subject of a buyout. up 12% right now but the reason, according to recode, is they want to keep xp out of the hands of amazon home depot may buy xpo over the weekend. >> could be a very interesting story. >> merry christmas, everybody. >> have a safe holiday, everyone, enjoy. thanks for watching "power lunch. >> "closing bell" starts right now. hello, everybody and welcome to the "closing bell c bell", i'm kelly evans to close out the week at the new york stock exchange. >> we've been standing here waiting for the show to start. i'm bill griffeth. the tax bill has been signed into law just before christmas as they said it would be many more companies have been announcing end of year bonuses as a result, including bank of america, pnc and bbnt. why are we listening to "jeopardy" song? >> i was going to ask, are you hearing this, too?

i was concerned it's just me >> i understand why they are now. >> bb&tceo will join us exclusively to talk about what's behind the decision for the company. i get it, oo, very funny, everybody. >> show starts at 3:00. >> i was here at 2:59:59 and we're also looking forward to talk to kelly king about bonus checks he is cutting to employees. today we have bitcoin in fturmoi falling 40% from its record at one point. we'll tell you what's behind the pledge, and why one planner is shelving his plans to begin a crypto hedge fund. countdown to christmas tomorrow is the second busiest shopping day of the year and our reporters are standing by to bring you the very latest right now. courtney reagan, where else? she's in a mall this time in queens, new york, with more on how the retailers are faring this holiday season. morgan brennan with is us here at the new york stock exchange looking at how the transportation industry has been handling the shipping rush and has one big retailer reportedly looks to buy a logistics company. so, morgan's got plenty to tell

us about, but first, courtney, start us off here. >> reporter: yeah, your favorite mall rat, right, got to come to me first two days before christmas. the traffic here at this mall has really been picking up throughout the day just wait until tomorrow they call it supersaturday for a reason 126 million americans are expected to hit the stores tomorrow that would make tomorrow the second busiest shopping day of the year and believe it or not, that's actually down from last year because there was so much early selling going on in november but, of course, far from everyone is done >> i just started because i work all the time so today's my first day of shopping. i'm not even close to being done i'm stressed i refuse to do it on christmas eve, so i'm going to try to get as much as i can done today, tomorrow morning then that's it. >> reporter: fresh transaction data, this is from november 1st until december 18th. they're saying retail sales, online and in store, all

together up more than 6.5% in the seven-week mark compared to the year before. they're up only 2% in the same mark last year this is three times as strong. electronics and appliances of the top-selling category here. also have building supplies, very strong. specialty retailer higher by almost 8%. that's a pretty key category if you're among those who have procrastinated and want to use some form of a hybrid with online and in store, you can still do that. target says, in fact, half of its online orders are picked up in stores in the days leading up to christmas and four out of ten kohl's shoppers do the same thing. things are getting picked over at least at this mall in elmhurst, new york they're opening at 8:00 a.m. tomorrow and staying open for 35 straight hours. >> i was at the mall last night in jersey. >> so i heard, yes. >> there was nowhere to park the inside it felt okay. there was nowhere to park. courtney, thank you very much. the foot traffic seems strong. >> i'm going to try that, if somebody doesn't get a present from me, i don't shop on

christmas eve, that's it. meantime, shares of transportation company, xpo, jumping today, they're up 11% now on reports that home depot may be interested in buying it morgan brennan is over at its trading post morgan >> reporter: recode reporting home depot has considered making an offer for this company. xpo logistics in part to keep it out of the hands of amazon which could be according to that report considering making a bid of its own no response from xpo on this report yesterday home depot saying it won't comment on acquisition rumors, but xpo has been growing gangbusters for the past several years, snapping up companies like trucker conway, and it has emerged as the largest provider of last-mile logistics for heavy goods. think televisions, furniture, appliances, in north america so we actually spoke with xpo's chief strategy officer scott mallet just recently as peak season was getting under way >> we are touching more and more homes every single year. our business and last miles

going up mid-teens percent we have 5 hubs, going to 85 hubs next year and we are moving over 13 -- we're facilitating the movement of over 13 million deliveries every year. >> reporter: so growing very robustly, still much smaller than u.p.s. and fedex, which with christmas a couple days away, are also in crunchtime right now. so far, service levels for u.p.s. and fedex are pretty strong with on-time performance for fedex ground 98% last week u.p.s. ground over 97%, according to data from shipmate r ship matrix. guys, whether u.p.s. and fedex, again, delivering record numbers of packages or potential takeover talks surrounding xpo logistics, actually doubled for the year, this really speaks to how crucial shipping and logistics has become for the retailers. as we continue to see e-commerce soar back over to you >> real quickly, if home depot

buys them, will they become an exclusive client, talk about that at all? >> reporter: don't know the answer to that, but what i can say is that right now, you know, based on conversations i've had with analysts, both amazon and home depot are customers of xpo. this is really sort of what they've become known for they doubled down on what's called so-called white glove deliveries all of these big, heavy goods that maybe clog up -- traditionally clog up the small sort networks of u.p. s. and fedex and that require you as a truck driver to bring it to somebody's home and actually in many cases even install it in smeebs ho somebody's home. >> right even when target bought shipped, it didn't make it exclusive. interesting to see how this pans out. thank you, morgan, see you in a little bit. >> let's talk about that among other thing in our "closing bell" exchange donald is with us from brauton capital. mike gibbs from raymond james a well stephen sar guilfoye

and rick santelli from chicago here we have these talks with home depot what do you make of that >> let's face it, xpo, what brad joy c ja i ccobs and his team built, liked this company for a very long time, for a number of years. whether they're acquired by home depot, acquired by amazon, or they continue to be a standalone company, we like fundamentally what this team has built it's a strong transportation company that provides a need that is not fulfilled by fedex and u.p.s., but it is in high demand as not only the depth of goods that are bought via e-commerce but the breadth continues to grow almost exponentially. >> do you have any idea, don, i know it's outside of your coverage area, but what home depot would find attractive about them relative to an amazon or somebody else >> oh, well, what happens is, you know, you order a refrigerator, you order a stove, you order things that don't fit

through the fedex or u.p.s. rotation system, someone has to deliver it and certainly xpo has become the leader in that part of the marketplace >> you know, mike, our theme here is the transportation companies, which have been hitting all-time highs this week the retailers which have been strong since black friday on good retail sales numbers we've been getting so far. are these groups that you like right now going into the new year or is this a one-time event in your view >> with the transports, i definitely like them i think the economic conditions the way they are, the earnings growth, it's a high tax-paying sector also with transports, a lot of other industrials, remember, they're extremely capital intensive, therefore, the expensing of their chacap-x is boost for them i like that space. the retailretailers, i'm not as aggressioni aggressi

aggressi aggression aggressive we've seen the market, almost like a vacuum. the market is paying in -- anything that pays a high effective tax rate, not paying attention to who has the strongest fundamentals those groups have not had strong fundamentals so i don't think i would chase in that area now because they are extended on the taxes. if we get q1 numbers and if we look at guidance through the years and looks like the numbers are going to firm up, then, yeah, i might be more positive for now, i think i would stand back from those areas and let them settle in just a little bit. >> sarg, meantime, we're 250 points away from the 25,000 level people thought we might hit before christmas on the dow. still an incredible year i think i read earlier, we're up nine straight months on the dow if this finishes higher, it's up 2% we haven't done that since the 1940s i think or '50s s. i mean, this has been quite a year. >> it's going to be froeprobably quite a year next year, i believe, although we'll have to reintroduce volatility getting long vol might not be a bad idea the bull case is earnings

driven you still have this tax reform plan which many analysts across many sectors are going to have to raise their numbers you'll likely have fiscal spending, infrastructure build or defense spending which the president mentioned today. the bear case is liquidity the bear, we know, is going to withdraw liquidity from the system trading at 19.8 times next year's earnings. if they draw that down to 17, 17.5, that changes the game but we have so much momentum and probably economic growth we can probably see a nice year next year regardless of valuations that come in somewhat. >> and, rick, your market's been kind of quiet today, that's no surprise what do withdryou make as we fip this year heading into 2018? >> you know, i think there's a lot about politics that's going to affect 2018 just like 2017 whether it was tax reform, what's going on with north korea. as a matter of fact, as we get ready for christmas, i have christmas songs i really like and there's lessons to be learned. en when i listen to my top five

christmas songs, it reminds me what a wild political year it's been let's do my top five christmas list my top five song, "i saw three ships. doesn't that make you think of kim jong-un? my number four song, "do can you hear what i hear?" just think, congressman devin nunes. my number three song, "silent night. those were the democrats when they were taking the votes for tax reform "o come all ye faithful. what the republicans were thinking before they called the vote finally my number one answer for my favorite christmas song, "i'll be home for christmas. hey, what do you think congress was thinking when they said don't worry about the debt ceiling? hopefully 2018 will be as exciting and hopefully the markets will have all the same type of up side. >> i'm trying to hum the song, "i saw three ships." i don't know that one. ♪ i saw three -- no, i don't know, rick, we need a rendition. sarg, anyone know the song

