>> close of session high. thank you for watching "power lunch." >> "closing bell" starts right now. hi, everybody. welcome to the "closing bell" on this friday. i'm kelly evans at the new york stock exchange. >> the very famous new york stock exchange. >> with the famous will fred frost. >> i'm in for bill griffeth. stocks set to close at all time highs yet again today. we have someone who says there is a lot more room to room coming up. >> breaking a couple hours ago. federal reserve governor dan tarullo is resigning. >> as president trump meets with japan's prime minister shinzo

abe, we have the head of the a.f.l.c.i.o. richard trumka. >> we start today with the president's meeting with the japanese prime minister. eamon javers is at the white house. eamon, first to you. >> reporter: hi, kelly. you might be able to hear it behind me, marine one, the president's helicopter is gearing up for a departure on the south lawn of the white house. the two leaders are headed from washington to mar-a-lago where they plan to play a little golf and do a little negotiating. take a look at the video of the arrival of the prime minister of japan here at the white house. he was greeted at the west portico by president trump. this is what you call, if anything, a presidential bro hug. the president giving an enthusiastic welcome here. the president said in the press conference that this was all about his warm feelings for the japanese people and for the prime minister of japan who he said he's had a chance to develop a close personal

relationship with going back to a visit at trump tower earlier this year. one of the things that came up that was interesting during that press conference though, kelly, was a comment that the president made about global currencies. he said that he's been complaining about global currency devaluation for a long time and here's exactly what he said. >> as far as the currency devaluations, i've been complaining about that for a long time. i believe that we will all eventually very much sooner than a lot of people think, we will all be on a level playing field. we will be on that field and we will all be working very hard to do great for our country, but it has to be fair and we will make it fair. >> not exactly clear what the president meant in terms of a global currency level playing field. i can tell you, kelly, that we also got the joint statement here between the japanese and the united states side.

one of the things that they say here is now that the united states is withdrawing from tpp, the trans-pacific partnership, they're going to look to a bilateral framework, relations economically between the united states and japan and that's one of the things that a senior official told us yesterday about this. the president very much views nation to nation negotiation as the best way to go, not these large group trade agreements. you can see the beginning of that starting to happen here at the white house today, kelly. >> all right, eamon. let's ask sara about this level playing field. >> reporter: we don't know what he means by that. he didn't expand on that as eamon mentioned. we do know that trump has targeted currencies and just last week said japan over the years had played the devaluation game leading some to worry about this meeting and whether that topic would come up. it's something japan maintains it does not do, manipulate its currency. it has not intervened in the

currency market since 2011. it can point to a weaker yen and say our central bank is looser than the fed. it shows the dollar moving down over the last, say, 40 years or so since 80. at one point they were looking at a dollar yen that was 200 to 280, almost 300 and it's gone all the way down to 113. that's a weaker dollar and a stronger yen. that's made the u.s. a little more competitive. so they can just point to a longer chart term there and show that they're not, in fact, manipulating their currency even if trump stays on this theme. >> sara, this is the second meeting that president trump has had with an international leader. theresa may came first. based on the other measures and statistics that you've been bringing cnbc viewers, that tallies in investment and jobs. >> investment is key. that's going to be key for prime minister abe to show how big of

an investor japan is in the united states. it's not just a trading partner. it is one of the largest. the fourth largest. to your point, it's the second biggest employer of u.s. workers here in the states. 839,000 jobs are employed by japanese firms and even better as a talking point for president trump. what prime minister abe can point to, wages. they pay the highest wages of any country that employs workers in this country. average wage above $81,000. so that's something that plays right to president trump's base. look at that. higher than some of the british firms that employ u.s. workers. they employ the highest number of manufacturing jobs thanks in part to the auto sector and the electronics sector. that's a big part of the story. it shows how close of an economic relationship they have. it shows a bargaining chip for japan in these economic negotiations going forward, guys. >> eamon can imagine them

continuing perhaps casually. the japanese prime minister and president trump heading to florida now, right? >> reporter: absolutely. they're headed to mar-a-lago. he's being comped at mar-a-lago. he's going to stay there on the president's dime personally so that removes one objection there that the japanese might have had to that trip, but clearly this is a president who wants to do this on a personal level. interpersonal negotiations. from prime minister abe's perspective, he wants to say there is a win-win here. at the chamber of commerce he went out of his way to point out that nobody of japan complained when japanese automakers were building here. they didn't complain they lost jobs to the americans because he said overall there was more business for everybody. you can expect that's the point he's going to be making behind the scenes. >> eamon javers and sara eisen, thank you.

we have chris zacharelli, jonathan corpino and rick santelli from the cme in chicago. jonathan, just beginning with you. what accounts for this rally today? >> you know, not one major headline that's out there. and the other side to it, there have been no negative headlines that are out on the market at this point. in the middle of the earnings did pretty good for the results that we've seen this week. there's nothing that's derailed this rally. i don't see a large conviction into this. i don't think we feel that a lot of money is flowing into this rally here. volume hasn't been supporting it. investors are still waiting to see how things are going to pan out. we have ms. yellen speaking twice next week. we have a longer economical lender. there's more that investors are going to sit back and wait to see what happens. clearly any headline that comes out of washington, we're

definitely focusing on that, too. >> chris, we've seen a good focus for materials and industrial sectors. what do you think that's based on? there's hope there's infrastructure coming out of the government. it set an international lead. >> what's happening is the political need and the idea is that you're going to start to see more inflation and program talks. you move the economy higher. materials are starting to react for all of those reasons. >> meanwhile, rick, politico said they weren't sure what the president was talking about with his phenomenal announcement. you might have thought that was going to sink the market. how much of the rally the last couple of days is predicated on his tax comments yesterday and how much is maybe other forces? >> you know, i still say that

the rally is more that the pieces in the puzzle box are the right pieces, but they're not on the table. they're not put together and the final image with all the pieces in it isn't done, but it's a better box of puzzle pieces than we've had in a while if you're a pro business type entity, and i think that's really it. and i do agree with the other guests that negative headlines are almost a bigger issue. the kind of baseline here is half full with regard to better business opportunities ahead. of course, we have what we call the tape land mine always potentially hitting, and that is something to deal with. i wish one other issue would come up with our talks with the president and the japanese leader, issues like quantitative easing that includes corporate securities, large buying in stock. these are all things that should be discussed and with regard to currency manipulation, you know, after a crisis this is going to be a hard conversation to have

because arguably our rate at 62.5 basis points, that contributes to a certain level of foreign exchange that might not be appropriate because in my opinion, in many people's opinions the rates are too low. these are all very complicated discussions and i think to look for any quick fixes, especially on the -- trying to come up with the right look for international foreign exchange levels, not an easy task. >> jonathan, what's your top sector pick at this level? >> i think we have to continue to look at the financial sector here. there are so many different initiatives that the president has put out and whether it's regulation or whether it's trade, that's going to help the banking sector. i think it's going to help as far as housing prices are concerned, small business loans are concerned and we've seen the financials rise 2% over the last month, 14% over the last three months. clearly it has moved in that right direction. i don't think we've seen the top of that area just yet.

