okay and do it legally. anything that's done illegally, and everybody does it, we need to make it legal and get the tax dollars. >> get some tax dollars, maybe they can help me with my property -- >> it's going to happen. >> been a pleasure, thank you so much. >> thank you, guys. >> happy new year. "billion dollar buyer" next wednesday. thanks for watching "power." >> rr >> all right "closing bell" starts right now. hi, everybody, welcome to the "closing bell," i'm kelly evans at the new york stock exchange. >> i'm bill griffeth time to sell your winners. i mean, technology has been the best performing sector this year the nasdaq, in fact, could post gains in 11 of the 12 months this year. that's something that has never been done before we keep saying that a lot this year, don't we >> yeah. we know it's been -- we know we've seen a lot of records. stats like that are the real eye openers. >> that's for sure we have a bull and bear on technology coming up a little bit later this hour.

while some investors like it when activists come in to shake up public companies, we've got someone who says they're ruining corporate america. he'll make his case coming up. and the new year's going to bring new business in california that would be legalized recreational marijuana what took them so long i'm surprised it's taken california this long. >> you moving back >> no, i go visit family once in a while, though. we're going to introduce you to the first company to be licensed to sell in california coming up. lets get straight, though, to the confusion that's for sure. the confusion surrounding the tax bill as americans continue to line up to prepay their property taxes before the new rules kick in in the new year. the irs did release that memo late yesterday in an attempt to clarify who exactly can take advantage of the prepayment. but there are still plenty of questions. so we sent our guy, eric chemi, out, to look into this he joins us now from a high-tax

town in new york's westchester county more lineups there, eric >> reporter: it's just been lines all day long you can see them behind me hundreds of people have been in line at any one point in the day. this has been going on since 8:00 in the morning. people are coming in with crutches, they're on canes, they've got folding chairs they've been here early. it's been a long day a lot of questions, a lot of confusion. the line behind me, you see, is actually the one where people get their bill if you don't already have it then you go into another line on the other side, that's where you pay the bill actually andrew cuomo, governor cuomo from new york state, was on cnbc a few minutes ago talking about all the mess that was happening. you can listen to him here >> the way they financed it was by raiding the blue states why? because the senate doesn't have any senators from the blue states so they came up with a very convenient rationale, we'll raise money from the blue states, and we'll give it to the red states

so new york, a blue state, california, a blue state, jersey, a blue state they are paying a penalty. >> reporter: that was governor cuomo and we actually talked to a lot of the people here who have been in line today. there was some confusion, a lot of people did not talk to their tax planners, they just showed up and hoping to say, how much can i pay, can i pay it now? whatever happens, they just wanted to see what the town would let them get away with here are some of the people that we talked with earlier >> if we can pay part of it this year to get the deduction, which we're not going to be allowed to get next year, doesn't that make sense to save money? >> everyone's just trying to get it in so we can write it off on our taxes for next year, because once january 1st comes, that opportunity's lost >> reporter: and the thing going on here, this is a town that has six villages there's different taxes. village taxes. school district taxes. fire department taxes. town taxes there's county taxes we don't know the county taxes

yet for 2018 those they can't pay all the local, the smaller ones like the school districts, you already know the rest of the year the second semester of the school district taxes, people are paying that generally, but a lot of people still didn't understand that because there are a lot of questions today, the town supervisor's been here bombarded by all these town residents trying to figure out what can i pay, what can i not pay? back to you guys >> two things. i was reading where new rochelle in westchester, citizens there already prepaid $15 million. >> wow. >> in their property taxes in my town, my wife went to pay yesterday, she said there was a sign on the door that said leave the envelope -- >> that's going to make people a little nervous. >> -- through the door there, we'll make sure it's posted by december 31st. >> did she leave the envelope? >> no, there was one in there, if you go after hours, post it

by putting it through the mail slot, they'll make sure they get it posted by january 1st. >> how is that town able to turn this out, other towns, westchester county, itself, was saying oh, no, i'm sorry, we can't come up with this in time. >> reporter: the town has its own taxes, county has different taxes. the towns already send you, for example, the school year tax, came out in the summer, good through next summer. if you have the piece of paper and saved it, you can do envelopes if you want to fit your name on it and drop it off. most people weren't doing that if you didn't bring your piece of paper, you get it in this line and go pay. a lot of blank checks. people getting ready to write some big bills here. >> that's for sure. >> odd way to ring in the new year. >> oh, brother, this is unbro f unbelievable never happened this more. >> joining us, henry, thank you, sir, for your time this afternoon. >> thank you very much >> we wanted to ask you what you think the impact will be on the housing market from all of these blue states, especially, where people are suddenly facing a potentially a lot higher taxes

>> well, i think the conventional wisdom is there will be some impact on the housing market, in effect, housing prices effectively go up with this and therefore people will think, you know, twice, make a deeper consideration about buying homes i hope personally, that the impact is not severe because the whole intent of tax reform and tax reduction is to stimulate the economy, not create disruptions in the economy the piece you just showed, the experience that's occurring today in new york and other blue states is an example of what happens when you rush a tax bill through, haven't thought through all of the consequences of a very complex system we have in our society. i believe we have these things calibrated very finely and you can see what it means to real people when misinformation or -- or changes are made without full

information, without full explanation. so what we're seeing now is people responding to the need to pay in advance, so they can get the deduction and a lot of confusion in communities i'm hopeful this can be resolved by communities, by counties, by cities, but it's unfortunate because it is inherent in rushing a tax bill of this complexity through for, you know, on an artificial deadline to make a political point. >> you know, it's not just about the state and local taxes, the ability to deduct those, but also on mortgages, you know, they're capping that as you well know >> correct. >> it just highlights how reliant we are on tax breaks for such an important part of our economic lives that would be housing. >> right and it also highlights just -- >> you have to imagine -- you have to imagine that it will have an impact if we don't have those breaks anymore, right? >> it's the breaks but it's also kind of the fragility of the system, in other words, people

are really watching these things very carefully as you can see from those tapes, older people, people who are disabled, really frightened by the prospect that they can't deduct their local taxes and then, of course, the mortgage impact as well, which is going to be harsher in some states than others. so, frankly, there's just -- the information has not been put out in a good way and i think now given that that bill passed, it's incumbent on state and local governments and local authorities to clarify their procedures and get it to petrip. that's not the way you do the government's business is to scare people. >> i do wonder if it's going to lower the trajectory of tax increases over time. for example, westchester county, we were just showing there, of course, rob made a point since he was elected in i believe 2010 trying to cap the increases and even push them slightly lower, and trying to say to people, look, that's far more important

than this one-time issue which will come and go do you think that other municipalities will be able to follow his lead and cap or in some cases even reduce the amount of taxes people are paying from here on out? >> well, unfortunately in the tax bill, as it passed, was some transference of responsibility from the federal government to state and local. an example was the ending of advanced refunding of municipal debt, which made it possible for municipalities to take advantage of lower interest rates and lower their debt responsibilities they will not be able to do that, therefore, they'll have to pay those higher prices for those higher debt rates for a longer period of time. all of that transfers burden to local governments. so, no, i don't see this as an area where local governments are going to be able to cut their own revenue streams because not only do we have situations like that in the tax bill, but we expect there's going to be cuts

in key programs that communities defepend upon. our system is very delicately built and do your point a moment ago, people rely on incentives, yes, but they also rely on a system that is finally finely tuned and finely balanced and some of the balance has been upset in a serious way by this tax bill. >> well, we are certainliy rseeg that with all the lines out the door mr. secretary, nice to see you again, happy new year. >> happy new year to you thank you. keep up the good work. >> former hud secretary henry cisneros joining us today. rets gplus signs among the r averages the dow the only one in record territory right now. joining our exchange today, quincy crosby from pru den dentt post 9 sitting next to kenny from o'neal securities and welcome back rick santelli as well kenny, we've been highlighting all week it's been a very quiet week you know, in the past few years

