message across but for our team and organization, we'll be together an whatever we do, whatever we decide to do and move forward from there. >> i don't know if you know this, james, you're sitting next to the only undefeated nba -- never lost a game as an owner. invited mark cuban to come on. mark might be watching mark, you could have been here thanks for joining us. >> with us, of course. >> of course thank you so much, james good luck. >> thank you, appreciate you guys. >> have a great season appreciate you guys. tilman, by the way, want to give it to your friend, giving to hurricane relief >> thanks for watching "closing bell" starts right now. the cash flow for 2017 is horrible we have to tighten the belt, we have to lead by example. i think our power business team missed the market?

yes. we haven't run this business well >> those straight answers from general electric ceo helping a big stock turnaround today welcome to "the closing bell", everybody, i'm kelly evans at the new york stock exchange. >> clearly a new sheriff is in town, that is for sure i'm bill griffeth. we'll have more of that interview with the brand new chairman and ce o of ge, john flannery and an analyst who says we could be approaching a bottom for the stock. >> it was down, what was it 8% this morning after those earnings. >> down a huge amount. started coming back. then especially when david's interview was going on there live on cnbc, stock really did come back at that point. >> g, e shares now positive there's the home builders up more than 1% there's a new emerging trend among millennial home buyers that could prove to be a little bit of a risk to this market, would you say? >> wouldn't you think? >> we'll ask bill if he'd do something like this for his

kids anyway. let's start with today's big rally, up 131 points on the dow right now fueled by in part the senate passing a 2018 budget late last night. a key first step toward tax reform ylan mui is in washington with what happens next. ylan >> reporter: bill, republicans are really sped up the timetable for tax reform with this vote last night the budget passed out of the senate 51-49 lawmakers also negotiated a surprise last-minute deal that could potentially cut out weeks of debate. you know, normally the next step in this process would be for the house and the senate to get together and negotiate a final version of the budget. but now republicans are saying they can skip all of that because the two chambers have already ironed out their differences. now, one of the things that we're seeing them do is the budget has a way to increase defense spending later on, and that makes the house happy in return, congressional republicans dropped their call from mandatory spending cuts and both the house and the senate

have now agreed to a tax cut of $1.5 trillion. the business roundtable and the chamber of commerce, they're praising this deal the rate coalition whose members include walmart, fedex and ford, they said the only thing standing between american workers and the pay raise they deserve is washington's resolve to reduce the corporate rate now, republicans say that they will announce a date for the rollout of the tax plan once the budget is, as they say, signed, sealed, delivered. so, guys, that big moment is probably going to come next week back over to you >> all right just real quickly on this, ylan, what is the significance of what rand paul is doing by not voting for the budget, but insisting he will support tax reform? >> reporter: really rand paul's vote was a protest vote. there had been some concern earlier in the week that he could derail the whole process because the margin of error for republicans is so thin, but once john mccain signed on, once susan collins signed on, once

they flew thad cochran back from his home in mississippi to washington to make this vote, it was clear that this was going to pass >> all right ylan mui, thank you very much. appreciate it. now austan goolsbee, currently at 32 advisers and former economic advisers chair under president obama joins us to talk more about this process along with mark bloomfield, ceo of the american council for capital formation. gentlemen, thank you for joining us to talk a little bit about the significance of this mark, i'll just begin with you the people are saying this paves the way for major tax reform would you agree? >> yes, once the genie of tax reform is out of the bottle, it's going to continue let me do one thing you do rarely here, let me thank austan goolsbee for serving the country as the 26th council -- >> austan's wondering what you want from him. yeah, yeah >> we're old friends we're old friends. that was -- >> i gather, that's okay we'll let you guys have lunch after this, though

austan, are you nervous at all that the democrats are not a part of this process at all? >> i'm not nervous because this was totally expected that's the only thing i don't understand here is why the market seems to have viewed that as positively as it was because i don't think there was any news it always was understood that they're going to try to pass a tax bill with no democratic support, mitch mcconnell said that weeks ago that they were going to do that so what happened here, this budget procedural move was only a positive for the chances of tax reform in the sense that if they couldn't pass this, then it was dead in the water. but i think this was totally expected and even the magnitude was expected >> okay. mark, meantime, there's been some speculation about what happens over in the house with all of this as well. so, again, let me just ask you what we began with here, which is does this pave the way for significant tax reform what would you say the odds are now?

>> oh, i think it does, and it's time for it and my gosh, when austan goolsbee was in office, president obama wanted a lower corporate tax rate we got to tear down that wall. i think it's on its way. i think what you got, you got to get that sucker over to the senate in other words, that move's in process. then let's have some what wyden calls principle bipartisanship to get this thing enacted. we all agree we need to reform our tax system, especially the corporate side. >> but mark, you know, mitch mcconnell has said this will be a huge reform simplification of the tax rolls. all i'm hearing about, though, really, are just tax cuts at this point maybe a few exemptions going away what will be so simple about this if, you know, i know it's very early in the process, but what are you anticipating being a simplification of the tax rolls out there? >> well, i think we talk about on the individual sides reducing

the number of tax brackets i think we talk about expensing for investment i think we're reducing the corporate tax rate i think we all agree that it's crazy to send our money zwroe overseas, our jobs overseas. complicated ways getting the money back to the united states. i think that's simplification. >> austan, would you support things like eliminating the alternative minimum tax? i mean, are there planks of this you think are a good idea? >> i could support a bunch of things if they were paid for, but i think you're on exactly the right note which is this isn't tax reform this is just a bunch of tax cuts and giveaways and if you add up who benefits, it's overwhelmingly to very high-income people counting inin that to trickle down and be magic beanstalk beans to grow the economy. >> you don't think middle

earners are going to benefit at all? is. >> i think a lot of middle income earners may see their taxes go up, some middle income earners may see a very small tax cut but the vast majority of the money is going to go to cut the estate tax, cutting taxes for the biggest corporations, the highest income people. and passthroughs i don't think that's what we need now this is twice the size of the obama stimulus which was done at the depths of the recession which republicans said no, we can't afford this is twice the stimulus of that and the unemployment rate's in the 4%s >> i'll give you 30 seconds to answer that, mark. >> i just think that more and more economists think that the corporate tax is borne by labor, and you get economic growth and with the economic growth, you're not going to pay for the whole tax cut but you're going to raise the wages of americans and get the economy growing. >> that was less than 30 >> that's fine i owe him a few. thank you both enjoy your lunch see you later.

austan goolsbee, mark bloomfield joining us. let's get to the "closing bell" exchange as we mentioned a pretty good rally under way today to cap off a strong week that pushed the dow above 23,000 for the first time peter is with us today cnbc contributor from the lindsay group. new york stock exchange trader, kenny. also a cnbc contributor from o'neal securities. post 9 jack from ucx is at the cme. e, i, e, i, oh what about fiscal policy as we watch the wheels slowly grind in congress right now >> well, i think for the economy, for the sake of the competitiveness of our companies, the tax reforms and tax ruts are going to be very benefici beneficial i entered the year saying we were going to have this tailwind of regulatory and tax reform relief on the one hand and

monetary tight ening on the other. it's clear the fiscal side won if there's an economic lift based on the tax cuts, you're going to get an acceleration in the rise of interest rates, potentially a quicker pace of fed tightening on top of the ecb. potential earnings growth versus where's the p/e pmultiple going to be with rising interest rates? >> kenny, where is the market when it comes to the fed chair race we saw janet yellen's odds surged again when she was seen at the white house reportedly meeting with gary cohn what's the significance to you >> the significance is, is she really still in the running? what does the market want? with janet yellen, they know what they have, understand what her policies are, understand the pace and rate in which she wants to raise interest rates. if you shift her out, put somebody else in there, you've now changed the whole mindset. who's that going to be is there going to be someone more aggressive like kevin warsh, someone like powell powell is very much like janet yellen what's the point

why would you take her out and put him in if you're of the same mainset in the o mindset in the one the market has to worry about is kevin warsh and hawkish point of view he takes. >> jack, on the toen year, highs of the week, 238 we're still in the range we've been in for a while. are you guys talk bing about much higher rates yet? at least until we get the presumed rate increase in december >> i think, bill, what you're seeing especially this week is an unwinding of positions. remember, you know, the october expiration which is today is notorious for having a lot of hedgers come in. and what they do is usually buy bonds and they hedge out their equities we've been seeing an unwinding of that position over the course of these last few days which is really putting a nice lift under the stock market but, you know, going forward, i think what we really want to pay attention to is what's coming out of d.c let's not fool ourselves the reason this market is doing what it's done, we're getting closer to legislative print. when we got wildly bullish last year when president trump got