>> thanks, everybody. have a great weekend. >> thank you very much. >> thanks for joining us. 50 minutes to go in this session and the dow is up 97 points after yesterday's triple digit gain. s&p is up 8.5 points and transports rallying another 50 points and small caps up 9 and nasdaq up 20. we'll have much ahead on the record setting market. etf rising after news that dan surillo submitted his resignation. up next richard trumka speaks with us. we'll get his take on rolling back the dodd-frank regulations which trumka says could hurt main street americans. you're watching cnbc, first in business worldwide.

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? the value of capital is to create, not just wealth, but things that matter.

morgan stanley

did you know slow internet can actually hold your business back? say goodbye to slow downloads, slow backups, slow everything. comcast business offers blazing fast and reliable internet that's over 6 times faster than slow internet from the phone company. say hello to internet speeds up to 250 mbps. and add phone and tv for only $34.90 more a month. call today. comcast business. built for business. welcome back. you're looking at a live shot at joint base andrews. he's en route to his mar-a-lago resort in palm beach, florida, where he's expected to host a dinner with japanese prime minister shinzo abe. as eamon just told us he'll

be -- >> yes, he will. >> i can't believe that was news. >> well, there they are stepping out. >> there we go. they're exiting the aircraft right now. then they make their way down to florida. we'll discuss trump and his relationship with unions is the president of the afl/cio richard trumka. hello, sir. >> hi, kelly. how are you? >> wonderful. so a lot of different topics to discuss, of course, when it comes to the president and his relationship with unions, but perhaps the most interesting was the way that one of the first meetings he held was with union leaders. you were not there though, it was some of the other unions, correct? does that tell you that he's at least trying to stand for the working class and that he's in a way trying to fashion his policies as pro worker policies? >> well, i was actually at a meeting before that. look, the vast majority of american workers regardless of

who they voted for voted to rewrite the rules of the economy. they wanted those rules rewritten to benefit workers, not wall street, not corporate america and not the wealthy but workers. and so these meetings were a chance for us to get to talk to him and tell him what kind of rules we'd like to see, how we'd like to see the economy work for working people. >> what are some examples that came up in that meeting? the kinds of policies that you are pushing for. >> i can tell you what didn't come up and things we would hope didn't happen. that's all of the repeals of the executive orders. look, the president said two things in his campaign that really resonated with workers. he said, one, he wasn't going to let wall street get away with murder and, two, the american economy works best when it works for american workers. and then he repeals a lot of the executive orders like the

fiduciary rule that will result in 25% retirement income over 35 years of investment. so it's not helping workers, it's really helping wall street and it flies in the face of wall street saying not only that they're going to get away with murder but they're going to profit handsomely from it. so we talked about those types of things and things that could benefit. we talked about trade. we talked about infrastructure. we talked about other things that could be job creators. >> so, richard, given that he has moved some of those financial deregulation executive orders that you just mentioned, do you feel, therefore, he lied on the campaign trail to get the workers and voters that you represent? >> that's a pretty strong word. he promised that he wouldn't let wall street get away with murder and he's changing the rules doing away with the rule of dodd-frank and doing away with the fiduciary rule, doing away

with the consumer protection bureau are going to let wall street get away with murder and profit handsomely. they didn't buy into that and so those things really will increase corporate america and wall street's profit and reduce wages and what they had in mind when they voted for change in a rewrite of the american rules was exactly the opposite, that worker's wages and income and retirement assets will increase and they wouldn't come at the expense of us, wall street wouldn't get a free, huge gift which is what these changes are. a huge gift to wall street that will be paid for by workers. so, no, that wasn't what we had in mind. it wasn't what we expected, and it wasn't what we wanted and, three, the last thing is, it's terrible for the economy. >> over all, are you encouraged by this president? particularly as a republican who i would suppose would say typically doesn't engage as much

as a democratic president might. is there more dialogue than you had expected from a republican president? >> you know, look. here's how we're going to address everything. when he does something we're going to look at it and ask two questions. is it consistent with the values of the american worker and the american people and, two, is it good for workers? if it passes that test, then we're going to work for it. if it doesn't, we're going to work against it. and most -- many of the things that he's done has failed that test. in addition to that, he said he was going to change the rules and drain the swamp and get wall street under control and instead his appointments have been more and more and more wall street which will benefit wall street and corporate america and hurt workers so we're concerned by the appointments. we're concerned by the first flurry of actions because

they're inconsistent with hess message which is, again, we wouldn't let wall street get away with murder and, two, the american economy works best when it works for the worker. >> on trade he seems to be more on point where he works for what you're talking about. the tpp nafta model has weakened our position. so undeniably the president seems to be on the same page and that seems to be part of the discussion he was having with union leaders. so, you know, in that case i wonder if there are union members, and i've read them quoted in the press, since the election who felt like they almost had to break ranks with what their union was politically telling them to do to support this president because they believed on this front that he will act quickly to cancel these treaties and renegotiate them if they're not a good deal as far as he's concerned. >> well, when it comes to tpp he went down the path that the american workers, we started. the past journey of the american people, how they voted, opposed

the trade regime that we had because it really wasn't working for the workers and tpp would have been a giant job killer in this country and he put the death sword into something that we had fought against. the next step is to renegotiate nafta and a bunch of other deals. we sent him a significant amount of material, a blueprint how he can do that to benefit the workers. the devil is in the details. if the rules get rewritten to make it worse for workers, we'll say that. if he rewrites it to make it better for workers, we'll say that. we're going to try to call balls and strikes. if it's good for the workers and good for the country, we'll say it. if it's bad for workers and the country, we'll be against it. >> i guess that's the point that we were both trying to make, which is that, you know, there are parts of this president that

are more populus, that seem to align with your objectives and in some ways your members are expressing their support of him. why does it need to be one unified political message against him as you laid out? >> no, i didn't say there was one unified message against him. i said, we're going to look at what he does policy by policy and call them like we see them. if it's bad for the country we'll be against it. we've got to stick together. if he proposes something good for work jeers, what he's done

far, the executive orders have been negative for workers. >> do you feel as though you have to get out there and make more of a message. >> union workers. it's a state economy. you know our contractor and consumer spending.

does he have higher wages to do that. a voice on the job helps. it strengthens that. >> richard, final question. what's your view on the treasury. >> steve mnuchin. he's the foreclosure king. >> there's remembering.

he misled the senate in the confirmation hearing. the american economy will suffer dramatically. i think workers will get hurt. i think he has a long way to go to convince any of us. >> thank you for joining us. >> there's a story on a union. >> we're going to play this in a

little bit. his name is jose moran. >> the workers are fed up. spend more time at. >> elon musk put out a statement saying this guy was hired by the uew. he doesn't work for us.

he works for the uaw. we hope and that apologizes for spreading fake news. mr. moran and other tesla have approached the uaw. we should point out that when it comes to unionizing auto plants in the u.s., if they're not already unionized, the uaw's track record is not a strong one. the big three while it's heavily unionized, yes, there is a union mization representation at some other automaker plants, generally speaking they have not been successful so it will be interesting to see what happens at the tesla plant out in california. >> possibly a big challenge. thank you, phil. phil lebeau with the latest there. we have 33 minutes to go into the close and the dow is up nearly 100 points today. all of these would be fresh highs across the major averages.

