a limited edition of french fries. they're called nacho fries including bold mexican seasoning including a side of nacho cheese dipping sauce. >> they're nacho fries, they're mine >> yeah. taco bell, i defer to. whatever they do, i like you like taco bell >> i like taco bell. make sure you join us tomorrow stay warm, everybody "squawk on the street" begins right now. a shot of the winter weather outside slamming the east coast as blizzard warnings hit at least half a dozen states. good thursday morning. welcome to "squawk on the stree street". i'm carl quintanilla with jim cramer faber is off today we're watching the dow and s&p 500. adp comes in strong. that two-year is knocking on 2%.

our road map begins with the global stock rally, rolling on dow 25,000 within striking distance that winter storm crippling the eastern u.s. thousands of flights have been canceled and shares of macy's are in focus, as the retailer announces some fresh store closures. we are close to a major milestone on the street. the dow is within 78 points of 25k. that's a day after another record-setting session for stocks this would be the fastest thousand-point surge in history. we know about the law of large numbers, but we're talking a little more than 30 days >> one day, it's actually going to be in the front page. you know, look, other than the president's tweets about it, you really don't -- no one's really focused on this. they're more focused on bitcoin, tesla. this is remarkable last night i did a piece where i had to stick my hands into the cake because it's not baked in so i think we blow through the number the only thing in my sights that

may be negative is that we are going to get a trade decision about steel in a couple of weeks and the bears who are dressed as bulls will take off their bull costumes and say, this is the end, and you'll have to buy it then when that happens >> we're getting the data today is hot as we said, adp, 250 our estimate was 195 fed funds at 1.5 and the two-year, near two, right? and fed minutes yesterday. why is -- why is the fed and inflation not a risk this year >> look, i think that some of it is technology. i think that when you see store closings, that's because technology is out moded. i'm reading a note today about perrigo making drugs for amazon. and it reminds me that the world is being pressured by the death star of amazon that there are so many things in the internet that are making it difficult for anyone to raise prices yes, oil, but oil is fungible. sometimes it's up, sometimes

it's down. what i'm looking for is for europe to raise rates. and that will do it. i need the fed -- the fed has to dump its bonds into this thing, before the interest rates really start going up this is a great time for the fed to take action it wouldn't surprise me if jay powell doesn't figure that out he's more of a markets guy and i think he knows, i've got to get that curve going like this if they sell their bonds, get good prices for the u.s. government, and what happens is, is we get some inflection. and that is very good. plus europe raising rates. all these things have to happen. >> yeah, you've been calling for europe to move for a while >> what are they doing it's not working for them. the euro is going through the roof enough already just admit that the economy is strong we are seeing numbers out of europe that are extraordinary. the pmi is on fire >> china pmis were good. >> japan >> you've got the vix below nine for the second day in a row. >> other than the north korean economy, really, i'm hard-pressed to find -- venezuela and north korea. two outlier nations. the rest of the world, the pmis

are on fire. now, there are people who will say that's negative. i will say, that's what happened in the '80s and '90s and look what the market did on a percentage basis then. >> yeah. >> and this is being fueled by changes in capital goods spending rpm was one this morning a little company, a little company. but raising numbers because of capital, raising numbers because of the change in accounting. raising numbers because of fantastic -- raising numbers, organic growth raising numbers, tax reform. and that's roofing and that's flooring it's the basics of our country >> we're going to get to some other names that are raising the guide today. shorter term, though, a lot of flights, thousands of flights have been canceled because of this winter storm that is slamming the eastern united states it's known as the bomb cyclone, of course, sometimes called a winter hurricane for more on this, we'll get to contessa brewer this morning who joins us in boston hey, contessa. >> reporter: i can't believe you avoided the opportunity to say bombogenesis i mean, i've never said it on tv, ever, but that's what it's called and it's already happening,

where the pressure drops sore dramatically, something like 24 millibars in 24 hours and this is up to 54 millibars. it's all greek to me, but bombogenesis okay, so behind me, copley square and i wanted to give you a sense of where we are right now. the snow has started we're under a snow emergency, have been for two hours. but take a look at the visibility you're looking at the -- what was known as the hancock tower here in boston and as you can see, up at the top, it's getting pretty hard to see around here. the traffic in the central part of boston is very slow the buses are running, the train's running, but people who are trying to get out, ahead of the storm, have limited options now. it looks like amtrak's on a modified schedule. logan, flights in and out, basically all canceled we're looking at some 3,000 flights domestically that have been canceled. and when we're talking about trying to get out, they're saying, you should not even be on the roads at this point in fact, the governor of massachusetts has urged businesses to allow their employees to work from home today. he says the state offices will

be closed. schools are closed in boston, as they are in new york city, philadelphia, washington, d.c., and all kinds of townships in between. and when we're talking about power outages, they're bracing now for significant impacts in massachusetts, national grid says 9% of their customers could be without power for 72 hours. it's really significant, because the temperature is expected to drop perhaps as low as with windchills 30 degrees below zero if you don't have power, for many people, that means you don't have heat. shelters are already open and they're already accepting people for business here in town, there's a lot of businesses that will remain closed today the new balance store has a sign up saying they're closed before the storm. cvs, a 24-hour pharmacy here on copley square, will remain open. the employees say they'll take the train back and forth to work guys >> amazing contessa, i don't know if you saw, ft. lauderdale, below 40. >> incredible. >> first time in seven years >> reporter: oh, poor them >> yeah, exactly

poor ft. lauderdale. >> when i see these things, what do i say amazon right? store's not open buy on amazon. raising numbers amazon this is our world. this is the world we've come to. these stores close people say, you know what, i'll do same-day. i just have to urge people to recognize, storms mean amazon prime. if you don't think that, you don't understand how amazon stock got to where it is >> contessa, we'll come back to you for more all morning long. our michelle caruso-cabrekroou r boston sales for the full year are expected to post a sharp decline. they're raising their annual earnings gin due in part to tax reform, but seven more store closures 5,000 jobs. comp stores for december, came in at plus 1.1 that is on -- that's a fulcrum,

that's a pivot they've got a 5-cent increase over tax reform. more importantly, remember at 19, we thought the dividend was going to go? i see this kind of number, i think the dividend is going to be increased this guy jeff gannet is doing remarkable thing right here, right now, and this cold weather plays they're buying back a lot of bonds, but i'm saying the idea that i would bet on an increase before i bet on a decrease, is what i'm saying. i think gannet has got a lot o optional a optiona optiona optionality. this was a stock that was down 78% when the numbers came out. macy's was down yesterday ahead of this, and i like same-store sales being up for macy's. and i like the fact that the guidance is going up because for how many years, since 2014, the guidance has gone down. this is a change it's an inflection, and people should recognize it's real >> i remember, we talked to him on black friday and he was

optimistic about the season. that surely panned out not to mention the news we're getting out of costco. december up 11 1/2 >> like an additional day. like that really matters everyone knew it was going to be an additional day. this is a winter wonderland of sales, and it's good for everybody. because, look, the cold weather is a remarkable thing. my dad used to sell gabberdines at gimbel's. that was some job he had you used to say, if it's not cold, i'm going to lose my job sure enough, it was not cold for two years and he lost his job. cold weather means low inventory, which means you can bring in spring and it's that simple my mom worked at litt's. same deal. >> what explains lb cutting their guide? >> yesterday, we thought they were going to have an upside surprise, because we heard that victoria's secret and that bath and body were doing better and that turned out to be a

little illusionary >> some exiting some categories. you see lb's down almost 10% >> and macy's is the opposite. >> jcp, 3, 4 for the final nine weeks. >> home doing well that's a continual theme and by the way, they said women's apparel. women's apparel hasn't been good since 1947 p i mean, this is an amazing thing. when i hear women's apparel, the gross margins -- and of course, i was being facetious. it was good in 2014. the gross margins on winter apparel, when you don't reduce the price are extraordinary. this winter is coming exactly in time for everybody in a department store basis even kohl's. >> it's a nice line between the weather story and this retail story, because they are connected. >> yes, they are we've got to make money off this stuff. we can't just say, woe is me, it's a bomb. it's a geobomb, it's a bombog. they closed philadelphia, i hear these things, like, are you kidding me come on.