we haven't had that. we had a market that just either was booming or heading south in a big way, but this year it feels like the market's either in a wait-and-see mode or fell like they figured everything out. >> it is, you know, we had this conversation, we've been talking about it for a while, the market is gliding into the end o the year, right, with the s&p up 25%, the dollar up almost 28% and with the nasdaq up almost over 30% you know, in the last couple -- the last week here, last couple days, no one is making any changes. they're going to let it ride which is exact lly what you see. i don't remember when volume was as low as it is today at 3:15 in the afternoon. it's really crazy which goes to show you large asset managers are just letting it ride >> quincy, where do you think we're going to see strength in 2018, how are you positioning for that >> well, you know, i think the president is going to start talking more and more about his infrastructure program he's already started but i think

given the success he's had with the tax reform going through, he's going to push for infrastructure spending and i think that's going to help the industrial commodities i think that's going to help the industry names anything associated with local and regional and state infrastructure spending could help the local banks as well for lending. so i think those names, and i think the market is going to focus once he starts and what's interesting, i think the market had doubted that he could get anything through well now they know that he was able to get the tax reform bill, tax cuts through i don't think the market is going to doubt that he can get infrastructure spending through. >> rick, we've talked a great deal this year about the decline of the dollar, the dollar index, and our research staff put a number on it today which is rather surprising, maybe not to you, but it -- barring some huge rally tomorrow, the dollar index will have experienced its worst year, its biggest down year, since 2003, going back 14 years. >> wow. >> pretty amazing, huh

>> yeah. i think it's pretty amazing. especially after you see what's going on with regard to some of the data points we just had this morning. i mean, the trade deficit for november we received today was a whisker under $70 billion. it was the worst the most negative trade deficit since march of 2015. usually when you see the trade deficit doing that, it's because the purchasing power of the dollar is moved a lot. and what we see is that americans are still purchasing, still have good demand, and yet the trade balance is -- it's a negative to the president. it's very kind of counterintuitive we see chicago at the best levels, chicago purchasing manager, since march of 2011 listen, i don't see why the dollar index is going to have any type of a banner beginning in 2018 even with the "wall street journal" notion of repatriate the money, what the fed's doing. it's going into year end basically in a horrible level,

close to the lows today. it's at the lowest levels since september. as you pointed out, worst year since '03. i think pretty much the euro currency strength is going to make europeans as unhappy as some of the people that are long the dollar index here. >> kenny, real quickly, what do you think is going to be most important to watch here as we close out this year and start january? >> listen, i think it's all about what's happening in the future between today and tomorrow, there's nothing that's going to change anybody's mind like quincy said, it's going to be all about this infrastructure program that he wants to announce and i have to believe, like quincy said, it's going to go because how's any democrat going to vote against an infrastructure program when they're talking about rebuilding roads and bridges and schools and in this country? how are they going to go home to their own constituents and say, oh, i voted against the infrastructure program not happening. therefore, i think all those names right along those line as she pointed out is going to be where the focus is going to be i think you'll already see that starting to happen >> all right thank you, folks always good to see you quincy, thank you. kenny, rick, see you later thanks for joining us.

>> thank you. >> we have about 45 minutes to go into the close. dow is up 48 as you said, we haven't talked about this in a week or two. that would be a record close. >> it's been a very long dry spell for the dow. ten days since we had a record. >> that's a record this year the s&p up two points. nasdaq up three. russell up two today as well. still ahead a new filing from apple shows ceo tim cook had a little extra cash this year to spend on holiday gifts $ million extra to be exact. even with that bump, he didn't have the highest compensation among apple's executive team we'll explain why coming up. also up next from nelson peltz's proxy vote recount, bill ackman with adp, it's been a big year for hedge fund battles. just ahead, what the new year could hold in store for activist investing. and we'd love to hear for you if you're not busy prepaying your taxes or something. reach out to the show on anitter, facebook, or send us e-mail you're watching cnbc, first in business worldwide

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time for our bitcoin moment.

prices dropping today after the south korean government announced it will implement new rules to regulate trade of the digital currency according to reuters, the rules would include prohibiting anonymous trading accounts, and could give authorities the ability to shut down exchanges >> and there's the negative response across the bitcoin complex. if we call it that. there have been a number of notable hedge fund battles this year for bill ackman's bid for adp's board seat, nelson peltz's down to the wire proxy battle. what does 2018 hold in store leslie picker has the hedge fund playbook. >> reporter: new sources of activism, retail investors, and environmental social governance are three key reasons why the outlook for hedge fund activism in 2018 may built upon some key trends from this year. first, new sources of activism sources in the activism world expect more nonactivist investors to use those strategies to push for changes at companies where they have large stakes that comes on the heels of newburgher berman's push at

whole foods and d.e. shaw's campaign in eqt earlier this year second, retail investors arconic, to adp, investors are not afraid of companies with a large retail component they found ways to reach investors. trian placed ads in a local cincinnati newspaper pershing square held video webcasts with live q&a during its fight with adp not all these activists won bae every seat they sought their strategies are likely to catch on with other activists in the new year finally, environmental social and governance investors are deplanding activists bring more director nominees that can help diversify the board and make it a force for good >> and while some activists may seek to do some good for fellow shareholders, our next guest thinks there's been excessive activism lately and it's bad for corporate america.

joining us is john levin wit levin capital strategies john, thanks for joining us today. >> hi, good afternoon. >> make your case. what are the activists doing that you don't like? >> let me give you a prelude every interaction i've had with nelson, with bill, high quality in a personal way. heez a terrifically competent people with strong organizations. the question has to be caasked whether this is in the national interest some activism is necessary i feel many of the major institutions have not been forceful enough when they've been shareholders. but i think that the consequence of activism is employment reduction, the country needs employment that's where most activists are seeking is cost cuts it needs research, which management cuts back to try do get its earnings up. it needs capital investment. it does not occur in isolation if activism is more and more, fewer companies will go public, a la other countries, which is

bad, and/or you'll find yourself in a voting/nonvoting situation. i think there is a balance to be found, and national policy should look upon it. i mean, i have some suggestions about what i would do. >> john, before we get -- yeah, before we get into some of those suggestions, you mentioned the balance. there's many like carl icahn who could say the balance in favor of checked out ceos with no board oversight who spend all of their time on the golf course leading zombie companies into oblivion is a major problem. and a lot of countries one of the things the u.s. has going for it, you have activists willing to come in, shake it up, some cases cause layoffs but make the companies dynamic, unlike other places where the culture is not as strong. >> i spent my life liking carl icahn. it's somewhat reciprocal carl at one point said 30% of employees of companies should be laid off he might be right from his

standpoint but the question is what would that mean for america and the consequences sure, there are some executives not working as hard but for the most part i have high regard for the executives i met in america and most the boards are responsible for trying to do the best job they can. >> i'm going to sound cynical with this question, but realistically, when you consider in a capitalist society, is the point of a corporation to turn a profit or simply to employ people >> that is an excellent question i would say, at least in my view, embedded in that question is, is the goal simply short-term profits, or is a stream of profits over many years helping the united states, helping the employees, helping the whole public i have a long view i think that the country has to balance between short-term opportunity and optimization and longer-term strategies >> john, let me ask you about

specifically hess as an example, i'll take your point there are tons of activist hedge funds launching, probably like the hedge fund industry, itself, you have a lot of imitators who aren't as good as the real innovators on this front in the case of hrkts hess, what would your defense of the company as it stands today be >> okay. so the elliott activist there is one of the great professionals in the world, john pike. we agree, and i've written john hess many times, cut back capital spending, just work on your prime projects. john hess has done a friterrific job. he took a small, or moderate-sized company, now is a partner with exxon, not only one of the largest discoveries in the world but exxon continues to want to work with him. i don't see what the grounds are to have john hess exited from a company where he's helped find one of the greatest discoveries in the world yeah maybe we should all write about

what we think about capital spending and the board will be responsive, but that's where the difference is. i don't want to destabilize hess i'd like to optimize it and as far as i can tell, john has been totally responsive in every conversation i've had with him on this subject. >> so, what are your suggestions? i mean, how do you fight back against the activists when you feel like it's being too disruptive and not productive? >> okay. here i think the first question is to decide whether corporate policy should be, what it should be what i would do is i would have activists limited to holding a stock for a year before they start a proxy fight. not this drive-by shooting i would only permit one, two, or three proxy contests a year. i would limit the number up to, say. 10% of anybody who's been in a proxy contest for five years and more than that, i wouldn't let managements participate in lbo transactions involving activists because it seems like the

managements in some cases are fighting activists but effect e effectively get together to take a lot of money away from the shareholders so i think there is a program to deal with this that's balanced >> john, good stuff. lot of interesting points there. >> john levin for s.e.c. chair >> thanks. thanks for having me on. >> thanks, john. you bet. see you later. coming up, california is ringing in the new year with a new law. that would be legalized recreational marijuana can't wait to see this happen. and with predictions of billions of dollars of sales in the next few years, the pot industry could be a big part to that state. we'll head out to the first company to receive a recreational license when we come back. later the nasdaq is on the cusp of doing something it's never done before, posting gains for 11 out of 12 months in a single calendar year tech stocks, of course, have been a major part of that run. we're going to debate whether 18ray llonnuin ctie 20

