -- michael, how much stock do you put in the possible standalone video channel, the virtual reality that clearly mark zuckerberg is high on. are those growth strategies that you can put faith in now, or do you have to be very patient to wait to see them become monetized? >> i think most of those are about engagement. trying to bring users onto the platform for longer periods of time, whether for watching videos or interacting with other

users or the platform via virtual reality. facebook is all about gathering more time from its users. i think those things may not be directly monetizable but they will show up in higher engagement and more time per user and that can be ultimately monetized. >> it strikes me we are getting a strong picture of big technology. fang. facebook, netflix. all strong. we'll see about amazon tomorrow. so far, is that the read? >> look, i think you are seeing all the companies continuing to benefit from the secular trends. at the same time, expectations have also recalibrated i think over the last few quarters where we're starting to see much more reasonable expectations. as well as the valuations, offering a little bit more compelling entry points going into the beginning of the year. as it relates to facebook, i think the thing to keep in mind is, the longer term, this is still a two-horse race between

them and google. from that standpoint, still very positive. when you are looking at the relative value versus like an alphabet, this thing, facebook trades at about double the revenue multiple and 50% higher ebitda mobile. versus alphabet which is growing at 20% like clockwork. that's the risk/reward that we think investors need to keep in mind. >> you're questioning the growth rate down the road. thank you both. tech is the second-best performing sector in the s&p for the year. sounds like a coming attraction for a hollywood film. in hong kong. the central figure, a missing chinese billionaire. the story line, conflicting reports of his travels and possible government agents. all leading up to a giant mystery. we'll have that for you next. first, controversy and super bowl ads, not exactly strangers over the years. budweiser appears to be wading

into political waters with an ad for sunday's game that takes a swipe at president trump's new immigration policy. up next, we'll talk to a sports marketing exec about the ad's risks. whether it's bringing cutting-edge wifi to 35,000 fans...

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>> amazing plot. chinese born billionaire taken by police from his apartment at the four seasons in hong kong last week. his whereabouts are unknown right now. xiao jianhua is worth an estimated $6 billion. he is the head of the tomorrow group which has holdings in chinese banks, insurance, coal, cement, real estate. 46 years old. he is close to many of the top families china's communist party. is actually a canadian citizen though he was born in china. the fact he was taken in hong kong raises the fears that china's one country, two systems approach may be eroding. this follows the famous abduction of a famous chinese book seller in 2015 and a pattern of vanishing billionaires in china that's cracking down on corruption. especially those out of favor with the current regime. 30 ceos and business owners missing. the owner of a giant clothing company, aircraft leasing

company. some return after being questioned, but they never talk about what happened during their disappearance. in a statement to a government-owned newspapers, xiao jianhua said, quote, i am a patriotic overseas chinese. i have always loved the country and the party. adding to the mystery, there was a statement from his country on chinese media where they said he is being treated overseas for a medical condition, but that was then quickly taken down when reuters questioned them about it. so we don't know where he is or what's happening. >> more than 30 have disappeared in the last year? >> more than three dozen in 2016 alone. and i have a joke. when people -- it's not a joke because it's tragedy. but when people fall off the billionaire's list in china it often means they literally disappear. there is a lot of turnover on that list because people just vanish. >> the market is closed there for a lunar holiday. clearly implications about the fact it was in hong kong.

>> explains why so many wealthy chinese are trying to get their money and families overseas as quickly as possible. >> thank you, robert. fascinating. bring us more when you know more details. >> we will. here we go. forget the clydesdales or the dogs or the what's up guys. budweiser appears to be taking a new tack with an ad celebrating the immigrant experience at a time when the trump administration's new policies split the country. when we come back, the risk for the brewer and the nfl dipping their toes into politics. >> i hope people have seen the ad and know what you are referring to there. >> what are you talking about? >> be sure to tune into "fast money." the man who predicted all-time highs for facebook -- facebook is at all-time highs. he'll tell us what he sees next. carter worth on "fast money." at the top of the hour.

