brings to mind some comments some lyrics. >> a song. i was thinking of "down across the delaware" about leaving new jersey i wubder if this will -- >> good song. >> we only have seven seconds for you to sing it we'll give you a pass. >> thanks for watching "power lunch," everybody. >> "closing bell's" next hi, everybody, welcome to the "closing bell," i'm kelly evans at the new york stock exchange. >> i'm bill griffeth historic day breaking news, as you know, this afternoon, big step forward for tax reform with the house just passing the bill moments ago now it moves on to the senate, where it will be voted on later tonight. presumably passed there as well. we'll tell you what's in it and the sectors that may still have room to run in the stock market. plus exclusively. we'll talk about how the bill could effect his business. or not >> right and tales from the crypto.

the s.e.c. halting trading on a small cap stock called crypto company. we got a breakdown on what to look for when considering stocks that are taking advantage of bitcoin mania. there are the four bitcoin prices there. >> all four of them. >> all in the red today, by the way. after the bell today, we have stitchfix reporting its first earnings since going public we're going to have a debate on whether this recent ipo is worth buying or not. we found a bull and a bear >> we could get the first earnings report of they list is always perhaps the volatile one. they already said what they think the numbers are go iing to be. >> right. >> looking forward to hearing from them later. breaking news out of washington right now, as the house votes to pass the tax bill ylan mui with the latest. >> reporter: we saw house republicans celebrating their victory here as they passed the tax bill out of their chamber. members of leadership were literally patti inting each othn the back, shaking hands, hugging even paul ryan framed this as a

campaign promise they made and kept. >> this is a good day for america, this is a good day for workers. this is a great day for growth and we're very excited about this moment. >> reporter: now, that final tally for the house vote was 227-203 with 1 republ2 republic voting against it from high-tax states, new york, new jersey, california this drama is not quite over yet. the senate is going to be up next senate majority leader mitch mcconnell telling reporters that a vote is planned for later this evening. he tweeted the tax bill is a once in a generation bill for americans. and it looks like republicans do have the votes to pass this through the senate as well however, vice president mike pence will be presiding over the vote in that chamber just in case they need him to break any ties there make no doubt about it, this is a consequential day for the republican agenda. perhaps the most important day that we've seen so far this year back over to you guys. >> ylan, for now, thank you. ylan mui more on tax reform, what sectors

could still rally when the big gets signed into law, terry haynes from evercore isi and jimmy from the american enterprise institute welcome, both of you terry, what do you think any sort of surprises at this point? you know, anything the markets should be particularly looking for? >> well, i think the thing that the markets need to be looking for, kelly, frankly, is that you'll see -- you will only now start to see tax reform baked into a lot of -- a lot of predictions, and a lot of calls. a lot of folks didn't want to call this before -- before it became obvious that it was going to be final. so you will see -- you'll see an upside to that and what we had called before was an upside in financials, in consumers, in telecom. some health care stocks and a variety of others. and you're now gong to see that start to be baked in a little bit more and there's probably going to be

some upside. we still think there's some room to run here. >> yeah, listen -- >> jimmy -- >> i think that's a great point. >> what do you think is going to change tomorrow and what's going to be different? >> well, listen, i think -- i think what we've seen the markets so far, i think primarily has not been about this tax cut i think there was too much skepticism given what happened with obamacare, as we just said, to fully bake this into the economy. bake this into corporate earnings projections i think that's going to start to happen and, listen, i've never been a believer this is a game-changing tax cut. i think incrementally it will give us modest growth, but, listen, you know, momentum wise, it's probably going be a plus. at least, you know, for some time, and we'll see if we ever start to worry about the deficit. maybe we'll never worry about the deficit. i also think this may be the last tax cut we see for a long, long time. >> terry, you mentioned some of the sectors you thought might pop here, sc financials, consumer, health care, energy, industri

industrials, telecom. >> what's going down >> who's left out? >> i guess real estate isn't having a great day, but, yeah. >> you know, it depends on the individual company, of course, but it's broadly positive across sectors and across industries. >> you don't think it's already in the market, terry that's been the big debate on wall street lately, is the tax cut already in the estimates by the analysts or could we see another gear for this market after they finally pass this thing? >> i think -- i think our view is that we see another gear. we see plenty of room to run, bill >> listen, this is a big tax cut. this is 14% we forget about the immediate expensing provision which is put to the side because of the temporary provision. that's also -- that's also a significant gain >> i just wonder, terry, procedurally, we also -- i think they have to fund the government past friday, right so what at this point is going to happen, does the whole thing

get lumped together into one bill and what happens for this push that susan collins has made in order to get onboard with -- and support tax reform by saying we also want you to sort of shore up the obamacare markets even while they're taking away the individual mandate how is that, you think, going to unfold by the end of the week? >> my view of this, kelly, for quite some time, has been that we're going to get a -- we're going to get a kick the can temporary short-term government funding, at least until mid-january, and probably longer but that -- it will ultimately be resolved around dreamers and a few other issues that's number one. number two, to your question, i think what is obvious now is that mrs. collins' deal was to actually get the -- the aca temporary fix onto the senate bill they're very hopeful that the gets done in the house, but tax

will be up and out before the spending bill. so we're still going to be wrangling around about the aca short-term fix for some time to come >> listen, there's no interest among republicans when they finally have a major legislative accomplishment do anything to step on this thing. you're not going to see a government shutdown any time soon >> and what about infrastructure, is there momentum for that now, jimmy that's what they're talking about for the beginning of 2018. >> well, listen, i mean, there you have a division, where you have, again, the trump administration talking about infrastructure, again, yet republicans will suddenly become debt hawks again and at least paul ryan, he may be the only one left in the party, treat paul ryan is going to push for entitlement reform, primarily medica medicare, probably also medic d medicaid you have two different agendas. >> you really think he's going to do that going into the midterms that they're already going to lose? >> i think he's going to try to

push that. the trump administration has derd zero interest in doing that. >> right terry, last question before we go, this is a gop facing a potential wave midterm election where they could lose the house and maybe the senate, too. i don't know what that means for the ultimate fate of everything that's being passioned right now, what ities are goin to be after this >> i think their legislative priorities will include infrastructure i've gonefrom very bullish on this 12 months ago to very bearish today. i don't see a common approach. i don't see the urgency. and democrats certainly have a very different position. would have been well interested in going into -- into debt and deficit over infrastructure. but i do think that republicans have a difficult time losing the 2018 midterms. the senate is very much against democrats and the gerrymandering in the house very much favors republicans. >> listen, if you wanted infrastructure, it should have been part of a corporate tax deal back in february.

that would have been it. that would have been the mother -- that would have been the giant compromise that democrats would have went, we didn't do that, so i think we're going to see a big infrastructure deal. >> all right, guys, we have to go, terry, jimmy, great to see you. appreciate your thought. >> let's get to our "closing bell" exchange joining us, michael han strks is he happens is here. along with steve grasso, director of institutional sales at stuart frankel. rick san tell will i joins us as well from the cme. all right, steve, tie this all together the narcotmarket holding if pla. the dow has been drifting lower. what do you make of it all >> the buzz language you've been hearing that you've been talking about. it's tax reform, it's bitcoin, it's rotation. not necessarily in that order. >> tell me markets aren't selling off because bitcoin -- >> i don't think the market's selling off. look at different aspects of the market you can see the fluctuations in volatility, bitcoin, people have

the risk on our risk of and probably a direct reflection of the overall market whether it's a risk on or risk off day. this is year in filing, putting in your buckets where you want to be. it is asbout tax reform, the leg into tax reform, where you think the biggest sectors are going to benefit the most from. i think any selloff you see in tech, large cap tech, i think should be bought those are the names that you're going to see the growth going forward. i heard the conversation before i came on about industrials and infrastructure i think you could see a tailwind going into that midterm. i think there's going to be a lot of stuff around the edges that might to the be a huge deal. but there's going to be a lot of but a lot of giveaways going into midterms. >> the long end of the yield curve just surging for the 10s and 30s here with the vote today. what do you make of that is that a growth strategy? not just here, overseas, too, by

the way. >> it had to be overseas if yields didn't pop eight basis points, i'd be shocked to see a 30-year bond up eight basis points or ten-year note up seven basis points yeah, i think we're all in the same ship together of course, there's going to be a large segment, remember, perception is reality in the marketplace. many believe that the tax ref m reform, as it passes, is one of these issues where you buy rumor and sell fact. there's going to be enough people to trade it that way. i think it's somewhat evident today. i don't think -- i think in a big picture it gets lost i agree with steve i think there's a year-end cyclical behavior and i think that everything going on with regard to taxes and this administration is going to make it that much more fun. i do think we're going to see more extreme prices going into year end both in treasuries and in the equity markets i think the dollar index continues to be the odd-man out. i don't see that changes for the rest of the year >> we're standing by for fun. >> michael, how are you guys tweaking your positioning into next year?