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california has long been known for its laid back stance on marijuana, boy is that true in just a few days recreational pot will become legal across the golden state k cnbc's aditi roy joins us from a dispensary in san jose to report on the economic impact of legalization aditi? >> reporter: hi there, bill. i am standing in one of the 20 growing rooms here at buddy's cannabis in silicon valley

this is where -- this room, alone, is worth $50 million worth of marijuana the company has been selling medicinal marijuana since 2010 now they plan on switching over to the recreational market once it becomes legalized starting on monday some believe the recreational marijuana market will be worth between $6 billion to $7 billion. there's skeptics out there who say the high taxes which some estimate to be as high as 45% could hurt the industry as well. then, of course, there's the bureaucratic hurdles to talk about, the state's only issued about three dozen licenses so far, and those companies still have to get municipal licenses you can see on the graphic where some those state licenses have already been handed out. many cities like los angeles aren't even handing out licenses until after the new year still the owner of buddy's says the financial opportunities are luge >> there is a concern, obviously, if you tax the legal cannabis too much, you're going to give an incentive for folks to go to the black market. i feel, though, that the

challenge is going to be on the retailers to keep the prices down >> reporter: and he says he's trying to do that. lucero believes with the extra taxes and regulations that his prices are going to go up about 10%. he believes he is absorbing many of the costs back to you guys >> i'm curious, you're in a disfence dis fen dispensary, there are all the plants behind you. like cut your own like at christmas tree farms what's going on there? >> reporter: it's interesting, they have 21,000 square foot of space in this industrial area. the upstairs where we are right now, they grow, they cultivate here in these rooms and they sell products downstairs they have a whole retail space this part is only where employees can be and it's where they're cultivating and plan on expanding this area to meet the market demand, they say, will be much more increased. >> oh, boy thank you, aditi see you later. aditi roy. >> reporter: thank you. >> if you can't get enough of this, be sure to tune in next

week to catch marcus in a special documentary "the profit in marijuana country" premieres tuesday at 10:00 eastern. >> me thinks you don't approve. >> this is like having to cover bitcoin, like bitcoin, legalized pot, like, oh, joy. >> yeah. where are we going time for now for a cnbc update with kate rogers. >> kelly, here's what's happening at this hour what many thought was a christmas gift ended up being coal a south carolina lottery glitch caused people who played a certain game to win nearly every time a line of people who thought they hit it big wrapped around the block at lottery headquarters officials say they'll make a decision on what to do about that by tomorrow. a heartbreaking story from connecticut where two dozen horses died in a barn fire overnight. in a post on its facebook page, foley farm said most of the animals had succumbed from smoke inhalation a month's long diplomatic standoff between the u.s. and turkey has come to an end. the countries are lifting visa

restrictions after agreeing staff overseas would to longer be targeted when performing official duties. and this may not be what you want to hear right before new year's, but dietary guidelines suggest women should have no more than one drink per day and men no more than two there are reasons to limit your booze intake the american cancer society says limiting alcohol is key for cancer prevention. that is the cnbc news update at this our back over to you guys. >> very important. thank you, kate. we're 20-some minutes left in the trading session for this thursday with the dow if record territory. only one of the major averages doing that here is gordon from rosenblat securities. >> thank you, bill first off i want to start out by saying -- >> what? >> -- the end of the workweek, almost the end of the workweek it's friday, lunchtime in is a moe y is samoa. >> i feel the warmth

>> i appreciate that. >> do you see this continuing? sometime we get a change in the tenor of the market from december 31st to january 1st we've had a stellar year, 70 record closing highs for the dow this year, that's never happened before, do you see that continuing into 2018 >> i think we're going to carry right through, bill. even though we're up a tenth of a percent, .2%, we're seeing the up volume eclipsing down volume 2-1, the way it's been the last couple times we had this move. we're seeing guys making the case in every sector, whether the beaten ones like energy or retail or the other high fliers th that there's no reason to sell not seeing the action you might see this time of year, hey, let me rotate, get into some of the hot areas. you're seeing people say, i'm going to hold my position, i'm good with what i have, i think i have room to move over here. we're not seeing that kind of action. >> even as the fed starts to raise rates. >> well, i think the fed raising rates is kind of built in, bill, off of what's happened with the

tax bill i think that, look, the tax bill is going to go two ways from a political standpoint either we're going to see a repatriation of funds from some of the majors which is going to. be a coup, not going to be loopholes galore and be a problem. right now i think the tone is that it's good that we are going to see continued growth in gdp and even if there is some sort of selloff, that there's a base under it there's a floor. i would say january effect looks good. >> okay. very good. really has been a pleasure i just wish you'd wear a new tie once in a while. thank you very much, gordon. kelly? >> lunchtime in american samoa, that's why i love him. thank you, both. up next, apple ceo tim cook has 4 million reasons to smile this year after a 47% pay hike he's far from having the highest compensation among apple executives we'll explain why just ahead. plus investors in apple and other tech companies have been rewarded in a big way this year with a tech sector gaining more than 30%

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gold is at a one-month high today, and the dollar index continues to weaken on pace for

its worst year since 2003 which we mentioned i eed earlier seema mody joins us with more of today's movers in the commodity base. >> reporter: gold as you point out is higher by nearly half a percent driven by a weaker dollar from a technical point of view, traders say 1,320 is the next level to watch. let's also talk oil, wti crude is trading right below the $60 mark which is broke on tuesday for 2018, analysts say watch opec to see if more production cuts will be announced meantime, china's trade data and increased supply disruptions have lit a fire under copper the industrial metal has seen 16 straight days of gains, now trading at a nearly four-year high analysts say increased supply disruptions specifically in china could push prices even higher in 2018 speaking of higher, nat gas prices surging as forecasts are now calling for even lower temperatures across the east coast. which means more americans will likely be using their heater, nat gas up almost 7% today bill

>> all right, seema, thank you see you later. heading to the close, 20 minutes left in the trading session here the dow in record territory. everybody else is positive they're not quite there yet. apple ceo tim cook getting a pay raise this year, but get this, tim cook, ceo, man in charge, is not even the highest paid executive at apple we have those details coming up. and with disney taking over 21st century fox studios, concerns are rising in hollywood that some of fox's less than family-friendly fare will be on the run under disney's stewardship. that's story coming up ok, so with the award-winning geico mobile app, our customers have 24/7 access, digital id cards,

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welcome back apple jumped nearly 50% this year the tech giant is now worth around $880 billion in market value. the company's ceo tim cook took home a sizable pay increakreecri career as a result josh lipton joins us with those details. >> reporter: kelly, it's been a good year as you point out for apple shareholders it hasn't been so bad for tim cook, either apple's ceo saw his compensation for the fiscal year which ended in september surge nearly 50% to