what you need -- canada goose, i thought that guy did fine. that's enough. the wife's got the canada goose up the wazoo and she's in india, still. please, follow her >> she's instagraming like crazy. >> she's in all towns that end with the term poor, which apparently is like berg. >> when we come back, a lot more to get to, including tesla delaying production of the model-3. we'll hear what intel's ceo is saying amid security fallouts in its chips. we've got calls on snap, roku, western dig, wells, master card and a lot more >> we need two hours today >> i know, it's going to be a two-hour, one-hour show. look at futures, looking for 25k at the open. we're "squawk on the street" in a minute 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?

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intel is down in the premarket amid news involving security flaws concerning its chips. this is what brian krzanich told our brian fort about fixing the problem. >> we believe we have the right fixes in place we've been testing those fixes and understand that we know how to instrument those. and those will get distributed out to the oems >> we saw some crazy price action intraday yesterday on

this news. >> yeah, look, there is some possibility, absolutely, that amd will gain some business in the data center. there is -- this is a real issue. and it's a -- it's a messy issue. it's not -- not a good situation for intel, candidly. and it's going to be a situation that dr. su at amd will take advantage of whether you think that's right or wrong the fact is, you can't have a flawed center. you just can't and that's why this is the real issue. it's not your pc it's the data center >> surprising it's coming from a player like this >> yeah. i mean, i think intel is maybe the world's greatest manufacturer i think they're going to fix it. i think we won't think about it a month from now, but the fact is that amd is going to use it as a chance to take care that dr. su is very aggressive ceo. and this is her time and she's got a lot of things going for her. so i have felt that the stock,

there's a little too much dilution but the fact is, it's something for them to say. remember, they're being squeezed by intel and nvidia. and suddenly they have a flag planted and you know what, it's real it's real. i didn't want to think it's real, because i'm an intelaholic, but i'm on the wagon. i'm also on a cleanse. >> yes, you are, for the month of january you see what amd is doing. speaking of chips really quick, vemo did cut western dig to market perform because of what they call supply/demand on the horizon. >> the problem with flash is that it ripples through the whole system, lamb research, but flash is overabundant, because the koreans are just putting up green field plants and you can build a flash plant very, very quickly even though they were trying to say it's proprietary at western dig, the stock is inexpensive. but it doesn't matter. once you got the tipping point on disc drives, it just doesn't come up. >> live and die by the cycle

>> exactly right >> we'll watch wdc tesla was down in the pre-market after delivering markets cutting short of expectation, pushing back on the production targets of the 3 they delivered 1,500 units of the highly anticipated sedan the estimate was 2,500 the company's original goal was 5,000 a week, which now looks like they'll hit, they say, at the end of q2. how disappoint iing on the spectrum of disappointment >> but musk said significant progress was made. you know, it's really amazing. they aim to produce 100,000 to 200,000 model-3s -- that was their projection in the second half of 2017 and like, these got -- look, they made 100,000 cars so, they sold around a dozen cars so people who love tesla are not going to hate tesla. the same people who hated tesla reiterated their hatred. the same people who liked tesla reiterated their positive -- there's a note, actually, talking about, well, now i'm

more optimistic. i mean, deutsche bank, growing pains again focus, attention on cash, moderating growth. but at the same time, they're not that negative. this thing, i'm not saying it's bulletproof, but i must say that musk keeps the balls in the air better than anyone i've ever seen >> we had seen some downgrades or target cuts late last year. and people say, look, putting a car together is complicated. >> right >> at scale. >> and the truth is that they've made repeatedly wrong projections, but it doesn't matter we're all waiting for that car they sold 1,500 cars, supposed to go mostly internally. but the fact is if they get it going, the people who hate it will look bad and the people who like it will look good and musk doesn't allow you to hate it. i'm surprised he didn't reiterate that he's going to put a man on mars faster than boeing >> that is the word, mars or -- >> there's a planet between sat

turn a urn and pluto. they're headed the there, too. >> at this time yesterday, weerp goi we were going over auto sales and saw the first decline. 15 and 16 were record years. you don't see that as cause for alarm? >> gm had plus 13% in china in december 491,000 vehicles we are too parochial you've got to look at the world. and the world is good. and if we just focus on domestic, i think we are missing the big picture. i also think the fact that that number was even that close is pretty darned good we're selling a lot of cars in this country notice how the rails act you move cars with them. if they're negative on the cars, i mean, you got to rethink your game plan. it's just, worldwide, people are buying them. >> when we come back, we'll get cramer's mad dash. we'll count down to the opening bell 25k in focus futures suggest we'll get there at the open. more "squawk on the street" from the nyse is straight ahead

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about eight minutes to the opening bell let's get cramer's mad dash. we've some downgrades today. roku is one and s.n.a.p. is another. >> roku is a lot about how netflix has more leverage and watch out for the amazon, watch out for the apple, watch out for the google this, keown downgrade to underperform for s.n.a.p. is devastating. they did an ad buyer surveyor. they don't want it they want instagram. s.n.a.p. resumed 96% of ad buyers refer to ad buyers on

instagram stories. they literally ginned that up in order to be able to beat s.n.a.p. mark zuckerberg is one of the great capitalists of all time. while there's positive engagement trends for s.n.a.p., the fact is that it's crackling and popping because of instagram. >> yeah, on just about every metric, roi, the ad buyers are interested in other platforms. >> it is amazing to me that the advertisers just seem to not like snap at all and do like instagram. and the advertisers in the end, we're talking about a long-term negative story on snap and i just find, when i talk to -- when i talk to my little survey of people, and not just lc detweiler on instagram who's begging to be followed, that's my wife, the ad buyers want the demow of instagram and they're not that crazy about that 14, 15, 16-year-old demo this survey was incredible

>> they have made steps in recent weeks to reup their ad platform >> absolutely. they're trying everything they can. you have to hand it to them that they're not just lying down and taking the beat down from zuckerberg but if the advertisers on instagram, a lot of people felt that instagram couldn't compete with snap, because snap's so cool and snap had the glasses and snap is heavily used for one second so we can't see it >> yeah. >> that's what snap's about. my kids will not let me see what they snap. but instagram, post, post. my daughter has rebranded herself as a spectacular outdoor person using instagram >> we'll watch what snap does in st a the opening bell coming upju few minutes don't go anywhere.