>> so just to echo those comments, it's similar rotation that we're seeing across the board that has more to do with year end than anything else. right, the tax policy, to an extent, has begun to be priced in over the last really late november up until today. and from our perspective, we would utilize this differentiation in returns to start thinking about scores you have internationally because we do believe that -- >> thinking in what direction? >> thinking more toward international diversification. simply because that gap, that widened out in the first three quarters of the year narrowed so for the quart erkts ter, s&p, d nasdaq, between 7% and 11% whereas the international markets up 3%, 3.5%, em up 4.5%. the wide 6%, 7% gap this year where international investors were finally seeing some benefit has narrowed we would use this as an opportunity to -- you're not fully positioned to start rotating there in our portfolios the biggest area of change isn't necessarily derisking outside the traditional -- it's more focused

within our credit allocations within fixed income. little bit of chatter and spread widening two, three weeks ago, has died down. what we're looking to do is utilize the stability in markets, twhere you're seeing th buoyant markets -- this is a good exit point. >> good exit point >> to us to really good scaling out. >> scaling out of high yields? >> scaling out of high yields so our fixed incomport foe portfols become -- we're making an active call that i'd take equity risk over credit risk. >> last thought? >> looks like the market echos that taking equity risk, but i do think michael brings up a great point with merging markets with a rising rate environment, that's usually a headwind for emerging markets that's why to a larger extent they underperform the s&p. you see that dislocation take advantage of it. buy emerging markets along with equities but overweighted emerging markets. >> steve, good to see you, michael, thank you for joining us today rick, see you later.

appreciate it. we have 47 minutes left in the trading session today. minus signs right now. the bill rally was yesterday. >> yeah. >> they had a preparty party but right now, the dow a down 29 we were down 77 at the low of the session. when we come back, bitcoin mania, is it possible that it's heating up as investors try to get in on the action the craze sending shares of financial tech company, longfin, through the roof, just days after going public why the company's ceo is calling its market valuation, quote, not justified. and what you need to know first about buying stocks off the bitcoin buzzwords. meantime, credit suisse says karcarnival has one of the lowet effective tax rates. we're going to talk to the cruise line ceo about how it could affected by tax reform and what it will mean to investors. we also want to hear from aryo t, ch out to the show she urhoughts with us. twitter, facebook, over e-mail you're watching cnbc, first in business worldwide ♪

[vo] progress is an unstoppable force. the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event.

welcome back these buzzwords like bitcoin, crypto, blockchain, anything remotely like that are driving wild market swings for small caps take a look at financial tech company, longfin, up more than 1

1,000% since going public last week yes, that's all correct. down less than 1% today. longfin purchased a company focused on blockchain technology here's what the ceo told "fast money" last night when melissa asked him if this valuation is justified. >> i love this >> it's not justified. i'm not saying -- >> it's not justified? >> it's not justified. market cap is not justified because if you look at my revenues, if i look at -- i valued my ipo pricing, look at it i valued my pricing at $5. >> $5. >> $300 million. somebody shorted -- nothing to do with it because we have nothing to do with -- euphoric mania. >> all right, dom chu joins us with more on this whole craze and the listing standards. >> i mean, that guy's conversation just tells you how crazed it is, he can't even figure out himself first off, guys, it's worth noting your use of the word, listing, in that whole thing,

because in order to be actually listed on an exchange, there are certain base requirements that actually need to be met. and then there are different levels or tiers of listing for each of these exchanges. that applies to exchanges like the nyse, like the nasdaq, in order to be on each of them, there are certain minimum criteria that have to be met both exchanges are going to look at things like your profit levels, also maybe your total assets, total sales. the value of your equity from stockholde stockholders how many shareholders you y. trading volume of your stock all of that stuff. also corporate governance requirements like the makeup of your board is there an audit committee on your board there has to be for some of these listings the accessibility of regular financial reports. who your auditors are. all that stuff is relevant where things get a little bit dicier is when it comes to publicly traded, but non-listed stocks, like what happened with the crypto company earlier today, remember, the s.e.c. temporarily suspended trading in the company's stock until after the new year due to what it calls concerns regarding the accuracy and adequacy of

information in the marketplace, just about the total company also concerns about potentially manipulative stock transactions over the course of the last month. now, a check on some of its recent regulatory filings shows a lack of disclosure on just simple things like an estimated revenue range. we did speak with a source familiar with nasdaq's exchange operations they el us at cnbc they have a battery of proprietary technology, also a team of analysts at constantly monitors its listed companies listed companies to make sure they're complying with listing standards. they also use outside specialists, believe it or not, like private investigators to keep track of their companies on their exchange there's a lot of stuff being done the question is it enough from a regulatory or exchange perspective for the average investor out there, guys >> imagine that. want to make sure you have enough revenues and profitability and shareholders and company holdings to go with the listing there. >> it's not just -- i mean, those are sort of the listed equities then there's the coin offerings.

>> the icos. >> the coin companies which don't even delve into any of that. >> may i just point out the obvious, that it was 20 years ago that anything that had the word, dotcom at the end of the company's name, it was suddenly skyrocketing. >> we should do a retrospective. >> are you saying it feels like 1 1997 >> i'm just reciting what has happened in the past i'm not saying it's going to en the same way you never know just bear it in mind. >> certainly, bill, kelly, cough y caveat, buyertrue ever words ha been spoken. the dow is down 20 points. we are waiting for the senate now, that's expected to vote in just a few hours on the tax reform bill. according to senator mark warner, he says this legislation in his view is the single worst that he's seen in his career the senator sat down with our john harwood we'll bring you that interview coming up. later, the ceo of carnival

nee tell us how the cruis li's bottom line will be impacted if bill becomes law it might surprise you. >> yeah. >> stay tuned. 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. ♪ when you have a really traumatic injury, we have a short amount of time to get our patient to the hospital with good results. we call that, the golden hour. evaluating patients remotely, is where i think we have a potential to make a difference. we would save a lot of lives if we could bring the doctor to the patient. verizon is racing to build the first and most powerful 5g network, with ultra low-latency that will enable things like precision robotic surgery from thousands of miles away. as we get faster wireless connections, it'll be possible to be able to operate on a patient in a way that was just not possible before. when i move my hand, the robot on the other side will mimic the movement, with almost no delay. who knew a scalpel could work thousands of miles away? ♪

zblrk welcome back take a quick look at cars.com, up 4% on reports that activist investor starboard value bought a stake in the company sources say starboard says potential for cars.com to be sold to a private equity firm maybe. here's the response, about a 4% jump in cars for you today

all right. time for a cnbc news update right now with sue herera. hey, sue. >> hello, guys good to see you. here's what's happening at this hour, everyone investigators are looking into whether the amtrak engineer whose speeding train was distracted by the presence of employee in training who was in the locomotive engine compartment. three people were killed and dozens more injured when part of that train toppled onto interstate 5 near dupont, washington. secretary of state rex tillerson arriving in ottawa for meetings with prime minister justin trudeau and foreign affairs minister christia freeland. attorney general jeff sessions visiting charlotte, north carolina, announcing two new initiatives to help that area and western pennsylvania combat violent crime he says two new task forces will focus on bank robberies, carjackings, kidnappings, and extortion. >> i fear that if we do not act

now and act smartly, the surge of our resources moving the resources to the areas that need them most, this nation could see decades of crime progress reversed >> you are up to date. that's the news update this hour bill, kelly, i'll send it back downtown to you. >> all right, sue, thank you very much. sue herera. the house just voting to pass the tax reform bill, and the senate is said to take up a vote tonight john harwood sat down with democratic senator mark warner for his less than flattering take on the bill and joins us now with more hi, john >> hi, kelly now, this is relevant not because of senator warner's vote for the bill, like the debate over obamacare, this is a completely party-line process and they're are not going to be any democratic votes for it. mark warner said it's possible, he's a former businessman, moderate democrat, said it would have been possible to lure some of those democrats with provisions like this one take a listen.

>> one of the things that would have made this much more palatable to me is if these companies are going to bring back their profits they generated in foreign countries at extraordinarily low rates, and the rate, the range is between 7% and 14%, why not say, fine, company, bring it back, but part of the price of bringing it back at that low rate is you've got to put in place a meaningful training program, not for everybody, but everybody in your company that makes less than $80,000 a year >> now, even though they don't need mark warner's vote, this is relevant because if the democrats in 2018 take back the congress, ultimately take back the presidency, you're going to see ideas like that debated as democrats take a run at repealing these tax cuts just like republicans tried, failed so far, to repeal obamacare, guys >> oh. it's never going to end, is it i mean, so we're just going to reverse this now >> that's the thing, bill. >> i know.