$12.8 million. his compensation, remember, is tied to revenue and profit targets set by the board, which the company did exceed so revenue for fiscal '17 was $229 billion operating income clocked in at $61 billion. it's a turnaround for cook whose compensation actually dropped 15% in 2016 when apple did not achieve its financial targets. apple stock as you point out, kelly, surged this year, up nearly 50% more than double that of the s&p 500. that's as investors bet that new phones, 8, 8 plus and x are going to spark a big upgrade cycle next year. other members of apple's top brass saw smaller increases in total compensation climbing about 6% to around $24 million they include cfo luca maestri, chief angela ahrendts and dan

ricco and bruce sewerl his total payout for the year came in at $10 million kelly, back to you >> so let's just be clear, the base salary is what we're talking about, his is lower than the rest of them, is that the idea >> reporter: yeah, the annual comp at around $1 milli2 millio think probably threw some people, bill when you take in account the stain to stock grants he's getting, more than $100 million. >> i realize that. just from a base salary standpoint, that to me says a ceo who's comfortable in his own skin. >> i love it. >> let other shine >> some of the execs he may view as needing that to be compensated for thosal lenge at that they bring. >> exactly. >> the thing i wonder, josh, i know as part of this they told tim cook he has to fly private, i imagine for security reasons. >> yeah. >> is tim cook, himself, seen as a key man at apple has he always been seen that way or what do you think

>> reporter: i'm sorry, kelly, as a key man, did you say? >> yes, is he seen as irreplaceable? >> reporter: well, i mean, i'll let traders and investors decide whether he's seen as irreplaceable. certainly they've applauded his role this year and since he started his tenure in 2011 before this role, he had a key role at apple, their supply chain guy. look at the executives he's brought in, to your point, kind of like angela ahrendts, ricco investors cheered his investments so far 2017 was a key year for apple in terms of services. traders and investors are making right now is 2018 will see even further gains. >> he had big shoes to fill. and i guess what i'm trying to say, feels like a lot of these, you know, moves by the board and others are indicating, yes, you filled them well. >> i think so. absolutely. >> as a steward of this company. thank you, josh. >> thanks, josh.

still love the beard 13 minutes left in the trading session here the dow holding on to enough of a gain to put it into record territory. the s&p and nasdaq and russell also higher but they are not in record terrterritory. >> if your portfolio is loaded with passive index funds, chances are you have a ton of exposure to the sector more than ever we're going to debate how much higher tech can go in the new year or if it's time to rotate out when we come back. 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.

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the high-flying tech sector is up more than 37% this year and it's pushed the nasdaq to new records, in fact, many people's portfolios, but not everyone thinks tech is a good bet for 2018. >> we're going to meet one of them in just a second here that's not paul meeks. he's the bull. chief investment officer and portfolio manager. our bull in this case, is ian, director of equity trading at webbush securities we all believe that tech is the future, but is tech -- is it too easy to say that i mean, are we going to expect the kind of gains next year that we saw this year, for example?

>> what i expect, bill, is the s&p 500 to be up next year but much less than it was in 2017. i do expect the tech sector to outperform again but, again, on an absolute basis, it's returned much lower than the huge returns that we've seen in '17. if folks are uncomfortable with active stock pickers and want to go passive, there are many ways you can replicate these indexes in an equal weighted manner instead of other indexes heavily overweighted in tech stocks because they're -- >> your advice, paul, to people, would be, if you want a passive index portfolio, you can do that but do it equal weighted and not market cap weighted, right >> that's right. not just u.s. indices, but the international developed world and also the emerging markets have those opportunities but the way i look at it, the largest names in tech, the faang stocks and a couple others in key industries within tech like cloud computing, the relative

fundamentals, i. ee., their fundamentals compared to everything else haven't been as good for probably a couple decades. i've been doing this a long time i like them fundamentally but i'd like to buy them only on downdrafts in their stocks and we probably at some point particularly in the beginning of 2018 will have those drops in the stocks to bring some good buying opportunities >> all right ian, you raised your hand when we were looking for a bear on technology i guess it's because you see growth slowing in the new year is that the idea >> yeah, i mean, if i look at the end markets for tech, and it's corporate and consumer, in the consumer market, handsets aren't going to grow much the next two years pcs aren't going to grow at all. automobiles are going to slow down in terms of growth. and the consumers running debt at all-time highs. if i look at the corporate side of the equation, cap-x to me seems right there's no reason it's going to increase because

of repatriation potentially. so fundamentally, yeah, there's pockets of tech that may do okay but overall, i actually think. you can underweight this sector because ultimately it comes down to are people buying the stuff i think the stuff you're hearing about apple and its iphone x may be the canary in the coal mine for consumers actually getting beyond their means at this point. >> ian, i wonder if people would be more comfortable making a valuation case against tech in a fundamental one. when it comes to corporate, they made after-tax investment cheaper so we should probably expect more of it wh when it comes to consumer debt, i take your point, there still should be some growth until the economy turns and in auto, we're in the midst of a revolution in terms of the amount of software and chips that are going into cars, so it's hard to make the case that there's not going to be any growth in tech. would you make the case that tech is simply too expensive >> no, i don't think it's a question of valuation because if you're going to talk about index funds, which paul is talking about, they don't care if

amstonamstoazon is trading at 100 times, 80 times earnings i'm not going to make a valuation case, it works the other way. i'll remind your viewers, that can happen they're going to get sold the hardest. i'm looking at the end market growth in most of the key areas that technology and semiconductors sell into, and after the monster move we've seen, it's just not that exciting >> all right quickly, paul, what do you say >> i think that thinking is too broad, and he did allude to the comment that there are pockets i do think there are pockets, and i think some of these pockets apocke pockets of growth are in the early innings like cloud computing. also artificial intelligence and some other areas if we have a slowdown in the economy, sure, enterprises and consumers will rein in their spending the areas i highlighted and stocks i focus on are going to do very well for a long period of time. >> okay. ian, before we go, would you then tell people, okay, if you want a passive index fund next

year, do it and take tech out of it >> no, i would tell people to go back into active investing because i think at the end of the day -- >> >> oh -- >> what was that sound i don't know what that -- >> a spooky halloween oooh >> oh, well, ho, ho, ho, because i can tell you right now too many people are packed into these passive funds with the mentality of i'm going to buy stuff on dips when it comes in, as i heard before, that to me is like when it comes in on that dip, believe me, they're not going to be there to buy it. >> all right very good, folks thanks paul meeks, ian. happy new year. >> thank you. >> okay. bitcoin, legalizing marijuana and active investing. >> i love activist -- there's a place for it, there are so many people who would say, are you kidding me i've just become a passive believer, i'm not going the other way right now. >> pendulum's got to swing back at some. point. >> i don't know where that spooky sound came from. >> we will come back to the

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of the year. something that has never happened before. so, write it down, but put it in pencil because we have one more day to go, tomorrow. the number one and two performing stocks in the s&p today were chesapeake energy, and range resources. the common denominator, that would be natural gas, which has been on fire, literally, for the last week or so with the arctic temperatures that we've seen in the northern and eastern parts of the country, and that's going to continue for the foreseeable future new year's eve, they're talking about windchills of zero degrees in times square. gold is at a one-month high. i'll bring bob pisani in on this, gold up to 12.96 and change today as the dollar index continues lower. that's a one-month chart of gold there. we have a one-year chart of the dollar index its worst year since 2003. >> snapping back a little bit. let me note, we have finally a little more stability in the tech semiconductors. doing a little bit better

recently so we saw some modest gains in them they've been weak for a while. and a very volatile day in bitcoin. of course, the south koreans are taking about more regulation headline risk is regulation in 2018 >> more out of washington on prepaying for taxes. is that a good idea or not and it's stump santoli thursday coming up on the second hour of the "closing bell" with kelly evans and company. see you tomorrow, kell thank you, bill, welcome to the "closing bell", everybody, i'm kelly evans. quite a spike on the close here. the dow going out with a 60-point gain. that is good for a record close for the blue chips 2 24,835 also the first time we closed above 24,800 there's a round level for you. up .25% today. the s&p 500 adding four, nearly five points, 2,687 that's shy of its record close the nasdaq composite up to 6,950. shy of its record high which was