you're watching cnbc, squawk on the street, live from the financial capital of the world the opening bell set to ring in just about 2 1/2 minutes keep your eye on dow 25,000. would be the fastest thousand-point surge in the history of the index, after hitting 24k on november 30th

and 20k in january of last year. by the way, the run on the last 1,000 points, about half of it is from five names that's boeing, cat, chevron, depot, and utx >> that's incredible it's incredible because of the vast difference in sectors, you have aerospace, the retailers spending a lot of money. you have capital machinery it's really great. and you had a tweet this morning about the first two days of the year >> s&p has had back-to-back closing highs to open the year, which hasn't happened since '64, which our friend followed the h said it was a 16% year. >> which is amazing. you have to go back to 1964. geesh, the country was -- you had president kennedy had cut capital gains. but there really -- cut the taxes which made it so it was a pretty good year in 64 but i've got to tell you, there was a terrible assassination, we

all remember but i've got to tell you that it's not nostalgia, it's insane. i mean, there is just an era of -- i said the other day, it's not a bull, it's not a bear. it's a beast and it is in beast mode. >> you're right about that and now we've got adp coming in at 250 >> hot >> by the way, of that, of the 250, 100k came from medium-sized businesses 94k from small business. the jobs number tomorrow, the president last night tweeting about the economy, said unemployment's at 4.1. and in his words, only getting better so we'll see what the number -- >> he's right. i've gotten -- now, look, there's a scramble to find employees in a lot of places but it is -- the people are doing what the president said would happen with tax reform they're hiring they're giving bonuses they're expanding. and the capital -- the accounting's changed it's working but people -- i'm happy to

mention that it's working. it's not saying, listen, vote for trump. i'm saying, it's working >> let's get to the opening bell on the s&p at the bottom of your screen at the big board today. it's planet fitness, a franchise and operator of fitness centers in north america and the caribbean at the nasdaq, mind/body, the technology platform for the wellness services industry. >> mind body on last night they do dynamic pricing for the really good spin instructors for the really good trainers that's their new thing it's a platform. also for haircuts, by the way. i'm tired of speaking to the people, all the haircut people treat my horribly. i get my hair cut constantly use this app and you can just fit yourself in. i have planet fitness tonight. but mind body is an interesting company. it's like open table for hair cuts and for salons >> we're watching the dow as we speak, jim we're about 19 points away from 25k. we talked about the economy.

jeremy grantham, well-known market watcher says we are currently entering the meltup phase of this very long bull market >> ken fisher, one of my absolute favorites, he's saying that could be happening. he likes europe more now but he says at the tail end, you do get this. we're getting exuberant, no doubt. but a lot of it has to do with the raising numbers. i mean, look, in the end, when you have bonnie herzog at wells fargo raising numbers for every consumer stock, when you have companies that are giant companies in retail, like a cvs or macy's doing better, what are you going to do? are you going fight it or recognize that maybe the maerrkt was cheaper than you thought because this tax reform was revolutionary and nobody thought it was going to happen >> you're attributing it to legislation that was signed days ago? >> i think that we're looking at numbers and saying that there's much more cash flow that's available for companies. and the companies are doing -- remember, they were supposed to just announce buybacks and dividends? maybe they do that on their

conference calls but what they're announcing is expansion. and they're also -- there are animal spirits in retail you don't get a plus 11 number at cost coast, because people are staying home these are extraordinary numbers. so, you've got retail doing well you have capital equipment doing well you have the president, you have steve bannon, is what they talk about today. bannon i don't care about bannon. i don't care about bannon. i care about jobs. >> it's striking how little we're talking about, even though, obviously, other networks are talking a lot -- >> and bannon doesn't put food on the table jobs do. i'm pro-jobs >> the list -- as we watch the index flirt with 25k here -- >> amazing this is amazing! >> it's a pretty broad mix of leaders today. cvs, nvidia, auto zone, mylan, target's up there today, jim >> okay, auto zone, because you have to still get -- amazon's in that business, but when cars break down because of winter, you use that and that's absolutely right.

now, nvidia is not because of intel's problems and the sub-optimal situation that brian krzanich, selling that stock he's the ceo what that is, i think, far more. and if you're buying it on that, you shouldn't. you shouldn't buy it on cryptocurrency we didn't even get to merrill saying no to cryptocurrency. nintendo, they are in the switch now, pokemongo is going to be introduced in china. and more importantly, nintendo said, listen, we're going to go from 10 million switch to 20 million switch if you smash open a switch, which i don't recommend, you will find nvidia chips and that's what's driving nvidia it's -- it's a remarkable stock. and if it takes out 217, all the shorts are going to finally have to say, it was a wrong thing to short that dog >> amd once again leading the s&p. >> i mean, lisa sue, this is her time sha she's a very tough ceo who's been waiting for a slip-up by the other guys and sthe ghe got.

>> people are selling retail, though >> the issue with retail is inventory. you know, the great mickey drexler taught me about this he said, look, you can't have too much inventory, but you can haven't too little inventory and it's a goldilocks scenario for those guys and what people are not recognizing, when you raise numbers for retailers, what will happen is, if there's no inventory, they can bring the spring stuff in and they pvh also going to do well here and vf corp., dom chu had a good piece this morning, talking about how they have northface, which has been a dog but it's no longer it had been really exciting and then it peaked macy's sells a huge amount of north fa northface. if you want to sell macy's, fine it's up almost 50% from when people thought no one was even going to see santa there but the margins are awfully good getting very close to 25k.

five or six points away. really quick, we mentioned dpz earlier. credit suisse does bring it to outperform >> i love that piece that he did. when you're staying at home, you go and buy a six of madelo, constellation numbers, they report tomorrow. and then you order pizza i mean, i can bring you tacos if i have to. >> they say that the q4 sales miss has largely been priced in. there's an investor day coming up on the 10th >> yeah, patty tells a great story. and people don't realize that the investor day -- >> there it is man, that graphic goes fast. dow 25,000, halfway between 20k and 30k. a little less than al ye year a crossing 20k >> that may be five inches on "the journal." we've got to focus on bannon, that's bigger than the dow the only guy who's really

tweeting about -- has he tweeted on it yet? what's he doing? he's got two tvs, isn't that something we learned >> it'll get there >> plus the shirt on the floor >> led by, as we said earlier, the classic names, boeing and cat, jim >> this is where you've got to -- if we fight back against china to preserve steel, which i think that when 232's invoked and wilbur ross pruushes it, you'll see those stocks get a hit. that will be your next chance. if you haven't taken that, wait for it it's coming up in mid-january, because nose companies are very heavy. if you haven't bought them yet, wait for the scare stories to come out and then china folds like a cheap suit they will. because they need our markets. and then you get another chance to buy both. >> are you in the camp that's calling for a mid-year slump >> no, i like the domestics more than i like -- at this point, the internationals have had a very big move. but aerospace cycle is just incredibly strong.

i'm hoping john flannery, when he reports in ge, tells you -- i want to know whether the engines are selling well the engines are good i want to hear about no problems there. that is, he's got oil going. it's kind of an oil stock now. he's got oil going the right direction. maybe the narrative can change look, it's not going to be like espn, where we don't talk about espn anymore, but he's got to get that narrative to change and the way to talk about it, john, i'm advising you here, is to talk about how it's an energy company that can sell off some energy, it's an aerospace company, it's a health care company, andwe we're going to f power. that's how you have ge going they have to fish the cash flow. >> ge, one of the leaders today, up almost a full percent >> and the volume. >> and amex, which had news of its own last night, regarding the year ahead, up more than a% today. over 100 >> that's a stock you want to own. there was a mastercard downgrade today that read like an upgrade. the payments processing business is on fire f.a.n.g. is back

it's better than ever. nvidia's about to take out its high these are where people are other than -- you know, merrill won't let you do bitcoin >> yeah, bespoke had a nice look at the -- if you divide last area's player in the s&p into deciles, it's the bottom decile that's doing the best in the first couple days of the year. >> it is amazing you -- well, look, scana, which was one of the top worst perform terse in the s&p got a bid from dominion i'll have dominion on tonight explaining that. but, yeah, the dogs are doing well exxon is outperforming chevron i think that's remarkable. ge was obviously down more than 40%. it's kind of inching back up these are strong i think that merck's a buy here. merck has got a 3% yield people have overlooked that stock in the great rotation into the cyclicals. i think there are a lot of things that are is on the bad. >> right, but the corollary is that the good performers are too expensive to a large degree.

