coalition power. what's interesting, though, is the reaction overnight, reaction in the european session -- >> not bad. >> not bad totally shirked it off maybe this is something that you have to watch in the longer term all right. thanks for watching "power lunch. >> "closing bell" starts right now. oh, you're back. hi, everybody. welcome the "closing bell. i'm kelly evans at the new york stock exkachange. >> i'm bill griffeth one bank is asking to no longer be deemed what's called systemically important we got top analyst mike mayo to talk about whether this could start a wave of deregulation, other banks could do the same, whether this would benefit those banks to have that designation taken away we'll explain it coming up in a little bit. >> slook forward to hearing what he has to say. also merck shares under pressure today the stock is now down 15% over the past month down 2% in the session

we're going to tell you about the new drug trial results weighing on that company today. >> guess how it went. >> well, it went well for someone else >> yeah. exactly. box office blues movie theater stocks are getting crushed again today. six superheroes can't even save those shares being very opaque here but we'll explain coming up in a little bit. first, breaking news, just this afternoon on fed chair janet yellen, our dom chu has more on the story. >> all right, so guys, federal reserve chairman janet yellen will be leaving the fed completely in february and this is what some fed observers say is no real surprise. fed chair yellen's term as chairman expires in february we know this and president trump has already made his pick to be the next fed head that's current fed governor jerome powell, of course, pending confirmation by the senate there had been some speculation around the notion, perhaps, yellen would maintain a presence on the fed board of governors since her term adds a governor of the central bank doesn't actually expire until january of

2024 now, yellen's complete departure from the fed both as chair and governor means that president trump will have four open spots to fill on the board of governors. the only person we know is going to take a spot is randy corels confirmed recently by the senate nominations for the other post have yet to be made. in the letter that janet yellen did send to president trump, she said "as i prepare to leave the board, i'm gratified that the financial system is much stronger than a decade ago and better able to withstand future bouts of instability and continue supporting the economic aspirations of american family and businesses." bill, kelly, for the rest of that letter, go to cnbc.com. still a very big development here with regard to future fed policy and personnel back over to you >> and i just -- let's make it clear once again, there might be some confusion out, rest of the regular media, she's not stepping down as chair of the federal reserve. she'll finish that term to january, when the next chair takes over she was going to be a governor until 2024 that's when her governorship was

going to end that's what she's resigning from. >> correct. >> just making it clear. >> right, right. so we already knew she was not going to be the next fed chair we knew jay powell was being nominated to that position by president trump. but that didn't mean that she wasn't going to be part of the fed board of governors she could have still stayed there until 2024 this is just now her way of saying that she is going to take a step away completely from the fed after this is all said and done with jerome powell being sworn in next year >> all right thanks, dom. see you later. welcome back, by the way. >> thank you. we have just over a month to go in this year. we're on track for the first year since 1995 without a 3% pullback in the s&p 500. but cracks in corporate debt could be one red flag for stocks mike santoli is here at post nine early with that part of the story. mike >> yes you have to look a little bit hard to see those cracks obviously last week the stock market did get a little bit wobbly as high-yield debt sort of acted a little bit -- little bit cranky i do think that that's one thing, though, that kind of

brings our attention to the fact that we do actually have very high levels of corporate debt out there. this is not a story of companies sitting on lots of unburdened cash if you look at non-financial corporate debt as a percentage of gdp, we're pretty much back up toward the highs of previous cycles that's been okay obviously rates are very low, cash flows have been strong. companies have been able to cover the debt, taking what the market has given them. i would point to a couple factors. one is certain pockets of the higher risk debt market aring a gt acting a little less stable. telecom, health care, some other areas like that. also stocks of strong balance sheet companies are way outperforming stocks, weak balance sheet companies. that could be the market telling, look, it might look like a late cycle when it comes to credit concerns so all these things have yet to really filter in broadly maybe last week was kind of a test run for ultimately when this stuff is going to matter. as you know, guys, it's one of these stories that's shadowed the market for a long time people always want to talk about how leverage always accompanies

some kind of market. no saying how high is too high. >> i was reminded stan dreckenmiller talked about how this could be a risk for the next one. >> which points to, there's no set number -- benchmark that has to be hit for us to say, okay, the top has arrived here. >> no. >> this could still go on if ar while. >> one way it might pinch, if rates go up a lot next year, let's say, if at least it's going to kind of put some companies out of the box in terms of being able to refinance, it's going to make it more expensive for others. again, not doomsday but squeezes on the margin. >> stay right there. the "wall street journal c" tod took a look with an entire page dedicated to warning signs in the market it's not just corporate bonds. among the other indicators, volatility index at record lows. stock valuations, the highest since the dotcom bust. treasury yields have remained low. junk bond yields have fallen appetite for risky investments have soared. tech stocks have a bigger share of the market than any time since the tech bubble.

>> going to add to i.q. level of post 9 here with "the wall street journal's" ken brown that joins us with more of the potential signs. i feel like i'm at a dow jones reunion with all three of you here then you throw in the da vinci painting last week you dlou in bitcoin. i mean, some of the other social things going on right now. we've seen this movie before, it seems. >> we have, you know, to call a top of a market is a terrible exercise because you're going to be wrong >> right. >> what we focus on is what can investors think in the next year, even a few months, what are the returns going to be as mike said, all this bond issuance, $6 trillion worth of bonds issued in each of the last six years. corporate bonds. yields are low what are the returns go iing tob in the future? that's the only question we try to answer. >> that's something we've just seen jack vogel weighing in isn't a disaster compared with some of the discussions of them collapsing entirely. one second, everybody.

>> where are we going leer we're going to the white house we have a press briefing rex tillerson weighing in. let's nissen in very quickly >> i call it the peaceful pressure campaign. the president calls it the maximum pressure campaign. this is to hold north korea accountable for a number of actions they've taken over the last several months, last year or so. le some some of you will know north korea was designated as a state sponsor of terrorism in 1988 that designation was lifted in 2008 as part of an effort to negotiate with north korea an end to their nuclear program that obviously failed. because we can see where we are today. but as a result of actions they've taken including assassinations outside of their country, using banned chemical weapons, these will all very, very serious actions on their part they put the public at risk as

well so that along with a number of other actions that they've taken resulted in their designation now again as a state sponsor of terrorism. i think as sarah indicated, the practical effect of it is it all -- we already have many of these actions in place through the current sanctions. it may, though, disrupt and dissuade some third parties from undertaking certain activities with north korea as it does impose prohibition on a number of other activities that might not be covered by existing sanctions. but i think importantly, this is just continuing to point out north korea's illicit, unlawful behaviors internationally and we felt it necessary to reimpose the designation for that reason. so with that, happy to take questions. i'm going to let sarah referee because i'm no good at refereeing >> thank you thank you, sir is this move an sbeintent to

incentivize kim jong-un toward negotiations i think it's been more than 60 days since we've seen some kind of test. do you think that timetable is in any way promising why wait until we are back in h the u.s. the president said thatdiplomace were in asia this seems to be counter that. >> no, we still hope for diplomacy. and this is -- the timing of this is just one of us concluding the process there is a very specific designation process that we have to go through at the state department to be a ibl to meet the criteria to make such a designation. we wanted to ensure we'd fully met a those requirements again, this is all part of continuing to puturn this presse up we continue to turn the pressure up on north korea by getting other countries to join and take taxes on their own we've had other countries in our visits to vietnam, they have committed that they're going to curtail activities further with north korea, malaysia has indicated their curtailment. singapore has cut off all trade

with north korea, the philippines have cut off all trade. just recently the deputy secretary of state has been in africa he had meetings with the sudanese government. the sudanese government had traditionally been buying military weapons from north korea. they now agreed to lawsuit all those purchases as well. so this is being -- it's taking effect all around the word we think as it takes effect, again, this continues to tighten the pressure on the kim regime all with an intention to have him understand this is only going to get worse until you're ready to come and talk. >> specific to the 60-day window, you don't think it's a trigger? >> we're hopeful that he continues this quiet period. that's our objective is he continue to be quiet as well this designation, as i said, is one that we're required to undertake from time to time. and we've been monitoring the situation. we wanted to be sure we had sufficient evidence before making the designation so this is a process that started actually several months