if we close any higher the russell is a point shy. >> materials and industrial sectors leading the charge. still to come, is it ever a good idea to buy stocks as they hit new highs? we'll put apple and a couple of other stocks in that spot. back in a couple of minutes. chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential

welcome back. half past the hour. time for a cnbc news update with sue herera. >> hi, guys. here's what's happening at this hour, everyone.

defense secretary jim mattis meeting with his german counterpart ahead of a nato gathering next week and then the munich security conference the week after. mattis continuing to reassure allies that the u.s. is committed to nato. former vice president joe biden and his wife jill have hired hollywood agents announcing that the creative artist agency will represent them but they did not specify what c.a.a. will work with them. heavy snow conditions caused this accident. the driver was taken to a hospital with minor injuries unbelievably, three people inside, no one was hurt. but the house obviously is temporarily uninhabitable. millennials are showing less interest in buying lottery tickets. ticket sales rose 9% in 2016, but the number of adults in their late teens to early 30s declined. that has lottery officials worried about the odds for future growth. that's the news update this hour.

back to you guys. >> sue, i have to say just that story has made this millennial want to go buy one. >> that's what i was going to say. >> the opposite. no. no. no. >> not good for the millennials. >> i'm going to wip win it. >> you've got to be in it to win it. >> they're watching john oliver and they know it's a scam. >> no, forget it. >> everyone else, go buy a ticket. >> i'm going to do it. >> sue, thank you very much for that. minutes before the bell. let's have a look at the markets. the dow is higher by around about half a percent. the s&p and the nasdaq just behind that. the top of the dow lights, caterpill caterpillar, knight, j&j. after the break a leading trader tells us what he's watching into the close on this final session of the week. you may not believe who else loaded up on stocks that same way that jpmorgan's jamie dimon did last year. other winners since the

so-called dimon bottom coming up.

welcome back. welcome back to the "closing bell." i'm joined by steve grasso from stewart frankel. started the week with the yield slipping, dollar slipping ended

the week with the trump train back on track. >> yesterday he gave the market a gift. we're always wondering about what's in charge of the market moves on a daily basis. yesterday we saw president trump talk about tax plan coming on two to three weeks. he said plan though. he didn't say it would be enacted. i think that was the big confusion in the marketplace. the market ran up on that. he was a little softer with china. that was one of the things that the market was a little apprehensive about. definitely back on with the trump trade, but are people getting ahead of themselves thinking we're going to see real change enacted in the next two or three weeks and that's not the case. >> so things like banks that have moved up on hopes of deregulation, if they over run it do you want to take profits there? >> banks, you're still okay in banks because it's more about rotation versus valuation where people were so under weight the financial sector as a whole. you're still okay as financials. we're at the same point we were a couple of weeks ago when the market might seem temporarily a

little toppy until we actually see some of these things come to fruition. >> steve, great stuff. thank you. have a great weekend. >> have a great weekend. thank you, guys. announcing fed governor dan tarullo will be resigning effective early april. three vacant board seats. one of the people considered to fill his position is john allison who joins "closing bell" earlier this week. here's what he said when we asked if he wanted the job. >> its spent three years in washington years in d.c. running kato, a libertarian think tank. it was an interesting environment. i'm not sure i want to go back into that environment. i know a lot of things i would like to see the fed do but how practically you could implement them is hard to know so i have mixed emotions. >> joining us now to discuss who else might fill these open seats is our own elom mui.

>> there's only going to be four members left on the board of governors. that means donald trump will be able to name three people to the board of governor. that means they barely have a quorum with four people in order to vote on regulatory issues, et cetera, so this is going to be a way for donald trump to really make a big impact, make big changes at the federal reserve in a relatively short period of time. the other thing to remember is that dan turullo is someone who was important not only for monetary policy, he had a big hand in setting regulatory policy. so he was involved in antitrust, capital requirement, et cetera, so that is something to watch. you know, dan turullo was not somebody who was able to get conformed to fill that vice president of supervision position that's been open at the fed. whoever donald trump picks in order to join the fed, that's a role that they might be able to fill. >> ylan, that position, vice president of supervision when i talk to the banks, it's an absolutely key one they say in

terms of which way regulation goes from here without any laws needing to be passed in congress. does turullo's absence more broadly and his absence from the fed, does that mean that appointment is even more important? >> reporter: i think it does. you've heard it in john allison's comments. there are many things he thinks the fed needs to do. it depends -- it's unclear whether or not they'll actually be able to do them. it's also important to know that there are other people who are in the mix and whose names have been floated to join the fed. among them are david nason and judy shelton who is someone who has worked at the atlas network. she is someone who has advocated for the role of gold in monetary standard. i know that i saw her at steven mnuchin's confirmation hearing, and when i talked to her she told me she is definitely interested in joining the fed. she's another person to keep an eye on. >> ylan, 30 seconds left, what's the latest you're hearing of the

fiduciary role and whether that can be delayed in terms of its implementation? >> reporter: well, actually, the administration finally submitted a proposal to the omb in order to actually delay that ruling. it said they were going to go for a delay of 180 days. they didn't do that previously but now they submitted rule making, a draft proposal in order to do so. we'll see if the omb actually approves their proposal and if that goes through perhaps some time next week. you can see the administration try to delay this rule but we'll have to see whether or not a court would uphold it again. >> ylan, thanks very much. >> want to save it for next time? >> well, i thought that was my -- >> oh, i see. you can read this then. >> well, there we go. minutes left before the bell. we're looking at half a percent of gains for the dow. 110 points to be precise. the nasdaq is up about 0.36%. a major rally for sears

today. what's behind that big stock move is next. and tomorrow is the one year anniversary of the so-called dimon bottom, but the jpmorgan chief isn't the only big winner since then. those details up next. we're back in a couple of minutes. 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? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.

welcome back. better than half a percent gain. over 2300 by a little ways now. the nasdaq is up 20 to 5739. russell is about a tenth or two shy of the record close. the three major averages have fresh records. struggling retailer sears surging more than 20% after the company announced a big cost saving restructuring program. michael santoli has the details. >> big move. short covering involved. sears has been on death watch perhaps having to at some point restructure in a more radical way. the stock is up tremendously. but only back to levels it traded at two weeks ago. still down 20% year to date. obviously this does not solve the financial problems or retail issues but here is what sears has unveiled.