>> which song? >> "i saw three ships. >> i don't know that i saw three ships. i can't top that. >> in ten minutes it's going to be the hottest thing on google. >> okay. i guess we'll look that up there. thanks, you guys everybody. merry christmas. thank you so much for your contributions. >> merry christmas >> thank you merry christmas. >> the funniest part is, i've heard of the song. >> i never heard that one. never have anyway, we have a little more than 45 minutes to go in the session here the last session before we do close for christmas and re-open on tuesday dow's down 28. s&p down one nasdaq down four russell down two it is a whoop-whoop day. >> traders getting ready for a three-day weekend. >> 333.33. you can hear that excitement. president trump signing his tax reform bill into law today even though we thought he might not do it until january. seven more companies are jumping onto the christmas tax gift train. >> it's the taxmas train as we're calling it here. >> i don't know what -- up next, the ceo of one of america's top

regional banks explains why he's on board. bitcoin taking a big tumble downward shocking some see it as a bubble bursting others see it as a buying opportunity. we'll look at the cryptocurrencies' descent when we come back. of course, we love to hear from you, reach out to the show via twitter, facebook, e-mail, send us a christmas card we accept anything here. c.o.d. we'll be reading your comments at the end of today's program as well you're watching cnbc, first in business worldwide this is not a cloud. this is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. this is a financial transaction secure from hacks and threats others can't see. this is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. this is not the cloud you know. this is the ibm cloud. the ibm cloud is the cloud for business.

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president trump signing the tact reform bill this morning. this coming as more companies are announcing today that they are offering employee bonuses as a result of this now, the biggest of them, bank of america, says it's planning to shell out $1,000 bonuses to nearly 150,000 of its employees. sinclair broadcasting in kansas city southern are among others committing to bonuses. bb&t pledging to give out bonuses of $1,200 for almost 75%

of its workforce and also raising its minimum wage from $12 to $15 an hour >> joining us right now in an exclusive interview is bb&t ceo kelly king welcome back, mr. king. >> welcome back, kelly. >> thanks, glad to be back. >> so why did you guys decide to do this move >> well, you know, we feel like this tax reform bill is very good for our country very good for, frankly, everybody, in the country. but specifically about bb&t, you know, our mission is to make the world we live in a better place to be. and we do that by focusing on our clients, our associates, out communities, and our shareholders, and so because the economy will grow, and our clients and our shareholders will kind of inheritly benefit, the economy will with growing faster more goods will have gotten sold the shareholders will do better because earnings will go up. that will probably cause the price to go up, cause dividends to go up we wanted to take specific mimd

acti immediate action to make it immediately better for our associates a unour communind co raising the min muimum raise, tt immediately helps our associates and by putting more money into the community, it helps the community better >> okay. >> we believe, frankly, it's morally the right thing to do. >> i'm going to come off as wildly cynical by asking this question, but i'm curious. i mean, the -- some of the other companies doing this, at&t was the first one, we all know the problems they're having with the government on their merger with time warner. wells fargo, we know the issues they face with the federal government right now sinclair broadcasting is waiting for approval of its deal with tribune media. and they announce a bonus. i mean, are these companies trying to curry favor, and what's the deal -- are you guys doing the same thing in some ways in case you have other acquisitions down the road that you want to make that you want to get approved by the federal government

i mean, is that what this is also about here? he asked cynically >> so, bill, this is christmas and that is wildly cynical i'll give that to you. good job i know you're not naturally that way, but it's a good question. so i can't speak for all the companies, but in all honesty, i doubt companies are doing, you know, making bonuses for the associates and making community donations in order to get some favor from some government entity i just do not think that's true. certainly -- >> does the $152 million you're handing out right now, does that represent all the savings you anticipate for next year as a result of the tax cut? >> no, no, it's about 25% of the before tax, you know, bottom line impact, and -- and so there may be other decisions, for example, i'm likely to be ri recommending to our board our dividends increase at a faster pace, some will go to the

shareholders there will be other uses there will be -- look, i said in october to your cynical question, i said in october on our earnings call that i thought conceptually, you know, if the bill were to pass, we could use about a third of it to reinvest in the business, you know, about a third of it for our shareholders directly and a third of it would kind of fall to the bottom line this is about reinvesting in the business because when we provide more income and benefits to our associates, you know, they're happier, they're more engaged and more productive. as i said before, it's just morally the right thing to do. when we provide more for the community, the communities do better and selfish terms, to be honest, that's god for us. it's also the right thing to do. i don't think companies are doing this to get some clandestine benefit. i think they're doing this because it's the right thing to do look, business is good it's christmas give us a break. >> i gotcha. >> i was going to say, if you're going to do all this, could you do it, anyway, and not mention tax reform

let me ask you about the buybacks are your buyback plans still a couple billion dollars next year and why, you know, continue that route as all when you could just give all of it back in terms of compensation, philanthropy and so forth >> well, that's a fair question, kelly. that's one of the decisions we will be looking at and others will be looking at, do you do buybacks, or with the economy being stimulated and growing faster, do you just reinvest more in the business you know, do more advertising, more digital development in terms of products and services it's a different world when the economy is growing faster in terms of how you reinvest your capital. i've always said buybacks is a last choice to do when there's nothing else good to do with your money >> right, but if the ratstio is still, i'm going to round up $2 billion worth of buybacks next year, $143 million for philanthropy and wage raises, that's still pretty lopsided, right? >> well, sure, so my hope is that we will have more opportunities to reinvest much

more of it in the business this is just, you know, an initial way for us to try to do what we thought was right. you know, in terms of helping our communitiy ies and our associates we will be deliberating other measures as we go along. certainly we've been thinking about this for some time at least for myself, i wasn't sure it was going to happen until very, very recently. yeah, we'll be considering other options. >> kelly and i are playing good cop/bad cop here today let me just, not to put too fine a point on it here, as we let you go, you would not be doing any of this if tax reform had not passed >> if tax reform had not passed, we would certainly continue to provide a good place for our associates to learn and grow and be fulfilled in their work look, bill, we are one of the few companies that has, still has a fully defined pension benefit program. we pay for it entirely the associates don't pay anything in addition to that, we have a 401(k) program with a 6% on 6% match for our associates

we have great educational programs we have a great program. so, you know, this is the way for us to do more than we were doing to share the wealth, if you will, with our associates, but -- >> right. >> -- you know, if it's something we needed to be doing for our associates independently, i'd do it whether tax reform passed or not and do it whether or not earnings went down or not. >> all right >> no good deed goes un -- >> i want to work for him someday, that's all i can say. kelly, merry christmas. >> come on over. >> thank you for joining us. >> merry christmas. >> love the sweater. >> thank you. >> thanks. see you later. bitcoin making a wide right turn here. bitcoin is plunging today amid issues with coinbase and a bitcoin bull is turning a little cautious here in the near term bob pisani joining us here at post 9 with what's jodriving it lower. >> what a week for bitcoin this has all the elements of mania and let's see what mike novograz said, you hear? he's putting his plans to launch a crypto hedge fund on pause he

says due to market conditions. although he's still planning to build out a fulmer chal bank f o cryptocurren cryptocurrencies the cme bitcoin futures contract, there are price limits, drop 713 in 20%, you get pauses when you drop 20%, you can't go further than that. you can trade below it it stayed down there, 20% down until we got some prices moving it up. still, 20,000, essentially 12,000 in just about a week here here's what i think is going on here some thoughts. if you look at the volume, we've been saying this for a long time, most of it is over in asia in fact, very large amounts. today's a little unusual because the u.s. volume is very heavy. japan is typically 50% south korea, another 10% or so my point here is let's talk about my bitcoin thoughts is most of this is retails th thaes that's out there it's not a futures-driven market it's a retail-driven -- the move up and down is driven by retail. it there have been a lot of first-time traders in december when bitcoin hit 10,000.