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liberty stands with you™. liberty mutual insurance. jianhua. the super bowl is only days away and you can speck to see an ad surrounding this tense time. this ad centers around immigration. take look. >> you don't look like you're from around here. >> i want to prove. >> welcome to america. >> you're not wanted here! >> go back home! >> this is not a movie. it is a commercial and it depicts the company's co-founder and his journey from germany to st. louis, missouri, back in the 1800s. this at a time when we find new immigration policies have split

the country. critics will likely wonder if the super bowl is the right place for such a topical ad. the founder and ceo from united entertainment group. first of all, this is an incredibly prescient timing of this. somebody anticipated this climate right now. what do you think of the strategy to employ an ad like this to make such a statement during the super bowl. >> i think what they're looking to do is tug at the heart strings of america ask doing it at a time when a lot of attention is focused on this. i believe what the company is doing, what the ad agency is doing is trying on hit americans at a time when they're thinking most about this subject matter. >> how carefully do you have to weigh the risks here? already we've seen boycotts, for

instance. this is a divided country. we saw it in the election. when you take one side of the issue, you don't even realize that you're taking it. isn't that a big risk for your consumer company? >> it is a risk. i think what the company and the advertising zri probably prior to creating the ad and committing to this spot was to probably weigh the options and look at the math and know that if they're creating a spot like this, that it could be polarizing to some americans and very acceptable to some. and it looks like the ad agency and the brand themselves made the decision to take that risk. >> we have a statement. let's see it. what did they say? do we have it built? there it is. it says we believe beer should be bipartisan and did not set out to create a piece of political commentary. however we recognize that you cannot reference the american

dream today without being part of the conversation. if you were their ad agency, would you allow them to do this? would you would have this be an acceptable strategy for you? >> you know, it is a good question. i think first i would have to find out what their strategy is. what their desired outcome is. if it were to create news and again tug at the heart strings of america and be inserted into the zeitgeist of social conversation and influence conversation and pop culture, then it is probably the right decision. if it is to sell product, then i would have to question the matrix and the numbers that trigger results. so it really depends on what their strategy is and their desired objective is going into this endeavour. >> i wonder if there are certain political issues, issues in the zeitgeist that are okay and some that aren't? and where immigration fits into

that. >> it is a good question. i think that number one, it came out that politics in general have become part of the social conversation more than ever before. i think the, both the brand world and the marketing world always desire to be part of that conversation and be topical and relevant. as far as the content itself, it really depends on the message the brand is looking the drive to their consumers. if this messaging of immigration is important to the budweiser brand, then i can understand why they made decision. >> all right. good to see you. thanks. >> people on twitter point out, we're already talking about it. >> it worked in that regard. >> facebook's earnings out. we'll look to the big fang stock tomorrow at this time which is amazon.

let's check back on facebook. it is up 2.2% after the earnings have pretty much beat all their key met rich. >> there will be questions on the call about what that looks

like, how much they'll deuce the ad growth. and 1.86 billion monthly average users. up 17% from last year. >> it will be interesting to hear what they have to say. they lost a lawsuit involving their acquisition of occulus of a few years ago. that came out as they were doing earnings. ? and how they'll milk revenue from their other platforms like instagram and video ad. speaking of video, i wanted to mention amazon earning this time tomorrow. there are high hopes for amazon on holiday spending. >> virtually half of the ecommerce during the holiday season was amazon. >> will it log 25% revenue growth? last quarter, amazon disappointed big time on the bottom line. the profit came in a lot lower than the analysts.

that's always the tricky one when it comes to amazon. we'll be looking for the cloud business which has been growing like gang busters as well. >> that's all for tomorrow. that's "closing bell." "fast money" begins right now. live from times square. tonight on "fast," investors are pouring into one of the richest areas of the market but they could be making a big mistake. he'll tell us what has him so nervous. plus one group of stocks had a big decline but investors are buying shares any way. and later the one surging dow stock that pete nagerian says you can still