ago. >> secretary tillerson. >> thanks, secretary you mentioned that you have increased regional pressure against the north korean regime. do you have any indication that that is working? if you haven't seen those indications just yet, how long do you go down this path before the administration has to change strategies >> we got a lot of anecdotal information that it is working and we have our own intelligence sources as well. and then what the chinese and others share with us that i think the general belief is it is having a significant effect on north korea we know that there are current shortages of fuel based upon what we can gather from anecd e anecdotal anecdotally, also from certain intel sources. we know that their revenues are down because a number of the revenue streams are being curtailed now. so i think it is having an effect is this the reason we haven't had a provocative act in 60 days i don't want to suggest to you that i could say, but we're hopeful this period will continue

and, again, i think the president in his address in seoul, south korea, to the general assembly, i thought he laid out the case very well to them that he wanted hem to co em have talks because he wants to deliver a different future to the people of north korea. >> thank you, mr. secretary. a couple for you, the first, can you give us an example of a third-party transaction that is now covered that was not covered by either existing american sanctions or the u.n. security council sanctions? >> well, there could be certain dual-use equipment that may not have been covered under previous sanctions that this would prohibit now a third party selling that again, i don't want to suggest to you that the designation is something going to put a whole new layer of sanctions on them because, again, i think we already have north korea so heavily sanctioned in so many ways with the u.n. resolutions that have been undertaken but this will close a few additional loopholes off. >> you and the president both referred to assassinations,

plural we obviously know about the kim jong-nam assassination at the airport. can you give us another example of another assassination on foreign soil >> i don't have anything that i can share with you specifically. >> secretary -- >> thanks. there seems to be more unilateral u.s. sanctions against north korea on the way the treasury is going to aflounce them tomorrow you given up on getting china to agree to an isoil embargo? >> we've not given up. let me say this with china we continue to talk with them first to ensure they're fully committed to implementing all the u.n. sanctions and they assured us they are. which as you recall, the last round of sanctions imposed a pretty severe restriction on the import of finnish products so fuels, petroleum, diesel, wh whatnot. we have suggest ted to them, yo control the oil pipeline that feeds their refinery you can do that unilaterally on your own if you want to increase that pressure. whether they're doing that or

not, we don't know, and it's very difficult for us to know whether they're taking actions to curtail all supplies to them. >> secretary, earlier today, president trump said that the treasury department is going to be announcing additional sanctions tomorrow you described it as a very large one, the highest level of sanctions. can youive us any insight into what those additional sanctions may be >> well, i'd like to leave it to treasury to announce those tomorrow they're similar to sanctions we've taken in the past. we're just going out much more broadly flow to more entities. i'd like to leave it to their announcement tomorrow. not jump the gun on them >> and do you all see today's announcement as more symbolic or as something that really does have a lot of teeth to it? >> well, i think it is very symbolic on the one hand because it just points out, again, what -- what a rogue regime this is and how brutal this regime is and how little they care for the value of human life.

so i think if -- that in and of itself i think makes a strong statement, just the nature of this regime. as i said, the practical effects may be limited, but we hopefully we're closing off a few loop locals with this >> thank you, mr. secretary. mara from npr. if china does not agree to cut off oil shipments to north kr korea, how can you possibly get enough pressure on them to come -- >> well, their fuel supplies are already quite constrained. as i said, we have evidence that there are fuel shortages in north korea. obviously, the civilians are by in large the ones that can't get fuel we see long lines of vehicles at petrol stations. we see certain petrol stations that appear to be out of fuel because they're closed when normally they'd be open. so there are indications that fuel supplies are already quite tight. as you know, they only refined a small amount of their fuel needs internally they only have one refinery that

operates it operates at a low capacity. so they were heavily depept pp on imports which have been constrained significantly with the u.n. sanctions. >> is the chinese action essential, in other words, do you need china to cut off those oil shipments? >> i don't know that the cutting off of oil is the magic wand or the silver bullet that is going to bring them to the table what i would say is the north koreans have demonstrated in the past they have an enormous capacity to withstand a lot. they'll make their people pay, but they have an enormous capacity to withstand a lot. so i don't want to suggest that we think that one action is all it would take to get them to the table. >> thank you margaret with bloomberg. thanks welcome in our briefing room any time i want to pick up on olivia's question about the assassinations was -- how determinative was that in the specific evidence that you used to make this

determination? and i also wanted to ask you, i think you and ambassador haley both spent some time with the president and that's unusual i know she's in town today ca can you tell us about that meeting? >> on the assassinations, assassination in malaysia was a significant event that caused us to look kafldly at what else they might have been doing as you know, that assassination involved the use of a chemical agent, a very dangerous agent in a public place so that really got our attention. one of the things that we wanted to ensure is we had a sufficient certainty around their role in that particular assassination. so we've been working with malaysian authorities as well. been in conversation with them wanted to let them have their own process, obviously, play out as well. with respect to ambassador haley and i, we were both in the cabinet meeting today. >> i know without getting too much into it, there had been a

suggestion from the north korean media about some violence directed toward the u.s. president. was that a determinative factor at all in the decision to make a designation? >> no. >> okay. >> mr. secretary, i'm sorry, peter baker, "the new york times. thank you for coming you talked about assassination on foreign soil using a chemical agent. russia have done assassinations on foreign soil in london. should they be -- >> we have to consider any country that takes a substance like that and use it illegally. >> is there -- >> i don't want to comment on that >> thank you, mr. secretary. trey with one america news how do you balance the impact of sanctions? you talked about the people of north korea paying the price is this something you're considering when you talk about more sanctions toward the regime of kim jong-un >> well, it's always a difficult choice you make when you impose sanctions in terms of who's really going to bear the burden here the truth of the matter is, the

people of north korea already live under enormously difficult conditions and i think what we're focused on is a mission that's going to change north korea's trajectory, change their path. that's the best way we can help the north korean people in the future is to have kim jong-un reverse his nuclear weapons program. allow us and the rest of the world to then engage with them on economic activity that will ultimately provide a better life for his people >> my follow-up question, do you believe thereat the united states is running out of diplomatic options to respond to the nuclear threat of north korea. >> no, i do not. >> got time for one last question john in the back >> thank you, mr. secretary. you talked about the limited intelligence on north korea and on the regime. is there any evidence of any dissent within pyeongchang at all or possibly reaction against the current government by other

members of the kim family even or other opponents to him? >> i want to be careful about how i answer that. what i would comment on is you're well aware of a number of executions that have occurred within his inner circle and within many of the military people that are close to him i'll leave it to your own interpretation >> thank you, mr. secretary. >> thank you >> secretary of state tillerson there. fleshing out the news that came out earlier today when president trump announced they were designating north korea as a sponsor of -- >> state sponsor -- >> yes, out there. there are hopes this might bring them around to the negotiating table. >> he got plenty of questions about china's role, the pressure they were bringing to bear on it again, the secretary of state appearing at the press briefing at the white house today still with us here on set at post 9, mike santoli and ken brown. we were talking about, i mean,

so much of the story the last couple weeks has been about politics and tax reform. right now it's actually something much more plain vanilla, this rally, the level of corporate debt we've been seeing and whether, ken, as you guys kind of explored today, these are all signs that this is some kind of market top. >> sure. so you pointed out what jack vogel said earlier, right, he said, oh, returns are going to be low there the future. the problem is, we've all experienced this three or four years from now, you say, oh, yeah, we got 4% it wasn't 4%, 4%, 4% it was minus 20, up 11. >> right. >> minus 15. when it goes down, it's volatile that's what people need to be prepared for low returns are going to be what they are it's how we get there. you know, with the bond market, the spreads are so tight now the spreads are tight. there's not a lot of give there. interest rates are going up. the other thing that's happening, because rates were so low, all these companies sold long-term debt when you have long-term bonds, they're more volatile. lose more money when interest rates go up.