>> i want the good performers to cool off a downgrade of illinois toolworks, cwhich i thought was unfortunate, it's got 8 to 10% growth they're worried about auto and construction of course, i'm worried that auto and construction are too hot but these are the stocks -- there's a parker hanafan upgrade i like i need to see the banks on fire. that's what i want i need leadership from jpmorgan wells fargo had a problem. i forget what it was was it stagecoach related? they opened some accounts -- >> there was some cross-selling going on >> that's why warren buffett likes it, i forgot geez, how we forget everything we forgeteverything. >> goldman did take wells to conviction buying. >> opened a lot of accounts. wells fargo is a great situation if the fed keeps raising it's really only intel that's

down and intel, brian krzanich just sold that $25 million. but that was a sell plan put in place october 30th it's a suboptimal optic. in retrospect, i thought brian was very good on tv. but it's advance micro that's -- dr. seuss should come on the show tonight >> intel is dragging the dow only a handful of components of the red. but intel's the loser among them for the second day in a row. >> but look at these cloud stocks they were just -- adobe. we thought adobe was a way you made homes in ancient times. adobe is now on fire this is amazing. it's amazing you see the restart of the cloud names because they had been terrible in the fourth quarter. terrible i mean, this is a new series of stocks that people are going into and i think a lot of people are repositioning and they're going into stuff that they had really

forgotten. at the same time, there will be people who say, listen, i've got to take profits, because we just crossed a dow milestone. there are always people who come out and say it they've done it -- they've done it 25 times. >> we've seen it 25 times, exactly. >> is you'll see programs selling. even though it seems silly, because things are indexed to the s&p. but you'll see programs selling that knocks the market down in 25,000 people will say, i have to sell because i have to sell very meaningful and rigorous >> for the time being, we're sitting just above 25k for the first time ever. bob pisani is on the floor >> three to one, advancing to declining stocks as we hit dow 25,000 and the sectors that advanced and got us there, still the ones that are advancing today semiconductors strong. banks did terrific we had a yields move up rather dramatically on the adp numbers this morning materials have been a winner all throughout the year. materials have been a laggard. they're down 10% in the last six weeks or so. no mean reversion there. nobody's buying utilities. if you look at etfs that are getting big moves.

the robotics etf out there that's been strong the copper miners have been strong that's copx. banks are up, and theeem, emerging markets, multi-year high there and that's one of the big outperformers of last year that's continuing into 2018. what's moving the markets? a bunch of things going on globally first, over in china, there were reports out of reuters that the chinese government is sticking with plans for around 6.5% gdp growth in 2019 the nikkei had a 26-year high, closed yesterday europe's up almost 22% we're seeing heavy volume over in europe this morning those adp numbers, 220,000, the estimate was 190,000 that moved stocks up and bond yields up as well. we've been talking about these big, round numbers in the last few days yesterday, nasdaq 7,000, today, 25,000 it's important to note, we're

just about a one-year milestone when we hit 20,000, january 17th of last year, 21,000 in march, 22,000 in august, 23,000 in october, and 24,000 in november. of course, now the differences are very small, only about 4 from 24,000 to 25,000. still a remarkable run there in the last year. and a lot of these old trading saws haven't worked in the last year, but here's one that did. the santa claus rally actually delivered. everyone was surprised, because it didn't start off very well. this is the propensity of stocks to move in the last five trading days to have the year and the first two trading days of the new year, and indeed, it was up, 1.1% this is the s&p 500. the historic average, 1.3% this one worked for a change so a lot of people keep wondering, why do we keep moving stocks up? it is not incredulous or unbelievable the tax cuts added fuel to the record earnings we've been having now we're talking about, instead of 10% up in 2018 on the earnings, we're talking 15, 16% that the tax cuts have added

that makes sense we're seeing continue global economic growth, we're seeing central banks on a low rate hike path and we're seeing inflation still relatively contained and now everyone's going to talk about what happens in 2018 the economic surprises have been stronger we don't know how much we're going to get out of infrastructure spending. it's not going to be a tax cut, but it's going to be something we're talking about modest wage increases and some people even have gdp of 3% we haven't seen that since 2005. those are real serious reasons why the market would stay up here the bears are talking about the high valuations, but when you have these very strong economic numbers, you can have high valuations for a long time yes, north korea is a worry, but not until something really happens. and inflation, el wit well, cant an economic expansion and not have inflation that's a big debate. i don't know if the phillips curve is dead or not, but people are debating it. important thing at this point is what kills rallies the two things historically that

has always killed rallies is, number one, a recession, and number two, aggressive fed rate hikes. i don't know if a recession is coming in 2018 i can tell you what the strategists think. unlikely as for an aggressive rate hike, how much clearer can they be about their very gradual glide path we've been talking about. if you get an overheated economy, that's your x factor. that could change things and the fed might get a little more aggressive and that might definitely impact the market but that's still on the horizon. dow 25,000 is now in the history books. >> let's get to the bond pits, as well. ruk san t rick santelli, busy morning at the cme in chicago hi, rick >> i agree with bob, santa claus rally in full force. what i disagree with is when it ban. i think it began november 8th 2016 we've covered a lot of handles there and i deny any fundamental balance sheet observer out there for stocks, put in a blind room, look at all the earnings since november 2016 and guess how many

handles the dow would have gone through. there's something going on here. and i still haven't heard a description that fits along with my thinking. i think it's pretty easier either you have d.c. hunked in front of the roadway, so nobody gets through, or they're not in front of the freeway of capitalism and we all get through. because that's what i see happening. and it isn't a move, it's a repricing. and it is a bit like a commodity, it is a bit like nasdaq in 99, 2000 this repricing may not end until 30,000 i won my bet i bet two months ago that the dow would hit 25k before bitcoin and i wasn't alone and we were ridiculed. this is nothing about bitcoin, and i applaud merrill lynch merrill lynch. let's look at intradays of tens. adp finds 250,000 jobs, even though we've been at full employment for how long? there's another metric you can put in the fireplace look at an intraday of bunds

they went up and then they went down 2018 is going to be about crushing some of these correlations we've set the spread three basis points wider on the difference of tens and bunds. two-year note yield, 196, 197, last time it happens is 2008 2008 encompassed a 3% trade. so we take that back to september. but we might bust through that if you look at five years, you're looking at tax time of 2011 finally, the dog it's not part of the dow, it's part of our wallets. intraday dollar index. yesterday on the minutes, the fact that things may be happening a bit quicker, maybe jay powell will wake up and scratch the sleep out of his eyes running the fed one thing is undeniable. whatever reason i can't put my finger on in a simple fashion, the dollar index avoids all fundamentals that normally takes its higher it's probably because it's about europe hey, they growing pretty well. it's just that their foundation is based on negative rates and that isn't going to end well,