elected, it was primarily for this reason. it's a shame they didn't tackle tax reform before health care reform but the reason this market is rallying is because we are going to free up capital, going to broaden the base, coming from the larry kudlow school, supply side is the answer it's the panacea. >> right, but jack -- >> go ahead. >> -- is this a buy the room, sell the fact type of event? i agree with you i think the market is doing better in anticipation of this what happens when it happens, right? >> kenny, you know what, i -- i think w-- i had this discussion with three traders behind me if we're pricing in anywhere from $10 to $20 worth of earnings for the s&p next year based off tax cuts, we don't know what that number is, then we're pricing in roughly 250 s&p points into the market no, this is almost a buy/buy scenario unless we end up with a ridiculous tax rate of 25% or 28% which is nothing >> right. >> peter, i just wanted to ask you for a second about the credit markets which have been so strong. it seems like no matter what the risks are, people are buying corporate debt no matter how low the yields go, they just keep

buying corporate debt. ultimately that does help boost stock prices so what stops that whole, you know, chain from continuing along here, continuing to push us to new highs? >> great question. i try to figure out that question every single day. i think as we get deeper into the tightening, things are going to matter. i estimate that it is going to be a $1 trillion of less liquidity next year between the fed's balance sheet getting smaller and the ecb ending qe. so $1 trillion to add to the financial system, i think, is going to matter when you consider how much influence $1 trillion into the economy had on asset prices >> i mean, you've been on record as saying you think the stock market goes down when the fed starts to raise rates in earnest here, right? i mean, sort of a reverse of what we've been going through since 2009 >> right, i mean, it's typically the case that fed tightening eventually leads us into recession and a bear market. i don't think this is going to be any different it's just a matter of when it happens. and, again, the ecb is ending qe

next year. the fed is rinking their balance sheet from now until the end of next year by almost $500 billion. to me, that's going to matter. at least on the multiple side. so let's just say earnings are the same if the multiple starts to go down because of that tightening, that, alone, is a headwind for stocks >> all right well, wish we could pursue this a little further but we must move on. thank you, guys. have a great weekend appreciate your thoughts. and we got 46 minutes left in the trading session here. we got rallies across the board for the most part of the major averages here. and that would put us still in record territory. >> that's what i was just checking on. yesterday we had record closes for the dow and s&p. neither the nasdaq or russell. nasdaq up 28 points to 6,633 that would put it pretty close to record territory if not there on the close. still ahead, president trump has a big decision on his hands when it comes to choosing the next fed chair we'll bring you the results of our latest fed survey where we asked wall street who the president should pick.

that's coming up. and after the break, ge chair and ceo john flannery sat down exclusively with us on cnbc here after his company's stock took a nose dive on its initial earnings report this morning we'll tell you what he said and why the stock since staged a major comeback in the seps i se later on we'll dig into our "closing bell" mailbag. >> that's what you were digging into i saw you earlier. >> i wear my santa hat reach out to the show. share your thoughts with us via twitter, facebook, over e-mail yes, we will read some solve our favorites on air you're watching cnbc, first in business worldwide

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market averages are higher but shares of procter & gamble are falling today after the company's quarterly report fell

short on sales p&g's biggest sales weakness came from its grooming business which reported a 5% decline in net sales. its baby and family care segment also saw a decline in sales by 1% and that stock is down 4% today, kelly >> yes, it is. we have talked at great length about p&g. how about shares of ge another one staging a major comeback today after dropping 8% premarket on the back of a big miss on third quarter earnings in full-year guidance. david faber spoke exclusively with ge chairman and ceo john flannery earlier today and asked if change are coming to ge capital's allocation plan and about its dividend payment listen. >> we've talked about the dividend already we've -- from a philosophy perspective, manage for total shareholder returns. going to be a mix of our capital that goes into a dividend, a mix that goes into organic and inorganic investment that has to be balanced. the process we're going through, the final completion of our analysis of everything going on in the company and going to

present that in november to the investors. >> november 13th. >> november 13th is when we're going to lay out the capital allocations broadly and specifically, the dif depd tevi that the last thing imbided in that question, the cash flow for 2017 is horrible. $27 billion number way off of our expectations. anyone's expectations. that's not the new normal. $7 billion is not the new normal there's a number of steps we're going to take to improve that significantly in 2018 and beyond how those all come together, with respect to the dividend, we'll lay out in november. >> jeff immelt on his last conference call said the day they cut the dividend, i believe it was in '09, i remember it well, i think i reported it was the worst day of his tenure. >> yeah. >> you want to have a bad day like that? >> listen, i look at all the capital allocation things quite rationally if it makes sense to pay a dividend, pay a dividend if it makes sense to buy stock back, buy a stock back if it makes sense to acquire a company, sell a company. so i don't view it very e potionpotion bla emotionally really

management capital, financial capital. how does that accrue to the benefits of the owners so i don't view it as an emotional issue. i view it as a financial issue. >> when you cut company cars or cut back on the plane -- the planes, i mean, listen, it's a cost but is it more about sending a message? >> definitely. it's not an insignificant cost but it's clearly a message that, guys, we're not performing for investors. that's our task. so we don't fly around, you know, planes and company cars. so it's to me, it's pretty straightforward thing that we have to tighten the belt, we have to lead by example and we have to run the company like we own it for the benefit of our owners >> all right let's bring in our own morgan brennan who has been covering the ge story for us. and also with us here at post 9 is citi analyst, andrew, who you have a buy rating on this stock. now, we talked earlier this week, andrew, about whether this would be sort of a kitchen sink kind of earnings report. it looks like one. threw all the bad stuff in there. do you think this is as bad as it gets or is there more to come

as he takes a scalpel to this company? >> look, i think this is as bad as it gets but i also think that there is more to come. what i mean by that is, i think this quarter there was pretty big surprise in terms of negative earnings and power. power was worse than we thought. but at the same time, you could see that ge kind of threw in there that cost margins were lower than we thought, there was a lot of sort of recognition that power was actually as bad as, you know, people had feared. and i think, you know, as we look forward, i think people are going to say, okay, 3q was way worse but could get better from here because i think that -- >> here's the thing. here's another comment from an analyst on it this morning noted the two worst businesses today are the two the company invested in most recently and worgs, that unwinding the mess will not necessarily create shareholder value and that he thinks the stock could drop another 20%. >> so here's what i would say.

we all knew power was going to be bad the reality is flannery has talked about significant cost cutting and it starts with power. i think they got caught kind of blind -- they were blinded by a worse market than we all thought. i did as well. when it comes down to it is they position the business to be aggressively growing and it's just not a growth market so it does seem like there's a lot of excess cost there that you can take out i think that's what we're sort of focused on is that maybe the business in the second half of 2017 is as weak as it gets and can get better from here from a combination of cost cutting. >> okay. >> and improvements over time in the market. >> meantime, morgan, share holders no doubt have the date, november 13th, circled on their calendar that's when the company's management will come forward with their plan for the future right? >> reporter: that's right, that is the day i mean, if there wasn't already a lot of anticipation and there was around november 13th before earnings today, i mean, after

flannery sat down with david faber, there's certainly anticipation now everybody is wondering what's going to happen with this dividend, does it actually get cut especially in light of the cash flow numbers, operating cash flow number of $7 billion which was cut in half from the previous forecast for 2017 we are looking for more details on the fact that he said he's going to shed another $20 billion in assets. there's a lot of details we still don't have yet. >> and morgan, as well, you have people saying on this that his comments to david about that this morning, he could cut the dividend in november without contradicting what he said this morning, right he never said it was off the table. >> he never said it was off the table and even prior to this, we started to see some speculation from the street, from analysts that the dividends could get cut, they've always -- they said it was a top priority. so we have not heard specifically that this dividend is safe. we did not hear that again today. we have a lot of questions that are still unanswered but going back to andrew's point, i mean, if you look at shares of ge today, my gosh, you want to talk about a whirlwind, it's