>> when we have a closely divided country and a very polarized country with both parties operating on narrow margins and determined to work and jam things through, themselves, it really does create a never-ending debate obamacare was passed seven years ago and there's a provision in this bill, removing the individual mandate you can count on the fact that democrats who now have the political wind at their back, who are now favored to take over the house, they are going to go after these tax cuts and try to roll them back >> very good thank you, john. good stuff thanks see you later. meantime, shares of carnival have popped today about 2% after the company reported quarterly numbers that beat expectations higher ticket prices helped to offset a hit from the hurricanes they did take a hit from those hurricanes this summer related costs in that regard >> our seema mody joins us now with the ceo of carnival, aronod

darnold in a cnbc interview. >> good to have you on the program. >> thank you, happy holidays, everyone. >> the cruise industry has been challenged by hurricanes, yet earnings for carnival continue to grow. help us understand, what's driving profits? >> what's driving profits is our ability to continue to exceed our guests' expectations we have 120,000 super passionate employees. we have tens of thousands of travel agents that support us. once people on those ships, they have a great time. we're also trying to create additional demand with all the things we do like we just announced yesterday, partnership with univision, the first primetime series by our ocean production efforts on univision, so spanish language, featuring all the spirit and family relationships and passion for life that you find in the hispanic community >> so booking volumes also looking to 2018 are on the rise and this on higher ticket prices when competition is also increasing so which market is

driving this growth? is it the caribbean or new markets like europe or china >> you know, every market in the world is underpenetrated they're all large. all the cabins in the world, they add up to less than 2% of the hotel rooms in the world so every major market is underpenetrated and we're some who constrainted, we can only add so much a year there are only so many ship yavrshipyard in the world being driven by almost every market in the world showing strength, creating demand, excess demand, to capture more of the value that exists between a cruise and equivalent land-based vacation. >> arnold, this bill, i had another question for you, but wait a minute, you caught my attention here you're creating a reality version of "love boat" with univision, is that what's happening here >> no, no, it's a beautiful, it's a beautiful program where a family reunion oriented, surprise reunions. it's about a one-hour program on univision that will air during primetime. we have also several other shows, you know, we have ocean

treks voyager, vacation creation two of those are on abc. one's on nbc we have our own digital network, ocean view, where we have additional content, digital streaming content. you can pick it up on roku, apple pay and others so, it's just one more of the many things we're doing to drive demand >> i got it. should we think of you as kind of a retail stock? i mean, especially here in the united states, we're seeing pretty strong retail climate for the holidays and i sense people are feeling good about their lives, they're willing to spend the money for whatever reason. and i guess it extends to your business as well, yes? >> well, yeah, you know, consumer attitude is important, but obviously we're a global business every year, there's economic malaise somewhere, every year there's typhoons, hurricanes, et cetera that happens every year. and so for us, we think we are what we are, which is cruise, and cruise is the greatest vacation value and greatest

vacation experience and that's why you're seeing the great results by ourselves and others in the industry. >> arnold, is it true you have a 2.2% effective tax rate? >> that's not true it's true from an income tax standpoint, but we pay lots of other taxes. maritime has an alternate tax treatment. it's not tax avoidance it's actual loss of taxes paid that other industries don't pay. and it's existed for a long time because the ships are at sea and go between countries so we pay a lot of taxes, almost $1 billion additionally in taxes outside of income taxes related to things like harbor fees and other things. >> i'm sure you know the reason i'm asking because when we were talking last week to analysts about who would be best and worst positioned from the tax cuts, they just said, look, a company like carnival doesn't have a vary high effective tax rate so it won't be helped out that much by this reform i have no idea if it touches on maritime tax law this tax reform plan so what is the effect of this

going to be on you >> there might be some small benefit, if it passes, where we would get some small benefit because we do pay u.s. income taxes and some of our subsidiaries the bigger benefit, if it passes, and if it works as intended, would be more disposable income. if u.s. citizens end up having more disposable income, obviously that's good for consumer attitude. good attitude for consumers means more vacation, more vacations mean more opportunities for us. >> what about wages, will they go up for your employee base which is truly global? >> our employee base is global and so our wages go up every year, of course, but we have 120,000 employees from over 70 countries. we are positioned all over the world. we're not just based here in the u.s. we have ships and ports all over the world. we visit 700 port the a year at home port, a number of them.

that's a very complex thing. of course our wages go up every year. >> all right, we'll leave it there, arnold, thank you for joining us today on carnival the stock is up on the earnings beat we look forward to having you on more on the show take care. >> thank you, guys merry christmas. >> merry christmas to you as well seema bucking for a raise for all the carnival vokes. >> i want to see show the companies are going to use the extra money they have due to this tax bill. >> that's it. >> probably share buybacks >> just don't buy the stock back thank you, seema see you later. jack in the box trading higher after firming up plans to sell qdoba mexican grill to a private equity firm. we'll have details on that bill and what it means for the food space coming up. and fedex will report earnings after the bell today. pretty timely. we'll have instant reaction to those numbers and what it means for investors coming up. see if they shed any light on the christmas delivery season. stay with us

check on some of the movers in the markets today, they're food related jack in the box announcing it agreed to sell qdoba mexican restaurants to apollo global managementment f for about $305 million in cash. the transaction is expected to close april of next year jack in the box is up almost 3%. and darden restaurants also

trading higher, in fact, it's been one of the best performers in the s&p after reporting an earnings and revenue beat this morning. the olive garden parent also raised its outlook for 2018, citing an increase in same restaurant sales that stock up 6.5% you know, wasn't too long ago we were talking about a restaurant recessi recession. >> yes. >> now we're seeing the next phase of that with some consolidation and you're going to see a real division between winners and losers now, don't you think? >> i also wonder does retail and restaurants go hand in hand a little bit >> next year -- clearly this has been a watershed year for retail as we've been discussing august year like in basketball and football, after the last game of the season, the losing coaches are fired the next day. >> yes. >> i think you're going to see that on retail this next year as well. >> we'll see it's been a little better of late i wonder, too, with darden, if there's any lift, people say, hey, the traffic in the stores isn't bad. that's been helping the stocks maybe it's helping a restaurant company, too we'll see what that shakeout is

like after the holidays. >> exactly. 21 minutes to go right now, the dow eebouncing around. still down down across the board. the s&p down six right now the russell is down 11 vix a little higher. the transports interestingly are hanging on to some gains right now. when we come back here, new home construction jumped last month. despite concerns over how tax reform could affect homeowners we're going to break down the data and the impact for investors. and stitch fix is lower today ahead f its first ever earnings report which comes after the bell it's actually reversed it's now higher by about 1, 1 1/3% we'll discuss whether you should buy this ahead of the results coming up. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you

through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise

we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. the chase mobile app changed the game for us. we had this plan to go to the hottest place on earth, harness the energy from the sun to develop popcorn. we thought we had the right equipment, we quickly realized we needed more. we were able to send a wire transfer to a local vendor and get more solar cookers delivered, right here in death valley. manage business expenses from virtually anywhere. the chase mobile app available with business checking. chase for business. make more of what's yours. the great emperor trekking a hundred miles inland to their breeding grounds. except for these two fellows. this time next year, we're gonna be sitting on an egg. i think we're getting close! make a u-turn... u-turn? recalculating...

man, we are never gonna breed. just give it a second. you will arrive in 92 days. nah, nuh-uh. nope, nope, nope. you know who i'm gonna follow? my instincts. as long as gps can still get you lost, you can count on geico saving folks money. i'm breeding, man. fifteen minutes could save you fifteen percent or more on car insurance. welcome back as we look at the markets with the dow at least trying to turn back into positive territory it's down about five the s&p is down just about the same amount. russell is lower, too. the sectors of the s&p 500 pretty evenly split. you can see consumer staples leading the way. only with about a .25% gain today. no big moves on the downside, we're seeing a bigger downside move

telecom a little less than 1% lower on the session utilities down 1.7%. real estate waxed today, down 1.9%, almost 2%. >> even though u.s. home building is on the rise right now. housing starts rose last month to their highest level in more than a year. cnbc's diana olick has more on what's driving the boom and how tax reform could affect the louzing selouz i bla housing sector, diana? >> boom is a little much construction moves higher steadily, did so in h november housing starts and building permits. take a look at single families starts up 5.3% for the month up 1% from a year ago. but you want to smooth it out to a six-month average because of all that hurricane impact we saw. so we're at an annualized rate of 869,000, definitely an improvement from last year still well below the 25-year average of just over a million new single family homes per year that said, builders' sentiment off the charts literally jumped to an 18-year high this month. and you can see it here, it's

really diverged from actual construction that is all about deregulation and the tax plan builders had actually fought against the tax plan, citing a loss of property and mortgage tax deductions, but now they say they're supporting it. the chairman of the national association of home builders specifically pointed to lower tax rates for small businesses, which most builders are, and keeping private activity bonds which support development of affordable housing now, economic growth will be key to housing next year, so will affordability, though, and without more steam in home construction, tight supply will keep home prices moving higher back to you guys >> wait a minute, so they like the bill because it will help the builders, themselves, but if they don't have customers, you know, what are they going to build? i mean, the customers will be affected -- >> they do have customers because the customers need to find a home. the shortage of homes for sale on the existing side is historic we've never seen it that low they have people coming in. >> i was going to say, do you

expect a push in this industry before some of this kicks in with -- especially with the fed raising rates next year, as rates start to rise, you're going to see a little bit of a push here in the industry? >> well, yeah, you're obviously going to see the builders trying to put more product out there. what they need to do is put it at the entry level they say they can't do that because of the high cost of land, labor and materials. but if they can get some of that entry-level supply into the market, it's going to go really fast it's going to serve them really well also because that lower price inventory isn't really affected by the tax cut, the mortgage interest deduction so if they can get that lower cost supply in, great. if they're still in the move-up in the higher-end market which they are right now, and prits ps still very high, they may have problems going forward given these cuts. >> interesting i know a millennial couple that already bought their house now there's somebody who's off the market. >> who's that? >> i fade any decision i ever make is all i can say.