a billion in annualized cost savings. it will provide operating back office functions, doing smarter things with inventory. they have managed to get a little more wiggle room on the debt size. increase their access to credit. this is something that the hedge fund manager who has been in this for a decade has been excellent at. turning inventory, real estate into cash. it doesn't change the story in terms of the long-term picture, this is still a retailer with double digit declines in comp sales, but the very fact that they announced this is why the stock is up today. it means they're not going to choose to look for a way to file for bankruptcy protection or anything like that. it means we're going to keep the game alive, keep the balls in the air at least probably through the back half of this year if not beyond that. >> what would it take for sears to start showing it has a future beyond saying we have a viable

independent future? >> sure. as a strategy they've gone all in. it's a loyalty program. they're calling it more than a rewards program. if they somehow got some traction, if they somehow got to integrate their online function and make their stores good for pickup and returns and things like that, more comprehensive way, perhaps that would do it. it's not as if the overall numbers are showing a tremendous amount of traction. >> important to add from sears, the week to date sector. retailers have done well. >> yes. >> all consumer stocks have. what's driving that to date? >> i think the market has basically been decreasing the potential odds of the border adjustment tax. if you see other trades going on, for example, in the oil market, it would suggest that the market thinks if we get tax reform it isn't necessarily going to include that. this obviously has been a very volatile group. very over sold. i do think when you have a positive flow in the market as we've had this week, the stuff that's lagged tends to lag the

most. >> still down 26% year to date. thank you. with minutes to go before the bell, let's have a look. the dow's up half a percent. as you can see the s&p and nasdaq trailing slightly. football season may be over but david darst is taking a play out of the gridiron playbook for his market acronym of the week when we come back.

welcome back. we have some breaking news on aig. sue herera back at headquarters with that. sue? >> kelly, thank you very much. new york's attorney general eric schneiderman has a settlement of what was called the martin act case. this was against mauer reason greenberg and howard smith. basically what's happened is that this was a case that was brought in 2005 by eliot spitzer, then the attorney general, following the admission by aig that the company had engaged in certain improper reinsurance transactions while mr. greenberg was the company's ceo. as a result of this mr. greenberg has said that he agrees to settle the case brought by the office of the new york attorney general and as a result of that mr. greenberg and mr. smith have agreed to return

the multi-million dollar bonuses that they received while the frauds were on aig's books. so it closes this particular chapter, kelly, of the aig saga. mr. greenberg saying he does agree to settle the case and he will disgeorge all bonuses made during that period of time. >> sue, does that amount to an admission of wrongdoing then? >> you know, all he said was -- and that's why i read it directly. he just said i agree to settle the case. he does not say anything about wrongdoing or not admitting wrongdoing, he just says, in quotes, i agree to settle the case brought against me. >> h'm. >> aig stock is up not related to that settlement and the market ending on a positive note. the dow is up back on 100 points. joining us is david darst. to sum things up, what is the

acronym of the wreeek. >> well, i want to say happy valentine's day to everybody. >> and to you. >> if you're a mother, anybody who's listening or watching, your mother says, don't get me anything, she does not mean it. number two -- >> that's a good reminder. >> the market's been slowly, slowly climbing up over a pass. we're either going to enter sunlit uplands or a desert below. so we are kind of reaching a turning point. >> it's more a tone of resilience? >> correct. long term is 39%. we don't have an excessive euphor euphoria. p is the first letter of the acronym there and that is the -- >> president sal policies.

>> i wanted you to say it. >> perfect plektsing investors. >> they are moving through the domestic and international ramifications. the a is al pipe valuations, alpine meaning very high. price earnings ratio is -- and the only been at this level twice before, 1999 and 1929. so it's about 50% above its long term average. it's 25, 26. the price to book, will fred, is three times. normally it's two times. price to earnings for the next 12 months, 17 times for the s&p 500, 19 times for the s&p 400 midcap and 20 times for the s&p midcap. be careful where you have even more alpine valuations. the s is stability. in november, october it will be

the 19th congressional party congress of the communist party of china. xi jinping who's 64 now, he wants to go another five years. so you can basically look for china's economic, financial, currency and political stability and the last s is soaring, stabilizing, moving up swelling earnings and the earnings up 10.5% for the year. that's why we will be constructive and use any pull back to add money to the market. >> david, great stuff. stability also with japan today. that was a very good toned meeting. >> beautiful. very, very touching moment to see him on cnbc this morning laying a wreath at the tomb of the unknown soldier. >> happy valentine's day as well. >> thank you. >> don't get me anything. >> i won't. >> great reminder. up next coming back with the closing countdown. after the bell, president trump is demoting the chair of

the counsel krin of advisors. we'll tell you how that will affect the decisions. you're watching cnbc, first in business worldwide. your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

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did i cease. markets bouncing back strongly. the russell 2000 just shy of a record close as we speak. want to show you the ten year because yields have been important. yields slipped for the first half of the week down to 2.35. equities were lackluster and light. yields have risen above 2.4. so have stocks. oil, similar charts for the course of the week. slipped to the start. energy was the worst performing sector but all prices advance as the week has ended. that has hemmed markets more broadly. joining me is morgan discussing other sectors. industrials you want to focus on. >> industrials, one of the top performers. a top performer so far this week. what's driving that higher is defense and etf up 2%. third straight week of gains. what's powering that? logano, lockheed. transdyne, arconic which is a name that has absolutely roared

higher on the heels of elliott management. >> we are seeing some profit taking in terms of the airlines today. they are the lagers within the transports but, yeah, it's been in general talking to folks on the floor here today. it's really higher scenes like the path of least resistance. >> markets able to take the path on the thought that donald trump might be able to deliver the policies, possibly talk that the border adjustment tax might not come through now. >> exactly. and it's interesting. we had threats or worries about, you know, trade and what that could look like, worries about immigration. market drifted slightly lower in recent weeks on that news, but as soon as we get those comments about an imminent tax announcement coming in coming weeks, then we'll have the details. we see these stocks move higher. >> it's possible no border adjustment tax allowing the retailers to go higher. the other sectors performing well, materials up 1% as well as

industrials. chinese trade data helping that. morgan, thank you very much for joining us. have a lovely weekend. ringing the bell here at the stock exchange, sanctuary for families. ringing the bell at the nasdaq. it's a musical tale. that closes us on record highs on this friday. kelly will pick up for the second hour. thank you. welcome. welcome to the "closing bell", everybody. i'm kelly evans. looks like we have all four averages hitting record highs at the close. certainly the dow, s&p and nasdaq. look at this rally, 100 points higher on the nose for the dow to close at 20,272. a half a percent gain. broad s&p 500 up a little better than 1/3 of 1%. 8.5 points to close at 2316. new high water mark there. the nasdaq which has already been setting new highs and last week up 1/3 of a percent, 5734.

the russell, take a look at this index. it did finally and barely eke out enough of an increase today with that 3/4 of 1% gain to close at a record high of 1388.69. that's just a hair above its prior record close of 1388.07. the small caps had been under performing for weeks but today's dynamic does appear to change things. a lot of individual names, too. apple, netflix and pliens are among them at or near record levels. apple we are watching to see if it could close above $133. it's just barely below that level with a quarter percent drop. netflix and price line moving higher. is there still room to run or are they getting too expensive? we'll debate that. joining me is cnbc markets commentator michael santoli. cnbc contributor, michael new

ma mark. >> first, thoughts on the record and the rally. >> it's impressive, you can tackle on further into record territory. i will say it's an extremely measured move that's not necessarily to denigrate it. this is not some kind of thrust of enthusiasm. it does seem that we're testing the up side. it's the fourth time the russell is up at this level. >> is there a quadruple top? >> there's no such thing as a quinn quintuple top. people have to be inching to the bullish side. this is impressive that it's gotten there. >> evan, some market watchers have gotten there. light volume in the qqqs had him