potentially the biggest move we've seen for this stock since a single day in the middle of 2009 it's poised to end the day higher when this stock opened at 9:30, it hit a low of just over $22. it was down almost 6%. now it's positive today. >> wow. >> would seem many investors do think maybe the worst is over. we have a lot of questions that aren't answered. >> but there is still the question of dividend now he said today, setting it up the cash flow horrible well, well below what they need it to be and the dividend yield is very high right now 4.1% do you think they'll cut it? >> look, john flannery seems like a very practical guy. i saw the interview that he did. basically the dividend is really not covered by the cash right now. but they did announce this $20 billion in potential divestitures they could do the reality is they do have a lot of flexibility but i think it creates more flexibility if they do cut the dividends. so i hate to opine, you know, they're going to talk about over the next few weeks, but the

reality is is that i think he's come off reasonably well today >> is it priced in already i mean, that's the thing if we're all talking about it in the open like this, you almost have to think to bill's point if it has a 5% dividend yield, maybe the market is already saying it's basically 3%. >> i think it is, priced in already. that's maybe why the stock is acting the way it does today the reality is it gives them flexibility to cut the dividend, at the same time i think cash can get better than. what it is today >> i'd be curious to hear andrew's thoughts on this, but, you know, i'm hearing potentially health care, lighting, which of course, is ge's really oldest sort of most famous business. as possible areas where you could see divestitures i'd be curious to hear what you think about that >> very quickly. >> yeah, so the low-hanging fruit is smaller businesses. you know, $1 billion, $2 billion businesses they can cut and, you know, maybe ten of them and you cut that first before you go after these bigger chunks. and i think that's the answers that they bought a lot of

businesses, for instance, maybe some of them they don't need some of them are sort of low margin but can get a multiple for them that gives you flexibility >> all right we'll wait and see what happens in november 13th thank you, both. marken, we'll see you later. andrew, thank you for joining us today. >> thank you. heading to the close with 34 minutes left in the trading session here record territory with the dow up 136 points. >> is this true, skechers is now up 40% geez, i blink and it goes up another 5. it is up that much after earnings last night. we're going to talk about one part of the business that is behind this big run. there's your hint. has sh cpa, ghrit? >> up 41%. we'll be right back.

welcome back there are shares of sketchecherp $10 for a 40% gain in the session today. reported earnings on a revenue beat yesterday after the bell. the shoe company saw quarterly net sales increase more than 16% in the third quarter driven by a 25% increase in the international wholesale business >> wow. >> those results driving the stock. very muchhigher. >> that's unbelievable isn't it >> i thought it might -- we were talking about skechers, they did a big deal with carrie, not terribly wrong ago international wholesale, maybe they just know where to sell. >> boy, certainly caught wall street flatfooted today, that's for sure. time for a cnbc news update, hey, look what it is, kids, michelle caruso-cabrera. >> here's what's happening at

this hour, at least 30 people killed by a suicide bomber in kabul, afghanistan the bomber detonating the explosives at a shiite mosque. coast guard looking for two crew members of a barge that exploded near rockport, texas, today, awaiting for assistance from a tugboat when the explosion happened no oil was spilled according to reports. wells fargo fired four foreign exchange bankers according to the "wall street journal. issues leading to the firings emerged as the company is reviewing its business practices in the wake of the fake accounts scandal. the washington nationals have fired dusty baker baker managed the team for two years. they made the playoffs both years but didn't win a postseason series either year. meanwhile the detroit tigers hiring rod gardenhire as their manager, previously managed the minnesota twins for 13 years that's the cnbc news update at this hour. >> they hired goldenhire good word play. sarah huckabee sanders

reporting president trump is considering both jay powell and john taylor for top spots at the fed. >> we still have an announce met on that as the president said. that's certainly something that's under consideration he hasn't ruled out a number of options. he'll have an announcement on that soon in the coming days. >> our steve liesman is back at headquarters with a look at who wall street wants. steve? >> reporter: yeah, who they want and whot they think they're goin to get, kelly, those are two separate things. we asked who will president trump appoint? you can see 45% say it will be fed governor jay powell. 23% say economics professor john taylor from stanford and only 13% saying yellen who should he appoint? different answer entirely. you can see 44% of our 47 respondents, by the way, economists, fund managers and strategists, they want the existing fed chair to be reappointed and comes down to john taylor 20%, powell about 17%. and then there's two other folks under consideration, former fed governor kevin warsh, and gary

cohn kevin warsh a respectable fourth on both. gary cohn once thought as the front-runner below 5% on both of those. how will all this change monetary policy? what does it mean for interest rate we asked who would be more hawkish or dovish relative to existing policy. see over here this would be the more hawkish john taylor thought to be the most hawkish kevin warsh a little more. powell and cohn considered to be right around what existing policy would be. question is why does the market want yellen? three reasons, one, she has more experience than all the other combined on the fed. markets generally just don't like change. time l finally over on this side, it ain't broke. as far as most in the market are concerned, policy on a pace the way they like it they don't see a need for change, change agents represented by taylor and warsh. bill >> steve liesman there we got 26 minutes left in the

trading session here on the floor the new york stock exchange with charles with rosenblatt securities. what do you guys talk about here regarding the fed? does it matter to you who is the next chair >> personally i don't think it's going to deviate the course. as steve was saying, if it ain't broke, don't fix it kind of thing. listen, the president might be wanting to curry some political favor here keeps a democrat in there or maybe he wants to play to his base and brings in a prurepublin i really don't think the outlook of what the fed is going to do is going to significantly impact us here today. look, today is an interesting day, bill. we have an expiration -- >> expiration day, right >> the last half hour is always the busiest time of the day. and then this is a major liquidity event. one of the things that makes it more important this time is now because we're getting toward the end of the year. >> right. >> now some of the guys go the to start thinking about the tax implications, what is your fund going to look like --

>> wow knithout knowing what th situation is going to be, right? >> very true we're still in earnings season in the fourth quarter. some of the stocks have acted well, some haven't sometime s chickens, sometimes feathers the fact of the matter is, you've been around trade loing g enough to know, take the escalator up and elevator down we're going have a very active close and going to start seeing as we get toward the end of the year when you have these kind of major liquidity days, they're going to be very profound and significant. >> okay. he got both of them in there you did it good job, gordon. >> by the way, bill, i want to tell you it's nice to see you here today. i probably missed the weather report >> is thank you very much. i'll see you later kelly? >> going to doctor to wear his ear piece again for that one thank you both. coming up, a new trend has millennials turning to their participant parents to help in buying a home the tactic they're using is interesting and could cause problem dows wn tdohe road.

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welcome back for the second time this week we have a big rally on our hands on wall street. the dow is up nearly 150 points right now. the s&p up 11. the nasdaq is up 23. and the russell's up seven

only the russell is not currently in record closing territory. >> we'll see what impact the expirations -- third friday of the month. we'll see if it has an impact on the trading -- >> yeah, you think you see a 359, can be very different at 401. >> sometimes it is, yep. >> is how about lulu lemon meantime >> yeah, that stock trading sharply higher today on the heels of an upgrade by citi to buy from neutral the firm raised its price target on the stock to 73 from 62 and says that the recent market concerns including worries about competition from amazon are overblown. so that stock moving higher today. what's coming up, kelly? >> let's see, we have ge ceo john flanner telling cnbc the company's cash flow is, quote, horrible we'll have a bear and bull face off over what investors should do with the stock. first, we've heard about millennials not entering the housing market that is starting to change and home buyers have mom and dad to thank for that