you get a lot of people, first-time people in, not very sophistica sophisticated. get happy on the way up and fearful when things start moving down the other major problem, what's the fundamentals of bitcoin to trade on there aren't any it's very difficult. not entirely clear whether traditional technical analysis will work here, some of the old-timers will tell you it will it's hotly debated let me show you what's going on in terms of the top. we've been talking all week about this, where the top might be these signs were pretty obvious from the very beginning. huge price swings. we're 20,000, and now we're 12,000 in a week competing coins that are out there, and then bitcoin etfs, then when the litecoin founder said he was going to liquidate his holdings, bill, that was the biggest sign to me do you remember, i know that you do, market observer, when julian robertson closed the tiger funds? right at the top of the market, or maybe a month before, and what he specifically said, julian robertson said, i don't understand what's going on maybe it was a month before the 2000 market cap.

this is exactly what the litecoin founder said, the man who's the most sophisticated, julian robertson the most sophisticated saying i don't understand that's bleep, bleep, with the red light blinking. >> lots of parallels with the '90s recently, bitcoin thank you, bob i'll see you on the close. we're heading to the close, as a matter of fact, we got 35 minutes left on this last trading day before christmas with the dow down 35 points. the third quarter of 2017 marked the second consecutive quarter of negative same-store sales for the restaurant industry. coming up, we'll look at what worked and what didn't in our restaurant playbook as we go into 2018. and kelly is at her favorite place here at the exchange. >> it is my favorite place. >> the snack stand. >> i'm downstairs here at the snack stand. this is so depressing, by the way. how much candy have i bought from you over the years? >> quite a lot >> archie is retiring today after at least two roles as a fixture here at the stock exchange for decades we're going to ask him for some of his views on this historic

market and much more if we can bear our tears >> my opinion, this market's overboard. >>avitorft ts. se f aerhi aded . 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

♪ ♪ ♪ ♪ 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. ♪ don't know why there's a crowd gathering around us. i guess we'll find out momentarily. in the meantime, it's time for a cnbc news update with sue herera. >> hello, bill, hello, kelly here's what's happening at this

north korea. it orders north koreans working overseas to return home within two years. sanctions were adopted by a 15-0 vote. more than 40 people were injured, four seriously, when a commuter train crashed into a barrier in a town near madrid. the country's railway operator said the double-decker train accident happened in late afternoon. investigators say the engineer of the amtrak passenger train that derailed off a bridge onto a highway near seattle remarked that the train was speeding six seconds before that accident occurred. the national transportation safety board said he then applied the brakes, but apparently did not apply the emergency brake. and the trade group, airlines for america, says 51 million of us are expected to fly to our christmas and new year's destinations. up more than 3% from last year it's due to more affordable rates and expanded routes. that's the news update this hour guys, i'll send it back downtown to you

>> the chaos of the floor. >> oh, they've been in the eggnog a little bit, perhaps >> yeah. well, there's another reason right now, and -- >> okay. >> -- everybody's gathering around to honor somebody he's been part of the new york stock exchange family for more than five decades. first, as a broker on the floor, and in recent years, as the person that you buy your snacks from >> every day. >> on a daily basis. >> multiple times. >> he has seen rallies, he's seen downturns you name it. he's seen it here. he's retiring, so he says, now for the second time. you introduce him. >> i'm almost choking up. >> i know i am. >> arcky can you tell them to keep it down here? give me a break. this floor is so loud. >> everybody loves arcky. >> everybody's gathered around. >> why are you leaving, what are you doing? >> 56 years was long enough to be down here i want to go on to something else. >> i want you to tell the story of how your wife fired you in

2007 >> three times i retired in 2001. >> yes >> as a broker that used a pen and pencil and a pad to write orders i went to work for dooreen they were using computers. >> doreen is your wife. >> right over there. lovely doreen. >> cost me so much money, it was embarrassing she fired me three times she fired me in the middle of the floor screaming at me. i got in dinner that night. >> there's an old line, if you're looking for real character, we have several of them at the floor of the esks chan exchange everybody loves this character, arcky. what are your memories going back 56 years, most memorable moments you saw here >> one memorable moment is when i met president reagan and gorbachev -- >> wow. >> -- in the blue room that's over there shook hands with them. it was just amazing. in 1987. >> yes, we talked about that on the anniversary when you were on the floor that day.

>> right 2001. >> okay. what happened then oh, 9/11. >> 9/11. and day-to-day disasters that we had down here. lights went out. in the '90s. the computers going down there were a lot of memorable moments. >> by the way, i mean, you've seen these markets rise through all of that and yet you still think -- can you mentioned before the break that things are overvalued here. >> the market, in my opinion, is overpriced at this point it's about, i think it's a bubble ready to burst. my wife and i, right or wrong, we got out a couple of weeks ago of all positions and it has risen quite a lot since, but we're still comfortable with what we did because you never know when a bubble hit like last night, bit fell 25% >> yep. >> that was the whoop whoop as

we call it around here that happens on the friday before a three-day weekend or any day before a three-day weekend here. you usually participate in that? >> not now i used to. >> yeah. >> when i was a member. >> do you sing -- are you part of the chorus that sings -- >> i can't sing. i don't sing my wife does the singing for us. >> and tell everybody why you came back after you left you had retired. you had a long career here you came back and been downstairs putting up with everybody here giving you a hard time >> mostly -- mostly it was from bordermen. i missed all this. i missed arguing with people the comrade. >> you >> you yeah it was enjoyable i met you guys down there. got to talk to you on almost a professional level >> all our cnbc guests parading through every day. >> yes meeting all those people it's been a great experience it's great experience. it was better than sitting home. as doreen would say, my biggest

decision in the morning was which chair do i sit in at night? >> you have a lot to look forward to. >> come here we keep talking about doreen. >> oh my goodness. >> this is the brains behind the operation here he's not really retiring, is he? >> not when i get finished with him, he's not going to be retiring. >> the honey do this is that long >> it's very, very long. very good because i'm working again back at tribal securities. >> in fact, he's been here since 1975 you've been here since 1980. >> 1981. we were both on the american stock exchange in 1973, actually so -- '75? i'm getting as old as you so i guess i don't remember >> any last words to the crew here as you depart >> i'm going to miss them all. i'm going to miss everybody at cnbc and i'm going to miss the people on the floor >> we're going to miss you, too. >> thank you. >> all the best. we love both of you. >> i love you, kelly >> thank you thanks very much [ applause ]

>> an institution down here. >> they call it a clapout. that's what happens. >> boy, do they deserve -- >> part of a family operation here at the new york stock exchange >> we should take a break, i guess. 25 minutes to go dow's down 26. s&p lower. russell lower, too much more to come on "closing bell" still. >> we'll be right back [ applause ] [ keyboard clacking ] [ 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.

want to check on alphabet, which is trading slightly lower today. the company announcing late yesterday that its executive chairman, eric schmidt, is stepping down from that post john lipton joins us now with what it means for the company. josh >> well, bill, the move takes effect in january, schmidt will transition to what's being described here as a technical adviser. importantly, he's also going to remain, though, on the board schmidt we know has been a critical part of this company's history and growth first joined google as ceo in 2001 when it was still just really that small scrappy search engine at the time google founders larry page and sergei brin explained why they hired him.

>> what's the idea behind that you guys couldn't run it yourself >> parental supervision. to be honest you know -- >> schmidt took the company public in '04, helped scale that business into a tech giant now valued at $740 billion alphabet's reach now extends beyond that bread and butter search business into everything from smartphones to online video to cloud computing cnbc learned this transition has been in the works for about a year schmidt's life we know outside the office has been a colorful one. reportedly he had romantic relationships with several women while still maintaining his longtime marriage to wife, wendy. spokesman for schmidt declined to comment on that issue schmidt has not run day-to-day operations at the company for some time. remember, handed the ceo baton back to larry page in 2011 google then reorganizes alphabet four years later attention now turning to who's going to be the next executive chairman sources tell cnbc that one possible candidate here is john

hennessy a member of alphabet's board since 2004 kelly? >> all right interesting stuff. josh, thank you very much. josh lipton. mergers menu moves and management changes were the order of the year for the restaurant sector. we're going to look at how some of the companies faredit wh consumers in the market and with investors. stay with us