6,994. the russell 2000 couldn't quite eke it out, 1,548 with .32% gain the record close is 1,548.93 as things shake out, we'll see if that changes if the small caps got a record, too for now it's just the blue chips in another one before we close out the year while stocks moved sideways since congress passed tax reform, one analyst says its corporate impact is underestimated the sectors he expects to soar next year coming right up. joining me now on the panel today, we have cnbc senior markets commentator michael santoli and bill smid joining us, ceo and cio of smid capital management welcome, guys. the biggest winner in the dow today was united health. the biggest loser was coca cola. over in the s&p, the big winner, chesapeake and discovery communications was the biggest loser. discovery, whole other story, mike i feel like it's been so volatile lately. >> yes. >> zooming back out for a second, dow had another record close. >> market is staying pretty much true to form final week at the end of a very

strong year. just kind of that upward drift is the main phenomenon here. obviously there's sector tweaks, there's some kind of internal rebalancing going on, but mostly the market stays well supported based on, you know, what's been working all year we got good economic data this morning and have loose financial conditions and basically no sellers. nobody seems to want to cash out just yet this year. >> bill, you selling anything? >> no. you know, we practiced very low turnover, anyway, but i think mike's right, one thing you could see in the new year, certainly a lot of people hold on to big winners into the new year so that when they do sell in january, they don't have to pay the tax until a year from april. so, you know, we have this phenomena where the january effect where things that did poorly the year before bounce back in the new year because the tax selling abates simultaneously, the people have been sitting on big gains and didn't want to show them have a tendency to move in in january >> by the way, mike, what do you

think about the dow's out-performance in this quarter? >> yeah. >> up 11%. only 6% for the s&p and the nasdaq and 2,400, 2,400 of the 5,000-point rally in the dow this year also came in q4. >> it's been a difference phase of this year's performance with the dow accelerating away from the rest of the market it is also about the same time you had that rotation into value stocks and really had the market focusing in on the tax reform possibilities. so if you look at it from almost labor day on, that seems to be when that effect happened and tech had built up its out-performance before that. it was a passing of the baton toward big global industrials. >> bill perked up when you said value. what are you going to say, bill? >> no, mike's right, really with the totality of investors out there especially in large cap, there has been a massive move into passive investments and that has a tendency to reward the largest cap companies in the s&p 500 index.

so for the last five or six weeks, for those largest cap tech stocks to, you know, underperform the dow, you know, maybe that's the canary in the coal mine for what begins to happen and you had a couple of people debating tech on before this, and what i would throw out that nobody's really talking about s is, you know, what happens if 2018 is the year that not just the millennials get bored with facebook but bill smid gets bored with facebook? and -- >> are you a heavy user of it, bill >> i was for a number of years for all kinds of great reasons, grandkids and old high school friends and old college friends, et cetera, but, you know, this -- when somebody recognizes they're addicted to something, they might back off in a big way and then secondly, having junk delivered to your door in cardboard boxes is probably so fun, you know, for somebody like, you know, that's our age

to sit there and go, hey, i'd like something, then the next day it's sitting in their -- at their doorstep that's probably pretty fun, but somewhere alod lodglong the line are going to add up and go, what am i going to do with my life? am i going have a robot clean my house? am i going to play golf in virtual reality? all of a sudden the reversion of the mean will start to hit these folks. >> i will admit the amazon boxes are a pain ann is here as well, equity team abe senior portfolio manager at wells fargo asset management ann, thank you for joining the fray here. we were just talking about tech, so let me read for a moment the performance that we've had this year it's up 37% year to date as we were saying a moment ago, the gains have caused big tech like apple and facebook to now account for almost 24% of the s&p 500, up from 20% last year, under 20% 3 years ago. ann, are you guys concerned about the size of the pie tech's now taken up here 123.

>> you know, i'm not surprised we got this high there hasn't been any other place to go for growth over the last few years and so, you know, as you look for growth, it's all been in technology if you look at the change in the marketplace, what's going on, amazon what it's done not only to traditional retailers, but what it's done to the grocers over this past year, it's been pretty incredible. so technology has been the place to go if you're looking for growth, fundamentals have been strong look at google and facebook, what they've done to advertising. so i agree with bill, though, too, when you're going into passive investing, that's taking up a larger share of technology investing as well. and so as we move forward, i think there's going to be better places to invest we're going to see growth broaden out due to tax reform. we're looking at other areas of the market that we think are more attractive than areas of technology. >> such as >> such as industrials. >> have yeah. >> financials. >> yeah. >> banks smaller tax companies that are

full taxpayers we think will be areas. you know, a little more of the value slant area of the market that has been, you know, left behind when you look at the valuation gap between growth stocks and value stocks this year, it's pretty remarkable the difference so those are the areas of the market -- >> yeah. let me hit the dollar here for a second because it's kind of an interesting flip side of the coin dollar moving higher again today. it was down half a point down 9% this year. on pace for its worst year since 2003 that, to me, is an incredible stat, mike >> it was a totally confounding of the consensus trade this year i mean, a year ago we were saying can the markets handle this ongoing rally in the dollar everybody assumed policy was going to be pointing in the direction of having the dollar outperform i think it's really more of a symptom of the fact it's been a globally balanced growth story, other parts of the world outperformed relative to the u.s. >> if you told people we'd have four rate hike totals, four rate

hikes after having just one a year president trump in the office. stock market on a rally. repatriation looming on the horizon. typical year-end scrambles into the dollar he said all of that was going to happen and the dollar would be having its worst year since 2003, what do you make of it >> well, i can remember three years ago being in europe to promote the offshore version of our mutual fund and the euro was, like, at $1.38. and so the thing that caused the poor performance in the dollar in our opinion in the last year was the huge move it made from $1.38, what was it, mike, $1.06, $1.07 at the low point, now it's bounced back to what is it, $1.18? i didn't look today. the point is it's made a huge move to get to there, and mike's right about that everyone ended up on that side of the trade and, again, i hate to be beating a dead horse, but that's the problem that the

amazons and the facebooks of the world have is which humans are going to be added, which analysts are going to be able to raise their price target another 200 or 300 points? you know, we'll have to bring back some of the analysts from '99 and 2000 to compete on that. >> what does that have to do with the dollar, bill? >> what it has to do with the dollar is that's where all the money has gone by the way, you mentioned up 37% in 2017. you didn't also mention that the tech group was far and away the best group and lastly, you also left out that netflix and amazon are not counted in tech, but there's not a single -- >> true, true. >> -- employee that works there. so tech is actually around 26, so just a quick quiz, in 1990, which was an era that microsoft was emerging in a massive way, tech was about 7% of the s&p just to give you some feel for how out of favor and in 1981, oil was 28% and now it's 7%.

so, people have to be really careful from a historical perspective both with the market in general, and secondly, with -- and, therefore, the dollar, to tie it back to the dollar, the interest rates going up were well telegraphed a year ago, right so everyone knew the fed was go i ing to tighten, therefore, you hit kind of a peak in the dollar. >> all right ann, a quick word on that. >> yeah, i think the market needs to see the pro-growth agenda really take hold. we need to see accelerating growth in the economy happen then we might see a rise in the dollar because as michael said, we've had -- we've seen global economies grow as well and so, you know, a weaker dollar is not bad, it makes it very competitive for u.s. companies to compete globally. so not too bad where we are. >> oh, sure. yeah, no, that's why if it goes back up, we'llsee if that's a headwind let's talk about citi for a second

those shares closed slightly higher today, despite ordered to pay $11.5 million in fines posting the wrong ratings on stocks $5.5 million of the fine is from the financial industry regulatory authority the other $6 million is the amount citi is expected to pay customers for the error. mike, the weird thing about this story is it went out on some sort of electronic notifications. >> yeah. >> it's not clear to me how many people were seeing this and actually literally seeing you should sell some stocks -- >> apparently no attempt to actually deceive, it was a kind of an operations bureaucratic glitch that didn't get fixed in time and so basically, people who first of all clients are not supposed to be able to own sell-rated stocks unless they explicitly say, yes, i want to some of them ended up owning ones that did not show sell ratings when they should have. look, i think it was one of these things that was caught, the low level of the fine tells you that the regulators didn't really believe this was some kind of fraud perpetrated on customers but does show that,

you know, these unwieldy institutions did not get on top of it very quickly. >> ann, you disagree with any of that >> no, i mean, i really believe big corporations, especially big banks, where it's really important for your customers to trust you, you know, they try to do the right things. when cust momers are harmed, thr should be some repercussions i really think the intention was to do the right thing. >> all right let's talk about bitcoin before we let everybody go. it did trade lower today, after south korea said it plans to ban new cryptocurrency trading accounts starting in january if an exchange allows new accounts, the commission has the ability to stop trading or shut down the exchange. bitcoin, of course, had a roller coaster run the last few weeks hit more than $19,000 in early december fell to a low of about $10,400 on friday. bill, i'm trying to think, what -- i mean, i just assume you hate bitcoin, but what are your thoughts on this whole phenomenon >> well, it's so interesting, we think that each era has a