but it probably isn't going to end anytime soon carl and jim, back to you. >> thank you so much, rick rick santelli at the cme in chicago. there's been some news out of washington today kayla tausche joins us with some breaking news. >> it concerns an announcement that we are now expecting a little bit later this morning. senior doj sources telling nbc news that attorney general sessions is expected to rescind the obama-era loosening of marijuana-related enforcement. remember, in 2009, the obama administration directed federal prosecutors to shift their resources away from pursuing marijuana-related offenses today, sessions is expected to announce that federal prosecutors in those states where marijuana is legal can decide whether to pursue these cases now. of course, businesses wanted regulation to go in the other direction in order to be able to process payments and sell across state lines. but it appears that the department of justice is now rearming federal prosecutors to pursue marijuana cases in states

where pot is legal we'll get you a little bit more when we get the announcement today. i'm sure there will be nuance to it but it will be a very important development for that industry. back to you. >> that's a big story, kayla thank you very much, kayla tausche. interesting. if it's up to individual u.s. attorneys, as our friend josh brown said today, there's going to be some action in the penny stocks >> yes, absolutely josh is right. this is not something that i think the u.s. attorneys want to spend a lot of time on but it's -- because the trend is obviously going the other way. but i think that people have to recognize that if you're going to go to jail for this stuff, it's kind of going to cool the movement >> added layer of risk, for sure dow is up 106 points again, dow 25k for the first time ever with about two-thirds of the component s in the green we're back in a moment

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dow 25k is in the history books as pisani said, up 116, being led by some big names. jpm and american express. >> intel even the ones that should be good i'm focused on today stop trading, bmware, sales force.com, workday up graded by key. these are the stocks that did nothing in the fourth quarter. everyone was concerned maybe the cloud is not growing no, the stocks had just cooled now they're back. >> sales force retraced maybe half of its losses since thanksgiving. >> i think there will be big announcements of banks adopting sales force that have not yet. i think they're going to rock the stock higher. >> we'll watch crm news this morning as well as out of washington. eamon jabers for that. >> just obtained a copy of a legal letter sent by the president's personal attorney to the publisher of that michael

wolffe book and to michael wolffe himself a cease and desist let irto the publisher and michael wolffe directly the letter is addressed to steve ruben, president and publisher of henry holt and company and to wolff. it says, there are demands from the president himself. they say mr. trump's making demands. he demands you immediately cease and desist from further publication, release or dissemination nation of the books. articles or summaries of them to any person or entity and issue a full and complete retraction to my client and all statements that lack competent evidentiary support. we see here an allegation there was an inducement of breach of mr. steve bannon's written agreement, his nondisclosure agreement with the trump campaign they're also asking for the publisher and wolff to immediately send a copy of the

book and send a messenger with a hard copy of the book to the president's personal attorney. i've got a statement bear with me this is a statement from charles harder, the president's personal attorney saying this law firm represents president trump and donald j. trump for president, inc. legal notice was issued to steve bannon that his actions of communicating with michael wolffe give rise to numerous legal claims including breach of his written confidentiality and nondisparagement agreement with our client legal action is imminent the people who received the letters from the president's attorney include steve bannon, the former chief extravagant gist, michael wolffe, the author of the book and the publisher of the book the president wants this book not to come out. unclear, there's going to be legal sorting out to do figuring out what the claims are made in the letters. unclear whether that will be a successful legal strategy or this is more so of a political

strategy to push back here against the claims made by michael wolffe so the white house can say this is absolutely false. we heard that from the white house press secretary yesterday saying this book was full of lies and falsehoods and there were a lot of things that didn't match her experience in the white house. the white house very aggressively pushing back. >> eamon, a couple things occur to us. this comes a day after manafort sues to rein in the mueller investigation. now this we're going to be seeing very interesting legal machinations there's also the question of how much discovery will be -- would come about as a result of any legal action >> that's the question. >> books have been destroyed. >> the president has repeatedly threatened to sue various people and has done it. largely because you don't want to get involved in discovery if you've got something you're concerned about becoming public. the president is concerned about all of this becoming public. whether there had is a legal

shot across the bow or an actual lawsuit pending we'll have to wait and see there are reasons why the president might not want to move forward. >> eamon, thank you very much for that a busy day in d.c., as well. "mad money" tonight. >> planet business and dominion. i think that dominican did that deal with scana. i think the retailers should be bought transports are very strong i like a lot of the action the banks are leading us that's a good market. >> that is true. >> bank of america is 30 can you believe it >> jim, we'll see you tonight. dow sittg ose incl0 session highs up 137 with dow 25k in the books.

good thursday morning welcome back i'm carl quintanilla with melissa lee, david and sarah are off. 258k on the dow. we hit it right at the opening bell with the blue chips up 150 points a lot going on, whether that's here or in washington. we're keeping an eye on all this with the s&p at 2726 of stocks, huge milestone. the dow hitting 25,000 for the first time ever. a little over a month after 24k. we'll look at the stocks that led the way and how high we may go this way. >> a massive storm making its

way up the east coast. lou it's impacts businesses and gas prices >> the ceo of intel reportedly selling a large stake in his firm after he found out about a massive security flaw. what he said straight ahead. >> first straight to this huge milestone day for stocks dow hitting 25,000 for the first time ever as markets continue to march higher despite turmoil at the white house. stewart and sam stovall chief investment strategist. good to see you. sam, you established your s&p 500 at 2800. which doesn't sound very bullish implying a 3% move from yesterday's close. here we are setting milestone after milestone. what's holding you back? >> i feel like a dieter who has a calorie allotment and gone-to-through half to three-quarters of that by 9:00

a.m. right now wall street is anticipating earnings of $145 for the s&p 500. our estimate is more like $155 based on the benefit of an improving economy as well as the tax cuts but i think wall street is basically saying no, we're going to go even higher than that. at the same time, put in an unreasonable pe multiple in order to come up with numbers that are like 3,000 up to 3300 so i find a lot of strategists are trying to jump over other people's estimates >> stewart, do you feel the same assam in terms of maybe front loading our gains for the year it's not just the dow, of course, today. the s&p as well as the nasdaq trading at record highs. >> you know, yesterday, we raised our numbers we raised our gdp expectations to 2.9%. we're at 2.3 in the middle of the year in '17. largely due to continuing

fundamental growth and the tax plan and job growth could result from spending and cap x expensing that takes place during 2018. we also raised earnings number to 152 the middle of last year, we were at $138. for the s&p. we're at $152. not far off here and our target is now 2800 to 2900. i mean, bull markets make new highs. it's what they do. valuations are stretched but if you look at them, they're in line with bonds. they're not ahead of bonds and you know, it's very unusual have inflation this low at this late in the cycle. it's a good reason why multiples could stay higher longer >> to that point, sam, you characterize some of the bullish forecasts as kind of sitting on unreasonable multiples potentially of this higher earnings level so is that implicitly saying we'll get the bump from the tax

benefit but the market itself is not necessarily going to build upon that at the same rate we've done right here? why wouldn't it? could we not say this is extending the life of the bull market and the fundamental story? >> i believe the bull market will make all-time highs and also establish a record, give us only eight months, we'll be at a brand-new record in terms of the duration of the bull market since world war ii we saw last year the first time in ordered history that we had 12 success kiv months of total return advances. and so typically, we see declines of 5% or more every six months and have not seen one in 23 months. so in my opinion, it's just a matter of time before we see some digestion of those gains. looking at housing start data, consumer confidence and the yield curve, i don't see recession. therefore, i don't see the end of the bull market. >> to the degree we see a pause, do you think 5% does it? >> right now we're overvalued by