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 shake shack and wing stop both falling today after the companies got downgraded from underperform to hold on valuation concerns wing stop down about 2%. if you're thinking about investing in the restaurant space in the new year, where should you look for opportunity? kate rogers has that playbook for 2018 kate >> hi, kelly, analysts are pointing to deeper discounts among fast food competitors, focus on mobile order and loyalty brands and their recognition programs and even more m&a in 2018 take a look. ♪ [ whistle 2017 was a big year for acquisitions, fast food and even faster ordering. will 2018 continue this pattern? here's what to watch in the year ahead. first, more m&a activity private equity had a big appetite for acquiring restaurants with nearly 20 deals

this year including roark capital buying of buffalo wild wings. expect even more buying in the new year second, price wars and promotion will dominate. mcdonald's and taco bell have already started promoting deeper values for the new year. expect price wars to continue as the competition becomes even steeper for consumers' wallets and third, mobile gets even hotter getting food quickly and easily has never been more important. fast food names like mcdonald's have seen major growth via partnerships with uber eats. starbucks, dunkin' donuts, pizza hut and more are gearing up for expansion of mobile ordering, rewards and delivery options in 2018 so that first point we saw, even more m&a this week, with jack in the box selling qdoba finally to apollo global management for $305 million expect more of that in the year to come. back over to you guys. >> oh, yeah, i think we'll see a lot of it, a lot of consolidation this year, in the

in tu year henew year here. we're finding there are too many stores out there and profit margins aren't what there used to be so there has to be this consolidation to keep everybody in business, right >> that's so true. analysts also point out interest rates are low, another reason you'll see more own more of this next year. >> exactly kate, good stuff, thank. you. >> thank you. >> kate rogers with our playbook on retail, fast food in the new year. we're heading to the close with 14 minutes left in the trading session. the dow is down 32 points. been down virtually all day. i think the high of the day we were up one point or something. >> still, it's been an amazing month up about 2%. >> exactly. >> nine straight months of gains, nine straight quarters of gains. we're really building on a lot of momentum. only two shopping days left until christmas. a debate on what the discount stores or luxury retailers will fare better this season, next. during this holiday season, we try to remember those who have struggled this year tuesday night, cnbc remembers some of this year's hurricane victims with "the profit in puerto rico: an ameran is."ic her, great things come in two's.

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michael kors up about 2% this week. after it was rated a buy in new coverage at nidham, citing sale

grow at jimmy choo is luxury retail making a comeback this holiday season what does that mean for the discounters? >> joining us now, david telsey, ceo of telsey advisory group, and david at oppenheimer group let's have these two square off. discount retail versus luxury. dana, who do you think is better positioned for success >> i like the luxury good companies. stock market going higher, global wealth continues to increase product innovation, skarsscarcin terms of products out there. as consumers get wealthier, there's more they can spend on luxury goods. >> brian, y you say discounters why? >> i don't totally disagree with dana i think what's happening here, overall spending environment is getting better and probably better quickly i think who probably benefits

more, kind of where we're coming from, i tend to say more the low income obviously there's no one really knows yet, the ultimate impact of this new tax legislation, but as i look at it quickly here, the initial details, i think that should be more of a benefit, the near term, for lower-income consumers. >> dana? >> i think overall, if we're getting this overall spending environment that's working, you're seeing high end and you're seeing low end. as long as these wealthy consumers of which global wealth is growing, the global consumer who is wealthy has more spending power, they can influence the high end and the low end i think some of these high-end luxury goods companies, whether it's companies like from overseas like lbmh, u.s. companies like tiffany and tapestry, and even michael kors, we can see an uplift that carries everyone a rising tide helps all luxury goods companies. >> you know, sort of coloring out of the lines with this question, but then what else is new? dana, lately, the question about

retail has been the business model in terms of how you sell to your customer brick and mortar versus online and often a blend is the thing that companies have to achieve to get that done. how are the luxury retailers doing with that? >> first beginning still early stages for many of these luxury goods companies because the model of service, store experience, is important when you're hearing about some of these luxury companies now, whether 15%, 20%, even going a little bit higher, they're adapting and starting to sell online, too. when you have companies taking the luxury good model and made it, shown it to other physical luxury goods companies, yes, yo can sell online, we're seeing luxury goods companies invest more dollars lately and doing that while also investing in their physical stores. >> brian, i never thought i'd have to ask if walmart's still a discount retailer but they're experimenting with this code 8 thing that might be aimed at nyc

urban moms or something like that are they confusing the market? >> well, look, i think first and foremost, walmart is a discount store. basically tag onto it what dana's saying, that is all these retailers, every traditional retailer i follow is really staying abreast of what's happening in the broader retail landscape. and moving more digital. and i think walmart, that's one of the reasons we recommend walmart sort of aggressively here is walmart's really taken a lead on that and look at their business model and said, look, we've been very successful historically in stores, we can take that success and translate it online. now you're seeing walmart.com and its other brands really start to flourish here >> and, i mean, yeah, i agree with kelly on the walmart thing, then you've got the other retail -- discounters out there and i'll ask you the same question i asked dana, as it regards to online selling. i mean, is that where the discount customer goes to buy their items necessarily? >> well, look, that's a great

question we look at awalmart, it's difficult to say where their online sales are coming from i think what's happening there, you have a customer, a core walmart customer, who's been shopping the stores. and maybe now is beginning to experiment with online commerce, not everything, but a certain portion of what they buy given what walmart is doing online, they're able to keep that market share. so, you know, and stave off a market share loss to some online-only play like an amazon. i think it's a basket. walmart talks a lot about this, too, that they don't have online customers. they don't have in-store customers. they got customers that shop the whole brand. >> exactly yeah right. dana, brian, thank you both for your thoughts on retail these days merry christmas. thanks for joining us. >> same to you. >> happy holidays. >> yep i know dana's got to get back to the mall more channel checks. we'll come back in just a inment here with the dow down 35 pots we have the closing countdown right after this the moment a fish is pulled out from the water,

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around the time of black friday and cyber monday and we moved higher there and here are sectors that contributed to that retail, the xrt, you know, right away after cyber monday, we had evidence that some of the numbers on that weekend were record numbers and retail stocks took off right away. they'd been lagging the rest of the year, and with this rally, this last month or so, they've almost come to even for the year same thing for the transports. big movers, you know, it's not just about shopping, it's about shipping during the holiday season and the transports this week have been -- the dow transports have been setting all-time highs this week. then we go to the ten-year yield. you know, that had been drifting lower for much of the year as the flattening of the yield curve continued, but just now with the tax bill being passed, suddenly the long end of the curve has moved higher, not just the ten year but the 30-year bond as well and crude oil has gone sideways in this time, but it caps off

what was a very strong rally during the summer and the fall we began around $40 a barrel, now we're up to $58, almost $59 a barrel in fact, we hit a two-year high last month on crude oil, bob pisani. >> and $58, see we're holding at $58 a big mover overall. this is the start of the sabtnt claus rally, tendency of the stock market to move up in the last five days of the trading year and first two tends to go up 1.4%. nothing on that today. this is a week that belongs to bitcoin. what can you say we've been talking about it, all of us have market doubles in a few weeks. all of a sudden you get people trading other kinds of instruments, other kind of coins. you get the founder of litecoin saying he's selling positions. this is signs of some kind of market top, at least temporarily. i think the blockchain has an enormously bright future, but what we've been seeing in the last few weeks has classic signs of what we saw i think back in the year 2000.

the important thing is most of this trading is retail driven and not futures driven we'll see what happens in the next couple of weeks. >> thank you, bob. merry christmas. a mixed market going out meaning we have a little red and a little green going out to the close for this friday merry christmas, everybody for those of us here at cnbc and especially "closing bell." hour number two begins now with kelly evans and company. have a good weekend and merry christmas, kell. thank you, bill, merry christmas. welcome to the "closing bell," everybody, i'm kelly evans here's how we're finishing up the day and week on wall street. we don't have trading again until tuesday because of the holiday. dow's down 26 points you can see small declines for everybody. 26 points lower for the dow. about a point on the s&p four points on the russell just a couple on the nasdaq, too. still positive for the week, everybody is we'll talk in a moment about some of the jaw-dropping stats for these markets all year

again, a bit of a rest after all of that today. president trump signed the tax bill into law today. while it preserves carried interest for hedge funds, the industry will get hit with a massive tax bill because of another profitable loophole that is ending. we will have all of those details coming up. joining me now is cnbc senior markets commentator michael santoli. cnbc contributor evan newmark. and dennis german, cnbc contributor from the "wall street journal." everybody ee everybody's here what's on your tie >> a unicorn. >> i thought it was a reindeer. >> unicorn movement of 2017. >> the tie cost $1 billion. >> topping the dow this week was caterpillar. pfizer was the laggard over on the s&p, discovery communications was a big leader. pg&e corp wihich may bear some responsibility for the northern california wildfires, big laggard down 16% as i mentioned, you have to zoom out from this one to get a sense of where we really stand in the markets. we're looking at the dow's best quarter, up 10% this quarter