convinced that february is going to be a short-term top. not that we're trying to call this in terms of each move, how would you read things generally. it depends how you're looking at the market and the time frame. i think valuations, you're getting in the small and midcaps, nosebleed, inching on it. you're basically got to believe a lot of good stuff is going to come on to justify the valuations. for other people who couldn't care about it, looking at it as a trump trade, time will tell whether or not it's the right -- they want to get ahead before all the good news comes, before you get the eke yom mick growth and that's what's driving the market higher bit by bit. for me, you know, i would say -- >> you're loading up on your gold. >> no, i would say -- i would say there are few areas that are still on a relative basis nowhere near the all-time highs. >> what do you like? >> if you look at the oils, again, i'm not saying, you know, oils -- oils in 2007 when, you

know, the price of a barrel was going to 200, never got there, but when it was going to, you know, stocks were probably twice where they are right now. so there are specific sectors. the minors, they have had huge runs. php is up 85%. that stock was probably twice at its peak. i'm not saying there's a lot of value, all i'm saying is if you believe in the reflation trade, those are probably better places. >> michael yoshikami, we can wind the clock back and give people a sense where it started. it started with japanese producer prices increasing year on year. it started with the import/export data being not bad. it starts with copper jumping the balance particular. this is where people are putting together the global reflation story. do you think it's going to hold up? >> i think it's going to hold up and i think it's going to hold up because people are starting to give up. the negatives, the bears are

starting to give up. when you talk about -- mike talked about people starting to drip into the market, maybe not a huge push higher, i think you are starting to see bearish investors starting to roll over. the sentiment is really switching. the markets are more broadly based in terms of the rallies. i think the market does have the opportunity to go higher even if the fundamentals don't support it so much. >> i know this is unpopular but, mike, looking at the trading action in the last couple of days, even be though we attributed yesterday and the timing showed this was part of it, but these comments that the president made about tax, they were sort of vague. congress appeared to be walking it back today yet we still had this big rally. if its a owe more about global reflation, do you think that story can remain intact no matter what happens on tax. >> i think it can remain intact but not dependent on your point on what happens with u.s. tax. traders have sort of decided that everyone else mostly cares

about tax reform and so when we see clues of tax reform, other people are going to buy so i'm going to buy first. honestly, i believe that. i don't think the throw away comments in a photo op should be taken or were taken as a comprehensive signal. today saying gary cohen is leading the charge on this tax package from the white house i think also probably lent some encouragement. >> if that's not necessarily why we're higher, it means if something gets delivered, that could still get priced in. is it entirely priced in now? >> yeah. yeah. i think -- i don't think people know exactly what's going to happen. the one thing the market is discounting tremendously is potential instability. you know, the market right now is seeing everything glass half full. you know, there will be tax reform, only question of when it happens. there's not going to be a trade war, you know, trump went ahead and he said one china policy, we're sticking to that.

so the market right now is susceptible to, you know, frankly, you know, the president doing something -- >> bad news. >> kind of silly and that's -- >> or something happening in europe. >> like i don't want to say something bad is going to happen but, you know, bad things happen every year. >> of course. >> you just don't know when they're going to happen. >> on this trade point, president talking trade and other hot button issues with japanese prime minister shinzo abe. eamon javers has the story. >> reporter: the washington leg is over today. the president and prime minister got on air force one at joint base andrews after leaving the white house here just a little while ago. they're flying down to mar-a-lago in florida where the prime minister will be staying with the president through the weekend. they're going to continue negotiating all through the weekend. there you see the two leaders and their wives at the base of the stairs. they're going to continue the negotiating session. they're going to carve out time

for some golf and relacking. the president very much wanting to make this a one-on-one relationship building weekend. the president at the white house during the news conference talking a little bit about what he expects going forward in terms of business activity at the white house. he hinted that there might be some significant announcements to come from corporations. here's what he had to say. >> i've been telling companies, car companies and other companies, many companies, come back into the united states, and they've been coming back in. and big announcements are going to be made over the next short period of time. some of you already know what those announcements are. >> reporter: so not clearnessly what those announcements are. i can tell you, kelly, i just saw kellyanne conway the white house senior adviser. i asked her which ceos are coming and what announcements they are going to make. she wouldn't say just yet. i'm going to go ask her. >> i don't like anything better, kelly, than when they say we

have to listen now and you have a microphone in someone's face and we get something out of them. >> reporter: every now and then they actually blurt out the truth. you never know. >> exactly. >> reporter: you keep sticking around they're going to tell you something. >> thank you. we'll let you get to it, eamon. we'll see you soon. michael yoshukimi, thr fits in with what we were saying. there's a lot of ways to look at the glass half full and there are a lot of risks for how the policies are renegotiated. >> i think the risk is tax policy. i think the risk is as larry kudlow said last week on the network, if there is not a significant tax policy implemented, the market is already pricing that in. so as he mentioned, and i agree with him, there are going to be market and economic consequences if a policy is not implemented. the marked expects that to happen. companies are basing their building plans based on that happening. i think that's the risk we have

to look out for over the course of a couple of weeks. >> there are still a couple of names that you like including costco, j&j and disney, is that right? >> yeah, exactly. costco sells cheaper stuff than you normally can buy other places. they need to get their internet strategy. j&j diversified and disney, i think they're going to be able to adapt to a skinny bundle world in terms of programming packages. >> i would just say just for context in terms of where we are and what's driving the market, year to date, s&p up 3.45%. >> wow. >> it's not all about what's coming out of washington. by the way, we're just about at the anniversary of the lows last year. total return is 28%. so there's been a lot of progress and it's for a lot of different pieces. >> things like the airlines and southwest, very well-run

companies. >> all-time highs. >> stock is up. stock's up 4% in a week just because there's a meeting with president trump. i'm saying when you start seeing investor behavior and the airlines stocks were notorious, terrible investments. no one knows that more than berkshire. >> southwest has probably gone from being a $10 stock to a $55 stock in the last eight years. >> home depot, marriott, netflix, price line, costco, de deere, honey well. does that say bubble or froth to you? >> it says the valuations are rich so you have to believe a lot of good things are going to happen over the next year to justify the valuation. >> no, this is not an indiscriminate mark but what you're not seeing there is a lot of bank statements are still capped out.

it's a matter of figuring out tactically. we had a place where you want to say, yes, this is a good entry or do you want to say, let's see how it shakes out. >> michael yoshikami, thank you for joining us. >> thank you. stocks closing at record highs for a second straight day. up next, we'll look at three stocks near unchartered territory to figure out whether you should be buying or selling them right now. new data shows hedge funds love president trump. you're watching cnbc, first in business worldwide. what if technology gave us the power to turn this enemy into an ally? microsoft and its partners are using smart traps to capture mosquitoes and sequence their dna to fight disease. there are over 100 million pieces of dna in every sample. with the microsoft cloud, we can analyze the data faster than ever before. if we can detect new viruses before they spread, we may someday prevent outbreaks

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built for business. welcome back. the dow and nasdaq, s&p all closing at records today. many individual stocks are also inching closer and closer to all-time highs. here are a few wildly held names nearing never before seen levels. costco, priceline, ebay, apple, netflix, are close to oh, so high levels. bill smaed from smaed capital management. thanks, guys. apple, is it a buy, bill?