that's going to happen duration is very long right now. >> mike, even in the face of the geopolitical issues like north korea, this market has been very resilie resilient, where in the past we might have seen volatility as a result of that. >> yeah, the market, it doesn't have that many raw nerves right now that seem to get rubbed by this news. i would point out one reason when it comes to north korea, in particular, we're reimposing sanctions from 1988, right this is not a brand new story and this market by many measures is as calm, low volatility as it's been since 1964-'65 when you had a nuclear standoff against a superpower, right? so i think you have to keep in mind what the market does and doesn't tend to price in on a daily basis. >> great point guys, thank you, both. >> thank you. >> abbreviated as it was. >> of the "wall street journal" and mike, we'll see you in a few minutes. plus signs for the most part here today the dow up 69 points was up almost 100 for a time joining our "closing bell" exchange now, jeremy siegel, professor of finance at the wharton school of business who's on record as saying 24,000 by january. which we'll talk about steve grasso from stuart frankel

joins us from the floor of the es exchange rick santelli is in chicago for us jeremy, here we are talking about all these signs that in the past have signaled the beginning of a topping process for the market do you acknowledge those at all and how does that factor in to your forecast with the market? >> well, we're clearly near to a top. you know, one of the strongest bull markets that we've had over the last seven, eight years, i think we have one more push and i think it's connected with the corporate tax reform which i think is very positive but next year's going to be a lot tougher than this year for the market first of all, political trends, valuation, which i don't think is unreasonable, but certainly isn't low. so i'm not putting out a warning, you know, everyone sell everything, and by the way, we've been talking about jack vogel, i remember a conference four years ago when he told

everyone stock returns were only going to be 4% a year. well, hey, the last four years have been much, much better than that so he's been bearish for many, many years unjustifiab unjustifiably, in my opinion clearly flow -- >> professor siegel, you've always taken the other side of that. >> not going to get the double-digit returns we've gotten over the last six, seven years on average. >> even the way you're talking about next year sounds much mor cautious than we usually hear you. the things you usually brush off. valuation of the tech space, best performers, are better than the valuations of consumer staples companies. >> and by the way, we're nowhere near 1999-2000 when the tech sector of the s&p, which was the profitable tech companies, were selling at 90 time s earnings s we're nowhere near that mania. but, again, i mean, when you get to 20, 21 times earnings,

politics, the midterm elections, i mean, you know, republicans want to get this tax reform done many of them are very worried about whether they're going to keep the congress. >> right. >> anyone whthen what do you lor to in 2018 that could keep this market, let's say, as buoyant as it's been this year? we had a great run i think we might have a pause. >> all right jeremy, i got to interrupt here. just when we thought it was going to be a quiet week because of the holidays, we got news breaking all over the place. leslie picker, doj, what's going on there >> hey, bill, that's right the u.s. is set to announce a major antitrust matter today nbc can confirm that it involves at&t, according to a person familiar with the matter time warner shares dropped on this news. just the announcement that the u.s. is going to announce an antitrust matter sent time warner shares, you can see, down about 1.7% last week, delrahim, head of

antitrust enforcement at the doj, was talking about how behavioral remedies in vertical mergers don't work it requires too much government regulation to patrol those and that only structural remedies are sufficient. as you can see, more in horizontal mergers we'll keep a close eye on this, listening in to see what happens, what develops as a result of this announcement, guys. >> yeah. it's funny how the market's already jumping to conclusions with time warner there julia boorstin is here as well with a little more color julia? >> kelly, i think we've been anticipating this news of the dwr doj would weigh in on this merger for quite some time as we reported over the past couple weeks, it's not just at&t and time warner interested in seeing what the doj is going to do here because all the media space is in the midst of so much talk of consolidation. there's so much interest in fox's assets a lot of people are going to be watching to fee whsee what happs

with this deal, how quickly the issues are revolved as a sign for what the environment would be for other mergers >> julia, the question is. what do randall stephenson and jeff, the ceos of those two companies to about swinging after the doj came out and said there were reservations about cnn and so forth does this prompt them to go to court, go sooner rather than they would have otherwise? >> randall stephenson has been clear about his interest and commitment of buying time warner of course, a lot of speculation about whether the department of justice would push to have at&t and time warner divest c, innn particular of the entire turner network, includes cnn, turner, and those tv networks are really the heart of time warner's assets there's also hbo if they were forced to sell off those networks, it would really change the deal entirely i think stephenson is really prepared to go to court.

i think they would file a response really, really quickly because they have been anticipating this. >> steve grasso is with us, steve, i'm curious what you think the broader implications are for the market once we hear the doj weigh in on this. >> i think the spin, though, has been so politicized regardi ini cnn that they have to be very careful in talking about how this deal or why this deal should not go through. so although you'll see the reaction, whether it's time warner, whether, as julia said, the other entities or stocks in the other space in the media space, you'll see them react, knee-jerk reaction i think ultimately, the deal probably figures out a way to get done, whether they'll nip and tuck around the edges and somehow get this deal done and ultimately probably be a positive for the media stocks. >> what are you -- so i was just going to say, you as a trader, you're going to try and play this sector right now? >> it's difficult to play out. i don't know if i have any edge when you look at time warner directly, but when you look at the other entities, whether it's

a disney or a fox, and when you start to look at a viacom, that is undervalued and has been the laggard in the entire space, i think it's a lot easier to buy a viacom than to place a bet on whether time warner is going up or down from here because your upside is a lot bigger than your downside risk in the stock that is down more than the entire group. >> it's easier in viacom, but you're also -- >> sure, oh, no. stocks -- if i had tomorrow's paper today, i'd only have to work one day this is all speculative. you want to limit your risk obviously to the downside. >> leslie, for those who are just joining us, what we're talking about is we're expecting a -- what has been billed by the department of justice as a major announcement and nbc has been able to confirm that it involves time warner. leslie picker, we don't know exactly what the announcement's going to be. we can pretty much guess based on past announcements by the doj regarding this possible merger of time warner and at&t, right

>> that's correct. delrahim said last week, you know, deals like this that traditionally in the m&a world have been kind of no-brainers, traditional precedent, have been very forthcoming for vertical integration. last week that tune was differe different. in the speech that he gave it caused a lot of concern among the market participants who trade in and out of deal stocks, merger arbitrage traders that this deal could be in jeopardy as could other vertical mergers, other future vertical mergers that are currently undergoing the review process historically, it's been more horizontal mergers that got that attention with regard to antitrust matters. now even vertical mergers are in the line of fire, it appears >> and leslie, we'll see you if just a couple minutes, of course, as we get more word on what is going to happen there officially rick, meantime, before we go, you always have a nice way of putting a button on things we talked so far about market top, whether we have one you know, the -- >> janet yellen's leaving. >> janet yellen's leaving. political crisis in germany.

so on and so forth does it all come back to the flat yield curve for you, or what >> in a way, it does all the big stories, whether it's high yield, whether it's credit worthiness, whether it's corporate securities getting over their skis, to me, there's one common denominator these have all been orchestrated all this behavior is modified behavior investors modified their behavior due to central banks and the fact they forced them into more risky asset classes. this is not going to end well. i'm not sure which is going to blink first. i do think the whole german coalition issue is huge, especially considering the political landscape for 2018 and countries like italy so i think that it's correlations that will, in my opinion, be the straw that breaks the camel's back i think the u.s. is actually in a good spot to capitalize on some of those issues in europe >> all right everybody, thank you jeremy, thanks for your time we'll be talking i'm sure as this market continues to trade into the new year.

thanks, everybody. see you later. we got 30 minutes left a little less than that right now with the dow up 67 points. and the nasdaq, i think, right, it's an all-time high if we close positive here. >> yeah, looks like -- we're close, absolutely. all-time high, 6,793 for the nasdaq >> we're close. zion bank corp wants to lose its systemically important status mike mayo is going to tell us whether mortgage regulation is ahead and which other banks could benefit right after this [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours.

we got stock movers here to watch. leslie picker joins us with more leslie >> hey, kelly, that's right. two movers in the food space jana, 8.74% stake in bloomin' brands, part company for outback steak house, italian grill and bonefish grills. shares up. 11% now on that news 13d filing shows jana wants to speak to management about strategic alternatives including a change in board competition as well as capital allocation jana last week disclosed a position in jack-in-the-box which sent shares higher earlier this year in the food space, they pushed whole foods to sell itself ult pimately to amazon hain celestial shares are spiking. they'd been evaluating strategic options as part of a settlement with engaged capital earlier this year.