best quarter since 2013. ninth straight monthly gain for the first time since 1959. >> been incredibly consistent, and it's also been one of the highest ratios of gain to pain that you've seen in any market year what that means is the amount of upside you've gotten per unit of downside in the pullbacks has been thebest since i think 1995 2013 might have been close, but it is basically the best year overall since 2013 i think it's much more of a fuller embrace of risk and the idea that good news for the economy is good news and policy and all the rest of it the question i have is, i think it's the question going into next year, is what's priced in, how much of the good stuff is priced in? we have not yet on the major indexes traded up to where we hit monday morning huge pop higher after we got confirmation the tax bill, we're idling below that now. >> evan, we haven't seen you since they passed and signed the tax bill what are your takeaways? >> i think it's not a great bill it probably will boost some corporations' profits, boost buybacks and so i think if

you're in the stock market, it's a net good thing whether or not it juices the economy from a 3% economy to a 4% gdp per anum economy, i'm skeptical. >> you're on the sidelines, maybe because of your age, some reason you've been watching this, go, okay, if i want to participate and benefit from that, should i get in now? >> yeah, i'm not -- you know, i'm still where i was last -- i don't -- i think it's tough. it's been a year of highs and lows low volatility low yields high profits and high multiples on stocks so it's very hard with that kind of background to be enthusiastic about stocks you know, you're buying in at all-time highs and generally that's not -- >> which has been true all year. >> it's been true all year but -- >> that was true in 19,000 on the dow, evan. >> it's true i was touching on what michael was saying, though, if you go back nine years ago, or eight to nine years ago, we have the exact opposite kind of market. back then, everybody was

skittish over anything >> right. >> now nothing such low volatility. nothing makes people skittish. >> dennis, what are you thinking about? >> to get his point about lows on the vix, especially, when you look at the vix over this year and over previous years, it really is very little precedent for sort of the placidness of the market now that just, you know, maybe we're just nervous guys, evan, i don't know. >> we are nervous guys. >> it does make you a little bit nervous, can it be this good for this long? i think there is a contrary case to be made that there really is a significant amount of bottom line flowing directly to companies because of that tax break. >> that might be placid. we'll talk about bitcoin for a second because it did plunge across -- >> last week. >> mike novogratz earlier today saying he's putting his plans for a crypto hedge fund on hold. he's bullish but sees bitcoin potentially dropping to $8,000 meanwhile, vanguard group's jack vogel not the only one avoiding bitcoin like the plague. berkshire's charlie munger

echoing that point of view at a university of michigan event saying, "its perfectly asinine to even pause to think about them." this is why i love charlie munger >> of course. >> i know what people are going to say, he's an old guy, old guys don't get it. they do get it. >> they get a lot, which is they -- they get that they need to understand how something works, why it has value, what it's going to displace of value in order for it to have value and it's not clear at all. what i do think is interesting is on the run-up to the highs for bitcoin, everybody, the same voices were saying this is ridiculous, it's a bubble. >> yes. >> do you ever get the opportunity to say, i told you so so dramatically and emphatically and soon if you were one of the skeptics. that's what makes me think maybe this isn't over. it's kind of a pullback and have to see how deep it goes. >> bitcoin lost 80% of its value five times already we go through that again, you'll have everybody say i wish i bought it, i'd buy it below $10,000, evan. they're going to watch it ramp all the way up. >> remember we had junior boy genius on last week. >> the high school --

>> the high school multimillionaire you know, i bet you he and his parents are wishing he had sold a couple of bitcoins during this week but even something like that i think it probably has not run its course these things can take years to run their course but overall, when you look at bitcoin, you go, is it a currency or is it a payment system i would make the case that it's neither. and why at the end of the day there won't be any value. >> at least in the stock or commodity, there is some semblance of fundamental analysis you can do about supply/demand production and arguably can do that about bitcoin as well but just the sheer arbitrariness of what we've seen >> novogratz comes up with, oh, it's gone 8,000. where do can you come up with 8,000? >> i'll tell you exactly whether y where you come up with 8,000 8,000 is where it traded before it went vertical around thanksgiving to 19,000 and that's where it's going back to probably if you believe the chart. >> it's all -- it's all mumbo jumbo. >> it's easy is it a speculation or an investment it's not an investment

it has no cash flows it's a pure speculation. if you want to speculate, fine, that's your business let's not confuse it for anything other than that >> trump land in florida didn't have cash flows in the 1990s >> you can generate cash from the land. >> right. >> you don't have to hold it and sell it to somebody. it can have productive value on its own. i don't see bitcoin having that. it's purely supply and demand. >> i'm not arguing that it actually has -- >> the presenting thing -- >> -- present value. >> here's wouchb tone of the po munger made. he's like, believe me, man is capable of creating more bitcoin. they tell you there are rules and they can't do it, don't believe them, when there's enough incentive, bad things will happen. >> the fellow created litecoin another guy went out, created this litecoin. >> he sold for a different reason. >> i understand. the whole point is that -- the whole idea that there's this inherent first-mover advantage facebook had the first-mover advantage. google all these people it's a technology. it's not -- it's like a currency

because i say it's a currency, and i got other people to buy in as a currency. >> let's talk about something a lot less controversial, the tax bill, okay because compared to bitcoin, anything's less controversial. the president did sign the gop's tax overhaul into law today. a law with a short-term government spending bill then departed to mar-a-lago for the christmas holiday and more companies announced bonuses in reaction to that adding to the list today, bank of america, bb&t we spoke with kelly king earlier. pnc and sinclair broadcast group. these -- we're talking about bonuses of $1,000, $1,200. >> you got a bonus. >> i did >> did you get a bonus >> i saw comcast on the -- on the -- check's in the mail >> we think the check's in the mail. >> it was pretty amazing to see the boeing full-page ad with the picture of president trump so, look, they're a government contractor, need to make sure the government's happy same with time warner w eer whih obviously has -- sorry, at&t, which obviously has a matter before the government.

look, you got to respect that they're doing it >> sure. >> i think one has to be sensitive to the political situation for all these companies. >> doesn't matter that the president signed the bill into law today. at&t was saying if he does it before christmas, they might be able to get those checks o out to people for the holidays looked like it was going to be january. interestingly, they were able to change the language at the last minute so we didn't have to wait and he was able -- >> they didn't have to wait because congress with the continuing resolution basically said that, okay, you don't have to -- those medicare cuts don't kick in. >> don't automatically kick in. >> there's a tax code reason in addition to the political orchestrations of all this, there's other tiers of policy which is your workers, these big companies, i always ask first, what message do they want to send to employees? employee relations are a huge part of it and the fact that buybacks are considered to be such bad behavior by a lot of people right now there are all these companies going to be announcing buybacks in january probably. >> well, that's an interesting question. >> you might as well have this out there first. >> i do want to -- last thing, then we'll move on, if the pace

of buybacks does start to decline now because of the public pressure, or otherwise, is that a problem for the stock market >> it depends on -- it depends on what you think is holding up the valuation. if you believe that profits are going to continue to grow and support the multiples, then you're okay. if you believe that it's just buybacks and the stock prices would go down. >> buybacks were kind of this fake thing we thought was holding up the market. >> i think it's pretty significant. we'll see, especially if the pace slows down. how about goldman sachs speaking of next year, goldman is bearish on treasuries based on expectations that the fed will raise rates the firm out with a note today saying the ten-year yield, 3% by the end of next year. >> i think day wrote that note five years ago when i started shorting -- >> i think everyone's written this note for five years straight. >> can't we not say just because it didn't happen for, say, the last eight years, doesn't mean it won't happen this year in 2018. >> of course i remember we had this dinner with cfos at cnbc early last year everyone went around the table and said where's the ten year going to be at the end of the

year 3.1. no one said 2.5. >> here's the big difference the three year today, the three-year treasury, passed 2% that's a big difference. >> yes. >> whereas in the previous years rates were at zero now they're at levels where it doesn't take a lot of steepening for the yield curve to go up so this year may, in fact, be the year of the 3% -- >> i always operate on the principle of have you been wrong enough for long enough if the con ssensus is wrong enoh for long enough -- might just be random luck that they're right this time. >> yes. >> i do think there's a psychological anchoring that everyone does that we look at sub 3% still and say even though it's been this way for a decade-plus and say somehow it has to revert. doesn't have to, but maybe there's a better chance this year. >> we got a news alert on brookfield and ggp i'd like to get to this. kate rogers standing by with those details. >> hi, kelly, that's right a dow jones headline regarding brookfield's bid for ggp p/e firm, brookfield property