>> well, we think in terms of five to ten-year time frames, and i think it will do fine for a while, but it's such a large capitalization company it's very difficult to move the needle the next five to ten years. so i think it's probably a hold if you've got it. we don't own it. i wouldn't be a buyer here. >> what about you, michael? >> well, i look at apple and fundamentally you look at two strong drivers of return, 15 to 20% up side from here, tax repatriation is a significant part of the valuation that will drive growth in the next 12 to 18 months. proprietary, google's pixel phone is significantly more expensive than the iphone. innovative technology that apple delivers and that 15 to 20% up side versus tax repatriation is forthcoming. >> what about netflix, bill smead, is that a name you'd buy here?

>> in this particular case the company is likely to grow a lot, but over five to ten years almost all great growth companies go through what we call the grand divorce and that is in the first 10 to 20 years they trade at very high price earnings ratios as people think of the unlimited potential that they've got and then somewhere along the line as the company even does well you lose the very, very high pe ratios, you drop into the mortal 20 to 40 times earnings range. so you could see the company succeed in spades in the next ten years as a corporation and the stock not be a good performer as it goes through the grand divorce. >> so a sell for you, bill, as opposed to more of a hold here for netflix? >> i've got no interest in owning stocks that are at that kind of pe ratios. >> michael, what about you on netflix? >> i'd say when you look at netflix, significant cash burn that's accelerating, business model is a little flawed. look at some of their technology

platform and leap frogging. we don't own the stock, we won't own it in the near future. >> when netflix comes up, most people's typical knee jerk reaction is stay away from it. the pe numbers are high. bear companies have known that. we're talking about record highs again today. >> i would say for a long time they want to be operating by amazon rules. everyone is saying it's so expensive and they're plowing this capital into growth. that's not to say they're going to get the credit long term but if the membership keeps going up, at some number the model works but it's up from here. >> kelly, that's why i love my job and don't like other people's jobs. i only have to own 25 to 30 companies and i only need 60 or 70% of them to be really successful over five or ten years and i'm very cleary -- i'm very leary of companies that attract an amazing amount of attention because i don't have an ability to add value in that situation. >> so let me ask you about home

depot then. would that be one of your names to buy here, bill? >> there are fewer homes for sale divided by the population as any time in the last 50 years. in fact, i like to joke we're probably in the same situation when people crossed the mississippi river on the oregon trail. people were coming west and there were no homes. now in the entire country there's a huge demand for affordable housing, and when i saw affordable housing and it has to be in the same relation as rent. home depot is going to be very busy. now it's a harden try point because the stock is 20 times earnings ish and that's a harden try point. the next five to ten years look bright. >> michael, would you be a buyer of home depot? >> absolutely. when you look at the growth metrics, it will be driven by single and multi-family. you see the tightness in the

housing market but those who can't afford it, they're going to rent. think about when one renter comes in, they have to use paint, carpet, fixtures. you see a three dimensional up side growth plate. >> i'm in the middle of moving apartments now. what were you going to say? >> the debate that these gentlemen are having, mind you, this is why picking individual stocks is so hard because -- no, it is -- >> it is hard. >> you have a share like amazon which has been at silly valuations for years. it's continued that way for years. microsoft stayed at 25 bucks for about ten years. >> right. >> so you don't know how the growth story is going to play out when it comes to net fliks or -- >> when you respond, bill, tell me one you would be afraid to sell? >> we would sell the energy plays that people love so much at $55 a barrel. we think that oil is in a 15 to

20-year bear market. it won't be done for another ten years. they're just taking the lambs to slaughter it looks to us. >> are you one of the lambs, evan? >> yeah. by the way, you know what, i was happily a lamb a year ago and i think all of the oil plays are up 50%. so i was happily a lamp -- when kwlefr one was getting them. >> we have to go, gentlemen. thank you so much. >> what about 50% the prior year that you lost? >> yeah. >> he was. >> i didn't lose it. >> wasn't in it. wasn't in it. >> everybody always is perfect. >> thank you. awesome. >> thank you for joining us. >> have a good weekend, guys. >> you, too. it's been a year since jpmorgan ceo jamie dimon that called the bottom. he made millions betting on their companies. we have the full list next. president trump breaking with republicans over a key institution to finance imports.

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welcome back. jamie dimon famously called the bottom in jpmorgan stock a year ago. eric chemmy has more. >> hi, kelly. last year jamie dimon made a lot of news for himself buying half a million shares of jpmorgan shares. with the stock up 60% he's made

$16 million on that trade so far. dimon wasn't alone at buying shares at the bottom. we dug into insider transaction filings and found a few other heavy hitters, namely steve mnuchin and warren buffet. mnuchin loaded up on shares of cit group. it's worth $5 million more today. the biggest buyer in total dollars was buffet's berkshire hathaway. they brought $78 million of phillips 66. the key thing, buffet did not panic when markets dropped continuing to buy more. just that one february in trade has earned over $6 million. we found a couple more big-name buyers that actually earned a higher return than dimon. steve wynn's $15 million purchase of his own company is up 67%. not bad for one trade in one year. and then there's elon musk who may have had the best trade of all. he bought solar city last year, sold it for tesla stocks and

then tesla shares rose even more. that original purchase has gained $7 million or nearly 70%. back to you, kelly. >> what were you even thinking? >> i'm thinking, eric is putting up a warren buffet trade that ned him $8 million. i mean, that's -- >> evan, it's an example -- >> i'm just kidding with you, eric. all i'm saying is most stocks from that february low, we talked about some of them. they're up 50 to 100 pers percent. odds are you're up. >> the key is they were buying. not all of them were. they actually put their money on the line to raise their stake. that's often a pretty good safe. >> -- save. >> real quick, eric. >> that's the point, right.

when you look at the insiders you just saw the five guys as the people we would know. a few other people. you didn't see a lot of other people. the fact that buffet made a little bit of money. the point is, he was still buying. >> he was day after day during the storm just like he always does. >> thank you, eric. >> he heard me also. >> you're going to feel. president trump meeting with japan's prime minister at the white house. fair trade deals with japan and china were a hot topic. larry kudlow joins us to see if we'll seal trade deals. >> look out victoria's secret. looking to get in on the lingerie business. you might be surprised to find out which one it is. we'll have those details coming up. fees? what did you have in mind? i don't know. $6.95 per trade? uhhh- and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering?