shared on that were halted now up 3.7% there, kelly >> yeah, little bit less, bigger move for bloomin'. that's an interesting one. leslie, thank you. zions bancorp shares up today after filed a petition challenging its status as urgedx the dodd/frank the senate finance committee wants to raise that to $250 billion. zions wants to get that process going right now. >> joining us right now for how this move to perhaps deregulate some of the banks in that regard, mike mayo, core senior analyst at wells fargo securities joins us right now. is that designation as onerous as some of these banks would have us believe. >> i want to take a step back, this is a huge potential event you know what happened in 1955, it was the start of disneyland it was the start of mcdonald's and it was the start of zions having a holding company structure. so we're talking about removing what's been in place for 62

years. >> wow. >> if that's not a sign of deregulation, i'm not sure what is. >> i wondered where you were going with that. >> what you're saying, they're going to shed the bank holding company status we've already seen others move to do the same thing to eliminate a layer of regulation >> exactly so they're proposing to eliminate it it's not happening yet we think it could happen over the next six months. they need approval but if they get approval, which seems more likely than not, that can help to eliminate a layer of regulation and could help -- >> that would remove them from the fed's oversight completely, right? does that leave them under the aegis of a completely different regulator, is that why they don't have to worry about that >> yes, there are many chefs in the bank regulatory kitchen. just because zions potentially rids the fed as an overseer, they would still have the occ and some other obviously many other check and balances. >> okay. so my first question, again, is it really thereat onerous to be a sifi, to be designated as a

systemically important bank? i can hear barney frank right now saying who cares, it will prevent another financial crisis like what we had in 2008. >> it's a lot more onerous on zions happen it is on the big banks. the banks the size of zions don't have the benefit of scale yet they have more of the regulatory oversight like the larger banks. >> is the answer to go to 250, where the designation right now is $50 billion in assets and above. >> well, i think that's the right direction. i mean, zions doesn't have that much in common with jp morgan, citigroup or bank of america there should be a different treatment for banks in that size category. >> the message we're sending, we're going to shed our bank holding company status, remove ourselves from our oversight -- we're not changing anything else about our behavior, right? this is now a serious problem for the fed if it wants to keep all of these banks under its oversight to either say -- to either not let them do that or somehow change the rules to keep more of them in. >> i wouldn't say it's a serious problem for the fed. by the way, the regulators have done a really good job this decade in ensuring the best

resiliency of the banking industry in a generation so i'm one of the few people who say thank you, regulators. having said that, if you have one less overseer, it certainly makes life easier. >> we have to go we just want to mention there's a couple other banks you guys think could be next to do this >> my colleague, jared shaw, published a list of ten banks that are likely next and we'll be monitoring this and also we're monitoring the business models of the banks. as i mentioned, we're debating the imf next week on the state of bank business models in the future so this is an ongoing a story. >> cmas, pbct, sbny, four out of the ten for people who want to get a sense of this. >> thank you, mike mayo of wells fargo securities as always. swiss drug maker roche serging today but the gains could mean pain for a number of other major drug companies we'll break down the pharma battle coming up creating th't state-of-the-art drone testing facility

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shares of drug maker roche holdings soaring today while other pharma stocks have been dropping we'll tell you what's behind those moves when we come back. on the heels of home depot's strong earnings last week, tomorrow we'll get results from rival, lowe's.

coming up, wlle' debate which home improvement stock is worth owning stay with us at fidelity, trades are now just $4.95.

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as wu mentioned, shares of drug maker roche holdings getting a big boost today after positive results for its cancer and hemophilia treatments.

those encouraging trials sent a number of other big pharma stocks lower today meg tirrell is here to sort it allous. >> both lung cancer and hemophilia we'll start to lung cancer, this, of course, is a big battle in new immunotherapy combinations to treat lung cancer, still the leading cause of cancer deaths in the united states see roche up 6% on this, driving shares of competitors bristol-myers and merck lower as investors parse through what this means we're expecting to hear more data from this study coming soon additionally if hhemophilia, a study met its primary goals, newly approved hemophilia drug approved by the fda last week, that affecting stocks of shire and. jeffries coming out, pointing out bioverativ down 10%.

think it's overdone, shares of bioverativ from the roche drug people taking this as a zero-sum game in the valuations >> thank you, meg tirrell back at hq. dow up 63 points as we head to the close about 13 minutes left in the trading day here. home improvement retailers like lowe's and home depot seeing big trends this year, and bucking the trend of other retailers hit hard by the surge of online shopping which one of the stocks, home depot or lowe's, is best to fight off the amazon effect. stay with us let's begin.

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all right. so lowe's is set to report its third-quarter earnings before the bell tomorrow morning coming on the heels of the strong earnings report from its competitor, home depot, last week so which home improvement stock is the better buy for investors right now? >> joining us, david what consumer edge research, and jamie from morningstar equity research jamie, i'll go to you first, because you're the lowe's bull history has simply not born out that lowe's is the better performer, go back to the '09, present, home depot wallops them go back one year, home depot's doubled the return on lowe's make the case for lowe's here. >> i think lowe's generally

tends to get punished by having performance that's relatively less positive than home depot's. i also think lowe's performance is still pretty solid. there are periods of time where the company gets a little bit distracted by other projects in the third quarter of last year, they had a number of different write-do write-downs. i think fundamentally the business is sound and i think it's not priced to perfection the way that home depot is so we believe at this point that lowe's is really undervalued relative to home depot and we have the shares trading at about 12% discount to our price target or fair value. >> all right david, we gave you the easy one. make the case for home depot >> so, we've -- i wouldn't -- doesn't make for a great debate. i wouldn't disagree a great deal what t with the other guest home depot is an extraordinary retailer they're very well positioned driving return on capital, driving -- coming through the pro business, and we think there's pent up demand in the

pro business, gets great visibility to driving the core metric that we calculate at consumer edge research that allows you to run a great retailer into the future and that metric at home depot is running two, three x faster than the rest of retail i really think it's an extraordinarily well-positioned business that's really selling into this pro explosion of growth in the home improvement category. >> david, that said, home depot has hardly stumbled throughout this rally and often with stocks like this, something will hap n happen, you know, think of t.j.maxx just the other day, also one of the best performers in retail, came out and didn't deliver the goods and all of a sudden its rival, ross stores, looks better at this moment in time so what -- you know, is it crazy to ask whether home depot, itself, could be susceptible to some kind of reset is there anything going on in the quarter, hurricane-related or otherwise, that you think could change that narrative? >> so i don't think it's crazy to ask it's all of our jobs to ask it i think that home depot's consistency and strength of

these core drivers, but consistency comes from patience. and companies, retailers, that patiently invest badge in employees, in their customer relationship, and then the shareholder, they talk about the three-legged stool that patience and building that -- sticking with that program, really limits the volatility to returns and the chances of some curve ball as you're describing it >> jamie, we're making -- i don't want to dispute the premise of this whole segment, we're making it sound like it's a zero-sum game, you know, either have to pick home depot or lowe's. but both have had pretty decent gains overall. but what does lowe's have to do to live in amazon's world? i guess that's really what we're asking here. >> well, i think for them to become more like home depot and generate returns that are more stable as well, they really need to focus on the productivity on their big box stores

and protect, you know, protecting against amazon is really going to be a function of the brand relationships they have, the ability to price properly, the ability to get the right merchandising in check, and like the other guest said, you know, tap into that pro business so they've sort of dipped their toes into that space as well in a much smaller scale than home depot did. that sort of cross-selling, you know, really prevents their business from being degraded longer term if they can tap into it the correct way. >> all right david, jamie thank you both reminder that lowe's does report its earnings first thing tomorrow morning we've got some more news on that expected doj antitrust announcement coming later today. eamon javers at the white house with more on that. eamon? >> reporter: yeah, bill, that's right. sarah huckabee sanders was asked about that potentiality in the white house press briefing that wrapped here a few minutes ago here's her answer in that exchange >> can you tell us whether the president or the white house actively encouraged the justice department to move forward with

the federal antitrust suit against at&t/time warner, against the deal that's been announced? >> to, i'm not aware of any specific action taken by the white house. >> reporter: the white house saying they're not aware of any specific action here taken by the white house and, of course, you wouldn't expect that there would be particular effort to intervene here of course, controversy over the president's public statements and tweets about mergers, particularly at&t and time warner and also cnn, criticism relentlessly of cmn over the past year. wait to see what the announcement is and how it plays out at the white house, bill. >> okay. eamon, thank you see you soon eamon javers. about five minutes left there the trading session with the dow up 71. we got theclosing countdown coming your way in just a moment small businesses show their love to you. with some friendly advice, a genuine smile and a warm welcome they make your town... well, your town.