partners working to restructure its offer for shares of mall owner ggp. last month brookfield made an offer worth $14.8 billion for the 66% of ggp shares it doesn't currently own. it was half cash, half equity. ggp had pushed back on that offer. now the company is apparently considering two new options. one is a new form of stock, another involves more cash it's not clear how much either of these deals will be worth ggp did close up higher by about 1.5% on the day, now lower by just about .5, kelly back over to you. >> thank you, kate, an interesting smoointerest ing move on the bell look the like ggp popped and -- i don't know if it got out somehow. what is the cig cabsignificancs this >> sorting out the details obviously on inside track bidder i think it's a matter of just sort of having the seller trying to maximize the terms. >> dennis, what do you think >> if you're worried about the deal getting through sort of as a signal to the disposition of the buyer, it certainly is a

positive. >> so, say that again, so i understand so you're saying the fact that they're tweaking it means the deal is more likery to get done? >> twhey quantitto want to get e there's risk sharing, there's the type on compensation you use. so, yeah >> last word on this, though, we've seen already the westfield deal happen with the european company, now brookfield and ggp. what does all this mall consolidation mean >> hey, the best operators in malls want to get out of the mall business. i think that's -- i mean, right over here at world trade center, it's a westfield mall. >> absolutely. >> i think it's just a total reordering of the retail sector. total reordering of the mall sector i think it's going to be actually quite interesting to see really the creative fruits of people reimagining these places over the next two to five years. things will be different and maybe they will change on the positive. >> when you know the industry is going to go through a tough time, you know there's going to be consolidation, you have top-tier operators that would rather pick their partner and

say we'd rather have other -- >> that's a good point. >> better positioned malls. >> you can almost put fox in the category in media, top-tier assets willing to sell -- >> the murdoch family -- we'll let you go dennis berman. evan and mike are sticking around. president trump delivered on one of his biggest campaign promises, tax reform coming up, larry kudlow tells us what big agenda attemitem trump should take on next. better get moving if you haven't done your christmas shopping we'll be live in a busy shopping mall to get the pulse of the last-minute shopper. we want to hear from you, contact the show, twitter, facebook, or over e-mail we'll read some of your thoughts at the end of the show you're wauctching cnbc, first i business worldwide

the final countdown for christmas shopping is on an estimated 126 million people are expected to hit stores tomorrow it being the last saturday courtney reagan is at the queens center mall in new york. how's it looking there, court? >> reporter: all right, kelly, to quote one of the great prophets from my childhood, kevin mcallister of "home alone," this is it, don't get scared now you're running out of time for christmas. if you haven't figured out what time it is, you have two days left and half of u.s. consumers

are expected to hit the stores tomorrow on supersaturday. that's going to make it the second busiest shopping day of the year >> none of it's done we're just getting started and i have two days to finish it >> started a week ago. today's my second day continuing my shopping and i think i'm going to go tomorrow again >> when you come to the mall last minute, everything, the prices go up and, you know, have to spend a lot more money. >> reporter: so if the idea of hitting the stores makes you a little nervous, you can actually do a hybrid. target says you can order online, pick up in stores as late as 6:00 p.m. on christmas eve. same thing for walmart target says, in fact, half of its shoppers that are ordering online pick up in stores as days get closer to christmas. kohl's 40% of its shoppers do the same thing analysts are getting really bullish going into this final weekend. piper jaffray conducted its second survey of the season. they like what they see when it comes to the intent to spended weather's been good. when they look at their holiday

picks they like amazon, best buy, steve madden and pvh. that's just a couple of their favorites. mkm partners, patrick mckeever likes the traffic he's seen at five below a good place to go for stocking stuffers a lot of americans are doing that walmart is one patrick mckeever likes. when it comes to what the top last-minute gift is, it's gift cards, again, this year. come only, guys, get a little more creative. i think the inventory malooks better this year make good choices even if it's the last minute. kelly, back to you merry christmas. >> i've done the gift card thing, spaeespecially amazon git cards for the family it's terrible. they appreciate it courtney reagan. many last-minute shoppers may be heading right from the mall to the airport today. eric is in newark in new jersey with a look at the holiday travel rush. eric >> reporter: that's right, kelly. right behind me, not a big rush right now. i spoke to the police, they say usually around 4:30 is when a big crowd tends to come in

it's going to start to pick up consider this the calm before the storm. if you take a look at the numbers nationally, you're looking at about 16 million people expected to travel this holiday weekend. that's 26% more than a usual weekend like that. and even here at newark, it's about 1,700 flights this week. 1,300 flights today. that's 9% more than last friday. so you're starting to see that pick up. another thing that's interesting, compared to the holiday weekend last year, 1.5% more flight the, 3% more people. so airlines are getting more efficient. it's squeezing in more flights and squeezing in more people on those flights. and generally speaking, lines are moving we looked all across this airport. tsa lines are moving the delays aren't that bad but even a good day like this, across the nation according to flight aware, you're already up to 130 canceled flights and about 2,700 delayed flights. so take that as a good day, it can only get worse from here especially with that big snowstorm coming on sunday and monday, christmas eve and christmas day. that could be a lot worse than what we're seeing here on

friday a lot of people think, too, they might travel on saturday because you have the monday holiday. so could be a busy weekend here at the airport back to you, kelly >> that's true i was just going to ask you, because we were just talking about it, you know, they changed a lot of these corporate perks in the tax bill and commuting benefits is one of them, right what is going to happen come january, everybody who might have had, you know, a couple hundred becoucks from their employer they used for planes, trains and automobiles >> reporter: that's a good question the idea is still in flux. you can use your pretax dollars as a person to do it the companies won't get the subsidy but the individual might get the subsidy then the whole point of this tax bill, you're going to get a cut according to the government if you get a net cut, maybe you'll have more money overall to spend on travel like this big holiday bonuses like the $1,000 checks come in handy, too. >> that's a good point eric, thank you very much. pick up my brother and sister while you're there, will you eric chemi in newark. >> reporter: yep, yep.

president trump checking tax reform from his to-do list what should trump tackle next? welfare, social security, infrastructure, something else larry kudlow has some ideas. he joins us next with his advice to the president. plus, california has grown faster than the rest of the nation since the recession now many in the state are planning to move in part because 'lhahe new tax law wel ve all those details when we come right back. what's critical thinking like? a basketball costs $14. what's team spirit worth?

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with vast, far-reaching networks... deep knowledge of industries... and, yes... maybe a little magic. ♪ well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. president trump signing the tax reform bill into law today and it looks like that move will

convince many californians to move away. despite a record low unemployment rate there right now. jane wells has the details jane >> reporter: hi, kehl hllkelly,, 4.6% unemployment rate is heard of the tax plan will be great for californians but not the higher income ones. people with large mortgages or pay state income tax rates of up to 13%-plus. those deductions are being capped at a level significantly lower than before. >> what would not. be a crisis, let's say, in omaha, could be a bit of a crisis here. >> reporter: author and urban studies professor says the new tax plan could accelerate california's outward migration state realtors say more people are leaving the state than moving here, a despaisparity the times higher than five years ago. two more people will join the wave marketing associate michael hutton because he can't afosford to buy a house and his mom, sandy, who's sick of all the taxes.

>> florida, texas, south carolina, where weather is tenable and relatively similar, but housing costs are 35%, 40% of what they are in california. >> i will miss california very much there are parts of california that just feed my soul, but i can always come back >> reporter: that's right. she can because after she plans to sell her house, the profit she makes on that house and buying a cheaper one in another state can finance her travel and, kelly, in this new version of hotel california, you can check out any time you want and you can leave. back to you. >> jane, it's a crazy story. thank you. our jane wells >> reporter: you bet. >> reporting in california for us. let's get a news update before we get reaction to all this let's go to sue herera and get our cnbc news update. >> actually i was going to say i was raised in california, i'll move back. anyway, thanks, kelly. here's what's happening at this hour, everybody. on a serious note, the fbi has thwarted a terrorist attack that was planned at pier 39 in san

francisco over the christmas holiday. former marine sharpshooter everitt aaron jameson was arrested at his home in modesto on wednesday police seized weapons, ammunition and a note claiming responsibility for that attack he said that he was inspired by a terrorist attack in new york that killed eight people back in october. senate majority leader mitch mcconnell in his year-end news conference says the senate heads into 2018 with a high level of confidence in its ability to work with the white house. >> well, i think we've established a really good working relationship you could sense this tax exercise kind of brought everybody together because we knew we were not going to have any support on the other side. and students at the university of nebraska saying good-bye to their oldest high-rise dorms. that implosion knocked all 13 stories down they opened in 1963, but the