thermometer. when the health care stocks were on fire in 2015, valeant pharmaceutical was the thermometer of the hot health care sector, right so that was the thermometer. it reached 250 everyone thought michael pearson was a small "g" god and when it busted, it busted dramatically, right? here we are, tech is hot fintech's hot. you know, cryptocurrency, blockchain, just change your name, and it's a thermometer and people should be really nervous about that thermometer because what it says is people are way too excited about technology >> is that possible, mike, to be too excited about technology >> it is possible to be too excited about technology investments. the ones that are available and to overpay for them, yes. >> like 1999, late '90s. >> you know, when 30% of the s&p was in technology sector in '99. i don't know if i can diagnose

the issue as being that in bitcoin. honestly, i almost wonder if the very low volatility environment we've had in traditional assets is almost kind of creating, sending the gamblers somewhere else and had this tremendous kind of world-changing cover story that says this is going to be the future. this is the ground floor of the next internet. what's interesting is when you had the ground floor of the past internet being created in the early '90s, nobody was talking about it so it's hard to know if this is going to be -- by the way -- >> when bitcoin first came around, it was a couple years before all of a sudden people are talking about it. >> came around in '08, '09 here it is ten years later after it's been developed and still kind of a wait until it becomes something kind of a story. >> right i think that's fair. ann, what would you say? >> i would say it's probably one of the most speculative investments i, you know, of 2017 when you have people talking about it in coffee shops and, you know, raging about how much money they've made or can make in it, and, yet, really can't explain it, that's cause for concern for me

and so -- >> yeah. >> -- it's an area that i'm a little bit worried about essentially investors really should be able to explain things that they're investing in. that makes me nervous. it's not something that i'm interested in. and it's people -- more professional investors i would say are nervous about it versus the people in the coffee shops so makes me nervous. >> bill, is it such a bad thing if all the gamblers are in bitcoin and not small caps >> it's the uber drivers that are the bitcoin, you know, you get in an uber now, that's who's buying the bitcoin just to be a little contentious, as a contrarian, i'll -- >> last word. >> all i can say is that you see this kind of stuff and if you look at expected ten-year returns from existing price earnings levels on the s&p 500 index, the next ten years offer very low returns and, therefore, if people are buying passive to get at an 8% return, they're statistically likely to be

sorely disappointed the next ten years. >> are you making the case for bitcoin there? >> no, i'm making the case that bitcoin -- >> thought you were explaining why -- >> -- is a sign of -- it's financial euphoria that's all it is. >> all right, thank you very much for joining us today. happy new year bill, ann. happy new year as well. stocks staged a huge rally this year, largely in anticipation of tax reform our next guest says don't ex pe expect a tax bill hangover in the next year. he thinks the market is underestimating corporate growth from the changes. uber's valuation taking a huge hit after softbank took a huge stake in the ride-hailing company. our takeaway on the uber discount coming up. we want to hear from you, contact the show, twitter, facebook, or send us an e-mail you're watching cnbc, first in business worldwide ♪

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there has been a good deal of debate if the tax bill is baked into the market or will soar because of it in 2018 my next guest says growth has been underestimated. joining us is dan clifton. welcome to you, dan. >> thanks for having me on, kelly. >> so you're talking about economic growth, are you talking about, you know, corporate profits? >> yeah, i would argue both of those. so, number one is, you know, how

does this affect the economy, how does this affect stocks and how does this affect swr individuals? if we separate that out, i think the greatest underestimate is on economic growth. a lot of it, investors that i've been speaking to this week are pricing in maybe .2%, .3% of boosted gdp. in 2018, the market is probably priced for around 2.7% gdp growth i would argue is there's a good chance that we're going to probably exceed that largely because this tax cut is about 1% of gdp in terms of its fiscal stimulus. you're talking about $12 bill2 of tax relief to consumers when most consumers believe they're going to get a tax increase. you're talking about another $83 billion of net tax cuts to corporations that are then going to be able to be used to deployed for investment and share buyback and dividends. when you look at this plan overall, it looks a lot like 2003 and the market did not price that growth until the

paychecks adjusted for higher aftertax income and that won't happen until february. so we think there's going to be an upside surprise to gdp in 2018 largely based on how this tax cut was drafted and the low expectations that we've seen since the tax bill's been passed into law >> dan, i'm sure you're getting a couple of varieties of pushback on this idea. >> yes. >> one is, first of all, does the market really wait to see the whites of growth's eyes right up front before it starts to price things in for example, the bond market >> yep. >> also are we at a different point in the economical cycle at this point, do you actually have that kind of juice as you did in '03? >> exactly right, mike let me say, there's a lot of concern that we may get too much growth and may lead to inflationary pressures but i have to tell you, again, go back to 2003, a lot of economists were arguing at that time a deficit finance tax cut that benefits the wealthy does not create any economic growth and we had 4% real gdp growth in

the first 12 months and it did take the bond market some time to figure it out look at today's debate about whether you can prepay your state and local tax property taxes. it's just a lot of confusion, lot of people don't know how this bill is going to work it's different than a separate rate cut that's why i believe that once this gets fully implemented and the paychecks adjust, you'll start to see better expectations for economic growth. just the first year, even if it does create inflation, inflation feels very good that first year because it's nominal growth and we tend to believe in nominal. so from a growth perspective, we think there's upside then you look at it from an equity perspective, a lot of this is priced in over the last two weeks. what we're seeing is still a lot more to be priced in in these high-tax stocks. we tend to believe there's going to be a 5.3% reduction in the effective tax rate of corporate -- on the s&p 500. i think the market's pricing in maybe a 300 to 400 basis point effective tax rate as the companies begin to

disclose how this is going to impact them, it's going to dis p proportionately benefit companies that have a lot of domestic income. some has been priced in but not fully priced in at this point. >> a couple sectors you think have -- chunk of the companies, industrials, financials, consumers, is that consumer discretionary even >> yeah, exactly right, kelly, when you think about it, right, consumers get two bites of the apple. retail companies have high tax rates then we're delivering $122 billion of tax cuts to consumers to go out and spend. it's that second part that's a lot harder for the analysts to estimate the earnings impact of that you look at industrials, this 100% expensing of capital equipment, there's no way to price out how many new planes, how many new machines are going to be bought, and so there's going to be upside surprise in the earnings estimates from the purchases of the -- from those industrial companies overall then the banks get an added benefit because if you get a stronger economy, you're going to get more loan growth from that

it's not just about the lower corporate tax rate, there are some an sillry benefits in the three sectors overall. >> dan, why do you think it is you're among a small handful of people who seem willing to espouse this being the case? everyone else we talked to seems to say either that, okay, now it's priced in, or the impact's not going to be that big, it's all going to go to share buybacks, it's not going to help the economy, no one needs to do any investment, if they needed to, they would have done it already. all of these reasons why, you know, the kind of lift you're explaining can be explained away. >> listen, i don't know how it's going to play out but i can only go based on my experience in working on every major piece of tax legislation over the last 15 years. there have only, two tax cuts that have been fully frontloaded. 2003 and today so we don't have much of a sample size of what happens when you frontload tax cuts if you use the 19 -- i'm sorry, the 2001 tax cut as an example, it didn't really create much growth and that's because a lot of it was backloaded, years '06, '07,

'08. a lot of analysts are using that as an example rather than looking at the front-loaded tax cut and the impact that could have this is what makes a market, kelly. in 2003, it was there is no plan, then there was a plan, it won't pass then it was it won't pass and won't create growth, in the final same, kelly, the markets final finally gave in. saw bond yields rise it looks like we're setting up the exact same playground here the more pessimism there is, the more opportunity there will be for investors in 2018. >> if we see the steepening of the ten-year yield goes up, that will be an unexpected move at this point. >> that's right. >> at least how the market is pricing it in. dan, thank you very much. >> thank you for having me appreciate it. >> dan clifton. another bitcoin crackdown is putting pressure on the cryptocurrency we're going to tell you what it is this time and whether bitcoin can bounce back. restoration hardware soaring nearly 200% this year after spending about $1 billion to buy

back nearly half its shares. r "takeaway" on whether that is the best way to spend that cash, when we come back. so how old do you want to be when you retire? uhh, i was thinking around 70. alright, and before that? you mean after that? no, i'm talking before that. do you have things you want to do before you retire? oh yeah sure... ok, like what? but i thought we were supposed to be talking about investing for retirement? we're absolutely doing that. but there's no law you can't make the most of today. what do you want to do? i'd really like to run with the bulls. wow. yea. hope you're fast. i am. get a portfolio that works for you now and as your needs change. investment management services from td ameritrade. your bbut as you get older,ing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish.