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did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online. just inside the two-minute mark as we head to the close today, if you're just joining us, we're getting word that the dow -- the doj, the department of justice, is going to make this major antitrust announcement later this afternoon. and it involves time warner and at&t presumably they will file suit to block that $85 billion merger we'll find out you'll hear more about that coming in the next hour. that's what the two stocks have done, in the meantime, as a response to that. the dow today pretty good gain after last week's down

week, first down week in a wile. we're off the highs, though, as we go to the close here. verizon was the biggest gainer of the day on word that they're working on a streaming deal with the nfl. merck was the big loser today on that roche holdings getting approval on one of its big drugs there. the nasdaq higher. we're not going to get any records today, but we are moving higher today wwnn resorts a big gainer, a two-year high. netease pulling back from the huge gain we saw in the chinese internet company after they reported earnings last week, seema mody you know, we got no congress this week. we're expecting a quiet week it's been anything but today so far. >> clearly, especially on the doj front. i think despite this urge to merge in the media sector, there are clearly certain antitrust regulatory hurdles that not just time warner and at&t will face, but 21st century as it tries to sell certain assets. potentially to disney or comcast. we got to wonder how that regulatory risk is being priced

into these stocks. aside from that, you pointed out verizon, but home depot, and cisco, one of those old large cap tech names, continues to push the dow higher. >> thank you, seema. we'll head to the close with a gain of about 73 points on the dow. stay tuned we're going to get more details on what the doj has in mind for at&t and time warner coming up on the second hour of the "closing bell" with kelly evans and company. see you tomorrow, kell thank you, bill. welcome to the "closing bell", everybody, i'm kelly evans looks like the nasdaq just missed closing as a record high on the session today here's how all the major averages closed. dow which was up 100 points earlier closing up about 73 on the bell there not quite making up for friday's decline. about ..31% gain. the nasdaq composite closing at 6,790 after .12% gain. again, it's closing high back from november 16th, 6,793.

russell 2000s getting there slowly, gradually, pretty big move today, actually 1,503. compares to 1,512 which was its closing high from early october. we're waiting for big antitrust news out of the deparetment of justice this afternoon both at&t and time warner moved on news there was going to be this announcement today. time warner down about a percent. at&t actually higher erhigher. we'll bring you the news as we hear it. names releasing earnings after the bell, palo alto networks, urban outfitters set to report and intuit joining me in the meantime, cnbc senior markets commentator michael santoli. next to him, mr. khan, chief investment officer at wealth enhancement group. dennis burman should be joining us maybe at some point, too. you already talked to him once today.

anyway, welcome to you both. >> he hasn't been sitting by the camera for the last six hours waiting? >> eagerly yeah he has a day job, too. biggest winner in the dow was verizon. as bill mentioned. biggest loser was merck. we'll have more on those stories later. s&p, biggest winner, delphi automotive biggest loser, incyte corp. janet yellen submitted her resignation today, will take effect upon the swearing in of jay powell mike, i'm curious if there's market implications to be drawn from the fact she won't stay on after jepowell is sworn in >> i don't know if there's any jarring implications i think the probabilities where she would not stay on as just a governor, although i think it brings a large er point into focus which is there really a lot of vacancies, go ing ing to be one more aftere leaves there's a lot to do to remake that committee at this point i think that has the potential for swaying opinion on what the

fed's going to do once those appointments are made. >> yeah, jim, what would you -- >> there are four open seats we have a president and the president is listening to sort of a right-wing conspiracy sort of organization that believes the fed should be disbanded. and we've seen him put people in positions like epa -- >> okay. that might be going a little far. >> there are people calling for the fed to be disbanded. >> this is the guy who nominated jedd powell to be the fed chair. we're not exactly talking about -- >> the same time, he nominated a -- >> he nominated federal regulators that have a deregulatory agenda. there's nothing wrong with that. >> there is a faction inside the republican party, you'd like to say, weakening of the fed. i believe he will put on the fed board one or two sort of firebrands that are going to stand up and say monetary policy does not belong if the hands of an unelected body. i think that can be very bad for the fed long term. >> dennis, i think you're with us, dennis burman from the "journal." if he does that to placate the base jim is speaking to, what effect do you think that would have on the ped? >> that's a hard one to say.

as we know, powell is pretty much a yellen redux. i think it's a stretch to say the fed is going to be disbanded here i know there's a lot of talk remember, henserling, congressman, he's moving out of the congress as well rand paul doesn't have as much sway perhaps as he used to i find that as a bit of a far-fetched scenario at this point. none necessary, there is movement in there but to disband the fed, i'm not buying it yet >> all right we'll see. let's get to the big merger news of the day, the department of justice is pexpected to make a big antitrust announcement any minute now raeleally. time warner shares dropping on nbc's report it play be about the pending at&t/time warner deal pete williams of nbc saying the news could come around 5:00 p.m. today. they're not huge moves. >> to, they're not time warner is also already trading well brelow the value o the offer. already significant doubt built

into the market about the -- also the valuation of time warner is not right now out of whack with where the other big media companies are, also with a lot of other merger talk going i don't think it's a big surprise also i think the government was expected to sue. so all that thrown in the mix, it's not too surprising to see these prices down here you know, at&t being up, of course, because the arbitrage would be taken off and it's a big bite and have to take on more debt to do this deal. >> what's your view on this? >> the broader icture, we're talking about rolling back net knneutrality, takes power away from the content providers and puts it back with the cable providers. and so if you allow this merger to happen the same time you roll back net neutrality, i think that gives a lot of credence to the argument you're taking away from consumer choice my guess is this lawsuit from the, you know, from the trust department, antitrust division, is actually coordinated with the eventual rollback of net neutrality and so that way you can sort of get the net neutrality rollback even if this deal fails which is basically a give to the cable industry

>> dennis, what would you say just as first specifically, on the time warner/at&t news, if the assumption is that they are going to sue to block it >> well, you're probably looking at, what, nine months of litigation, probably so think about how much has changed in the media business in the last nine months and how much more it will change over the next nine months it might turn out that time warner wants to, perhaps, do a deal with fox, of course, it would be in a lot of cases contractually obligated to pursue its deal with at&t. so there's really a tough -- a tough reality here and net neutrality, your other guest brought up a really good point, net neutrality favors bigger, bigger, bigger companies because they have to negotiate with the cable companies. the bigger they are, the more leverage they have so these changes favor scale even though they're suing against at&t purchase of time warner. >> just one final note is that people think that the companies have a very good chance in beating this. >> winning. >> so it's not so much the market is going to say deal's

o off. >> that's true a great point. let's get to earnings. intuit's results are out deirdre bosa has that for us. >> intuit, software firm and pay maker of turbo tax and quick books reporting first-quarter earnings, huge beat. eps up 11 cents adjusted versus 5 cents expected a less big revenue beat coming in at $886 million versus $856 million which the street was expecting as they're gearing up for tax season, ceo and chairman brad smith saying this is a strong start to the quarter you're seeing the stock lower by about 2/10 of 1% q2 guidance is slightly above estimates, full-year guidance is in line and we see the stock losing a little bit. back over to you guys. . >> deirdre, thank you. mike, anything to adhere i mean, is it interesting the market is taking this as a negative >> i would say the thing to keep in mind, this company like h&r block makes the vast majority of its revenue in the april

quarters i mean, its earnings this is actually the weakest seasonal quarter for them so it's all about kind of what they're saying about the next quarter and the fact the stock's up huge. it's been caught up in this whole kind of software platform mania that people love. >> so no concern here about filing your taxes on a postcard, jim, for intuit. that might be -- >> a lot of people are talking about tax simplification there are very few tax simplification schemes out there. if anything, our clients are asking more questions about their tax. i think tax repairers are going to have a boom year as we ftry o figure it out. >> intuit down half a percent after hours. chip makers marvell technology and cavium closing higher news marvell plans to buy cavium $40 a share marvell is offering in cash. comes on the heels of increased consolidation across the chip space. remember, qualcomm rejecting a

takeover bid from rival broadcom earlier this year. there's cavium up 10%, marvell up 6.5%. i thought it was interesting the expression of both moving to the higher including the acquirer. feels like that's the market saying it wants consolidation across the space and maybe wants pricing power against the likes of apple. >> yeah, absolutely. what's really fascinating, kelly, when you think about the ecosystems, there's so much strength at the top, we talk about the faangs, really exert so much power. that in turn drives consolidation up and down the chain. whether it's semiconductors, whether it's software. we're really seeing -- this i think is a fair question for the trump administration and congress at large. how much concentration is too much across the tech sector? we just see it going step after step after step, qualcomm, of course, being the biggest one in play right now its fate uncertain. >> yeah. by the way, shares of cvs also closed lower today and aetna closed a little bit higher on word that that deal could be announced by the end of