university concluded that renovating them would just be too costly so they're going to start from scratch that's the news update this hour, kelly, back to you have a wonderful holiday >> sue, you, too merry christmas. >> merry christmas. >> thank you very much >> sue herera. let's take a look at how we finished on wall street. dow down 28. s&p down one russell down four. the nasdaq down about five points small declines across the board for the second day in a row. and how about some of the other big stories today in our "rapid recap"? >> evaluations are high as a starting point we just went through a really strong year. i think the odds are that the skeptics may actually win the day next year instead. >> bitcoin, no matter what exchange you're looking at, the cryptocurrency seeking deeper into bear market territory, down near 25% in the past 24 hours, alone. breaking briefly below 12k and triggering some trading halts at the cmeand cboe. >> mike novogratz, former hedge fund manager, shelving his plans

to launch a crypto hedge fund. >> this is the bill right here, and we're very proud of it it's going to be a tremendous thing for the american people. it's going to be fantastic for the economy. it's going to keep companies from leaving our shores and opening up in other countries. >> bb&t is the latest company to make announcements regarding wages and bonuses if the wake of this tax reform bill so they are going to be raising their hourly pay for workers, minimum of $$12 an hour to $15 a hour effective january 1st. >> this is about reinvesting in the business, when we provide income and benefits to sois associates, they're happier, more engaged, more productive. >> speaking of effects of that tax bill, amgen just out with news on how the law will impact its business mike has more. >> amgen did a filing this afternoon, looks like a net tax expense they're going to have to book on a gap basis of $6 billion to $6.5 billion.

>> wow. >> they're essentially saying based on the rules that the govern what happens to overseas cash, right, all these companies that have a lot of cash held overseas, it's never been taxed by the u.s., are going to have that one-time, i guess it's 15.5%, if it's cash. >> cash. >> if it's noncash, some other type of asset. a lower amount this effectively is 15%-ish of the cash that amgen held overseas. >> i wonder if we should expect next week to get one after the other after the other -- >> the company decides what the assets it applies to, whether they want to take it now into 2017 year, however they're kbroing goin to do it i think the market is going to treat these as one-time events amgen, or any company, is free to use or not use the cash it's all a book entry thing. it's already kind of home. they now have flexibility to use it wherever they want in the world. >> we'll see if anyone has a bigger reaction. even to citi's charge for a different reason, that was largely shrugged off. earlier today the president signed the bill into law which takes effect on jan 1st. two days later congress will

return to tackle the next item on the agenda. what should be at the top of the to-do list here with insight, larry kudlow, cnbc director. is there anything you want to it tell -- politico is reporting after gary cohn steps down from the position that you might fill his -- >> well, i'm old school on these things i have no comment on it whatsoever i'm honored to be named, i guess, talked about, whatever, but i don't have anything to say. >> you didn't leak this to them? >> i did not >> all right i won't push you any further on this, but we want to know first. >> i appreciate that very much, and i'd like to know first >> you'll probably read about it in the press like everything else anyway, larry, let's talk for a second about some of the priorities next year because the two different things i've heard are, "a," they're going to do entitlement reform which sounds -- i'm skeptical, but i want to hear your thoughts and "b," they're going to do infrastructure which would seem too ma

to make a lot more sense except now you have a major deficit problem. >> i don't know about the deficit problem. i think probably both are wrong. the first order of business in washington is going to be big budget fight big budget fight they're operating on a short-term continuing ro resolution there's a friction that's going to go on inside the congress, republican party you want to raise defense spending, that's trump administration policy. also republican policy but at the same time, you need to offset that and then some on so-called discretionary nonentitlement spending. that's going to be a huge battle and start right away very important issue here. i think -- >> how big of a battle are we talking about a shutdown? >> i don't know about shutdowns. shutdowns, by the way, are not real shutdowns to put that in there. we can go through the -- i was in a lot of shutdowns in the reagan administration. unfortunately i had to work because everything is paid out except the national parts and the washington -- >> you were essential. >> i was essential you know that. that's exactly right

that's the nomenclature. i'm -- whatever i had, third top job, i had to work during the shut dunndodown because i was essential. for what, i don't know you're going to have big battle here and it may include the small entitlement. i don't think it's going to include the large entitlements but eligibility has been essentially abolished. things like disability and food stamps and welfare so that's going to all be part of it. the good news is i think the growing economy will make the budgets less difficult to deal with you're going to have lessde m s >> because of all the changes in the tax reform and so foort forth, do they have to change food stamps and med kaicaid and things like that, anything they're going to touch, or do they want to >> i think it's want in a sense, it's have, because you've had explosive costs in those areas. and i personally -- a lot of it is because of the weak economy i grant you that but it's more than that. the eligibility requirements, the work requirements, so forth,

that were put into place in the mid '90s under clinton and gingrich and so forth, have basically been abolished, all right? and that's bad so there's -- unfortunately, you got to reincentivize work and work is very important. >> they think early next year is the right time to do it, going into the midterms after the partisan fight that already happened after tax reform, after accusations it's only going to help the reiich, then you think that's going to be the right time politically to do that? >> i think the best time to do that is when the economy is booming and i think the economy is on the verge, which you heard me say this, because of the tax changes and regulatory changes, we're on the front end of an investor boom. you've seen all the companies -- i haven't seen anything like this, these companies either declaring more investment equipment or wage increases in dividend it's phenomenal. trump tweeted out today, i love this, he called it tax love. i'm going to call it tax love. i think that's terrific. in fact, the whole thing is about tax love so, to answer your question specifically, i don't know what the timing is. they got to put a budget out and

got to have appropriations committee allocate the budget. that's going to be a big fight i think you're probably right on infrastructure i think there's going to be, however, a much different -- it's not going to be an ordinary transportation bill. it's going to be, i think, a lot of people want private-driven infrastructure. >> that's the only way to afford it, right? >> that's the most efficient way to do it you know, affording, you're probably right, but certainly the most efficient way you know, by the way, stuff in laguardia, which is the catastrophic airport of the world, that's all being done privately. you know the management of laguardia is going to be done privately? so that spirit which has worked in indiana, texas, elsewhere, i think that's going to be on the drawing board. i do not think that's going to be some kind of government infrastructure bank. i think that would be an absolutely terrible idea but the main thing here is going to be a messaging battle over the tax cuts look -- >> that's why before we go, what do you think about people, this california story jane was talking about? >> well, look, the -- i have a

great solution elect governors and legislators that lower state taxes. >> in california. >> in california there once was a time when california was a low-tax state, by the way remember proposition whatever it was called. >> 13. >> 13. thank you. years ago. right after -- look, this is true for all these states. new york, connecticut, illinois, new jersey the way out of this is spawn a tax rebellion. and start electing -- i don't care what party they're from start electing political people who want to lower state income taxes and sales taxes and property taxes and i think the handwriting is on the wall for exactly this kind of movement >> we got to go. >> don't look at it in isolation. business is going to boom. people are going to have tremendous revenues and salary increases and evan's going to get his stock market gains so he can quit complaining to me we got it done before christmas. >> you did, larry, i have to

give you full credit on that one. >> whoa. >> count me as a skeptic i was a skeptic. >> somebody needs to podcast this right away. please podcast this right away >> tip of the hat. >> thank you happy, healthy, merry, holy, everything to everybody. thank you. >> thank you. still to come, world wrestling entertainment shares slumping today after the ceo vince mcmahon sold $100 million worth of his stock and may use it to revive one of the biggest flops outside of the ring. our "takeaway" is next. congress may have kept the controversial carried interest loophole in the new tax law. we'll look at how another loophole is set to close that will hit hedge funds with a huge tax bill stay with us