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record day for the dow, the s&p and the nasdaq all trading higher russell is up 6.7 points but what a crazy week. rare that we get these kinds of rallies. typically we'll get a 20, 30, 50-point move. >> yeah, this rally, it's been quiet. >> this week we had 250-point rallies this week. so very strong week. >> and after three straight months of declines, existing home saleshigher diana olick joins us with the latest numbers. >> reporter: let's say half an inch, raised 0.7% compared to august the real headline is that september ohm sales were down 1.5% compared to a year ago. that's the first annual sales drop in evover a year. what's the problem nothing to buy 1.9 million homes for sale that may sound like a lot but it's the lowest september read ever and down over 6% from a year ago builders are not stepping up a lot of that because of the labor shortage which is only getting worse with workers heading to houston, florida,

northern california and even puerto rico to rebuild after those disasters. interesting on houston, though, realtors reporting a surprising jump in september sales in houston. up 4% compared to a year ago last year was strong now some of that is from delayed closings from september, but we also have evidence from closing deeds that large single-family rental companies and other investors really stepped up the buying in houston last month buying damaged homes as is from people who, perhaps, didn't have flood insurance, or really just wanted to get out fast more of that onli onlinerealtycheck.cnbc.com. >> diandiana, thank you very muh part of a new trend, millennials using their parents' home equity to buy their home for all cash an all-cash bid can be a huge advantage when bidding wars break out in tight housing markets but what are the risks >> joins us, cass is a real estate agent with redfin in the d.c. area which is traditionally a hot market, anyway

you never have enough inventory and so much demand you are starting to see this with millennials using some of mom and dad's home equity to buy their residence, right >> yes, absolutely absolutely something we've actually seen quite a spike in is the millennials going to their parents and asking them if they have any equity in their house what these parents have done is refinanced, cashed out their home, giving this cash to their millennials, their kids, so that way they could go ahead and make an offer in a competitive market, you know, as we know, cash is king this way when they make a cash offer, they can go ahead and stand out in a competitive market and be able to win the bidding war that way with a cash offer. yes? >> and then what, cass so after this happens, let's say the millennials get this half a million dollar home in all cash, then what? >> yeah, exactly so, so what we've seen is, and this actually happened to one of my sellers was, you know, we received about ten offers on her

condo and one of the offers that she chose to go with was a cash offer. but we noticed that they were asking for a 30-day settlement and when we asked, you know, why are we doing a 30-day settlement, the buyer's agent told us, look, we're going to purchase this in cash but we're going to try to get a loan if we're able to get a loan, then the money, the cash, is going to go back to the participantparts and we'll get the loan and move forward. if we're not able to obtain a loan within 30 days, we're going to go ahead and purchase this with cash. either way your seller will be happy, we'll be able to move forward. >> see, i -- if it makes economic sense, if you're going into a market that is not so hot that it's, you know, ripe for a decline of some kind, you know, there's so much cash out there, anyway, we hear. this might be a place -- >> why can't they go somewhere else to get it why do they have to come to mom and dad? >> come on, you know why they go to mom and dad. >> does it draw the parents into the equation from a risk point of view? >> absolutely.

but like i said, if it makes sense economically, if this is -- you know, you know my daughter lives here in washington if i felt like she was going to be there long enough, it made sense to make the investment, absolutely, i put the money -- >> would it make sense, though, for you to just say, okay, we're going to buy her a property in washington and kind of keep that, i don't know, leverage i don't know it's just -- i'm trying to think about it from a balance sheet point of view. >> we'll be back with you in a second we're trying to work this out ourselves. we're having the kind of conversation that i'm sure parents and their kids are having these days right now, right? >> they are. >> does this make sense to do this from an investment standpoint >> absolutely, they are. that's something else we've also taken into consideration is some of these parents are actually looking into the future and thinking about downsizing. so what they've actually done is they've invested in their own future by purchasing or helping purchase their millennial kids byt by this condo, know in the next couple years when their kids are

going to purchase something bigger, maybe a single-family house, when the parents are going to be downsizing, they have a place they can go to now. >> here's my issue, cass, if you refinance your existing home -- >> yes. >> -- you might pay $5,000, $8,000, a big sum of money to do that that then goes on to the size of the loan so then your home value has to keep appreciating in order for this whole thing to make sense. i mean -- >> like i said, it has to make sense for it -- if that's going to be the case and you're worried about the value of your own home going down, doesn't make sense then. >> yeah. >> it might otherwise. >> you don't know what you don't know about these housing markets and where they might be going. >> you guys are going, absolutely i mean, look, it has to make sense to the parents the parents are just not going to willy-nilly go ahead and refinance if it doesn't make sense. what we've seen at redfin in the washington, d.c., area, especially in the washington, d.c., area, is millennials are driving the market and because millennials are driving the market, what the sellers are realizing is, look, if they're the ones who are

going to be purchasing these homes and they're losing out in multiple offers, so to speak, this is just a different way of making your offer stand out. whether it's to reduce the number of contingencies, waive off contingencies. if you have additional cash reserves, maybe you might be able to waive an appraisal contingency. there's something else that we, you know, advise individuals to do something called a preinspection. this is where you're able to go in and inspect the property prior to you submitting an offer or bid on this house. >> that's interesting. >> and when you do it this way, you're able to also, again, waive the contingencies, make your offer stand out within a crowd. >> very interesting. cass, thanks very much >> absolutely. thank you for having me. >> kas from redfin there in d.c. by the way, if my daughter's watching, i did not commit to buying you something for you there in washington. just so we're clear. >> you didn't know a lot about how hot that market is. >> it is very hot. >> if this doesn't tell you the

housing market is pretty hot right now, i don't know what would. ten minutes to go until the close and speaking of hot markets, the dow is up 136 points s&p is up ten. the nasdaq on track for its fourth straight positive week in a record close, up 18 points and the russell is up 6. as i mentioned with that nasdaq, 6,623. at all-time high we'll head to the midtown exchange for an update after this. by the way on monday, this is what we call a deep tease tune into "squawk box" for an interview with investor saudi prince alwaleed bin talal, always love to hear from him and his thoughts on the market their inside saudi aramco coverage starts at 6:00 a.m. eastern time come monday don't miss that. stay tuned and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies

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mr. cashin stopped by and told us the market on close orders show an imbalance of $600 million to the buy side, but this is -- it's tricky as we go to the close because of the expiration you're going to get a spate of buying and selling here as we head into the close today. so we'll see if that has an impact the dow is up 141 points right now. meanwhile the nasdaq hitting a fresh intraday record high as well bertha coombs is at the nasdaq market there in times square

bertha >> reporter: that's right, bill. that's where i am. getting help from apple rebounding after the concerns yesterday. it saw a bit of a selloff on concerns that iphone 8 sales are slow and also helping to push up chip stocks. chip stocks also strong. even as you have apple snapping a three-week winning streak, chip stocks are up for the eighth straight week we got all-time highs on the back of strong earnings for maxim and lam research this week, nose are the tailwinds texas instruments up next week applied materials about $1 away from its all-time high from 2000 the faang names this week not really helping things out. they're actually for the most part down for the week some of the old tech names from 2000 that were the big winners, big winners at all-time highs today, paypal strong earnings back, tailwinds there, also for adobe as well as up 13% for the week one of the best performers here. and microsoft which is up next thursday, guys, which is earnings paluza.

we've got microsoft, alphabet and amazon all three after the bell next thursday back to you. >> i'm not going to be here. >> oh, boy i -- i love those kinds of days so i'll be there for that. i can't wait seriously. >> i will be watching if home. seriously. >> yes, i'm sure you will. >> testing that new connection thank you very much. >> thanks, bertha. up next, we are coming right back with the "closing countdown. stay with us until the bel l. today, the new new york is sparking innovation. you see it in the southern tier with companies that are developing powerful batteries that make everything from cell phones to rail cars more efficient. which helps improve every aspect of advanced rail technology. all with support from a highly-educated workforce and vocational job training. across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov. to grow your business with us in new york state, what's critical thinking like?

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2 1/2 minutes left in the trading session with the dow up 145 in record territory, and by my calendar, we're almost through the month of october notoriously, one of the worst months for the stock market. so was september, but it's been anything but bad for the stock market look at this week for the dow. this is the week that we blew through 23,000 our fourth millennial level just this year. and we're going out at the highs for the week and it's been doing this without the help of general electric ge has been down about 25% this year this week, was it a turnaround who knows. this is today. down 8% on the open after those horrible earnings and then as the market was watching what john flannery told david faber

about ge's future, what he plans to do to try to turn things around, the stock did turn around and finishing higher on the day. the ten-year yield finishing on the high for the week at 238 as this market continues to get ready for whatever the fed has in mind for the month of december and oil still above $50 a barrel opec talking about maintaining those cuts in production but also the situation with the kurds and the iranians seizing -- iraqis seizing the oil fields up there in the northern part of the country but we are definitely not in the 20th century anymore, toto, when ge is not helping this market. >> ge is not the only big turnaround this week remember what happened to ibm on tuesday when whenever said, oh my heavens, the revenue declines are stopping, down 0.4%. remember the joke, 22 consecutive quarters of revenue declines ibm turned around exactly the way ge turned around people starting to believe maybe there's a bottom there just note, bill, new highs on the banks and big names out