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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. it's been a rough couple weeks for bitcoin investors. today is no exception. seema mody has a look at what's behind the latest selloff. >> kelly, the south korean government is putting a stop to anonymous trading account and shutting down the country's bitcoin exchange saying it's

vulnerable to investment fraud last week, ubid, a crypto exchange in seoul, filed fur bankruptcy after it was hacked a second time in eight months. the proposed legislation is anticipated to go into effect next month meantime bitcoin traders are expecting higher volatility as south korea is the largest bitcoin market, in fact, south korea reportedly makes up 20% of global bitcoin trade bitcoin took a large dip on the news as did blockchain-related companies. overstock and square, which accept bitcoin, are also down around 2%. and with today's losses, bitcoin is down 33% from its recent high now it's not just bitcoin that could face more regulation initial coin offerings which are already banned in south korea and china are expected to face more scrutiny from regulators in washington i spoke to the former omb director david stockman who said that's one area we could see further regulation in 2018 kelly? >> i'm surprised we haven't seen it yet thank you very much.

>> we're slowry starting to see it, perhaps more in 2018. >> korea's leading the way seema mody. time for a cnbc news update, let's get over to kate rogers. hi, kate. >> hey there, kelly, here's blamast happening at this hour preparations under way at the cross roads of the world an estimate the 2 million people will show up to watch the ball drop in times square new york city officials are increasing security by banning backpacks, large bags and umbrellas. additional check points and street closures are expected. a government report says the fda is taking too long to remove tainted food from grocery store shelves. investigators, 0 30 recalls between 2012 and 2015, the agency took an average of 57 days to recall potentially dangerous items. users of fitness tracker fitbit had a very busy year. the company released stats on user activity for 2017 which showed they walked over 45 trillion steps, and got over 41 billion hours of sleep and the most active day was last new

year's eve and if you're taking a trip to paris any time soon, make sure to check out newly installed trampolines. they're set up for a limited time on the roof of the city's tallest, rather, skyscraper. that is the cnbc news update at this hour, kelly, back over to you. >> i don't think i have the stomach for that >> that looks pretty cool i think. >> oh. it's cool, but, man, i'd be scared kate, thank you very much. >> thanks. >> our kate rogers. quick look at how we finished on wall street. it was a record for the dow. a 63-point gain for the first close over 24,800. .25% increase. the s&p 500 up a similar amount, five points. shy of a record. same for the nasdaq, up ten. the russell looked like it might have done it on the close there. 1,548.93 very close let's get to other big stories now in our "rapid recap. >> cold weather across the country sending nat gas prices surging. nat gas higher by 7% today hitting a three-week high.

>> apple giving its ceo tim cook and other executives a big pay boost after the company topped annual sales and profit goals for fiscal 2017. >> we are looking at a tectonic shift in the tax code that's happening in not a lot of time here. >> i'm here in the town of greenberg, new york, one of the towns in westchester see these lines behind me. hundreds of people have been here today some people waiting as long as two hours to prepay their property taxes before tomorrow >> if i passed the law in new york state that said republicans pay one tax rate, and democrats pass -- pay another tax rate, and the republican rate is higher than the democratic rate, it would be ludicrous. that is in essence what they have done here >> copper continues its march higher on track for 16 straight positive sessions on pace for its best year since 2010 up 30% here in 2017. >> and it's time now for our "takeaway. we begin today with uber whose

shares would be down 30% today if it was publicly traded, sort of softbank succeeded in its offer to buy 15% of the company at after offering price well below uber's last $70 billion valuation in fact, the new valuation is about $48 billion it seems shareholders were lets to sell at that price. michael, is this a victory or a blow for uber? >> it's a little bit of a blow in terms of people were anchored on that $70 billion valuation. obviously this is a reality check. it's not necessarily truly reliable number for ultimate value, but it's a little more reliable than venture capital estimates and auditors and things like that so i do think it's a little bit of a blow, but, look, there was obviously soft bank is a big anchor investor and that's in a way, you know, a different kind of victory for uber. >> they're gik oing to get the capital, have a long-term partner. >> is also with a near liquid situation, you have employees who said, okay, fine,vy a r vi a ready buyer, i'm going to put it into cash. >> takes pressure off the ipo,

according to the ceo, feels like it's coming around the koecorner it's falling to more terrestrial, you know -- >> it's getting -- >> -- airbnb was that it for uber or is this a reality check before it goes public then maybe can grow >> it's a really good question, very unclear how the public markets are going to treat it, either, because you don't now how the business model is going to perform on a quarterly basis if there's going to be an uptake. >> i'm excited if rt t ed for te can finally cover the earnings. next, restoration hardware bought back nearly half its shares this year spending $1 billion to do it and it borrowed about two-thirds of that sum the ceo says the shares were undervalued and granted they've gone from under $30 to over $90 this year. the "wall street journal" suggests this is also a battle against short sellers who may have lost $1 billion this year as a result. is this a smart move >> it's a huge bet by management

is it a smart move long term to lever up the balance sheet to this degree in order to buy back a huge pile of stock at accelerating values? i don't know if that's the case. i think that the management protests a little too much when they say they weren't out to get the shorts clearly aware it would engineer a short gesqueeze. a lot of criticism of the stewardship of the company and the strategy, one of the acquisitions it made so, anyway, what's interesting is it's one of the biggest battlegrounds out there. not just about retail is kind of not a hot area it's this particular story they think is making strategic mistakes, the short sellers do right now they're losing on paper. >> we'll see if the company ends up being em blblematic of the e of buybacks. mifinally, big tech is eyei a vast market in saudi arabia. according to reuters, apple and amazon already sell products in saudi but have yet to establish a direct presence which they'ring doing now. amazon is looking to introduce web services there

apple may open a store as early as 2019. the crown prince made this a big push of his, this technology push at the same time, michael, he's holding the kingdom's big investor hostage in the ritz-carlton >> i wonder about what the reception would be ultimately if they had a big on the ground presence in saudi arabia before a lot of this gets sorted out. it probably does show you among other things there just aren't that many markets in the world with a relatively affluent customer base. >> young customers. >> exactly they don't have a lot of exposure to. so it's almost, they probably feel as if they have to try, you know, there probably would be some blow-back. >> i wonder if anyone is going to turn to them and say why should you be investing there, expanding there? can you help the liberalization of it? are you going to be seen as a partner? >> an instrument -- you know, of course, they're privatizing aramco saudi clearly wants to make gesture toward opening things up. >> yeah. >> based on an economic basis. >> we'll see if the rest of the faangs follow suit.