more than 10%. let's face it, the street, why isn't the street shooting up with earnings estimates right now if the basis of the tax cut has been aware of for quite some time i think it's because we're not going from 35% down to 21% we're going from 25.6% tax rate down to 21%. maybe it adds 5 percentage points to earnings it is not a 159 percentage point boost. >> why hasn't the street lifted their earnings, the street's usually late the streets wait till the companies come out and exactly say what the impact is it's going to be a big one, stewart, in terms of fourth quarter reporting season on the conference calls we're going to see companies taking a hit because accounting practices from the tax code. we're going to have much more detailed elab rags how it's going to produce earnings. afterwards, i would expect that a lot of analysts would play

catchup in terms of adjusting earnings estimates >> yeah. we may see some hits early on and maybe some hits due to the weather right now. snow issues when the market's looking ahead at what possibly could, probably will unless we get inflation, significant inflation, an extension of the cycle for you know, maybe a year, maybe an extra year. and more job growth. it's nice that the interest rate cuts 4 percentage points, however you want to look at it, is going to help earnings. but the cap x expensing should allow for a great deal of spending and more cap x is weighted towards '18 as opposed to evenly out over time. i think you know, a lot of the growth could come at the top line for some companies as they benefit from cap x spending of

other companies and also -- so that cap x part is the most important number that drives earnings up we think as we look into this year and next year. >> sam, so if i want more than a 3% return on the year with, do i go >> small caps. because 50% of the companies in the s&p will end up benefitting from the tax cuts more than 60% of companies in the small cap will benefit so if we have an equivalent rise in earnings for small caps as we're anticipating for large caps plus applying a 16% premium to the multiple which historically we have seen, that implies instead of a mid single digit gain for large caps, we could see a mid teens price advance for the maul caps. >> sam and stuart, thank you >> thank you 25k is one story the other big one is the is blizzard slamming the east coast with days of freezing temperatures ahead let's get to contessa brewner boston this morning. morning again, contessa. >> good morning, carl.

the snow is coming down at a steady clip here the good news is, it's relatively balmy at 26 degrees the bad news is the windchill is 12 at this point we're still seeing people out and about today. but as it stands, the national weather service revised upwards the amount of snowfall the greater boston area could get. could get as much as 18 inches now. what we're seeing from the power companies is they're bracing for significant impact for the power customers. national grid says they expect some 9% of customers to lose power and they could be without electricity up to 72 hours part of the problem here is that the weather has been so cold that the sap inside these trees has already frozen and expanded. it makes the trees very vulnerable now to wind less able to withstand blizzard force winds expected in just a few hours. we know that the hospitals are on standby they have their staff sleeping on site or nearby in hotels so that they can handle the influx.

they expect is the weather to be a real problem because of hypothermia and shoveling-related injuries at this point four different emergency vehicles equipped with sleds so that the crews can get in and out with supplies or carrying people businesses have been encouraged to allow employees to work from home or stay at home today what we're seeing here along copley square is some bys like the cvs are open others have notes on the door saying they're closed for the storm. the governor says he can't have people out on the roads today when the visibility will be bad, blowing wind will be bad and snow accumulation will be bad, as well. who is at work today the patriots coach bill belichick told his players they better not be late for practice. they live in new england and should be used to it right now apparently a lot of people following suit. >> i don't see him giving the players school days. contessa brewner boston.

this change in federal marijuana policy is going to give us a market flash. >> absolutely. we're watching shares of scotts miracle grow they are taking a hit in early trading down about 5% on the heels of headlines from jeff sessions according to sources telling nbc news, sessions will look to dismantle obama era policies that helped pave the way for the legalization of marijuana. scott's shares have been gaining in part because of the perception they could benefit as more farmers benefit marijuana for commercial consumption and rallied sharply in the last week as pot shochs opened legally right after the new year back over to you. >>. >> two stocks not participating in this morning's massive rally, tesla and intel. more on the electric carmakers security issue and the security flaw weighing on intel w u134. ok, so with the award-wing geico mobile app, our customers have 24/7 access, digital id cards,

they can even pay their bill- (beep) bill has joined the call. hey bill, we're just- phone: hi guys, bill here. do we have julia on the line too? 'k, well we'll just- phone: hey sorry. i had you muted. well yea let's just- phone: so what i was thinking- ok well we'll- phone: yeah- let's just go ahead- phone: oh alright- the award-winning geico app. download it today.

dow 25,000 in the books for now. hitting that huge milestone for the first time ever this

morning. dominic chu joins us back at hq for a look which stocks got us from 20k to 25,000. >> mike that, 5,000 point move just took about a year january 25th of 2017 was the first time we crossed that mark and closed above there almost a year to get to that 5,000 point mark 25% rise let's take a look at some of the stocks that have gotten us there because the bulk of gains have come from five names particular if you look at the biggest point contributor from 20,000 to 25,000, boing shares 89 points add the just because of boeing alone. unitedhealth group, 429 points from them. boeing a far leap above and beyond all the other ones out there. chat pillar added 407 points by itself it, 3m added 306 points and home depot added 355 if you take the five stocks, add them all together, we're talking just about half of the

5,000-point move in the dow in that time span just because of these five names, nearly 2500 points that have 5,000-point move back over to you, melissa. >> thanks so much. intel and some of the other chipmakers are scramblinging to pass security flaws in chips that power nearly all the worlds pa cz, phones and data centers john >> thanks. intel ceo's telling me that this isn't just an intel problem, it's industrywide for high performance computing devices. some phones and tablets could be affected, too. intel rival amd pushing back on that a bit pointing out its chips aren't vulnerable to all three of the exploits that researchers found mainly just one of them. intel saying the actual problem might not be as pressing as some make it out to be. >> we found no instances of anybody actually executing this

exploit. so we found no case where somebody's done this but what we constantly are learning and you see this from time to time across everyone's products is that we are finding things that we need to patch and fix in order to avoid somebody exploiting this. and that's why we say it's not a flaw it's working like it should. >> well, easy to say it's not a flaw any vulnerability this be widespreaded that could result in passwords being lost is serious and cloud providers especially have rushed to protect cloud customers who can see their data at risk amazon, microsoft, google assuring customers they're taking necessary steps to protect data at the same time, for hackers to exploit this vulnerability, they would have to actually get software running on a system that has the passwords on it they want to collect it's not as if this is easy to do remotely.