there, normally doesn't happen in earnings weeks. usually the banks tend to move down when they go into the earnings week. a very, very good sign for the banks right now. >> three more records with the dow, the s&p and the nasdaq. what a week. and a lot of earnings coming next week as well. we'll get you set up for that coming up on the second hour of "the closing bell" with kelly evans and company. have a good weekend, kell. man, it is loud in here today. welcome to "the closing bell", everybody, i am kelly evans. we're closing at record highs on wall street for the day, for the week what a week it's been. this is the second time we've seen a rally this powerful this time, all the averages are participatie in participating, earlier it was just dow, when ibm was pacing it up more than 100 points. going out 164 points higher on the dow today, still the best performer, new closing high of 23,327 the s&p up half a percent to

close at 25,575. new record close for the broad market nasdaq composite, much weaker yesterday with facebook and some faang names lower today 6,629 is a record high close for the nasdaq the russell 2000 is up half a percent today. still three points below its october 5th closing high we'll have more on this in just a moment. plus should you buy ge after its huge comeback today? as viewers joked, should have bought it after its earnings report we'll have more on that today as well. joining me now cnbc senior markets commentator michael santoli, cnbc contributor evan numark is it a-r-k? says a-r-k, but it's just ark like noah. >> i confess >> ark invest's kathie lloyd is here record close for the three major averages i mentioned the dow solidly above 23,000 the sixth straight week of gains both for the dow and for the s&p

500. by the way, the big winner on the dow is boeing today. the biggest loser was p&g, dropped 4% on the bell top of the s&p 500, under armour on upgrades. biggest laggard, celgene, down 10% in the setback of its therapy we recently told you about. michael, what do you make of it all? >> still very orderly. sort of resilient. the releantless bid in the markt not really about buying everything things look a little bit better than they look worse every single day it's what bull markets do, kind of ignore the kind of doubts if you think the market was going to have trouble this year and were sitting on july 31st, you thought it was going to happen by october's expiration which is today, you kind of have to say if nothing bad happened until now, why am i getting in the way of it? >> evan, how does the -- especially when you have a really big year. this came up with ge earlier today. people going to start selling the -- what are you looking for in terms of that effect in

general? >> you know, i think that's super technical stuff. i have been doing --i've been selling into record closes i know it's something in h my portfolio, i'm going to take a loss which will go unnamed. >> is it a tbt >> you can probably guess what it is. i think there is some of that. i have been one of those people since july i've been selling into the record close. >> have anything left to sell at this point >> i'm 40 some odd percent in equities which for me is low as a relative thing aisle not comfortable buying at these levels this bull market has been on -- it's autopilot i mean, you getting -- >> if the bull market -- going to point to the credit markets again. if this goes on for a couple more years, will you regret that selling? >> no, i don't think it's going to go on for a couple many r ye more years valuations are stretched people respect saren't sitting

going that's so cheap, it's a great deal it's basically people are buying because the market goes up every day. that's why people are buying. >> cathie, you have to do this for your job how are you guys feeling about it >> we're pretty excited about what's going on, we're focused on only disruptive innovation and there's so much disruptive innovation taking place out there. >> are the prices there still attractive to you? or do you have the same issue? >> we have a longer-term point of view. this bull market as it extends and expands, investors are taking a longer-term point of view they're rewarding our themes at the end of the day if we're right on autonomous taxi networks and artificial intelligence, so forth, the earnings growth is going to be -- >> by the way, i saw chicago may be taxing uber and lyft now. i mean, they're pulling it all into this, they're saying all these startup companies, you're going to pay us to do business, aren't they? >> yes, but i still think that even if there's a tax put on, the cost to drive an autonomous taxi network is going to be half

the cost of our own cars and one-tenth that of a taxi. >> all right we'll get back to tech in a moment. let's talk about financial the for a second, though, they did lead the market as investors eyed a little increase in treasu treasuries cinch synchrony was the standout up 4%. that's where you look for the deteriorating credit quality. >> we've seen big bank earnings. many are saying credit looks benign right now synchrony, the stock well below its highs. it bounced here. i think financials in general, treasury yields went up a little bit, had that overnight market lift when you had the senate pass the budget bill because, okay, people are going to inkment incrementally say maybe we get tax cuts treasury yields, little steeper. and financials are helped. really not that much more complicated. >> you're not big on wall street, evan i know what about other parts >> look, the whole thing is,

like, yields go up a little and the whole -- the xlf or financial stocks go up 1% to 2%. it's like they go up a little and go up 1% to 2%. >> is it a big relative move >> the reality is this, if you looked at the earnings, certainly goldman earnings, they harvested a lot of private equity investments the core business of wall street when you look at trading and asset management, those businesses are not -- we have a huge bull market right now >> yeah. >> those businesses are not firing on all cylinders. >> what percentage of the financial sector, the s&p, do you actually think is capitalizing those -- it's not a lot. the biggest member of the xlf. >> no, no, i'm saying to kelly's point about wall street, writ large, i'm talking about -- i'm not talking about a lot -- the regional banks or things likein business of wall street. this is unusual. everybody goes, goldman -- it's cheap now. i mean, look, if you believe as i believe that there's going to

be huge margin compression in the -- >> this is a former employer this is like you -- you know this stuff. >> i'm not -- you can be a well-run bank but, you know, they're in a huge bull market and they're struggling to get a return on equity in the double digits that says something. >> absolutely. biotech was getting hit today. that was kind of the flip side of this rally. celgene saw the huge drop-off after announcing plans to stop developing a critical drug to treat crohn's disease. the biotech index down 1% today. cath cathie, are you guys biotech as well >> yes, we are very focused on the genomic revolution and celgene partnered two of the -- >> told you it's rowdy down here >> yeah, those two stocks are juneau and bluebird. >> yes. >> they have indications, you know kite got approved this week for nonhodgkins -- >> yep. >> they have similar indications. celgene has partnered with them. we think this was an overreaction today sure, a disappointment but

they've got a lot going on very positive in the genomic space. all right. speak of, let's talk about turnarounds with ge today. general electric shares on a big earnings miss this morning the stock was sinking but ended the day palmost 1% higher john flannery sat down with david faber earlier today, might have helped spark the turn ya d turnaround he was very candid. >> cash flow for 2017 is horrible, $7 billion number, way off our expectations, anyone's expectati expectations that's no the new normal $7 billion is not the new normal there's a number of steps we're going to take to improve that significantly in 2018 and beyond >> is and evan, people are obsessed with the cash flow, they want to know is dividend going to be cut? >> this is, remember last week, we talked about value traps. this, ge, for the last few years, classic example of -- >> are you impressed with th fact he's saying we're shutting down the corporate jets, we're getting rid of our far-flung research centers, we got to have more -- >> i think he's talking to wall

street and the problem with ge is not wall street, per se, it's with the core businesses and whether or not their core businesses are healthy and generating free cash flow and doing all that stuff he's talking because that's -- the game that ge has played over the last 30 years is you manage wall street. manage your balance sheet, you manage stock buybacks, manage the dividend, do all the stuff to make wall street happy and your stock price goes up for the last ten years that's not worked for ge. >> you think despite the fact he's breaking with the recent past, that he's actually continuing the same errors they've made? >> look, i think he's doing the kitchen sink routine, if i was coming in as a new ceo, i would do the same thing, everything's horrible, everything is bad, you can't believe how bad it is. you think it's bad, it's worse and it's bad what you do as a new ceo, you set expectations frankly, you don't even care if it knocks your share price a bit in the short term. >> you want to go out and be able to say, look, we started all the way down here, i took it all the way up here. >> that's right. i think that the way the street's reading this, first of

all, at the highs yesterday, before the earnings report, the stock was at i think 23,075. had this very strange thing where a lot of short-term folks said it was going to be a good number they puked it out before the open this morning. down 8%. lot of turnover. huge volume in the share holder base i think what people took away from the interview with john flannery, he seems to believe this stuff is no the that complex to fix yes, it's hard, tough decisions but not as if you have to go and invent a new business. you basically have to say, get operationally and financially more disciplined, you have to kind of clear out some of the lazy stuff, and we can get a little bit of progress on that i don't think he's sold it really well. the idea that all these businesses belong together. >> yeah. >> that's for tomorrow for today, if you can operate the businesses you have today a little better, maybe it's worth a little more. >> look at the swing, speaks a lot to what you're talking about. ge closed higher today. it's also been a very good week for ipos and is that all related? let's ask bob pisani

bob? >> what's going on we've been complaining about the ipo market for a year but some signs things are starting to turn around. things are starting to price above the range. we haven't heard that in a long time seven of the last ten ipos i followed, price above the range. i haven't seen this in ages. r.i.s.e., s.e.a., mongodb, qudian, cargurus we only had 88 this time last year the return has been 30% or so. those are better numbers people are starting to set up and take notice. we have nine deals next week this is what i'm talking about all of a sudden the market is opening up a little bit. got bp midstream, one of the big oil pipeline companies national vision, one of the big optimal retailers. forescout, a tech unicorn security firm, that's getting a lot of interest as well. the floats very, very small on that the ipo e r tf, up 34%, twice t s&p 500.