november mike, what would you say that? >> another vertical attempted merger we'll see if this one kind of runs into any antitrust issues people like the logic of the proposed deal when it was first reported we'll see if it actually kicks off similar ones in the space. people feel like they have to own that whole chain for prescriptions. >> yeah, i was going to go back to the chip maker for a second i think it a really interesting industry,ton interesting where a number of units sold are actually going up, our prices are going down what you're seeing basically margins getting squeezed so when you sigh thee that in every ind you end up with consolidation. looks like the automotive industry in the 1920s and '30s it's going to be healthy for the industry and innovation. what we're seeing with vertical integration on the health care side and vertical integration on the chip side, the question of how big should a firm be what we're finding in the new economy with technology. >> it's big. >> firms need to be really, really big or be really, really splau small. we're seeing more startups and more sort of these massive mega-cap companies and that's

the direction i think that -- >> more than half a trillion -- let me just quickly get to these earnings and circle back to this the results from urban outfitters are out courtney reagan joins us with that rundown court courtn courtney >> urban outfitters out, shares up 9% at this point beating on earnings for the third quarter, turning in earnings per share, street looking for 33 cents. revenues stronger than expected, $893 million the street looking $8361 million. when you look at those comp sales, all-important comp sales number, the total number up 1% analysts according to thompson reuters actually had forecast that to be down 2.3% so all in all, a good quarter for urban outfitters and the shares are reacting here after hou hours. kelly, back over to you. >> sounds like tlaif been hey'va tear since the last earnings report, too. courtney, by the way, this is the second time, i think we were

talking about gap brands, they thad a strong comp granted william sonoma went the other way. interesting a lot of chains with string of decan klein cadeclinn positivity. >> some of the buy brands numbers are messy with urban outfitters which it why we didn't give them to you, thai t trying to figure out what they would have been with the hurrica hurricane. some of the retailers broke negative streaks like you're talking about, kelly, of course something you really want to see? you're a retailer going into the holiday quarter. >> oh, yeah. that's going to put a spring in their step in fact, urban shares up, thank you, courtney, sneernearly 8%, . >> yeah. it's a wild one. came off a multi-year low when it did rally off the august -- held its valuation more. people feel as if it's got a little more brand value than your sort of generic basics retailer also like a lot of these chains, very crowded short, more than a quarter of the float is already held short that's where you see exaggerated moves after numbers. >> yeah, about nearly 8% move to the upside here on urban

jim? >> just more generally value stocks perform terribly over the last six years and i think this is an example of a company that retailers have been written off for dead a lot of them if they show positive momentum at all, they basically explode so i think there's an opportunity even in the financial services sector, retail sector, to actually buy some of these quality names and probably do relatively well the next three, five years as the rest of the high growth sector seems like it's overvalued at this point zblchlts let. let's get to the politics and latest on the tax bill president trump criticized senator flake in a tweet earlier this morning saying the senator plans to oppose the gop tax bill senator flake says he has yet to make up his mind on the bill rick mulvaney said sunday the president is open to not including a reveal of obamacare in the bill if it impedes passing tax reform obama is pushing congress to have that legislation passed by christmas. dennis, this flame thing is interesting, he potentially could be the third senator, if it's the president saying he's not going to support it, susan collins has reservations on ron

johnson, too. >> i've really seen those three. look, what do we know about donald trump. >> he loves to negotiate. why not throw in the aca mandatory coverage thing in there 37 at the beginning so yo can then take it away and be a grand bargainer. those with leverage are trying to exert it. flake's no different strikes me we're going to be here around new year's, kelly, talk about what the real deal is on the table between the senate and the president because right now it seems like both are negotiating from somewhat extreme positions so they can then come somewhere to the middle by the end of the process. >> yeah, and strategis saying 30% chance of the deal getting done is priced if ed in right nw let's break this to go to palo alto earnings. aditi roy has those earnings. >> strong numbers here, kelly, a beat on the top and bottom lines for palo alto networks cyber security company beating on revenue which came in at $506 million versus expectations of $489 million on the bottom line, the company

reports 74 cents a share versus expectations of 69 cents and on that all-important billings metric can be a signal for future revenue, the company also beating expectations, 597 versus 594 million guidance also looking good on both q2 and also full-year revenue and eps. you may remember, kelly, that cisco had some strong earnings, also recently. it will be interesting to see if he get any color on the call on the impact of the equifax breach, whether that helped cyber security firms like palo alto networks. we should mention shares are spiking up about 5.5% right now. the company's been doing well. the shares are up year to date 14%. kelly, back to you. >> aditi, thank you. jim, qwhat do you say? >> go back to tax reform for a second, the tax reform bill is a bill federal government bill that's not how most people are looking at it. high-tax states like california and new york that are net contributors to the federal

budget, essentially they're going to have to cut state taxes in order to be competitive that mean s there are going to b less resources to take care of their hone at the state level, means they have to rely more on the republican party that's what the republican party is supposed to be about, supposed to be about small government i think flake probably stands up for his principle. he's done that before. the president knows he's probably going to vote against it. >> mike, real quickly on palo alto, shares up 5%. >> a bit of relief, there were some competitors that had maybe some billing noise i think the decent number allays that that's been going sideways up 14% year to date. below its highs of a couple years ago. i think it's better than feared. >> let's see how it is over at agilent. >> down a little bit in the after hours. eps coming in at 67 cent on adjusted basis versus analyst estimates of 62 cents on average. revenue, $1.19 billion, beating their estimate of $1.17 billion. looks like what's driving the stock down 4.5% now is earnings

guidance looking a little bit light for next year in the first quarter they're guiding to 55 to 57 cents for q1 versus estimates of 60 cents, guys you're seeing agilent down a little more than 4%, kelly, back do you. >> meg, thank you. >> stock up 50% year to date, this is in a very quiet but very hot group a couple months ago. i took a look at the instrumentation in medical technology stocks. it really was just one of these blind growth stock plays i think people thought it was in a good spot so i think get a little giveback on earnings makes sense. >> again, that context, perhaps not too major, either. >> not too bad. >> mentioned light guidance for the next quarter jim, dennis, thank you, both jim, dennis, on a newsy afternoon here gop senators are tweaking a small provision in their tax bill that could have a big impact on individual investors while leading the institutional players out. we have a debate on whether that's the right move next. much more on will the doj

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some more breaking news on

the at&t/time warner deal or lack thereof sue herera, what's happening >> we have a tastatement from a& basically saying the justice department is suing to block the at&t deal with time warner this statement is attributable to david r. mcatee, senior executive vice president and general counsel of at&t. he says "today's doj lawsuit is a radical and inexplicable departure of decades of antitrust precedent. vertical mergers like this one are routinely approved because they benefit consumers without removing any competitor from the market we see no legitimate reason for our merger to be treated differently. now there is going to be a conference call with at&t and time warner at 5:30 p.m. eastern time we will be, of course, monitoring that whole situation. the chairman and ceo randall stephenson will provide an overview of developments in the at&t/time warner merger but the headline is the jus sttice department is suing to block

that particular deal kelly, back to you. >> sue, thank qulyou. sue herera let's bring in larry haverty now. he owns both at&t and time warner larry, what are your thoughts here >> well, the cat's out of the bag now and i think given the theatricality in the last hour and a half with an announcement scheduled and confidential press conferences that the decision was highly predictable that the justice department was going to litigate i think it's highly predictable that time warner and at&t are not going to go away yet peaceab peaceably. i think along with everybody else that i can find, and that's not an exclusive list, but rogers, for instance, this morning on one of your earlier shows indicates that the antitrust potential of this is not really very exciting and the

language in the at&t press release that sue herera just read could hardly be stronger. i think the market in its wisdom will think that the probability of a deal going through is really quite high. i think they'll also think that if it doesn't go through, which in my opinion is the minor probability, will have six months to nine months to pass and that there really is very, very little downside risk in time warner. the valuation premium for the multiple has largely eroded with the massive cash flows that this industry generates it will erode more in the next nine months. >> okay. >> and clearly time warner has the capacity to buy its own stock or maybe they'll be w horizontal mergers clearly fox has talked with time warner before we have a three-way proposition going on

by disney, time warner and comcast. so a lot of activity here in the media industry and at the end of the day, i think the markets reawoken to the fact that these are wonderful businesses, they're scarce businesses and generate very large amounts of free cash flow and interest rates are low and free cash flow is very attractively priced. so -- >> larry -- >> i'm dejected by this but i'm not discouraged being a media investor i think it's a great time to be a media investor. >> yeah, seems like the plarmart has sort of become more alert to all those points you mentioned there although i do wonder, the way you set it up, it seems as if the government would be bereft of any real case. clearly they're going do bring some kind of case on some kind of a theory that this could be a harmful transaction. what do you think that case might look like? are they able to say something about at&t's, you know, near ubiquity in mobile devices can give them some kind of a market power owning time warner content that we didn't before see?