still, we've got so many different factors at play here that breaches have been very much in the news people are concerned about this. it's widespread. there's also the issue of the stock sale not long ago that was as jim cramer mentioned earlier today one of those scheduled sales. so optically. >> sub optimal >> selling stock, ceos selling stocks always sub optimal. this is one that had already been set up. >> during the session when you're doing this interview, you saw intel pare its losses and amd pare its gains the disparity between the two is even greater amd is trading now at even high level than yesterday what's your take on what either amd said in response or what kryzanich said that's causing stocks to move again >> to some extent amd is less

susceptible to this issue overall, the vulnerability called melt down is particularly in intel though that is being patched at a level that seems like it will deal with most of the industry concerns, overall because amd has been on the upswing, they've got a great systolic new chips out, this is potentially good for them because some people will probably look at this and say there are some problems was intel's high performance chips sometimes that are specifically just intel maybe we should buy more amd in the future at least gives them the opening. overall, it doesn't look like something like in the past i asked bryan specifically about the floating point controversy from a generation ago. it doesn't look like something on that scale where it's like intel made a design error specifically causing problems with the way computers operated. this is a bit different. >> how quickly or dramatically can those market share shifts happen when you see the market move the way it has here, that's one of

the interesting things. >> not as quickly as in the past it used to be this is a pc war, largely retail battle. enterprise going out and buying laptops and pcs and it was a growing business now the cloud providers are determining this they are buying chips not just off the shelf but making lots of customizations which is why intel bought altera. there are a number of factors that cloud providers have to consider when deciding where to buy from chances are they're not just going to switch to amd on something like this especially because the specter of vulnerability potentially affects everybody. it's not like doing a switch like that will take care of all the problems. >> john, great interview continued coverage of this market milestone art cashin is standing in the wings all ready to go and will join us on set check out shares of macy's sliding after the taerreil said it is expecting sales for the

full year to decline sharply "squawk on the street" back right after this

let's get a market flash we'll go to julia boorstin in l.a. good morning >> two companies that went public last year are seeing their stock plummet today, snap shares falling over 4% after it was downgraded to underperform and lowered its price target following a survey that found ad buyers preferred instagram stories over snap ads. roku shares gaining 6% yesterday are down over 7% today morgan stanley downgraded the stocking to underweight saying the current valuation is hard to justify. roku shares down about 7.5%. back to you. >> julia, thank you very much. as we said earlier, dow hit the

25k milestone. art cashin is here with us with more on therally everyone wants to know where you get these hats if you've got them all the way to 35,000 somewhere. >> no, we keep following the rally. when there's some degree of certitude, we get the little men sitting down at his sewing machine and out comes another hat. we're starting to vary the color now, too >> i noticed that. >> what does it mean, 25k? >> you know, as the a psychological thing. importantly, the market's had a kind of change of attitude you know, last week we were thinking we would have to put san tap clause's face on a milk carton the year was not going to be bright new money for the new year kept pouring in seems to continue to pour in today. that puts us in reasonably good stride we've had a series of years in which we had an outstanding thing like a 20% rise. if you get just the right kind of action, you get a rather

satisfactory 10% follow-up and i would take that in a heart beat so we'll wait and see. we've got a couple other things coming up here you want to finish the first week that's a booed signal. secondarily, if we canlet's che.

but let's give it a look. >> a january february, barometer. >> it's the beginning of january, it's the first week of january. it's the month of january. but the point being that if you want a little more certitude, if you get through the january rally and you can continue to

rally and it doesn't have to be a rocket blast you don't have to go parabolic if we continue to steadily move up into the end of february, then it's almost a thousand% historic batting average so we'll wait and see. now last year was not good for historic seasonal patterns we'll hope that this year gets back to normal see where we go. >> thanks, art. >> nice to be here and nice to have my hat ready. >> we are a little bit under an hour into trading. that dow hitting the 25,000 mark for the first time our etf spotlight today, we're looking at dow stocks in places you might not expect to find them here's an etf. msci, usa momentum etf essentially it's a smarter beta etf which selects stocks based on displayed share price momentum it's basically piling into the

stocks that have shown very good relative strength. other criteria, as well. what's fascinating it's not necessarily the most high octane kind of glamour stocks you might expect to see in a fund like this it's tech 38% of this fund is in tech, 20% in financials. those are some of the leading sectors. 15% in health care and on down the dow stocks you'll find in here is fascinating. six of the eight largest holdings in this fund as of last night are dow stocks jpmorg jpmorgan, apple, boeing, microsoft, and visa sa these global bellwethers, these companies exposed to global growth as well as some of the big tech names have been leaders but it is fascinating and reminds me of early 2017 last year when you started to see the technology weighting in the low volatility etf go up a lot tech stocks were cast in a different role as very safe

defensive stocks right here. right here dow stocks have been where the momentum has been. it's not necessarily what you would expect. >> how do they define momentum. >> it's a statistical definition look at the strength of these stocks as it's performed well. first of all, it's one of the factors over time has held pretty true. value and momentum are basically the two core ingredients of quantitative strategieses. nothing's guaranteed but this fund has been up well more than the s&p. i think 37% or something in the last 12 months. >> the discussion this week as well as about if you want exposure to tech, you have to play large caps over mid and small caps >> the way to market entirely setup right now, betting on the s&p is betting big betting on these huge big tech platform companies that are the consensus winners. you want to talk about risk out of left field, it would

something undermining confidence in digital advertising or smartphone development. >> that's a leap when you're talking about big changes, voice activated internet we haven't gotten to things like mobility and artificial intelligence yet. >> the secul cue wave it's so stronging. > shares shares of tesla under pressure after the carmaker reported weaker than expected deliveries >> it's not just the deliveries in the fourth quarter coming in at 15.50 versus most expecting 2500 it's the guidance for ramping up production of the model 3. their previous guidance was 5,000 per week by the end of q1. before that it was supposed to be at the end of q4. by the end of request 1. now they're saying it will be just 2500 model 3s per week and 5,000 per week by the end of q2. you would think that potentially

wall street would slam them on slowing down the ramp up of the model 3. that's not what we're seeing today. ever corp isi, model 3, pain, pain, won't go away. deutsche banc growing pains once again, focus attention on cash morgan stanley, delayed model 3 ramp still two times our forecast we buy the dip and if you are bullish on the future of tesla, if you really think that the model 3 is going to pay off, this is one of those dips you take a look at. shares of tesla over the last year, we're nowhere close to where we were he were earlier this year. it is not down in the 2 0 range a lot of people talk about, but it is a dip that gets some attention. in terms of overall deliveries, yes, tesla did exceed forecast of delivering about 100,000 vehicles officially they've abdelivered just over 101,000. but the guidance changed so many times, guys, that i hear very few people saying they're going to deliver x number of vehicles

this year. it's about the model 3 it's not about overall production it's about the model 3 >> and there are certain other issues that extrapolate from the ramp of the model 3. margins in terms of margins efficiency won't ramp as quickly as anticipated by wall street. you run the risk that consumers might cancel reservations. it's not clear if they'll lose their deposit money if they cancel because they've got to wait longer for the 3 ramp. >> i'm going to be in the camp of we'll not see widespread cancellation of reservations most people who put in a reservation believe in the company and had the reservations in for a couple years. so they've got to wait eight or nine months, i don't think they're going to cancel on that. you bring up a good point in terms of margins, cash flow and in terms of whether or not this company needs another capital raise as it continues to work through production issues.

>> and in terms of the margins, jeffrey osborn was making the point that they were discounting or promoting s & x there was pressure on that part. the model 3 ramp challenges margins overall. that challenges the ability to raise money especially when the latest offering is trading below par at this point. wall street, have they come around to the idea that perhaps it might be harder for tes las to raise money when they need to go to market once again? >> i think they believe it might be a little bit harder but nobody believes it's going to be impossible nor will they think of it as a hurdle that can't be overcome >> yeah. >> hence all the buys out there on shares. phil, thanks a lot phil lebeau. >> you bet. >> now over to landon dowd for a news update. >> here's your cnbc news update. a blizzard pounding the northeast. strong winds and snow began pounding the jersey shore. massachusetts started dealing

with 60-mile-per-hour wind gusts. the snow could pile as high as 1 inches in portions of new england today. a fiery train crash in south africa involving a truck trying to cross the tracks. officials say at least 12 people have been killed and more than 260 people injured the train burst into flames after the collision. a dangerous strain of e. coli sickening nearly 60 people in the u.s. and canada canadian health authorities linked it to romaine lettuce the cdc in the u.s. has not determined the source. and the powerball jackpot is getting bigger no one won wednesday's $460 million prize. it would have been the biggest, the seventh largest payout in the game's history don't worry, you get a chance to play again on saturday for an even bigger prize, $550 million. that's our jus update at this hour jackie deangel lis >> you can see natural gas prices are slightly lower after

the eia reported a drawdown in inventories of 206 billion cubic feet that's a lot, twice the five-year average but it was a little bit less than expectations obviously the arctic blast is bringing demand up for natural gas. you can see these prices have been on the rise up about 3% on the week i will say this. as a result of fracking, the whole game has been changed when it comes to supplies now trading over 3 billion cubic feet. a lot of gas is in storage that's why the prices aren't going out of control in 2014 in february we saw them go as high as $6 they're trading right now just under $3, guys. >> thank you very much when we come back, continued coverage of this market rally. dow up 162 now 84 points above 25k and new 52 week highs on the s&p. amazon among them. back in a minute well sure, at first, but jj can help you with that.