diana, thank you very much. >> thanks, diana. >> there was some concern, like a car, down 20% off the lot but we'll see. >> stay there. 15 minutes to go into until the close. dow down 15. s&p down six na nasdaq down 26 russell about ten. stitch fix is going to release its first ever earnings report since going public before the bell before then, a debate on whether the subscription-based clothing company has a sustainable business model to fight off the good old amazon effect. >> up 6%. yh,ooathat. wow. there he is. your new brother-in-law. you like him. he's one of those guys who always smells good. his 5 o'clock shadow is always at 5 o'clock. you like him. your mom says he's done really well for himself.

he has stocks and bonds. your dad wants to go fishing with him. your dad doesn't even like fishing. you like your brother-in-law. but you'd like him better if you made more money than he does. don't get mad at your brother-in-law. get e*trade. their leadership is instinctive. they're experts in things you haven't heard of - researchers of technologies that one day, you will. some call them the best of the best. some call them veterans. we call them our team.

welcome back take a look at shares of stitch fix. >> now it's off the high. >> had been down much of the day. all of a sudden, up 1% and 6%. now up a little less than 5% no clue as to why here this is just in the last couple minutes. ten minutes to go until the close. we're waiting for the company to post its first earnings report after the bell stitch fix delivers clothing to your door through a subscription service. a model that's become popular for everything from dinner, to shaving, to cosmetics. >> joining us now, a bull and a bear david strasser is our bull grad he is right now jan niffen is with us,

we can't figure out why the stock moved suddenly typically you would think maybe the word got out early, maybe earnings came out prematurely. we can't figure out if that's the case. >> it's possible, it's the first time they're reporting as a public company. maybe something went wrong i just don't know. maybe people got scared. it's a tough market. you don't want to be wrong on the -- be negative and wrong in this market. >> why are you bullish on stitch fix? >> i'm bullish on it because we do a lot looking at these e-commerce type retailers, subscription retailers and you look at what their lifetime value of their customer is, it's really good and relative to what it costs to acquire that customer, you know, we do a lot of internet e-commerce and always looking at lifetime value versus cost of acquisition or customer acquisition and here they were, you know, they're pretty good numbers, still in the mid to high single digit number and, you know, that's after spending $70 million of which we'll see how much of that's really starting to bear fruit and really start to drive

reacceleration of customer growth. >> there's a rot lot of reasonsu don't like stitch fix, right >> yes i don't disagree with everything david did said i generally agree with david on stuff, so i'm not surprised but i think the concern is they're spending a lot of money to acquire customers and can they keep acquiring customers at the rate it takes to have that long-term benefit? because i'm really concerned that if it's a good idea for stitch fix to do this, it's a really good idea for amazon to do this. and amazon's the biggest player right now in women's apparel and they've already got a model, right? amazon wardrobe. and so they could put a lot of pressure on this space, and nobody's better at data than they are and nobody's better at curating than they are and nobody's got more customers to deal with than they do. so i just think this could be something that could take a hit really fast from a company like amazon >> david, what do you think its valuati valuation, the share price, is >> i mean, i think that people don't know i think they're really struggling right now around valuation. it's a new model

i'll compare it to blue apron. blue apron came out and very quickly the reason that stock didn't do well is because their lifetime value to customer acquisition was negative and it was i think .8 versus a multiple -- here before they invested in all this marketing was in the mid to high teens now it's mid single -- like i said, five or six times still. so i think it's different and i -- i agree on amazon is being -- you always have to be wary here. two things about stitch fix, number one, they've done well in the midwest -- in parts of the country where these e-commerce businesses don't usually start out strong, and number two, amazon's really -- they're more about the consumable, more about commodity -- this is a fashion business if you believe it's a fashion business, it will be a little bit tougher, i think, for amazon to compete >> i also believe it's the retail business, not a tech business so we should value it like a retailer, not like a tech company. these guys are 300, 400 stylists and only got 75 data guys. they're really a retailer.

>> and i was reading in the notes, you know, you're pointing out that women's apparel has been falling for the last five years. so are they in the wrong category to begin with >> well, it is a $400 billion catego category you don't have to get much of it to win, so that's not so much of a problem. you still have to win. it's highly competitive. it's going to get more competitive. what i do like about stitch fix, they're very personal. that's where the customer is going. that's a positive. i still claim that amazon can do personalization about as well as anybody. >> david -- >> let me ask a question of a possible -- >> total expert. >> i guess would you buy into this? >> so it wasn't clear -- i'm not a fan of having a lot of stuff that's problem number one. but so i was actually asking people about the model a little bit because i think it's $20 a month, but you don't have to get clothes every month. you can get it once a quarter, maybe less frequently. for something that was very infrequent, maybe i could see

the attraction, especially if the sizing was good and the selection was good, but i feel like i've got many other subscriptions -- >> all the stars have to be in alignment there i guess. >> it's interesting, 80% of clothes in a woman's closet get worn one or zero times so there is -- that could catch up to them at some point we looked at stuff in the rental business you know, that is an area where it makes it a much more efficient process because you are -- you're not acquiring, you're borrowing. >> and finally, what were you going to say about them being a technology versus a fashion company? >> when i was a retail analyst, i would have agreed. now that i'm doing venture investing, investing a lot in technology, i -- it's both it's really about acquiring that customer and getting the most out of that customer and where retailers, they never really understand who their customer is that's one of the things all the brick and mortar guys are trying to figure out, who are their customer, what do they do? one thing about stitch fix, that customer is theirs and know a lot about them >> by the way, bill, they do men's boxes, too >> is really >> oh, yeah.

>> well, i could get into that. >> david, amazon knows who that customer is, too >> all right. >> of course, they do. of course, they do >> glass half full/glass half empty, all depends on whether you're pouring or drinking that's what it's all about david, jan, thank you both we'll see what the numbers look like when stitch fix reports coming up in the next half hour or so. in the meantime with the dow down 13 points, we have the "closing countdown" coming your way after this. after the bell, an earnings parade not just stitch fix. we're going to hear from fedex, 'lbrg , red hat among others wel inyou the results as soon as they happened. you're watching cnbc, first in business worldwide [lance] monica, it is absolute chaos out here!

gale force winds, accumulations up to 8 inches... ...don't know if you can hear me, but [monica] what's he doing? [lance] can we get a shot of this cold front, right here. winter has arrived. whooo! hahaha [vo] progress is an unstoppable force. brace yourself for the season of audi sales event. audi will cover your first

month's lease payment on select models during the season of audi sales event. us. it's what this country is made of. but right now, our bond is fraying. how do we get back to "us"? the y fills the gaps. and bridges our divides. donate to your local y today. because where there's a y, there's an us. your new brother-in-law. you like him. he's one of those guys who always smells good. his 5 o'clock shadow is always at 5 o'clock. you like him. your mom says he's done really well for himself. he has stocks and bonds. your dad wants to go fishing with him. your dad doesn't even like fishing. you like your brother-in-law.

but you'd like him better if you made more money than he does. don't get mad at your brother-in-law. get e*trade. welcome back we've got about two minutes. we're inside the two-minute mark with the dow down a little bit i want to show you going back five days, the dow, first of all, this is the run-up to the tax bill we had the rally yesterday we had a pretty good week last week, too, didn't we but today, with them passing the bill, presumably, the house has already done that, the senate is going to do it tonight, we believe. the stock market kind of sitting there. we're not getting much of -- there, that happened beforehand. there's the five-day chart of the dow. now, let's see the ten-year yield. that's where we're getting a move today we've been stuck at 235, 237, in

the yield there, but today we got to 247, which is above where we began the year, bob pisani, and now we're back 245 right now, but a lot of the long-term yields, germany, the bund went up to i think 39 or something like that. 39 basis points. and here we are at 247 at one point today. >> i wonder if you could jump ahead, show you the two ten-year yield. the yield curve is not the ten-year going up. yield curve is steepening. >> yes, yes. >> better than 60 basis points we haven't seen that in a long, long time. that's kind of important because some people are arguing now that the tax plan will promote economic growth, and the bond market might be responding to that this is controversial, but you get the point. it's starting to motivate people >> darden was one of the best gainers today. they had that great earnings report up almost 6%. and wellstone and ventas, couple real estate investment trusts led it lower for the real estate firms. >> big rise in the ten-year yield, group like utilities and

telecom, were notably weak today. you would have thought, bill, the banks would have moved up. basically the banks have not moved. some people are saying this is finally the start of a sell on the news idea we've been talking about for the last two weeks. >> waiting for the senate vote and earnings from among others, stitch fix and fedex, 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 no record closes on wall street toi today. let's look at the declines dow dropping 35 points on the bell to 24,756 just over a tenth of a percent drop it gets worse as you go down the list the s&p 500 down .32%, 8 1/2 points on the bell 2,681 the close. the has dock down almost .50 to 6,963. the russell 2000 shedding .79%, a 12-point drop.