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welcome back. more records on wall street. 28,269 is how things shook out. s&p 500 up 823.16. the russell 2000 even managing a close record with 1388 and change. let's get to sue herera for our cnbc news update. >> hi, kelly. here's what's happening at this hour. russian president vladimir putin

said slovenia will be a good pick for his first choimpts he added the choice of venue will not be his choice alone. newly confirmed secretary of education betsy devos was forced to enter a middle school in washington, d.c., through the back door after protestors blocked the front. the crowd including parents, union officials and teachers from other schools were carrying signs and chanting. >> it was really wonderful to visit this school and i look forward to many visits of many great public schools, both in d.c. and across the country. thanks very much. msg has banned former new york knicks charles oakley for life according to multiple reports. this after oakley was involved in a scuffle with madison square guards security officials in which he was handcuffed and arrested.

he was feuding with james dolan and kelly, associated press now quoting mr. dolan as saying that he does ban charles oakley from the garden but he says, quote, hopefully it will not be forever. end quote. >> wow. >> that was amazing. i mean, they really had to wrestle him down and out of there. >> we'll see. we'll see. he says, quote, hopefully it won't be forever. there's another chapter on this coming. >> i'm sure. thank you, sue. >> sure. >> have a good one. president donald trump meeting with japanese prime minister today and here's what the president had to say about taxes and trade. >> i think the united states is going to be an even bigger player than it is right now by a lot when it comes to trade. a lot of that will have to do with our tax policy, which you'll be seeing in the not too distant future. we'll have an incentive based policy, much more so than we have right now. joining us to talk more about this is cnbc senior

contributor larry kudlow joining us at post 9. welcome to you. >> that was a great line right there. that was a great line. incentive based policy. >> okay. >> what does that mean? >> couldn't have said it better myself. in fact, i have said it. in fact, i said it all during the campaign and i keep telling people trump believes it. the business tax rates are coming down from roughly 40 to 15 or 20 along with expensing and repatriation. the individual tax rates are coming down and the theory here is, i mean, i'm not doing any breaking news, i'm an old reagan supply seider. if you keep more of what you earn and more of what you invest and more of what you risk, you will be incentivized to keep on doing it. for a change. i'm going to read into this. this is great to hear from mr. trump. he is saying, we will reward success not punish it, okay? and he's also saying the war

against business is over. that's a key issue, and then i'm thrilled that he said that. and we'll do japan in a moment. >> there's a ton to talk to you about. one piece fits into this discussion. the x in bank. are you surprised he's supportive of that? >> i'm a little surprised. i'm a little surprised. it's a very controversial thing. it's just a handful of thing. >> boeing. >> the boeing people talked him into it in one of those roosevelt room meetings. i'm not a supporter of xm. i'm not a supporter of government subsidies. slash their tax rate. give them this and give them repatriation. i don't know why they need government -- remember, subsidies are forms of federal spending. i don't think they need that. it may be true, you know, the guy from delta who opposes this, brave guy, he's saying, look, we're giving boeing money, okay, to make and sell their planes to competitors of ours. >> right. >> i never understood the logic of doing that but -- >> well, it's not surprising

because of the fairness in trade rules argument would play into this. the people who benefit from it. look, the other countries are subsidizing their manufacturers. just a reciprocity. >> those other countries are semisocialist. i don't want us to be semisocialists. i want us to be free market capitalists. i'm not coming after you, michael, i'm just saying. the border adjustment tax. i don't want the united states to have that. i don't want to have that. i don't want us to be an export led economy, i want us to be a market driven economy. the other countries, europe, asia may be exports. if we are going to redo our tax incentives and -- i don't want to be like the other places. >> quick question. do budget deficits matter? >> here -- >> go back. in the old world, larry, all of a sudden you wave the tax wand. >> i do. >> and everything is hunky-dory. >> i do. >> 4 or 5% growth. >> i do. >> what if you don't get the 4

or 5% growth. will the republicans go along with the budget deficits don't matter thing? >> well, look. i've said this to you before. growth, growth, growth. you want to lower the budget deficit, you want to lower the debt to gdp ratio, then grow the economy, not one to two but three or four and growth solves a lot of problems. every one percentage point above the baseline, which is 2, cuts deficits down by over $3 trillion over ten years. now i'm not opposed to government spending restraint. i would like to get rid of the department of labor. i would like to get rid of department of commerce. i'm all for that. i would like to cut all the wage fraud and abuse. >> they're getting rid of the council of economic advisers. >> that's the one i had in mind. not my problem. >> to give us a brief history of that position and there's all these different sort of economic advisory groups around the president. so if they're not part of the cabinet, what practical effect

will that have? >> look, the ca was legislated into place in the 1940s. i believe harry truman signed the act. i've been out of this for four, five, six weeks so i'm being objective. ca has a three-member group, chairman, two members, bunch of staff. they're there to give the president constant updates on the economy. it's a very useful function. they're not there to do seminal nobel prize winning research. work a day, practical economists. they help set the macro economic forecast, deviations from the forecast. extremely useful. >> there's also the nec and there's also -- there's all these different agencies and how does that relate to gary cohen and his position? >> nec is very important and mr. cohen is very important. the nec is more of a broker. the nec puts together other stuff from other agencies like ca, there's something called domestic policy council, there's

trade, there's treasury, there's commerce, okay? >> right. >> so the nec is supposed to be an honest broker and present itself to the president. i'm all for that. but the ca is a key component of that because they're the economic specialist whether they're economics or practitioners. you have an issue just for the heck of it. no one's telling the president so far as i know that, look, sir, if your policies are put into place, and you heard it today, tax incentives, the economy is going to grow faster. the trade deficit is going to be larger, the dollar is going to go higher. so far the president has not made those connections. he's talking about lower trade gaps and a weaker dollar. if his policies go through and work as i believe they will, it's the reverse. you need somebody to go in there and say, think about this. here's some charts about what happens if it passes. what's the role of a good cea. >> that was the role you could

have played, larry. >> no, no, no. the role i'm playing is the role right here -- >> might be -- >> i'm convincing evan about economic growth, merit. i'm convincing you. >> thank you for coming down here. >> japan, come on, one quickie. these guys are making love to each other. that is important. really important. they're going to play golf together because the pacific trade deal broke down. the heart of that deal was japan and there's the bull work against china. now they're going to go back and negotiate bilateral, making nice music together. look how happy abe is. golf, this is a good sign of american/japanese relations for trade, the economy, china. i really like that. >> larry, thank you for coming down. good to see you. larry kudlow here at post nine. markets are rallying since donald trump was elected. coming up, find out why hedge fund managers are cheering the 45th president. plus, we have new details on what hedge fund manager says

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hthis bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade we have a news alert. >> dan loeb dropped on this friday evening. he's a third point. it's clear that in his new position he's very interested in financials. he took new stakes in bank of america, j.p. morgan, goldman sachs. in terms of things that he

appeared to be more bearish about, he's been pairing back stakes and pulled back on google, apple and facebook and interestingly completely dissolved his stake in alibaba, the chinese ecommerce giant. just a reminder that these stakes are as of the end of last year so he may have traded in or out of them since then. we are digging through. >> leslie, stay there. what do you think about these moves? >> clearly from his letter we knew he bought into the sector moves that would be trump beneficiary. leslie mentioned ac supply. that's domestic housing type play as well as some industrials. i do think it's consistent. not really consistent with the kind of activist hands on -- >> he has other companies to be run. >> i don't think he's picking up the phone calling lloyd i'm unhappy with lloyd. the odd thing -- those are big

stocks. big liquid stocks that he can get in and out of them. i wouldn't put too much credence on what his position is today given that that was, you know, a few weeks ago. >> meanwhile, leslie, you've been following how closely hedge funds have done under president trump. what do you find? >> hedge fund watchers will tell you 2016 was not a bountiful year for the industry. by most accounts it was the worst for hedge funds since the depths of the recession. things appear to be looking up at least in the short term. hedge funds may have president trump to thank. hedge funds had the best january in four years according to hedge fund research data. the hrfi fund gained 1.2%. that was better than the dow performed but still below the s&p for the month. not just january. that index has gone up for three consecutive months going back to november when donald trump was elected president. on the promise of stimulus and tax cuts. his economic promises have driven equities higher and hedge

fund favorites like kraft, charter, amazon have gained since trump's election over the firm's top 50 holdings. only seven in the red since november. some of them still lag the s&p 500 so, kelly, it may be too early yet to get excited about hedge funds yet. >> all right. although i was going to say, guys, this is the point nicole made today, the best gift from trump to markets or investors or what have you is simply the drop in correlations that we've seen. >> without a doubt. it's basically fallen off a cliff but also rates going up does that as well. i think you have the beneficiaries and losers. that list, big, liquid stocks. something like a p&g, the hedge fund folks think there's a catalyst. >> my view is the gig's up for the hedge funds. been that way for a few years. you're seeing it's a tidal wave. hedge funds aren't going out of business, they're not. some guys will be able to raise money year in and year out.