>> i think the best proposition i can give you is a book by a professor named franklin and it reflects the future of the world that's dominated by digital giants, in particular, google, amazon, facebook, et cetera. and the whole market, i think you have to define this as digital things, whether it's time on cellular or time on cellular or smartphones, or tablets viewing content, and that basically if you control a lot of this data either by being a cellular carrier or being an internet guy or being a major content producer, you can't combine -- if you're "a," you can't combine with "b," can't combine with "c" because it's a wheel n

whole new world and have to have a whole -- i think that dog doesn't hunt i real willly don't. >> to the point mike was making if you go back, deal was announced october of 2016. before trump was elected conventional wisdom at the time was still it was going to be hillary in the white house a cash and stock deal at&t made for $107.50 a share and time warner shares in late october were closing around $87 which is roughly where they are today so the highest they ever got was over $107. the market was pricing in a significant possibility the deal wouldn't get done if you go back to when it was first announced why? this is not new, is it from day one the market thought this would have a hard time getting done no matter who was in the white house why? >> i think it's really a taste of the size. you're combining companies and you have $60 billion of cash flow you have in the neighborhood of $300 billion of equity value

plus or minus $20 billion depending on where things run. you have tremendous access to customers, at&t, verizon i mean, 20, 25 years ago, kelly, i guess we broke up the telephone company and now at&t's back bigger and better than ever and i think the market maybe feared that there was something that history couldn't give you a guide on, but -- >> right. >> -- that was worrisome so i think this action had been long discounted. i personally thought that it was unlikely, but after i read the book, i thought the likelihood had increased, but on -- >> got it. >> -- the other hand, as an owner of both of the companies, i look at time warner at $87 and think three, five years from now, regardless of whether they're merged with telephone or standing alone, that stock's going to be a lot higher jeff has done a great, great job

running the company. he's done a number of things that have maximized shareholder value and understands how the market works so if he can't do this, he'll figure out a way to put additional cash flow on the financials and i think valuation in the shareholders' pockets so i think here at $87 on time winner, a win/win proposition. >> all right, larry haverty staying positive, again. shares taking the news slight sly negative president trump saying today he's going to give the american people a big beautiful christmas present in the form of tax cuts. some under the radar parts of the bill couldeaa x ke r me mn tahi we'll explain right after the break. [ keyboard clacking ]

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you set it. nasdaq. rewrite tomorrow. welcome back it's time now for a cnbc news update with sue herera hi, sue. >> hi, kelly here's what's happening at this hour, everyone the eu picked paris as the new host for its banking authority replacing london after britain leaves the bloc. this follows three rounds of voting that failed to produce a winner earlier, the eu picked amsterdam to be its new site for its medicines agency which also had been located in london fed chief janet yellen submitting her resignation as a member of the board of governors of the federal reserve system. it's effective upon the square g i swearing in of her predecessor as chair jerome powell. honda recalling 800,000 odyssey minivans because of seat latch problems the recall affects models dating from 2011 to 2017.

the company has received 46 reports about the second-row seat tipping forward during moderate to heavy braking because it was not latched properly. and at london's westminster abby, bell ringers began a three-hour celebratory chiming in a tribute to the queen's 70th wedding anniversary. she married the naval lieutenant philip at westminster abby november 20th of 1947. congratulations to them. >> 70 years. >> i know. it's amazing >> should have a 70 hour bell ringing. >> i flow. it's amazing it really is they know how to do it in london especially when it comes to the queen. >> thank you very much. >> you got it, kell, see you tomorrow. >> sue herera. the dow was up 72 points a little off the highs of the session. up about 1/3 of 1% the s&p up three points. the nasdaq up 1/10 of 1% the nasdaq missed a record high be a couple points russell 2000 having a strong

day. nearly 1,503 is names moving after hours. palo alto, urban outfitters, intuit palo alto higher by 6.5% intuit down by 1.5%. of course at&t announcing the department of justice is suing to block its deal with time warner. got more details coming up with at&t shares still moving a little higher as they did in the session today. time warnershedding .25% after hours. let's get to other big stories of the day in our rapid recap. >> marvell technology is buying chip maker cavium for $6 billion in cash and stock. >> let's go ge first, jim, since this is a call that you made you think it's close to bottom. >> i just think at a certain point you get a 17 multiple. i believe in the dollar. i think they can do dollar/dollar fine i think that it can go another dollar down, and i know that everyone's been trapped by ge

can go another dollar down. >> i think it's entirely possible this quarter is just awful. >> the latest step in a series of, as you can see, ongoing steps to increase the pressure i call it the peaceful pressure campaign the president calls it the maximum pressure campaign. so there's no confusion, they're one in the same. and i think this is, though, to hold north korea accountable for a number of actions that they've taken over the last several months, the last year or so. >> well, we're clearly near to a top, you know, one of the strongest bull markets that we've had over the last seven, eight years. i think we have one more push and i think it's connected with the corporate tax reform which i think is very positive but next year is going to be a lot tougher than this year >> siegel last lour on "closing bell" here. if you've been paying attention to the tax reform saga, you're familiar with the proposed tax cut and state and local deductions

small carveouts could also have big impacts. robert frank has those details >> stock investors, grad stud t students and even art collectors could see a tax hike under the house and senate bills grad students could get hit by a change on tuition waivers. the house bill would label as taxable income, college tuition waivers, when a university waives tuition for grad students who work as teaching or research assistants about 145,000 grad students and 27,000 undergrads are awarded a waiver every year. people who collect art, cars and other family treasures could also get a tax hike. the house bill does away with what's called 1031 exchanges or swaps. that's basically when someone sells an asset but postpones the capital gains tax if the proceeds are then used to buy something similar or of the same or higher value. now, art collectors, they use this a lot when they sell one painting to buy another without paying a cap gains tax so do buyers of airplanes, farm tractors and even cars

suther sutherby's mentioned this in an earnings call as a possible negative for the art market. the biggest surprised, we talked about it today, a provision in the senate bill which would tax stock investors through first in/first out accounting. the bill would prevent investors with taxable brokerage accounts by minimizing taxes by choosing which shares of stock they're going to sell. instead, they would have to sell their oldest shares first rathe than sell their money-losing stock or most expensive shares now, it would raise around $2.7 billion over the next ten years and if it passes would take effect this january 1st. guys, back to you. >> there's a lot if there. robert, thank you. mutual funds are now exempt from that rule, but individual investors still are not. joining us now to discuss, rejoining us, ivory johnsonjohn. member of the cnbc financial adviser council. tom fost is chairman and ceo at e eaton vance. welcome back to you both tom, let me begin with this -- >> tlauhank you. >> -- news i guess they're recognizing the harm that could come from this and letting

institutions and mutual funds skirt it, but why still leave this on individual investors, do you think? >> i think that's a big -- that's a big question. this -- to my thinking, this solution doesn't make a lot of sense because in h addition to the other issues you have, now you have a fundamental fairness issue. i don't think there is a good justification why professional pools of money and registry investment funds should be treated one way and individual investors should be treated differently. >> ivory, what do you think would be the practical implications here, both before such a change might take effectd after, how might it change how individuals deal with their portfolios >> i think initially they're going to preempt the law and going to sell those, the shares with maybe a higher cost basis and moving forward, they'll keep the lower cost basis, but, you know, essentially this is, you know, if at first you don't

succe succeed, call your lobbyist because now the robo advisers are still going to be affected by this. for those of you who are fans of, you know, what's happening is public policy now is distributing winners -- distributing profits and choosing winners or losers look back to charles schwab, with the lower commissions, think about what that's done for our industry the first thing it is does, it forces participants in the industry now to get better so i think it's a problem. i think if you look at the overall bill, i think it's instructive of how it's being applied. >> it tom, the same time, it is true that if you just use the average cost method, you avoid all of this, right it's not -- i understand that people do this a lot for tax planning purposes when they're picking, you know, which shares they want to sell. there's also a lot of people who don't go through the trouble of that record-keeping and average out the cost of the shares they own and call it a day. is that why this would actually