1,536 is the close for the small cap russell 2k going to be a busy hour for earnings morgan brennan standing by to cover fedex results. courtney reagan will bring us stitch fix's first earnings report as a public company josh lipton results from micron. deirdre bosa will bring us numbers from red hat thank you, everybody we'll see you in a couple minutes as they start to cross joining me on the panel today, cnbc senior markets commentator michael santoli along with mark spillman, co-portfolio manager and alpine funds kevin o'leary, chairman of o-shares etfs. bigger winner in the dow is intel, up nicely a couple sessions now, while the biggest loser today was goldman sachs. over in the s&p the biggest winner was darden after its earnings this morning. the biggest loser, ppl, along with real estate companies real estate the worst sector today. in d.c., tax reform passed through the house earlier this afternoon. and it's set for a vote in the senate later tonight raising the question, michael, of is this a sell the news type of event >> i can hear you, can you hear

me >> dramatic enough, to characterize as a sell on the news obviously you retain most of yesterday's upside market's up modestly in december which i think is basically when it seemed like this was mostly a sure thing for passage i do think the market is kind of like, okay, what's next? you know, if not to say that every penny of the benefit are priced in or any of the unintended consequences already accounted for but i think it's about, you know, how does the picture evolve from here when you talk about growth next year, and all the other inputs >> yeah. mark, meantime, we finally had a little bit of movement in the lod longer end in terms of bond yields ten-year yield, 30-year yield especially you're a dividend guy. >> yes. >> does that have you nervous? do you look at all these companies announcing and raising dividends especially maybe after the tax bill passes and go, come on on, everything's fine? >> traditional engtquity income utilities and yield for yield sake, could be at risk as yeeied continue to go higher. the tax bill is going to increase cash flow dramatically. one of the first places that

money is going to go to is share repurchase and higher dividend payouts. that's where i think the best place to keep your real income protection next year is going to be. >> what do you make of, michael, the fact that real estate was down so much today, almost 2%? telecom weak, utilities weak. >> i do think it's the rate sensitivity. i mean, you had the ten-year yield just kind of nudge above the recent range above 245 it shows you how sensitive that the rate-linked sectors are. you know, i don't think it means that it's up and away for yields but sometimes those sectors of the stock market are kind of load leading indicators of, okay, at least yields aren't going to pull back. rick santelli was talking about, the german ten-year yield was tick for tick in terms of how much our ten-year went up today. >> great point kevin, real quickly, what do you think of the impact market wise is going to be, the house passed the bill now, looks like the senate is on track to do the same. >> i think we're anticipating, everybody knows it's going to go through now. now it's focused on rates. i think at the end of the day, rates never matter until they

do and finally in the last two weeks, people are starting to get concerned about rate-sensitive sectors te will, telco, housing taking the hit. to see the yield curve sharpen is a good piece of news because it pushes off a recession outside of anything visible, and i like it because i like inflation. i like pricing power for corporations in addition to enhanced cash flow from tax reform, pricing power's a great thing. i anticipate wage inflation coming in 2018 i think we're going to have more volatility but an exciting up market i really do. this is all good news as far as i can see. >> all right by the way, goldman was down today. just -- >> yep. >> and not that this is a knee-jerk type of thing, again, if the financials are going to benefit from that move, as we said, perhaps in the shorter end of the whole thing. >> right. >> let's get over to josh lipton, looks like we have earnings from micron which crossed now. joshua, how did they do? >> reporting earnings per share of $2.45 versus an expectation of $2.21

revenue comes in at $6.8 billion. the street was looking for $6.4 million. beats there on the bottom and the top. micron saying it released, kelly, looks like overall consolidated gross margin, 55.1%. in the first quarter they say that was higher than the fourth quarter of 2017 and they say that reflects margin expansion for both d-ram rukt products talk about ongoing strength in the pricing environment and favorable mix. heading into this report, the stock was down 10% from its intraday peak in november. that was on concerns about price declines and na n flash memory on this conference call, we're going to want to hear a lot more about the supply/demand dynam dynamics pricing environment. gross margins. this company's cap-x plans the company's call will start at 4:30 eastern and we'll be on it. kelly, back to you >> josh, thank you the ceo of micron is also going to be on "squawk alley" tomorrow in an exclusive interview to talk about these results that's also a don't-miss

interview. michael, pretty good especially when you consider their own guidance for the quarter was $6.1 billion to $6.8 billion. >> i was seeing analyst previews they thought the upside surprise could be 230 to 240 based on chip pricing and their history of beats this was obviously better than that and on the revenue side as well. i think there's sensitivity with the stocks in the group in the sense, look, fiscal 2018 might be the peak of the cycle. they're sense tiitive to the sis of that. this report didn't give you much -- >> mark, how would you situate micron >> i think it's indicative of the fact that tech stocks are probably not the biggest beneficiaries of fax reform. so i think the rotation we saw a couple weeks ago, i wouldn't doubt that that comes back a little bit more. there's nothing fundamentally wrong with the tech sector, but the logical trade, whose earnings are going to explode, whose free cash flow is going to explode? they're not on the top of the list i could see taking a breather here although there's nothing fundamentally wrong with the businesses. >> micron shares up 4%

we'll keep on yeye on it. a new survey from bank of americ america/merrill lynch has bitcoin as the most crowded trade for the month of december. respondents named bitcoin as the most crowded trader from 26%, in september, when it first made the top of the list. meanti meantime, faang, facebook, amazon, apple, netflix, google, came in as a close second followed by being short volatility. >> yes. >> given the kind of year we've had, no major surprise, mike i don't know what it means, are institutions crowded into bitcoin? >> i have a feeling when -- first of all, it means merrill put it on the survey, so, therefore, a lot of times when you do get results of the most crowded trade, it literally is what people, themselves, own i would doubt that's the case. these are global fund managers i think it's a sense of this came out of nowhere. it's a tremendous monstrous percentage gain this year. therefore, if i think it's not worth much, the fact it's going

up at all mean it must be crowded. >> it must be crowded. kevin, are you crowding into it? >> i'm trying to find an institutional investor now that the options are available in the futures. i can't find anybody that's institutionally taking a position in any cryptocurrency so this must be very, very thin. a lot of people all around the world buying small incremental amounts. it's very entertaining i'm really enjoying it, but is anybody using it, for example, as a 5% weighting as they would in a portfolio for gold? not that i can find. and probably because they don't feel liquidity on the exit is easy that's very hard try and sell $1 million with a bitcoin, you got to find a whole lot of people buying $5 of it to get rid of that. so it's a cockroach motel. you can get in, very tough to get out. >> i don't actually disagree with any of what kevin's saying but depends how you define institution. i saw something today, blockchain capital recently surveyed 91 cryptocurrency hedge fund managers. >> there are 91, wow >> average age, 26

>> mark, and i'm guessing it's never going to be in the rising dividend fund. >> we're not having a lot of bitcoin. you had patrick burn from overstock on just the other day, he's accepted bitcoin i think for four years. >> yeah. >> it represents 0.2% of his revenue right now. i mean, at some point you have to use this other than trading it with my friend over at another hedge fund. >> all right we'll stop beating up on bitcoin. ten-year yield was moving higher today robert kaplan is watching the yield closely because too low of a level could limit how much and how fast the fed could hike rates. during my interview with stan druckenmiller of duquesne last week, he said the main cause behind the low bond yield is the fed, itself. listen >> for me to say, oh, the fed's making a mistake, the economy i going to slow down because of the yield curve, the only thing i know that's happening with the yield curve is somebody's picking up the phone and buying -- and buying bonds from investors then they're picking up the phone and buying bonds. >> fed and other central banks

stop intervening, you think those long-term interest rates are going back up to something much more, quote/unquote, normal >> i think that's a strong possibility. >> what do you guys think? mike >> i mean, you can't deny that everybody who's a player in the bond market is, you know, as a buyer, is part of why yields won't go higher on the long end but i also will tell you in the last cycle, no central banks were buying treasuries and we had what was greenspan's conundrum. why isn't the long end going up? i also remember very distinctly people saying they'll never get the fund funds rate up to where they expect, around 4% or more it will have to deflate from there because the long end is not moving they got it there, whether they should have or not, they did. >> do you think, though, i'll ask you, mark, do you think the fed should not be interpreting any signals from the rate curve right now given that there's so much central bank ownership and activity in those markets? >> i think that's a very fair point. i'm not sure exactly what the right number is but i'm trying to figure out where could things go wrong and there's been one combination