"star wars: the last jedi" saved the box office this year the merger of the studios will impact hollywood next year and beyond, after this

"star wars: the last jedi"

brought in more than $400 million since its release, which some say is saving the box office this year even that's not enough to keep the u.s. box overall from sinking to a three-year low. joining me is andrew, editor in chief of "variety," andrew, thanks for joining us. >> good to be here >> so is it seems the deep concerns from this summer passed a little bit about when it comes to the box office, but where do we go from here, first ofall >> well, where we go is close but no cigar the hopes were we'd see enough year-end momentum where the studios could at least match the $11.4 billion they bought in in domestic box office last year. looks like we're going to end up at $11.1 billion despite the fact that this latest "star wars" movie, "last jedi," is performing quite well. >> so disney is going to win the box office for the second straight year with a 21% share next is warner brothers with 19%.

then comcast, then fox by the way, disney only released 12 movies this year. fox released 38. andrew, what happens when disney and fox tie up, we're talking about more than a third of the box office they own, and what kind of movies and how many of them will be coming out then >> yeah, there's a lot of questions. i would start with is there going to be some antitrust concerns here? could this be the kind of thing, this combination of two studios, the number one and the number four, that could actually trip things up for this acquisition with regulators? and then i do think, to your question, the volume of titles coming out from these combined studios really no indication yet. disney has certainly learned that less can be more. >> so in the past, disney has had small studios like searchlight, maybe touchstone. there have been a couple over the years that have not lasted with fox now putting out so many more movies, is that going to be

a threat for movie production under disney's ownership >> quite possibly, although i'll point out that searchlight is a fox property disney has really always been in recent years squarely in the blockbuster business their appetite for mid-budget films, the kind of movies that netflix, for instance, seems to be making a lot of going into 2018, these are just a few of the bigs strategic questions as disney should they make this acquisition happen >> maybe if their trying kelly, apple just now putting out a letter to its customers regarding this issue about its batteries. remember, apple did acknowledge it introduced a new feature to ios last year that iphones with older batteries are throttled at

specific times to try to make sure they don't get overwhelmed and shut down to really improve power management we know some complained at the time that apple could have been more transparent about that change apple now saying in a letter here to its customers "we know some of you feel apple has let you down we apologize there's been a lot of misunderstanding about this issue so we would like to clarify and let you know about some changes we're making. first and foremost, we have never and would never do anything to intentionally shorten the life of any apple product or degrade the user experience to drive customer upgrades our goal has always been to make products that our customers love and making iphones last as long as possible is an important part of that. also some specific changes apple goes on to say it's going to be making here, kelly, some concrete steps to address the issue, one, apple is going to be reducing the price of out of warranty iphone battery replacement the by about 50 bucks so that brings it up from

$79 to $29 they also say -- that's going to be for anyone, by the way, with an iphone 6 or later whose battery needs to be replaced that starts next month also next year apple is saying it's going to issue this ios update with new features the whole point of that will be to give users more visibility into health of their battery, kelly, so, listen, when this issue first hit, you know, we had tech analysts who said that what apple did was technically defensible, that they're dealing with this very real issue, lithium ion batteries do decline over time. your older i foiphones do suffe. tech analysts right here on cnbc thought apple could have been more transparent, better communicating about that apple trying to take that step switching gears, kelly, we also had reports earlier today that softbank had, indeed, succeeded in its bid to buy that big stake in uber. uber now just out with an official statement about that. "we look forward to working with the purchasers to close the

overall transaction we expect to support our technology investments, fuel our growth and strengthen our corporate governance." i know, kelly, you and mike were talking about this not just the money here that's so important but also a range of critical corporate governance changes that are going to make place now for uber that really transform the company and they were tied to this tender offer as well. so big news from uber and softbank there kelly, back to you >> all right, josh, thank you very much. mike, on apple, it's easy in retrospect to say they should have been more transparticipaent the battery issue. they're going to roll out features to do so. i think perhaps the one that could win people over, $29 battery replacement if you have a relatively new phone -- >> exactly. >> -- is not bad the issue is do people trust that apple has good intentions here >> at this point, it's a recognition by apple it was not going to blow over and the fact they were so kind of secretive about this, it all happens behind the veil of kind of software being manipulated and removed was something they had

to address i also think long term it's also a good reminder that we put such tremendous loads on these devices that over time, you know, you actually do have to modulate what they do and maybe over time, it means pent-up demand for upgrades all the time yes, that battery issue, i think, is definitely a gesture that says we're on your side, you can actually extend the life of your device this way, and that was the one thing people said, look, even if you -- if you had a warranty, they didn't real will i tell you. >> exactly. >> that it could be covered. >> if there needed to be a learning moment for the consumer out of this, again, this is something they should have made much for clear along the way, it's not the phone, not software that we're deliberately slowing down, it's a battery problem so they're going to do two things, now let you replace your batteries for 29 bucks if it's a 6 or later, they're going to introduce an ios next year with more visibility on battery health so if this works, and people become more attuned to their battery health, you know, is that going to i want prove tmpre experience with their older phones

>> i don't know if it's going to that across the board, obviously when people want to hang onto their phone, it makes it easier to do so i think the big thing, though, is the fact that apple was not up front about this whole issue beforehand, it -- it forced people or got people to go to the most cynical interpretation of what's going on >> yes yeah. >> so what this should do is maybe undermine that kind of suspicion story that apple's intentionally trying to disable your phone. >> and we'll see if it does that apple, again, out with a statement and a couple of fixes aimed at placating people who are concerned about these slowdo slowdowns. meanwhile the s&p retail sector climbed nearly 30% this year we're going to break down both the year and the holiday season's winners and losers just ahead. later on "fast money" legendary tech investor roger mcmenae will reveal while he thinks the bitcoin boom is coming to an end 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.

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the whole christmas shopping rush is now pretty much over up next we'll take a look at the retailers who fared the stbe and worst this holiday season. some names might surprise you. and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

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the christmas shopping blitz is over. and with just one trading day left in 2017, kate rogers has a

look at which retailers fared well >> reporter: let's look at the etf xrt, it hit a new 52-week high the day after christmas who are the retail winners and losers this year year to date, these five stocks are the best performerers. khan's inc., wayfair, pet med express, and ali's bargain outlet and five below. now, the bottom five in the index were rite aid, gnc, then traditional department stores jcpenney and sears, and rounding out the bottom five, genersco inc., down 50% for the year. the retail season, the naughty and nice list from november 1st, the names kind of change around. these are the top five from that point on foot locker, express, abercrombie and fitch, finish

line, and ingles, all up 50 and 60%. foot locker was one of the worst performers for the year but it's turned around this shopping holiday season to the downside, gnc, sears, significant net jewellers, liberty trip adviser and carmax. in terms of execution, amazon and walmart are the real winners, they're up nearly 65 and 40% for the year >> i'm shocked at some of those names, it's quite volatile, i guess. kate, thank you very much. kate rogers in headquarters. we're closing t ou2017 with a year in review edition of stump santoli. 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.

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not just wealth, but things that matter. morgan stanley welcome back it is now time for -- >> stump santoli >> it's our final stump santoli edition of the year. >> for this year i do better for 1997, but okay >> he's been trying to take a peek at these all day. the dow has hit more than 70 highs today. what's the second best performing dow omponent? >> caterpillar >> yes

it's up more than 70% year to date really >> they were all in the top five >> exactly, we tried to make it tough. one of the most buzzed about deals was amazon buying whole foods. that made them the fifth largest grocery retailer in the u.s. who is number one? >> that's a trick question i'll say walmart >> it is walmart correct. two for two. it wasn't really a trick question >> kroger is a real grocery company. >> but you still went with walmart. number three, the disbanding of the president's manufacturing council. who was the first executive to leave? >> frazier >> three for three you can't leave on such a -- >> we're done?

>> no, there's two more. the box office for 2017 looked grim until "star wars" came along. which movie was the top domestic movie of the year so far >> wow >> i can read this again >> no, no. this is probably a pure guess. "guardians of the galaxy." >> no, it was not. this surprised me as well. do you want to guess again >> not really. >> it's "beauty and the beast. >> that would have been my second it had $50 of my money >> $504 million of everybody's money, so that was the biggie. was it four questions? was there a fifth? is that everybody? that's it. i thought maybe there was another one. did you want to -- >> i have a quiz for you so the momentum etf, mtum, how many dow stocks are in the top five holdings? >> you just told me. was it three >> out of the top five

it's four. >> four, okay. this still shocks me let me see if i can remember microsoft. >> microsoft >> but not caterpillar that's not fair. it was -- >> jpmorgan. >> right apple was in there what was the last one? i don't know we're stumped together michael, thanks for being a good sport as always. happy new year, everybody. "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," bitcoin burning investors again today, falling nearly 10%, back below 14 grand legendary tech investor roger mcnamee says dramatic price swings are far from over next, apple apologizing for its battery issues just moments ago and lowering the