the aftermarket returns of these things have been better because they pushed the prices, initial prices down. speaking of boosting the prices, s.e.a., public today, $15. that's another one priced above the range and it just made -- had a wild session, actually went -- broke syndicate at one point. as you can see, closed to the upside 16.26. a lot to say next week about those ipos kelly, have a good weekend. >> you, too, our bob pisani. cathie, what do you make of it >> what's interesting about the ipos this year, we had the second lowest number of ipos since '09. 3 '09 was a horrible environment what i think it indicates is we're still in this wall of worry, we're gradually coming out of it. but the wall of worry has been building for eight years now and i think it's -- it's prepared the market or it's the underpinnings are in place now for a have strong bold move. >> i have a totally -- i have the exact opposite take which

is -- which is -- no, no, in fairness, she talks about the wall of worry. the wall of worry eight or nine years ago for the last nine years we've actually averted it. it used to be eight or nine years ago, everybody was afraid of everything. now we have the opposite. >> nobody say trade of anything? >> which is nobody is afraid of really anything at all. >> where do you think the ipos are? >> at this stage -- >> just buying them all up >> a year like this year, you should have twice as many ipos as have been taken place. >> that's true it's an -- that's true, that just means there's a lot of worry out there -- >> no, i don't think the supply of good companies is there the private market has taken a lot of them out. >> i can tell you from going around talking to perspective investors, they're afraid. do they move in now and to disruptive innovation -- >> is that because there's been high-profile companies like snap, blue apron that hasn't done well this year? >> they were early last year and this year. they got all the headlines these others are not gotten the

headlines. you're now surfacing something positive >> but there is a risk if stitch fix, just to pick an example that's a little more well known, if that the comes out and does poorly, you think it's going to feed into this idea it's too risky to go public or invest in these public companies? >> with tax reform, with the economy chugging along, i actually think more and more people as this bull market broadens out are going to be pulled in it i think we agree to disagree. >> i'd be thrilled if you were right, i'd be thrilled if you were right it's just, you know, you talk about the bull market and these -- uber was valued at $70 billion 2 years ago by the private market you know, paint the good case for many where uber goes out at $150 billion later this year. >> uber made a few mistakes, lyft has done something quite different. >> the wall of worry is higher than you would expect it to g given what the market has done and how the economy is that's the residual caution. >> valuation, yield curve, so the flattening of the yield

curve has scared the heck out of people. >> yeah. >> and we think it's going to continue to flatten because deflationary boom pushes prices down >> but the question is how long does that play out cathie, this is fun. come back. we'll pick it back up. cathie wood, very much appreciate you coming here from ark investments. stocks rally today after the senate passed that budget resolution last night and took another step closer to tax reform will the house and senate be able to agree on a deal without too many republicans jumping ship larry kudlow will weigh in but first, ge staging a major comeback today after missing wall street estimates this morning and cutting its full-year outlook. we'll talk about whether the beaten down stock is ripe for a recovery right after this. and today we're also going to be reading some of your comments on air. there's still time to send them in contact the show and share your thoughts with us by twitter, facebook or send an e-mail to closingbell@nbcuni.com you're watching cnbc, first in business worldwide

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it recovered and closed up 1% after david faber interviewed john flannery about his plans for the company. flannery said he was going to cut more than $2 billion in costs. didn't rule out cutting the dividend and said no changes were off limits. take a listen. >> we're looking at every aspect of the company, that includes everything inside the company and things external to the company, includes the board. so everything's under review the board has encouraged me as new ceo to look at everything in the company. so sththat would be the first point. second, we have a large board because we have obviously a complex company on some levels, added a lot of people during the financial crisis so the company, itself, is larger bull but the last thing, we added ed garden from triumph to the board. very much looking forward to -- he starts, november is our first meeting with him i'm looking forward to that dialogue i thchk itink it's healthy to ha lot of pushback and debate between management and the board. he's doing to add a lot of that. multiple business units. micro issue in h each one. culture, operating rigor

capital allocation doing those three things better and really world class are operational issues they're in our control when we do that, i know we're going to restore this to be in a growth platform and value creator for investors. people are going to like what they see we got to do the work. i know it's -- it's show me time. >> of course. >> no words are going to get us out of where we are. it's only the results. >> pretty candid from the ceo. joining us to debate whether this today is an inflection point in general for ge stock, michael, permanent portfolio family of funds president. and portfolio manager. brian, principal and industrial strategist at langenburg and co. welcome to you both. brian, let me begin with you i mean, has he managed to get all the bad news in the stock now, do you think? what's your read on this >> good question first of all, this was at the very least a kitchen sink quarter and then some. does that mean the bad news is

out and that fundamentals are going to improve tomorrow morning or next week absolutely no way. there are some things going wrong. when your marquee large business including the acquisition is running profitability at about $2 billion a year below the annualized rate, people are looking for six months ago, it's going to take a while. >> how long, michael and are you positive on the stock? >> i think we're mixed i mean, i would largely agree with the ceo's comments today and i think that makes the bull case but i would say that there's a lot of questions around that when i look at the business, and i look at the land scape where you have resuming global growth potentially, you have potentially better tax policy including current year and much more accelerated expensing, so you got a lot of the businesses ge are in, power generation, industrial products, oil and gas development, aircraft engines. these are hardcore cap x

businesses that if you liberalize the depreciation rules you could get a lot of pent up demand and buy some of those products i would argue they were maybe weighted down and people are waiting to maybe invest in those areas and that has hurt the stock. i think they've gotten -- they rested on their laurels the left ten years to some degree when the ceo mentions culture, when flannery mentions culture, i think to me that's sort of what he meant. i think there's a renewed energy there to sort of get lean and mean you hear them talking about cost cutting. and capital allocation returns are all on the table in terms of flexibility. those are all great signs. i think they're encouraging. valuation is definitely attractive here. based on where it's been although i don't think you can measure it on the p/e numbers right now because there's been so many restructurings going on. it's a cautious optimistic story going forward for long-term investor >> how long is it for you, brian, i guess how long until you think a full break of a ge is back on the table i mean, if their core business at the end of the day, you know, they used to pride themselves, i

mean, when i was in business school, it was all about the great ge capital allocation model and they tried to sell us that, you know, well, you know that didn't work out too well for ge. >> good question. >> let's put it that way why doesn't h he come out and say, you know what, we're going to look at a breakup. >> it's a good question. when you look at the history of triumph partners, they bring adult expectation and focus on what you have. when i look at the portfolio general electric has today, they said they're going to have at least another $20 billion of divestitures over the next year or two, it is not a particularly dispersed portfolio. the issues are that they've executed poorly. when i look at the industrial portfolio you have, if they even do about 10% free cash flow to revenue on those assets, that should be about $12 billion a year free cash flow prefinance instead of the, you know, billion dollars or so they're going to do this year.

simple things like, you know, building an extra $2 billion of inventory in the power business when you're supposed to be cutting costs and getting efficient. it's just not pretty so they don't have to break it up they need to run it. >> all right brian langenburg, michael, thank you both for joining us. interesting stuff. >> thanks. >> we'll see apple's opening its new flagship store in chicago and the company's retail chief wants new stores like this one to be a sort of town square where people can hang out, attend concerts and, yes, shop will the strategy work we will ask next plus, tesla shares tumbling today after jp morgan suggested the automaker may have to raise the price of its model 3 to preserve margins how that could impact demand for the new hie.vecl still to come on "the closing bell." zar: one of our investors was in his late 50s