that has usually been a bad indicator. it's when credit spreads, which are incredibly thin right now, explode over 100 basis points. and the yield curve inverts. when you get both of those things, the last four times that's happened there has been a market -- i don't know what the right number on the ten year is, but those are the things i'm looking for. >> doesn't look like we're there yet. >> not at all. we can stay at these levels for an extended period of time. >> yeah, painfully extended. let's get back to josh lipton, a little more on micron's earnings. >> kelly, micron moving higher in the after hours the company now delivering a strong q2 guide leer, kelly. eps of 251 to 265. analysts had been looking for $2.03. the top line they say look for $6.8 billion to $7.2 billion that is versus expectations of $6.2 billion and gross margin, the guidance here, kelly, is 54% to 58% analysts modeled more like 51.9%. this conference call is going to

start in just about 20 minutes kelly, back to you. >> that's pretty impressive stuff. josh, thank you. still, guys, the shares aren't moving much more additionally on that, still hanging onto a 4% gain maybe this quells larger concerns about micron, the macro. >> that's what i would say not always known as being particularly aggressive about talking about pricing and things like that down the road, so, yeah, it does underscore the idea -- look, a lot of these chip stocks that had a great run, this stock doubled this year, had been selling on the result, even when they're been good so it's probably a pretty decent sign it's up 4% although it was at 50% the beginning of november. >> it's a little over 45% right now. kev kevin, any thoughts? >> there would have been a day when a beat like this in a semi, micron beat like this, would have moved the stock 15%, 20%. i don't really think we're in a tech bubble again. in fact, this rotation out of tech is really muted this upside this is one heck of a beat nobody on the street had these numbers, and, boy, %, 54%, 5% i

nothing burger for the stock which tells me it could trade down tomorrow. i'm not excited about getting in i see a lot of money leaving tech is moving to other places where they're going to get a bigger bump because of tax reform definitely not exciting. i'm really surprised that that's all it's getting >> real quick, mark, before we go. >> i agree three out of the top four inflows in etfs were value related last we're and gets back to my point, there's not necessarily anything wrong with tech but they're all up 50% to 100% i think the thematic trade is tax reform going forward for the next few months. >> good stuff. gentlemen, thank you both. here to talk with these markets as we kick things off this afternoon. thank you very much. up next, fedex is minutes away from reporting its earnings we'll have stitch fix results, too. we're going to have instant reaction to the deliveries numbers. find out if the company was able to do that, deliver, for investors. plus, the dow up 25% this year jeremy siegel who's one of the first market watchers to call this massive rally is raising

some flags now coming up, he'll explain why he is starting to worry. and we want to hear from you. contact the show, twitter, facebook, send us an e-mail. share your thoughts with us. you're watching cnbc, first in business worldwide

welcome back bunch of earnings here let's start with stitch fix whose shares are down 6% we're still digging into the results. back with us for some reaction is david strasser, managing director at swan and legend venture partners and jan niffen. guys, welcome. i know it's early minutes here, but david, what do you think about the results? >> you know the thing i was looking at is memberships at 2.4 million which is where sort of seems like consensus was everything we had seen i just think this thing is going to be volatile over the next couple days, next couple weeks it's just the volatility here has been up and down i think people are trying to figure out how to manage this. what i'm most interested in hearing them talk about is sort of how the marketing and what the momentum is like from some of these marketing expenses that they're spending and how that's going to drive in customers. >> so you don't see anything changes your bullish stance on the company here >> no, i don't i mean, i know there's going to be a lot of, you know, a lot of volatility here. i still like what they're doing. the thing i'm going to watch is

what this lifetime value is of customer versus acquisition costs. i think it's going to drive the value of the business. >> stitch fix, jan, is down nearly 8%. of course, that's reversing part of thelittle pop it had before the close there. what do you see here, what jumps out at you >> i didn't see a thing wrong with the release like david didn't see anything done with the release. they were what, if better, than the street thought they were going to be. everything looks normal. have to parse through the numbers to see if there's something people didn't like down all morning, up at the close. now it's down again. i'm with david, this is going to be a volatile stock until we all figure it out. so far we haven't figured it out. >> mike, now it's down 10%. >> look, i think as these guys are saying, they basically gave quasi guidance or real guidance five or six weeks ago. it's really not a lot of suspense in terms of what they were going to report for the quarter, how you going to read that, extrapolate it if they didn't beat on memberships, subscribersing maybe that means there's not as much momentum as some of the

bulls would want i don't think -- this is noise in the context of how much it's up in the ipo price. >> stitch fix down 12% now we'll continue to follow it. thank you. joining us for some reaction there on the stock. >> thank you. meantime earnings from fedex just hit wow. let's get to morgan brennan with those numbers. morgan >> hey, kelly, that's right. shares are up 2% right now in afterhours trade, beat on the top and bottom line. earnings per share adjusted coming in at d$3.18 per share, better than the $288 the street was looking for. revenue better than expected $16.31 billion versus expectations for $15.68 billion. a few things to note here in the release, ceo and chairman fred smith saying that the company's on track for another record holiday shipping season, and customer service levels have been outstanding also, the company raising its fiscal 2018 earnings forecast. says they now expect before year end market-to-market pension accounting -- expenses related

to tnt express, that they're expecting $12.70 to $13.30 per diluted share up from the previous outlook and also saying that if the tax reform that act goes through, that earnings per share could increase by an estimated $4.40 to $5.50 per dr saluted share for fiscal 2018. a beat on the top and bottom line also raised full-year fiscal 2018 earnings guidance and shares are up right now on this report. back over to you >> morgan, thank you >> strong, definitely strong reports, strong guidance i would argue muted response by the stock. just because it's up so much and i think that it's at the upper end of where it trades in terms of valuation but, you know, still, given how well it's done this year >> yeah, it's up better than -- >> tacking on a little bit -- >> for shire 2.25% right now his, of course key season for them. for more we're joined on the

phone by donald, the top and bottom line beat in the guidance looks pretty good. >> it's extraordinary. without a doubt. yeah, the stock is only up 2.25%. but the results have been out, what, less than four minutes give everybody a time to digest this the real key here is not only are they beaten ting the tom an bottom line, how are they getting there? we know about e-commerce, that continues to grow. they continue to make service happen without any service interruptions. unlike the brown team, unlike the competitor u.p.s what's really key here is look at the marmgin on express, thats 11% margins, record high margins. all the billions of dollars they invested in technologies, rotation, bran brad-new airplan starting to pay off in efficiency and capacity, so they can get the service and deliver really solid margins, bottom line remember, the highest margin business for them historically has been ground.

it's been other part of the business which are smaller revenue. the big revenue is still express and when express starts to deliver 11%-plus margins, guess what, you get what we just got. >> yeah. thasts the 30-set beat on the bottom line. the revenue, again, was well involve what the street was looking for and it looks like they're saying there could be an additional benefit if tax refor goes through is that priced into the stock, do you think >> no, i don't think so. nobody was talking about -- i talked to hundreds of people in the last couple of weeks about the company, what's going on e-commerce and that was not the topic of conversation the topic of conversation was service, yield, revenue. what was the margin going to be, did they have to pay extra i would tell you, 2 pr.87, 2.88a the consensus. could be $2.90, $2.95, maybe as much as $3 obviously they smokedtalking abe

taxes. once you pile that in there, i expect shares to trade very nicely tomorrow. >> donald, thanks for your time. appreciate you joining us. >> always a pleasure. >> fedex shares up a little measure more than 2% as investors react after hours. stitch fix reported its earnings for the first time as a public company courtney reagan has more from those numbers. >> hi there, kelly, thanks for being patient with us. first time stitch fix reported earnings as a public company for the first quarter. so earnings coming in at 4 cents per share. that is on a gap basis and not comparable to wall street's estimates. it's kind of a low quality earnings print because a huge chunk of the profit is due to this one-time item, with the revaluation of preferred stock warrants so it's a little unclear how analysts are going to treat that revenue coming in basically in line with what stitch fix told us, that's the same thing for the active customer base then owhen you look at the

guidance, the second-quarter guidance is a little above wall street's estimates the full year revenue guidance also a little above wall street's estimates however, there is no earnings guidance in this report. so you can see shares are down sharply for stitch fix, down about 11%. but a little confusing with the way they presented the financials for this quarter. coupled with the fact that not a lot of it is new from what we've learned from the s1. kelly, back over to you. >> all right courtney, thank you. stay there just for a moment so, mike, a few things that might explain the drop here is as courtney mentioned a big part of that earnings, the 4 cent number they reported one time -- >> as a financial adjustment yeah. >> stock warrants. then also not in earnings guidance going forward >> yeah, i don't know if the company has sort of said, look, we're not going to get bottom line guidance going out because if they typically were expected to, maybe that's a slight red flag still i think given how much the stock has run, mostly held its gains since the ipo, i'm not surprised that there's this

backing off right here >> there's a couple other -- >> go ahead, kelly. >> yeah, go ahead. i was going to ask about the clients and marketing cost, that sort of thing. >> exactly okay so the active clients, the number that they gave, was about the same as what we saw in the s1 which was five or six weeks ago. that's at about $2.4 million so about 20%, 30%, rather, higher year over year. talked about near term how gross march will decline as they invest in new categories and marketing spend goldman sachs says is going to have to increase going forward to grab new clients. day also call out that shrink was actually a bit of an issue this quarter so they want to make sure to sort of tackle different technologies to make sure that that improves and shrink, of course, includes stolen items which gets a lot of the headlines but things like damaged goods which if you're shipping clothing and trying them on without seeing them and then deciding whether you're going to keep them, that is an important cost factor here >> glad you elaborated for a second i go shrink? they don't make the clothes. what happens