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welcome back it's time for our "takeaway. we begin with apple today. the "wall street journal" says its new phones are getting a quote/unquote lukewarm reception from buyers. not as strong as the iphone 6 and 7. the 6 and 6 plus, get this, accounted for 91% of all iphone sales in their first launch month back in 2014 but the 8, 8s, x, or 10, those are 69% of iphone sales in month one of this year. what do you guys think >> i don't know if you really can generalize about what the

rules of an upgrade cycle are supposed to look like with apple especially given that this cycle came very hard on the heels of the 7. so they were not, i don't think, analogo analogous. i don't think necessarily it's time to panic. the market shouldn't be panicking. who knows, to be honest with you. the x might just end up being this kind of mostly for the chinese market or -- >> that's true they did say the chinese -- >> i'm holding on to my 6. >> people still have phones they like from past cycles. that was probably less true for the 6. >> i never got the whole replacement cycle thing. i'm not young and i don't use very many applications >> you're not doing a lot of snapchat. >> no. but i do think going forward this is going to be the -- this is the issue for apple you know, whether or not you think that the stock is relatively cheap is basically a bet on how you view future replacement cycles. >> all right we'll see if he get more information. facebook scrapped its effort to label fake use stories as dispu disputed turns out slapping articles with that label helped to entrench deeply-held beliefs instead of

undermining them there were other issues, too facebook instead will show related articles next to fake news stories is this effort, mike, going to work >> i don't -- i think it will be kind of an ongoing unending game of cat and mouse right? a software battle that gets fought mostly as opposed to let's get the community to try to tag news as fake. that seemed very cumbersome. >> a problem for them because i think you look at europe, the regulatory regime that may be coming, whether they label facebook as a media company, whether other countries try to do the same and their handling of stuff like this is going to factor into that. >> fake news thing, it's very -- it's a strange thing because as you know, i don't have a facebook account, but people who do apparently get the feed is, like, a dominant source for their news media and i -- that's just not my pattern. so i'm always, like, fake news, fake news, what's fake news? then i see on google trends, i always see some crazy story that i don't believe. i'm like, that must be fake news. >> so you get the same effect on google which is also a problem, by the way they both have to deal with this

issue. it's not just one or the other. finally, is the xfl coming back vince mcmahon who co-launched the ill fated league nearly two decades ago with sister company, nbc sports, sold a bunch of wwe stock to fund a separate entity called alpha entertainment llc the filing says alpha will explore investment opportunities including professional football and alpha applied for five trademarks related to the xfl on december 16th. it also, guys, trademarked urfl. i don't know what that means, but is this league coming back should the nfl be worried? >> those should be two different questions i think. even if it comes back, i'm still not sure nfl should be worried i don't know if the xfl is the extreme fun league, the nfl is the no fun league. i don't know i don't think the world is sitting there saying i want more football, but of a different type, with lesser players. >> evan, i want to hear -- i have something to say about this i want to hear you first. >> i watch probably as much football as the average american, which is to say, too

much i can't imagine there being a lot of consumer demand then, again, bitcoin exists. what do i know >> you can tell me -- i think the xfl already won. the nfl hasturned into it. i tried to watch it this year. the fighting, the celebrations by the way, they adopted the technology when it comes to miking people on the field, the camera people, smoowoosh down ad swoosh back up the emphasis on entertainment over what used to be the no fun league feels to me like the nfl jumped the xfl -- >> officiating is so heavy handed with the nfl, not necessarily on celebrations and things like that i feel like that's their problem. basically nobody can decipher what the outcome of a play is until you look at it for five minutes. >> true in a lot of sports, by the way, basketball. >> the weird thing mcmahon is probably betting on, i don't know, he can create a channel on the thousands of channels that exist out there, and there's enough demand just like there is for wwe, you know, where they have their little subscription channel. >> sure. >> i don't know if that's a big enough thing to cover the cost of -- >> to me it just feels the gap

between the xfl from the past and nfl narrowed substantially since they tried it the last time around. >> people never even watch the xfl -- >> of course, it was a major flop a major flop ironically -- >> competing with video games and e-sports i think more than the traditional nfl viewer. >> might be it'sa video game thg this is interesting. i want to see. tell us whether you think i'm crazy or not or if the nfl has become that. $25 million, could be how much the hedge fund industry owes in the u.s. in taxes after congress failed to extend a financial era crisis loophole. we have those details coming up. like i said, we want to hear from you, contact the show or twitter, facebook or over e-mail 'lreour thoughts at the end of the show. you're watching cnbc, first in business worldwide

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when it comes to the new tax law, even winners can be losers. the hedge fund industry scored a victory when the loophole for carried interest was enclosed but another tax loophole that could hit the whole industry hard is ending we have those details next. tonight on "fast money" after bitcoin got crushed today, one technician is saying it could be your best chance to 'ly. hel tell them what's got him so excited about bitcoin perienc. 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.

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welcome back hedge funds got good news and bad news in the tax law. the carried interest loophole is still around bad news, another loophole is expiring leslie picker is here to explain. >> reporter: that's right, kelly. hedge funds are giving something up the window is quickly closing, december 31st is the deadline after congress instituted a change to the law a decade ago as part of the emergency economic stabilization act of 2008 at the time, official government estimates said the windfall would amount to about $25 billion. but most people in the industry say that figure is likely much, much larger. a vast majority of hedge funds have offshore vehicles and are impacted by next week's deadline most hedge funds have been preparing for the tax bill for

months and in some cases, years. some hedge funds have moved from high tax states like new york and connecticut to low tax states like florida. some hedge funds are also in the position to accelerate ordinary tax losses which would offset the ordinary income to be taxed. some have upped their charitable giving to deduct more this year. when those options have been completely exhausted, some hedge fund managers have had to redeem from their own funds to pay their taxes, guys. >> i feel like i haven't heard anything about this. this could be $100 billion now but pouring back in. they're not coming up, i guess charitable contributions is there any way around it >> not for hedge fund managers some were hoping there would be some last ditch effort by the trump administration to squeeze in something that would protect them against this looming tax bill as we know this week, that was not the case people now have an about a week, if they've procrastinated, to

figure out how to pay this >> cry me a river. the hedge fund and private equity guys, their whole business is predicated on leverage and avoiding taxes. that's the whole thing, it's not on picking better stocks, it's the idea that they can lever up and they can reduce their taxes as much as possible. if you look, i want you to look next year at blackstone's reported profits because you're going to see a masterpiece of what steve schwartz was able to do with this tax bill. it's going to be the hedge funds and some private equities funds that will be the big winner. >> we've had so many hedge fund closures, and yes, underperformance has been a problem. yes, if the economics don't look that great, what happens after this sunset? in other words, starting 2018, if you're still offshore and going forward, what then >> if you do decide to keep your capital offshore, you'll still have to pay the taxes even if you don't repatriate them. if you keep them offshore, it

would be more for convenience. this is something hedge funds will have to grapple with. as you mentioned, returns have not been stellar, they've been underperforming the s&p 500. they've had to take back their fees, take down their fees because lps have been complaining about returns, and they have to justify why they're raking in two and 20 it's no longer two and 20 anymore. the business is untenable for some and they have to shut down. >> to evan's point, all this money has been able to compound for a while offshore, it's not necessarily the same percentage that you're paying in taxes that you otherwise would have >> hedge funds, it's like 95% of the time, the hedge fund guys, they're not losing their capital. they may be losing money that they had earned as carried interest but they're not actually losing the capital. that's left for the limited partners who are the ones that get left holding the bag >> it is an interesting way to

explain, for people leaving the northeast, a lot of the huge charitable giving amounts we've seen leslie, thanks very much, and good luck tomorrow morning >> thank you >> braving the airport up next, you've been e-mailing, tweeting all show long we'll read your best responses to our mailbox when we come right back it lets you know where your data lives, down to the very server. it keeps your insights from prying eyes, so they're used by no one else but you. it. is. the cloud. the ibm cloud. the cloud that's designed for your data. ai ready. secure to the core. the ibm cloud is the cloud for business. yours. [ mouse clicks, keyboard clacking ] [ mouse clicking ] [ keyboard clacking ]

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time to close out our week with the mailbox we had responses to the warning to avoid bitcoin like the playing. he and buffett would not be where they are betting on the bubble du jour aaron wrote, i wouldn't be bothered with crypto either, it's a threat to traditional banking. david tweets about jane wells' report about californians moving away because of tax reform he says, but with the new tax act, buying a small house isn't going to save a person any tax going forward. why would someone leave her when it's 75 and clear on the konejo? >> is it a river >> we'll need a twitter followup, please digging through our e-mail inbox, art is saying, i hope my

dividend increases outpace my health premium increases, definitely feel the pain on that one. finally, man across the water tweets, two things xfl had which nfl doesn't, players who stand for national anthem and a guy named he hate me evan says, -- >> i'm a lover of it's a new year >> no, pick a -- what investment or, you know, you've got to give us something you're a lover of >> i'm not a lover of bitcoin, in case you didn't get that one. >> you don't have anything >> there's one thing, i think a two- to three-year treasury bill looks good, paying 2 to 3% per year and not losing your capital. >> boring. >> so boring, not going to get you excited. if the stock market is down 10 or 15% next year, the 2% will look good.

>> dividend yields above the ten-year yield, the dividend yield now is below the three-year treasury. that's what happens in a bull market >> i wish everybody a new year that's my positive thought >> you didn't even say happy >> happy new year, merry christmas. >> we wish everyone a very merry christmas. see you on tuesday "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," a classic investment theory is flash the buy sign for one beaten down stock. the chart master will tell us the name plus the holiday rush is on as fedex and ups race to your door are those stocks the best way to cash in on online shopping the traders have a way to play it first, the kryptonicrypto