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i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor. welcome back apple sent out another record-breaking day on wall street closed higher just about a quarter. after yesterday's drop, the company giving investors an upclose look at its retail strategy today at a new flagship store in chicago that's where we find our josh lipton with the details. josh >> reporter: so, kelly, this new store in chicago is going to open its doors for the first time in about an hour and a half i want to snow you something else, kelly, i'm going to have the cameraman pan over see a crowd here starting to form people waiting to get in and beyond that, kelly, can see apple has built this big stage right across from the store, so clearly, a performance of some kind is coming

and that really speaks directly to the vision and the strategy of apple retail chief angela ahrendts who now thinks of these stores as what she calls town squares. places where people are going to meet up, take classes and attend live shows >> the way we look at it is building a relationship and if we can create, we can look you in the eyes and create a lifelong loyal relationship where you trust us, you trust what we're teaching you, you trust what we're offering for you to purchase because we're not selling you, and then it's no different than fashion. >> reporter: apple stores are productive they generate more than $5,000 in sales per square foot and that is more than any other retailer that e-marketer tracks. i also did talk to angela ahrendts about that new iphone x that's on the way and told me she's telling her retail staff they shouldn't feel pressured to

upsell consumers to that specific new device. >> of course, you want those fans to have the latest, greatest, but everybody's at a different phase of their apple journey, if you will and i think it's most important that we give you the thing that you need at the right time in your life that you need it if it happens to be the x, terrific but if it's a young child, i'd much prefer just to have them have apple and then be able to come in and learn everything they can about that device and i think they'll gradually go up to the others. >> reporter: kelly, back to you. >> all right, joshua, thank you very much. josh lipton in chicago there guys, what do you think, real quickly, about this whole flagship strategy, this town square notion that apple's talking about? >> i think the stores definitely needed a refresh i was surprised they almost had 500 locations which actually makes them kind of a real footprint on the retail side i think b it does make sense not everything is going to be analogous to some prime spot, beautiful spot on the river in chicago. >> right >> i think it does make sense to

have a place for people to come in. >> i was going to ask mike where he was on his apple journey. as angela put it i -- you know, i happen to think, you know, they do what they can apple is not going -- the stock is not going to rise or fall on the retail things or having the guy at the genius bar looking at you longingly in the eyes. >> who's looking at me longingly? >> that's what she was talking about, having a one-to-one relationship. >> making a connection, not like -- >> that's what i'm talking about. >> she looked like a real person she looked like a real person? >> angela did? >> so many apple people, i don't know. >> they don't seem like real people to you? >> i can adjust. >> no, no, i just -- i think you can't really assail the level of service, it's almost magic that they can just sort of swap out your phone -- >> somebody looked longingly into santoli's eyes. >> let's get a news update continue this with larry kudlow who's on set with us michelle caruso ka br-cabrera i joining us. >> harvey weinstein could be

kicked out of the organization behind the memoemmy awards. already kicked out of the act mib of motion pictures art and sciences following accusations of sexual harassment. whole foods solved an incident, compromised information of patients in some in-store restaurant locations. it has since replaced all point of sale machines breached by, quote, unauthorized software the faa urging global airlines to ban laptop computers in dhekchecked luggage a study showing that rechargeable lithium ion batteries are prone to overheating and can catch fire or even ex-employee in certain situations. jet blue removing its listings from a dozen second tier travel agency sites wants people to book on its own site which saves it from having to pay other sites' fees it gets over half of its bookings on jetblue.com. that's the cnbc update at this

hour, kelly, back to you. >> i don't think the phase of the internet where it's -- where everything was coming together on one platform, you got to download all the stuff all over again. anyway, thank you, michelle caruso-cabrera by the way, if you're just joining us, we had a record-setting day on wall street today the dow, s&p and nasdaq all closing at record highs. dow up 165 points, s&p up 13, the nasdaq up 23 and the small cap russells up seven. president trump has been interviewing potential candidates for the top job at the fed. a job janet yellen has held for the past four years. fed chair yellen was seen leaving the white house yesterday after meeting with the president. today, the white house saying no choice has been made but that the president is considering both jerome powell and john taylor for top post. it's kind of what larry's been saying cnbc senior contributor larry kudlow does join us with the latest on the horse race. >> one point on this, yellen had lunch today with gary cohn after the meeting with president yesterday. i try to read the tea leafs like

anything else. >> i thought it was a monthly thing. >> she meets with him all the time the idea is was she was called back for a follow-up interview but in fact this is a semiregular thing. >> semi. semi. >> can i ask a question to get you started? i wouldn't disregard that. a ban from the white house that's all i'd say. >> let me ask you a question. >> yes >> what is the probability he picks taylor i would put it as zero or close to zero. you know a lot more about this why are we even talking about him, why aren't we totally focused on powell at this stage? >> we're talking about him -- >> what am i missing >> you're missing a brilliant guy. you could learn from him. >> nothing to do with that >> go back and read his blog and learn something from taylor. >> a president who basically marked the success of his administration on the stock market and the number one enemy among all those fed picks of the stock market would be mr. taylor. >> i don't agree with that see, look, i think you have two factions here. okay hear me out.

>> okay. >> one is the status quo faction, the establishment i think that's yellen and powell i don't think they're going to change the models, they're phillips curbers, they think growth leads to inflation. they're the ones i worry about for tightening because if trump gets the tax cuts, the economy is going to grow much faster i worry more about them, the others i call the reformers, the other faction. that's kevin warsh and john taylor and those guys believe growth is a good thing, higher wages are good they would not automatically tighten at all they favor the tax cuts. and i -- neither of them are phillips crew guys the irony, inflation and unemployment tend to move together, not in opposites. >> this is a good point. what you are saying, the conventional wisdom that yellen and powell would be dovish, and taylor and warsh may be the opposite -- >> exactly right could be turned right on its head i'd make that bet. >> really? >> i'm for the warsh/taylor

ticket, i have been from day one. >> really? >> i think those two guys would look great have a combination warsh loves to use dollar markets and commodity markets to predict inflation. john taylor agrees taylor rule. >> but the fed funds rate under the taylor rule would be, like, 3.5%. >> i agree yes. and he has said that's not the way he would work it remember, these are just theoretical equations. you have to adjust to the real world. so we'll see i just thought it was interesting that yellen was back in the white house today you know what, no one knows. >> no one knows. >> president trump will make his decision. >> do you have any insight about the budget process and the tax reform >> i think the reason the market's been roaring the last week or two is the tax reform seems to be gathering momentum and let me say this. the senate passed its budget resolution party line vote, okay? except for -- >> rand paul. >> rand paul whatever but in that -- i didn't know this until this morning, in the

resolution, they say there will be no conference with the house, that the house budget resolution will be identical to the senate budget resolution and that means you're cutting out at least a week of, you know, blather and going back and forth, if not more so shortcutting the conference for the budget means they're going to jump right into the tax cuts the next step is the house ways & means committee i believe beginning next week will start its markup session they call it the chairman's mark when it's completed. and presumably over in the senate finance committee, they'll do lifeline. look, the gop is much more united on tax cuts than they were on health care. >> do they only need the 50 votes or the party-line vote >> 50 plus 1 50 plus vice president pence. >> that's in the senate. what about in the house? i mean, there is -- >> doesn't matter. this reconciliation is a senate vote they have $1.5 trillion tax cut

whole. it could be even less than that if they use current policy baseline on taxes that will be renewed and restored it's easy. it's growth. it's all about growth. >> they're not going to lose any republicans along the way here >> i can't predict that. that's tricky. senators are tricky. and it's very hard to know that. they did very well in holding the party line on the budget vote tax thing might be a little more complicated. i personally believe they will make deals and compromises and some judgeships will be handed out and some bridges to nowhere. i'm perfectly okay with that i'm perfectly okay with that. >> what about the new york state local and -- >> largely because of your bellyaching, they're now going back -- >> i'm curious about that. >> -- and they're looking. >> they might keep the -- >> that's correct. they may keep the property tax or they might have a very high income test for wealthier people so the middle class -- it's the -- the big states that use it, it's the 150,000 to 300,000 area that have to watch it