>> yeah. >> and shrink, retail shrink, got it good stuff, courtney, thank you for bringing us some of the details from that report shares are still down double digits stitch fix ceo katrina lake will be on "squawk alley" tomorrow and have much more elaboration on these results do not miss that. red hat earnings are out now. let's get over to deirdre bosa as we round this out deirdre? >> hey, kelly, it is a beat on the earnings and revenue front for the open-source software company and developer of linux operating system eps coming in 2 cents above forecast at 73 cents revenue also higher than the street was expecting at $748 million versus $739348 whi milln which was expected despite the beat and higher view for q4, shares are slipping in the after hours currently down 3% remember the stock has been on an absolute tear this year it's up about 85%. as of today, year to date. 2% since the last set of earnings this company has really been benefiting from jumping onto

many of this year's biggest tech trends like the sbempinternet o things subscription revenue continues and relating to emerging technologies was up 44% year over year in the quarter keml lkelly, back over to you. >> thank you, deirdre. red hat ceo jim whitehurst will be on tomorrow don't miss it. it's going to. be a busy hour for them, michael. >> sure will lots of ceo stuff. maybe trying to, you know, give a little color that helps their stock on the way i do think the game this year in red hat is mostly the story here probably not enough -- >> how big of a gain is it now >> they didn't come out and say. it's the -- up 80% it's been on this tremendous run. a lot of these kind of software names did get caught up in that the. >> yeah, why do you think 80%? it's -- in other words, there's the big tech platforms that have had a monster year. >> sure. >> there's names and kind of -- semiconductors, chips, parts where you can explain -- >> i think it's just being in the correct little sliver of the

market right there yeah >> all right there's red hat. >> as i keep talking about red hat, i think bitcoin brings me back to the old red hat days when everyone knew linux was going to take over the world, this was the only way to play. >> i appreciate that that explanation i very much enjoyed. breaking news on the tax bill ylan mui, what's happening >> kelly, you're not going to believe it but it looks like the house will need to vote again on the republican tax bill after it hit a procedural snafu over in the senate a senate aide confirming to us that the parliamentarian has ruled that two provisions in the tax bill do not comply with something known as the burr rule those supervisions are one around 529s being used for home school expenses as well as exemptions for certain colleges from this new excise tax based on them. those two provisions not allowed by senate rules, which means that even if the senate does continue to vote on a revised version of the bill tonight, the

house would likely have to take it up again, possibly tonight, but more likely tomorrow and this is just a technical problem, however, it does eat up valuable time for republicans as they try to speed this tax bill through, get it to the president's desk, and avoid, by the way, a government shutdown scheduled to occur on friday if they don't pass a spending bill. so, again, the house looks like it will need to vote again on the tax bill after it hit a snafu in the senate, guys. back over to you. >> ylan, i know you mentioned this is a snafu, but if those parts of the bill, the 529 issue, college exemption one, don't comply with the rule, what do they have to do do they have to get them to c e comp comply >> reporter: yes. >> strike them out >> reporter: we're going to the procedural weeds, kelly. i'll do my best to explain them it looks like they can simply strike the provisions. the easiest thing might be to strike the provisions entirely, have the senate vote on a clean

verks of the bill, still move forward tonight. again, because the house just passed it, it would have to go back to the house for a new vote since there are changes to the bill >> so the senate could vote on the clean version tonight? >> reporter: the senate could still vote on the clean version tonight. that's what we've been told. >> and remind me one more time, so the first one related to what part of the 529 plan issue >> reporter: there was a provision in the tax bill that would allow people to contribute to 529s and allow those contributions to be used for expenses for home schooling. and for k-12 education that was a provision that was requested by senator ted cruz. the other one exempted certain colleges and universities from a new excise tax on their endowments according to the senate aide, only one college would be impacted by that and it's in kentucky >> hillsdale, right? >> barea never heard of it. >> yeah, college of the bible i think? >> yeah. >> anyway, yla in, thank you stay with us for just a second.

>> ylan, does it require if they're going to re-vote in the house, there's time for debate and all this other stuff, do they have to essentially devote a day to it, say >> reporter: yeah, that is still up in the air. it would have to go back to the rules committee before it can go to the full house floor. the rules committee debate, we're told, could take about an hour, maybe longer, an hour at the fastest. and then, again, going back to the house floor. so unclear exactly what steps they're going to take in what order at this point. but we're hearing that they could go back to rules tonight, may go back to rules in the morning. but all of this seems to be setting up for another house vote tomorrow. >> wow i don't think the -- do the futures open at 4:30 just -- >> they should -- >> -- if there was any immediate down market reaction to that if it sounds like this is something they can work out pretty quickly and not going to hold up all of a sudden their ability -- >> reporter: it doesn't jeopardize support for the bill, it eats up time. that is in short supply right

now. >> yeah. that's for sure. ylan, thank you very much. ylan mui on capitol hill there fascinating development. let's get over to cnbc news update with sue herera at this hour hi, sue. >> hello, kelly. here's what's happening at this hour, everyone,a terrible accident in mexico at least 12 people have died including seven americans when a bus carrying cruise ship passengers to mayan ruins in eastern mexico flipped over on the highway. royal caribbean cruises says passengers from two of its ships were involved in the crash. vermont senator patrick leahy says he regrets calling for senator al franken to resign instead of waiting for an ethics investigation. franken announced his resignation earlier this month following allegations of sexual misconduct. new york governor andrew cuomo announcing increased security for the holiday season in new york city including beefing up security at bridges, tunnels, airports and mass transit systems

>> it's a high-volume time it's a high-traffic time and given the increase in the volume and the traffic, and given the recent events, we believe it's prudent to increase security at the major crossings and the major transportation hubs. >> you're up to date that's the news update this hour back downtown to you, kelly. >> all right, sue, thank you very much. our sue herera jeremy siegel was one of the early believers in this massive market rally but he's turning cautious while david rosenberg thinks there is more upside xtey're going to debate what's ne for stocks when "closing bell" comes right back ike? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods?

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

[ mouse clicks, keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] ♪ 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. welcome back here's how we finished up on wall street. red across the board after a big session yesterday. dow dropped. nasdaq down 30 the rulssell 2000 the worst performer. earnings after hours, we've had a bunch of them. fedex is up a little less than 2% still after its strong top and bottom line beat stitch fix down about 10% right now. micron up 3% and red hat down 4.5%. although markets closed lower today, year to date they have had a huge run. the three major averages up 20% or more for the year will we hit dow 25k before the new year joining us is jeremy siegel, a finance professor at the wharton school at the university of pennsylvania david rosenberg, chief economist

and strategist, author of "the breakfast with dave" newsletter. welcome to you both. mr. siegel, first of all, professor siegel, where -- so we've talked about how you think there's still some room left for the market but not that much. what do you think? >> i think we're 1% away from 25,000 on the dow and, you know, that certainly can happen. but i'm one of those people, and i'm, you know, very positive on the tax plan, but it's sell, buy on the anticipation, sell on the news i think that all the good things about the corporate tax plan have been built into the rally that we have seen over the last two months and i'm not sure how much else there is really going to be. take a look at the bond market today. are we going to get more of those in the future? that's going to be a real challenge next year. and, you know, as i've mentioned, you know, earlier, i

think the prush can republicans to be politically challenged next year for the midterm elections. i don't think any other republican policies are going to be passed in 2018. >> okay. dave, how do you feel about the market >> well, i don't disagree at all with what the professor had to say. you know, there could be obviously with the positive seasonals in the momentum, the question was are we going to see 25,000 we probably will but when it happens, by the end of the year, i mean, that's still guesswork. my sense is that, you know, you do have a lot priced in. let's take a look, you know, forget the trailing multiple, which is already at 23 times earnings we're all looking forward. even when you put the profit forecast in from the tax relief, you're talking about a 17 1/2 guard price earnings multiple. you know, that is stretching at least one standard from the historical norm. no, i'm got toing isnot going ty

we're in a bubble. this market is really expensive. actually even when you count in the benefits of the tax reform package in the valuations, it is actually the most expensive stock market we've had since the dot bubble craze 17 years ago. so i don't see where there's going to be room for a whole lot of upside from here. >> okay. so that's what i was going to ask. taking valuation -- >> i don't know if i agree with -- first of all, the world of -- the difference is the interest rate. that kind of bubble, we had treasuries at 7% today they're 2 pr.5%. even if they move up to 3%, 3.25%, i mean, we're still in an amazingly low interest rate world so, you know, i -- i don't think that 17 is high. i think 17 is low. i think some of the earnings estimates for next year are too high but i -- >> i think -- >> if you want to know the truth, in the world that we live in, 20 is the new normal p/e ratio. >> no, no. >> 15, forget it. >> i don't think so.