the trend is not the friend of the hedge fund. >> absolutely towards passive, that's for sure. leslie, thank you. according to reports the department of homeland security has calculated the cost of building trump's border wall with mexico. those details and the impact it could have on the border patrol next. coming up on "fast money", with the stocks at record highs, the traders tell you names they are selling to lock in higher profits. that's at 5:00 p.m. eastern. our senses awake, our hearts racing as one. i know this is sudden, but they say: if you love something... set it free. see you around, giulia ♪

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>> reuters citing a new report from the department of homeland security. reports that the wall president trump plans to build would have an estimated price tag of $21.6 billion and take some three years to fully construct. now trump's executive order also called for the hiring of an additional 5,000 border patrol agents. that may prove to be a challenge for the agency, which is already looking to fill some 1700 agent positions this year. the agency's union, the national border patrol council, is feeling optimistic about trump. >> i believe agents will get back to enforcing the law and that will help retain people that are thinking about retiring early or going to a local or state law enforcement job or another federal agency. >> moran did stop short of the full on endorsement of the wall but said a physical barrier is needed. department of homeland security spokesperson told cnbc, quote, as a matter of policy we do not

comment or talk about predecisional deliberative documents. in other words, if there's an official price tag, it hasn't been reached yet. we didn't receive responses on this. back over to you. >> kate, stay with us. you know -- well, kate, let me ask quantify this figure, what is the impact of putting a number on that and giving people a sense of, you know, looming construction of this thing at some point? >> we're also curious who will pay for it. president trump has now said the taxpayers will front the cost initially but then mexico will reimburse us. this is a group according to reuters, commissioned by the department of homeland security secretary john kelly. it also accounts for the time and cost of acquiring private land. that's why the price tag is so much higher than the $12 billion president trump had initially cited. the $15 billion paul ryan had cited. as far as how much it will cost, a lot of figures out there. this is the highest one we've

seen but it seems the incorporate many other factors that haven't been addressed so far. >> i have to say, the $21.5 billion, that sounds cheap to me. new york city just built three new subway stations and it cost $4.5 billion. >> but had it's one of the densest places. >> it cost $4.5 billion to build three new subway stations in new york. this is under a city. this thing stretches -- >> one thing though. >> i will bet you it costs. more than $25 billion. >> since we're referring to cost, i hope it did you have cost more. he wants to bring on per executive order an additional 5,000 agents. that's proving to be a challenge for them. you have to remember only 1 in 175 people who actually apply make it on to the force and they have up to 65,000 applicants a year. they're already struggling to

find right people and they're stationing them in challenging places. i think it will be a challenge. the union as you heard is feeling optimistic. >> my cousin was almost going to do it. it is extremely tough. i saw what she had to go through. we have a news alert. what's happening, sue? >> in an interview he gave to dow jones these comments. he announced today that he is resigning and his term goes to 2022. the fed's tarullo said the election was not a consideration. he said liquidity rules are well grounded. they should be had durable. there's room to change some rules without undercutting stability and he said trump's regulatory direction is unclear but it is hard to argue with principles that the administration has articulated at this point. so he is making some comments

about what lies ahead given the fact the trump administration has talked about rolling back some regulation on financial services. back to you. >> all right. thank you. >> watch out, victoria's secret. there is a new lingerie maker on the scene and we'll tell you who is getting in on the game after this.

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we have some aerial footage, we're going to show you, of a freight train derailed in sacramento city. three people were on board. no injuries have been reported. no word yet on who was operating the train. we'll bring you more details as we get them again. derailing near elk grove, california. as you can see, all those cars piled up there. no injuries. we'll follow the story. victoria's secret should watch its back. new reports saying amazon could be getting in on the lingerie business and could start selling its own line of intimate apparel in the u.s. this seems like a fertile opportunity. victoria's secret has clearly lost its niche here. if zonl camazon can cut them on. >> do you see jeff bezos talking

with cat walk? >> but the cat walk has jumped the shark. >> that inflates actual price. he probably sees -- the one thing i assume with amazon any time they enter the category, they have a tremendous amount of data on what time of stuff people buy. who is the likely candidate to be a buyer of this item and what the price point would be. >> this is a bad category to talk about. i buy t-shirts. i pay $3 for them online. >> if you look at the costs, had pr imark, $3.50. i can tell you. you can get less than $15, extremely high quality products. ? why do people get more? >> they must think it's worthwhile. some consumers must think it is worthwhile. there's victoria's secret at $39.50. a lot of people will go there in terms of premium. >> you've listened to the ceos of victoria's secret over the

years talk about their product as if it is silicon valley innovation. we have the new thing something in the history of things we've never tried before. >> for a while that's what they were doing. but they've missed a couple of trends. they got rid of the catalogue not terribly h long ago and relying on brick and mortar. then you have plenty of competitors out there, this is where the real technology and innovation comes. you can make great product for extremely low price that is not differentiated from what they're offering. >> that soon there will be no brick and mortar left. it will be walking through a ghost town. empty stores everywhere. >> i don't think people are aware how thigh vacancy rates are in new york city. you have 20 to 30% vacancy rates in some of the prime rental markets because the rents so high. >> look at the had mall reads. the central potential victim of

all this. simon property. down 20, 30%. it is demand for that. >> as the when the work habits are changing dramatically, my father's workplace is an example. this was in washington, d.c. area. of full workplace. now two-thirds max are actually in that office anymore. and that's happening across the board. you might be in there a couple days and then you don't need as much office space. you shrink the foot print. >> it's true. >> he's been defending commercial real estate for years. how do you defend department stores. it is not a fan anymore. >> i know why they persist. >> if you want to look at had amazon -- yes. apartment very hot.

all these people snapping the smaller ones too. >> it's bizarre but it really depends totally on what he says. >> it's a global growth market. it is getting you to the same place. "fast money" begins right now. "fast money" right now. traders on the decks. tonight another day, another record. all three indices hitting record highs. did you miss the rally? we have the ultimate catch-up trade later this hour. plus, it's been one year since oil bottomed. the commodity has doubled in the past year but it has one of our traders very worried. we'll explain. and later, apple just penaltyies away from an all time high. pennies