i know you're way above that >> no comment. >> your bellyaching caused them -- i said -- i told him not to listen to you the whole time. >> larry kudlow. >> good policy is good policy. >> with good insight thank you very much. >> by the way, gold falling, dollar rising. >> i hear you. >> growth is good. not inflationary. >> thank you, sir, always a pleasure larry kudlow. news alert on canadian retailer hudson's bay. >> hudsonson's bay ceo stepping down effective november 1st, returning to his advisory firm the company retained an executive search firm to recruit a ceo. in the meantime, baker to be in the ceo role as an interim basis. hudson's bay over the last 12 months is down over 30%. again, the news here, hudson's bay owner of sachs fifth avenue, lord taylor, jerry storch stepping down as ceo. >> we hear lord and taylor is cooking something up with walmart. >> jerry storch was my first

boss on my first thing i worked on on mackenzie. >> i assume it wasn't in retail. >> kind of a qua dsi retail business. >> you should bring him on. >> jerry's been on with toys "r" us, trying to take that public that didn't work out think he was at target for a number of years. >> a tough business right now. tougher than it's ever been. jerry storch leaving hudson's bay. we work as the nation's startup valued at $20 billion. critics are calling it overvalued tesla shares down 2% today after jp morgan released a note saying the company may have to increase prices on the model 3 we'll have those details straight ahead a u

shares of tesla heading south today after jp morgan cut their price target on the electric automaker coming up, we'll look at what was behind the analyst call with the shares down about 2% while the likes of uber and space x are exotic startups with big ambitions, a startup company built on desk chairs and office space has been soaring on the valuation charts the less than exciting business that has some investors excited while others are pretty concerned is next in our "fast take."

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>> fees were a big part of that and all of a sudden can get 0%. >> the whole idea, you know, is -- >> stock picking >> no, it's just crazy that you're paying somebody, i mean, they're doing this because they've been performing so poorly >> that's my point >> why -- >> what would you say to somebody, okay, i understand your stock picks haven't performed well but if you're not going to take any performance cut on this, and i can just give you my money and maybe, you know -- >> the whole idea behind the performance fee, you were supposed to -- everybody's incentives were supposed to be aligned. you're getting rid of -- >> you have to add one thing this deal is only available to existing investors can't decide today to do it -- which means all it is is allowing them to have a lower blended fee exposure and to retain their money >> feel better about your losing investment >> all right you're being very -- >> be contrarian and say maybe these guys are actually -- pe pendulum is going to swing. >> speaking of harsh language, there was some on the "journal's" front page today calling co-working startup

wework, quote/unquote, fueled by silicon valley pixie dust. now apparently wework won't admit they're just a real estate company which the "journal" implies would merit a much lower valuation, guys. i think there's something to be said about the idea of a physical social network, a different kind of work space than is necessarily available everywhere else. >> you could argue it's a better run, more attractive real estate property i think that's probably true nobody else has a brand. >> the social character of it matter in other words, you have people on their laptops who could be from 30 different companies -- >> in the current environment, it definitely makes wework's properties more attractive to startups and i think it's a brand. you don't otherwise say, gee, i really want to go to a boston properties building and put my startup in there there's no real sense of that. >> i looked into these spaces, evan, they are quite pricey, but apparently they are now cutting prices because so many copycats have sprung up. >> yeah, it's a real estate business at the end of the day i was -- at the height of the internet boom, the company -- >> yes, i was just thinking about -- >> when everybody has regis, it

was like, okay, it's the internet boom, it's a regis space. it was an office space it was an office space. >> wework is just one of softbank's many investments. the japanese conglomerate not only owns sprint and arm o holdings, can invest $100 million in companies like wework and may be launching another bigger tech fund according to recode bernstein research is calling the company the berkshire hathaway of tech,ing guy guys. >> by the way, the last guy, you know, somebody used to call sears -- >> eddie lampart is the name you're looking for. >> no, no, somebody on this network used to call eddie the -- >> the warren buffett of retail. the berkshire hathaway -- >> is the comparison apt because they're a big conglomerate with a lot of money in fairness to bernstein, talking about the performance of softbank, said over the last ten years berkshire produced 129% total shareholder return while softbank is 320% in u.s.

dollars. >> well, the time when it masen to say -- would have been the equivalent of 1965 for buffett we made all his best investments that did stupendously well long before people were saying warren buffett is coming with his money. right now softbank -- >> that's true. >> coming with its war chest they need to put to work. >> i think that's a very good point. we're not going to hear anymore from you. >> i think i'm done. tesla troubles model 3 is the reason behind concerns over the stock. has analysts disturbed we'll ta alkbout whether they need to raise prices, coming up.

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welcome back we saw a drop in tesla's shares, nearly 2% in today's session analysts slashed price guidance on the stock phil lebeau joins us from chicago. >> reporter: kelly, a number of people are wondering what tesla will tell investors next week about the model 3. the expectation is we could see weaker deliveries not just for the fourth quarter but potentially leading into next year due to higher costs and potentially that means lower margins, lower than the 25% targeted by the company originally jpmorgan saying today that in order to preserve the targeted gross margin of roughly 25%, tesla may need to increase the price of the vehicle to consumers. that's gotten a lot of attention. whether or not they will have to raise the price from 35,000 and ultimately live with lower margins, again, we find out what tesla believes is in store for the fourth quarter

they report earnings on november 1st. kelly? >> phil, it's interesting to think about what those price increases would mean the demand for the car seems to say -- i wonder how sensitive people are to the pricing. it's hard to tell. >> reporter: kelly, my guess is, of the approximately 500,000 reservation holders out there, i don't think they're going to drop their reservations were tesla were to say instead of $35,000 we're going to charge $38,000. if they said $50,000, that might be a bigger story. when you get beyond those 500,000 reservations, which biwbi w by the way, is worldwide, what happens? >> does it matter who they're up against? would that put it more in competition with the bolt or the volt are we talking more at the mercedes or bmw level?

>> reporter: i have long contend that most people look at tesla as a luxury brand, not as a mass market competitor to the volt and the leaf again, they're going up against luxury brands. you're talking about the c class or 3 series. that's the most relative comparison >> that's how it feels, i agree. phil, thank you very much. >> reporter: you bet >> phil lebeau mail, we get lots of it, all from you we'll share with you what you're telling us we'll tell you what you're telling us when we come right back what is the power of pacific? it's life insurance and retirement solutions to help you reach your goals. it's having the confidence to create the future

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welcome back it's time for the "closing bell" mailbag. we begin with what anthony de paula just said, he said janet yellen ate lunch today, kudlow says that may give him insight into the next fed chair. ouch, anthony. earlier this week we had chip and joanna gaines here jim commented on facebook, when

you have special guests it would have been better to spend more time with them, maybe skip fast take or something else you do this with all the guests, you have three minutes, it just doesn't do it. i know that might have felt like three minutes, which is a good thing. it went nine, we had to kill the next block >> i hope he's not talking about fast take on fridays fast take other times of the week i could understand, for example. >> we're trying. >> that looks like he was on for nine minutes >> i'll hand him a hammer and crowbar. >> we played that whole nine minutes of the interview >> you can replay it, just not on friday. >> i've never seen somebody get their paint swatches autographed. >> i was very excited. next week i'll be saying, maybe this one is slightly too yellow. >> you still seem a little residually star struck >> i should move on. roger tweeted about our black monday coverage. he said, great job, bill

griffeth and kelly, much happier watching the market at all time highs. >> no doubt about it the message most of us struck yesterday was, you know, not as many similarities as differences right now. but it was a singular event. >> i was on wall street. but i was physically in london i remember this is the days when you had these quotrons >> it happened there first >> no, it happened in new york i was able to sell my fidelity european mutual fund at the -- >> london was closed for the day in a storm >> i was able to get the price, as if the european markets were closed nowadays you would never be able to do it >> would it be harder for that type of crash to happen today or would it be easier would it transmit more quickly i know we have circuit breakers so it's not quite the same >> it would be harder, in a weird way. that was the dawn of computer

trading. >> it was half automated >> it was weird, like a halfway house, which is why it was so traumatic. >> if you had quotes delayed two hours or three hours, the market is going to melt down. that's less likely to happen now. >> we appreciate it. thank you very much. i will see you next friday that does it for "closing bell." "fast money" starts right now. "fast money" starts right now. you hear the music and you know what that means stocks are at all time highs america is getting rich. the dow, s&p and nasdaq hitting fresh records. the dollar also surging and the yield on the ten-year also rising as traders dumped bonds after d.c. takes its first steps on the path to making tax reform a reality with the senate passing a budget and wall street is loving it do you jus