>> not in this interest rate world. >> i think, professor, you're using the wrong interest rate. you can't use the interest rate on a treasury note in a riskless asset and compare it to a risky asset. take a look at where, say, the multiple is, benchmarked, against, say, where the high yield interest rate is let's compare a risky asset on the capital structure to a risky asset. taking a look at where the average high yield coupon is right now, it's not clear at all that the stock market is trading cheaply next to interest rates i hear that all the time it's the fable fed model which never made anybody money when you bench mark the multiple, the earnings yield against the appropriate yield and the high-yield market, the stock market is absolutely no bargain right now. >> is jeremy, last word. we got to go >> well, you know, i think interest rates are -- i mean, that's the world's largest asset class is fixed income. if they don't give competition, i think that's good for the stock market >> all right we had a lot of breaking news, but i love hearing this debate guys, thank you very much. >> thank you.

>> jeremy siegel, dave rosenberg, planting some ideas about rates for stock valuation. quite interesting. coming up, we'll look at whether higher oil prices and president trump's policies including the tax reform bill could lead to more jobs in oil infrastructure we're going to head live to a pipeline plant toige atut furth o ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. the moment a fish is pulled out from the water, it's a race against time. and keeping it in the right conditions is the best way to get that fish to your plate safely.

sometimes the product arrives and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. we took our world class network and we developed devices to track environmental conditions. this device allows people to understand what's happening with the location, but also if it's too hot, if it's too cold, if it's been dropped... it's completely unique. if you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. who knew a tiny sensor could help keep the food chain safe?

welcome back breaking news on the banks this hour dom chu, what's happening? >> banking regulators including the federal reserve and fdic have come out with their status report on u.s. bank living wills. that i have given at least a passing grade to eight of those banks. they have no problem with plans submitted by bank of new york m mellon, citigroup, jpmorgan chase or state street. however, they're referring bank of america, goldman sachs, morgan stanley and wells fargo back to do some fixing they have found some -- they have some shortcomings day are not material deficiencies which would have required a refiling and replanning of their living will. however, they are going to go back and ask those four banks to fix at least some of the problems that they've found. again, satisfactory or passing grades for all eight of those banks but the four, specifically, bank of america, goldman sachs, morgan stanley,

wells fargo, the regulators want to see some of those weaknesses they found in mare plans readdressed. we have more details the stocks are not moving hugely on this. of course, in context, kelly, the reason we talk about living wills, this is part of dodd/frank and this orderly resolution plan in case these banks ever go out of business. back over to you. >> dom, thank you. mike, what would you say on this >> right now, we're lucky enough that it's like editing the will of the very healthy person, there's no urgency to it, trying to do the bureaucratic fixes it's not something that's really critical i think there's a lot of people who actually wonder even the living wills that pass muster, like functionally, are they going to operate the way they're intended is. >> elizabeth warren has been a big critic of that even though it's been an important part of dodd/frank, is there sign that regulators now under this white house, i mean, not that day report -- >> i don't know if they touch the process at all. >> if they're more deregulatory, if they're going to be less obsessed over the living wills --

>> the fed is stress testing issues, so you have to see under the new chair if that's going to change. >> right comes in in early february, of course, but in conjunction with the fdic, i don't know if it's a major issue or feels like once they've been put out there, i don't know. >> i imagine if you explain -- had them explain exactly why they didn't measure up, it'd be hard to really see one from another. >> these documents are thousands of pages long a piece. glad i don't have to read them. stitch fix -- thank you, dom. stitch fix shares sinking after reporting its first earnings as a public company what to listen for on the conference call. we have that coming up. also shale is booming and creating jobs in the process production has not gone up in a straight line. we have a deep dive into the industry and an in-depth look at a new pipeline facility. still to come. you're watching cnbc, first in business worldwide at fidelity, trades are now just $4.95.

we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. and at $4.95, you can trade with a clear advantage.

the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. ♪ ♪ ♪ ♪ what we do every night is like something out of a strange dream. except that the next morning... it all makes sense. fedex powers global commerce with vast, far-reaching networks...

deep knowledge of industries... and, yes... maybe a little magic. ♪ the price of oil climbed to more than 27% since donald trump was elected president. our jackie deangelis is in bay city, texas, at a new pipeline plant with how the policies from trump are impacting the energy industry and closer look at the pipes that support it. jackie >> reporter: good afternoon, to you, kelly that's exactly right you can see this facility behind me here. it's one and a quarter million square feet. it's the size of seven golden gate bridges what they're doing here is making seamless pipes for the oil and gas industry now, this is a project that started back in 2013 the idea was anchor here in bay

city, texatexas, supply pipes f the expanding shale infrastructure that's going to come out of this region. this is a project that employed over 20,000 people during construction it's going to give about 600 people full-time jobs. it required a total investment of 600 people full-time jobs with a total investment of $2 billion why is the company doubling down on shale despite the reductions we've seen in oil prices, they believe the demand will be there and they want to capitalize on it. they told me that president trump's pro-energy, pro-infrastructure stance is an added incentive. we saw oil prices get near $25 a barrel because we had a supply glut most producers are confident that even though it's been difficult, conditions are starting to improve slowly the key with projects like these is longevity, that they'll pay out over a period of time, and that these short term price

fluctuations probably won't have a long tell me impact. i will say this, a lot of the people i spoke to here as we are waiting for the tax bill to be voted on, they say corporations will be the beneficiaries, maybe they'll invest more in projects like these >> putting 25,000 more people to work, that would be something, jackie deangelis, thank you very much a procedural snag was hit in the senate, we have the latest from capitol hill after this

let's get back to capitol hill for the latest on the tax bill which has just hit a snag

ylan mui has the latest. >> reporter: the house will need to vote again on the republican tax bill there were some problems with the bill in the senate the senate parliamentarian ruled that several provisions in the bill did not comply with what are known as the byrd rules. i just spoke to house ways and means committee chairman kevin brady, he said it's no big deal, it's just a procedural process, they expected some challenges to be raised. again, this does eat up the time that republicans had been hoping to use to clear this off their plate and move over to a government funding bill. also receiving a statement from bernie sanders and ron wyden, ranking democrats on the budget and finance committees they said, "in the mad dash to provide tax breaks to their billionaire campaign contributor, our republican friends forgot to comply with the senate rules." the house will have to vote

again on the republican tax plan, kelly. >> ylan, stay with us, i just wanted to check the futures real quickly and see if there was negative reaction, given that they're susceptible to any hiccup in all this it looks like, let's see, the implied has the s&p down ten points, dow down 35, nasdaq down 31 it's very light volume right now, of course, but some negative reaction there. i was just going to say, if i heard you right earlier, ylan, these provisions are not exactly the type that sanders and his colleagues were referring to one would allow contributions to your plan to home school your kids, the other exempts a college in kentucky from the excise tax they were impose on documents. >> reporter: that's right, kelly, this goes to the process the republicans have been use to go push it through without democratic votes it constrains how large the bill

can be and puts them up against some tough, arcane rules in the senate that clearly now the parliamentarian has ruled the bill does not comply with. >> we don't envy you having to figure out how this all works. >> i don't want to overstate the reaction perhaps it could be another day of voting for this, does it raise the possibility of a government shutdown slightly because there's not that much time i don't know if that's really -- >> well, there's not that much time >> reporter: i asked kevin brady what that means for the vote on the stopgap spending measure he said unclear at this time >> thank you, ylan mui on capitol hill stitch fix and red hen have earnings calls, we'll have numbers to listen for after this ok, so with the award-winning geico mobile app, our customers have 24/7 access,

digital id cards, they can even pay their bill- (beep) bill has joined the call. hey bill, we're just- phone: hi guys, bill here. do we have julia on the line too? 'k, well we'll just- phone: hey sorry. i had you muted. well yea let's just- phone: so what i was thinking- ok well we'll- phone: yeah- let's just go ahead- phone: oh alright- the award-winning geico app. download it today. their leadership is instinctive. they're experts in things you haven't heard of - researchers of technologies that one day, you will. some call them the best of the best. some call them veterans. we call them our team. feel that?

that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

welcome back checking on some of the earnings movers after hours, fedex up 1%, a little off the 2% initial gain red hat still down 4%. stitchfix down 10.5% their calls begin in just a couple of minutes. real quickly, what will you be listening for? >> obviously, for fedex, anything about this quarter, whether they can meet demand stitchfix has to basically

convince people they have it figured out for their business model. >> futures are down after hours but that's capturing the last 24 hours, capturing the move we saw in the session today, it might actually be up >> basically little changed since the official 4:00 market closed no apparent reaction to this revote in the house. >> that does it for "closing bell," thanks for joining us "fast money" starts right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. tonight on "fast," we're all over the after hours action. fedex, micron, and stitchfix, all reporting earnings moments ago. we'll bring you tell latest details and tell you which names the traders might be buying. plus why blockchain is soaring today. we warned you right here on the show, buyer beware famed short seller andrew left is targeting the company. he'll join us to tell us wha