be relatively small relative to the size of financial markets? >> no, so average cost method is only available in a narrow range of circumstances which is by a mutual fund investor, investor in a registered investment fund. others will not have access to average cost if you own shares of, say, apple stock that you bought 20 years ago and shares you bought two months ago, when you go to sell that position, you will have to find the cost basis information on those shares you bought 20 years ago and you will have to pay tax as if the shares you sold were the ones you bought 20 years ago. we think that's unfair we think it complicates the lives of investors unnecessarily. we think ultimately this comes a the a cost of economic growth. we think as we look at the goals of tax reform to produce a simpler, fairer, tax system, and one that promotes growth, this does, in fact, the opposite. >> all right guys, thank you, again, for joining us here. we'll continue to see how this

plays out. tom fost, and ivory johnson. thank you very much. >> thank you bitcoin topped 8,000 bucks for the first time ever. now coinbase is making some changes to make it easier for those institutional investors to get involved with that cryptocurrency the ceo will join us to explain right after this whoo! ( ♪ ) woman: class, let's turn to page 136, recessive traits skip generations. ( ♪ ) molly: i reprogrammed the robots to do the inspection. it's running much faster now. see? it's amazing, molly. thank you. ( ♪ ) parts a and b and want more coverage, guess what? you could apply for a medicare supplement insurance plan whenever you want. no enrollment window. no waiting to apply. that means now may be a great time to shop for an

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bitcoin continues to hit new highs. it broke through the 8,000 mark for the first time and it's now around 8,200 and coinbase just launched a coinbase custody in hopes to help institutional investors securely store their digital assets joining us do talk more about it in an exclusive interview, coinbase ceo brian armstrong brian, thank you for joining us. >> yeah, thank you for having me. >> this whole premise kind of makes me chuckle it's a recognition of just how much institutional demand there is for cryptocurrency there is, right? >> yeah, it really is. there's been over 100 hedge funds created in last year that are interested in trading digital currency and we have hundreds more reaching out to us looking from traditional hedge funds, sovereign wealth funds, family offices, seems like everybody's interested in digital currency these days. . >> certainly the interest is there, brian what is -- what are you giving these institutional clients that they otherwise didn't have access to?

obviously, you could kind of be snarky about it, say the whole point of bitcoin is to remove the risk of intermediaries but how does it work >> yeah, well coinbase custody is seeking to become the first qualified custodian for institutions that are looking to store digital currency and so what that means is they need a secure, compliant way to store funds on behalf of their lps if they're going to start investing in this space, and from what we've seen, there's probably about $10 billion of institutional money sitting on the sidelines waiting to flow into digital currency and the main thing blocking it is just the existence of a qualified custodian like this. that's what we're seeking to become with our coinbase custody product. >> and where, brian, i mean, is bitcoin the one that for you guys has the most interest is it anetherium? >> there's dozens of these digital currencies, i think

there's 50 to 100 now with a market cap over $100 million so it's almost becoming like stock market 2.0, if you want to think of it that way the moneys most exciting to us we have on the platform today are bitcoin, atherium and lightcoin. many more are going to be added to the platform in 2018 and this is going to be an exciting space for all kinds of institutional investors to make money. >> so if s.e.c. cracks down, we know already there china they cracked down on initial coin offerings and so forth, what happens for you guys does that represent a material risk that you could be involved, you know, cast judgment upon for helping facilitate all this, or would it simply be a business risk because people wouldn't have as much demand to store these? >> yeah, so we stayed out of adding any icos on the platform to date just because of that regulatory uncertainty and i do think there's a good chance that some percentage of those icos will end up being considered securities. head of the s.e.c. has said that

much we're approaching that area cautiously whenever we decide to add a new asset on the platform, we look at a number of factors and released our gdax new asset trading policy a few weeks ago that gives more insight into how we do this, but we look at things like what the regulatory risk is, we do some diligence on the team we do a security audit of the coin what the customer demand is. we consider all those factors before adding it to the platform so we're really looking to provide a safe place where customers can have assets that they trust, and participate in this market. >> yeah, they know the assets are safe, we know about the value -- won't get into it bri brian, thuank you for joining us fascinating. >> absolutely. >> brian armstrong, ceo of coinbase. news the doj will make an antitrust announcement this afternoon. we'll speak with antitrust lawyer david goodfriend. coming up on "fast money" one wall street strategist says

big tech has gone too fa tr,oo fast tony dwyer will tell you what tto buy instead.

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we're prepared to litigate now. like i said, we've been working on this for a year so we're prepared to litigate now. i'm not a lawyer, but we would obviously asked for an expedited hearing. we feel a transaction of this size you would likely get an expedited hearing, so we feel comfortable this transaction could be litigated, a hearing conducted and an answer provided well before that april 22nd deadline that was at&t's ceo randall stevenson ea stephen son earlier this month at&t is saying just moments ago the doj is suing to block the deal

time warner and at&t will hold a joint conversation at 5:30, in about 45 minutes david goodfriend, thank you for joining us. >> thanks for having me. >> is randall stephenson right, if he does sue the doj, take it to trial, he could get it done on an expedited basis. >> that's up to the discretion of the judge i think the bigger question is whether or not he has the likelihood of success on the merits i mean, what's going to happen is the department of justice is suing in an injunction, they want to stop the action from happening. in order for that to tap happen, the department of justice has to show they are likely to win at trial. what we don't know right now what concerned of goods, the department of justice lawyers have when they file, they might have a smoking gun e-mail, they might have data that at&t is not aware of they have to prove to this judge that under the antitrust

standards, when this thing goes to trial, the department of justice is likely to succeed if they prove that and there's harm if the deal is allowed to close, my money is on the department of justice. 29 of the last 30 times the department has brought that kind of injunctive claim, the department of justice has won. if you go on those odds, they wouldn't be bringing this case if they didn't feel confident they could prevail. >> that assumes, of course, that the department is going on the merits, because they feel as if they have built the case with some evidence. what are the other variables you might be listening for when it comes for the government's announcement and how they're going to present their side of things, to the extent they do. is it known what court they're even going to file, any of that stuff open for question? >> i don't know that, but the last time i went to this movie, i worked for dish network, the satellite tv company we were trying to acquire

directv. the department of justice sued to block that deal, and they did it in d.c. federal district court. that's probably what will happen here look, you have to -- you raise a -- i think a nuanced point, which is what else could be going on here? the kind of giant elephant in the room that's been raised lately is whether or not the department of justice is acting more with politics than policy are they under pressure from the trump white house to block this deal because president trump doesn't like cnn that's really the big elephant in the room. i have one very specific answer to that myself i'm a progressive democrat and have called, as others, for more string end antitruth enforcement including on mergers like this if there's politics involved, we'll find out when we see how the department of justice deals with another pending merger, that's the acquisition by

sinclair broadcasting group of tribute. sinclair is a pro-trump media outlet if the department of justice decides to treat that action gently and permissively, but they go after this transaction with gusto, i think we all can conclude politics are involved, but if they go with that with as much gusto, i think we know we have a new cop on the beat and they're serious about antitrust enforcement, and that's not a bad thing. >> thank you, david, for joining us again, we'll hear much more on this over the next half hour or hour. meanwhile, from at&t to vezorin, in a potential deal there with the nfl, we'll have thought details when we come right back.

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let out your inner child at the lexus december to remember sales event. experience amazing at your lexus dealer. [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours. talk to one today and see why we're bullish on the future. big thinking in the finger lakes is pushing the new new york forward. we're the number one dairy and apple producers in the eastern united states supported by innovative packaging that extends the shelf life of foods and infrastructure upgrades that help us share our produce with the world.

all 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 verizon a reportedly near a deal to stream nfl games on bigger screens, whereas the past deal limited the screening, this one reportedly would allow customers to watch on tvs and tablets, and verizon would not get exclusive rights as a result i wonder if this is worth verizon's time, given it will be one of many potential customers. >> to me it underescrows the

fact that ought distribution needs the nfl. >> even with declining ratings >> yes it has more than any other linear product. >> and maybe the giants will be great again. >> we have to wait a well. time for "fast money" to the follow the big story of the day. it starts right now. "fast money" starts right now with breaking new on the time warner and at&t deal. leslie picker has the details. >> the doj officially filing a lawsuit this evening seeking to block at&t's acquisition of time warner, challenge toss vertical mergers, which includes purchases along the supply chain are rare the government has never won a case against -- >> the justice department plans to argue it would harm competition and thwart innovation