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could it go from worse to firsts a beaten down ge getting a big start to t yr.heea should you trust the rally find outat tradingnation.cnbc.com more "squawk on the street" coming up. the dow surges past 2d

nasdaq also rallying it's all board the bull. brian, it's good to have you back what a day historic the question is, how much it portends about the year. what do you say? >> thank you so much for having us happy new year thank you for having the great art cashin on early this morning. this is the perspective your viewers need to hear 50 years of experience and the problem that we see with the majority of our clients around the world especially on the institutional side, majority o our clients have never seen a bull market before the majority of clients running money with ten years or less of experience have never seen this.

the bull market is very much alive. we came out in 2009 and said the u.s. stock market was entering a 20 to 25-year bull market. we think it continues. mr. cashin was boong on in terms of statistics. when you see a year that has 20% upside, it typically sees the next year up at least double digits i think we're positioned for that not just because we're bullish, not just because this is a momentum market but because fundamentals, carl, continue to tell you and tell us from a fundamental perspective that u.s. stocks are heading higher >> all right so year end target is, am i right, 2950? >> yeah, 2950. we initiated that november 17th of the past year our earnings number is 145 in the next few minutes, we're publishing an updated number post the tax follow-through. our number previously did not include taxes. when you look at where we think multiples could be, that's

around 1 times with our new number we think that's a pretty good number if you think back to the '90s when we were so concentrated, especially the late '90s in tech stocks in, the mid '90s, the u.s. stock market was exceedingly concentrated in things like consumer staples and nifty 50 what we've seen in this bull market especially near term in the fourth quarter but the let's call three days a trend, we've seen a bit of broadening out of the rally which we think is very, very positive on a short-term basis as long as we continue on with respect to earnings growth going up, we think multiples will flatten in 2018. something that you're not hearing from other people and something we think a lot of investors haven't seen during this bull market since 2009. >> brian, i guess the question is, you say all board. when do you know that everyone's aboard i know you're talking to clients. they don't have the muscle memory from prior bull markets most of the indicators of equity

exposures, what real money is doing, it's not as if people are as crazy as they've ever been in history but they're generally buying into the notion that thing look good and therefore, stocks are positioned to do okay do you dispute that idea >> no, we don't. it's a great point i think this a couple things. number one, mackerel investorses have massively underperformed the last two years last year. who are the investors? those that is only look at data points based on gdp or other macro data points or quantitative data points these are backward looking art of fundamental investing, we're calling ourselves the patron saint of investing. people don't look at stories or earnings like we did in the '80s or 90s that's why we've been able to call markets correctly but more importantly the portfolios we run have been more positive. when do we pull the cork when all the macro guys become

super bullish, economists admit they missed the market and some very bearish brokerage firms decide to say forget it. now we'll turnbullish on a near term sentiment basis, that would be really negative we'll see a pull back at some point. fundamentals continue to lead the market that's the key thing that most investors are missing. > based on what you like in terms of sectors, it does look like you might be aligned with macro investors and levered to a sickly cal of here >> that's a great point. we look at sectors on a 12-1-month time frame. we were overweight health care last year. now we think those multiples are fairly valued and seen a nice rebound in biotech stocks. that's more bottom fishing financials is a big trade. the majority of our investors around the world are massively

underweight financials with respect to technology, we've been positive for a long time i think a market weight but being more positioned in the big cash-rich industrial type tech names that have been leading the way warrants a better and bigger position within that sector. >> brian, just in terms of risks, people point to balance sheet expansion slowing down, savings rate has peaked, inflation risk, labor tightness, more hawkish fed how do you account for those, if at all >> inflation is what most people are talking about. what we need to start thinking about is more a growth surprise on the upside that would actually potentially force the fed to become a little bit more aggressive let's be clear mr. powell is laying the same playbook that miss yellen played until we start to see a growth surprise, the fed will not be more aggressive. that's going to be what people will be looking for. i think all of this notion with

respect to rhetoric out of washington proved that's not the right indicator to look at and base your investment decisions on but going forward, the biggest i think taylor i'm sorry headwind that could hit the markets is everybody's talking about global synchronized growth again. what if global growth begins to slow down? clearly on the u.s. side, north american growth remains solid. what if we do see some sort of headwind facing emerging markets? that could be something people are not positioned for accordingly. >> we look forward to seeing your updated report, brian good to talk to you. brian bell ski talking about this rally dow is now sup 167 let's get to rick at the santelli exchanging. > hi, carl i'd like to welcome jim karen from morgan stanley. thanks for taking the time today. >> happy new year. >> happy new year. you wrote something in your most recent writing, the fed is not

tightening i know what you meant. give us a brief explanation of exactly what you're describing with that statement. >> sure, so the fed is certainly increasing interest rates but they're not tightening financial conditions they're not increasing interest rates at a pace creating equity markets to go down or spreads necessarily widen. they're not trying to tighten meaning slow the economy what they're doing is just removing the excess accommodation that they put into the markets over the past several years. >> all right having said that, i look up there morning and see 250,000 on the adp jobs this comes after years and years and years of the fed and all the fed telling us we're getting close, we're at full employment. 95 million able bodied people not working isn't going to be a pool to choose from. to me, i think that's the wrong statement. what do you think? >> i think that's wrong, as well we have to look at the underep employed, as well and some of

the broader measures of unemployment like the u6 numbers out there. which in many cases what we're seeing is a lot of people that have been as the term goes, have been sitting on the couch are now coming back into the workforce because the economy is actually thriving more than it was in the past. there's more demand for labor and jobs there's more job openings coming up, and people with are getting back employeded. we're seeing surges in jobs being created which is significant and i think it's going to be strong for the economy going forward. that's starting to come into the markets just now rick, what we're not seeing at this point is wages necessarily going higher what that's doing effectively is keeping profit margins for corporations relatively high that means that equity markets and other risky assets can continue to perform well as long as margins stay relatively high. at some point wages go up and that's a good thing. we need that to happen that could also be something that slows the cycle down that

we're currently in >> all right, my final thought is, i looked at the low jobless claims number today. 250,000. realizing that 223,000 from 2017 was the lowest going back to the '70s every year i've been on the trading floor, you always get seasonal abnormalities around holidays and usually claims spike. if we assume 250 was the spike, what are the low initial claims telling us about future job numbers? >> this is telling us that job numbers are probably going to continue to be strong. we're also probably getting some surge in jobs from the hurricanes that we had over the past couple months sol of that still coming back into the market. we're getting a little bit of tail wind there. the way we look at it today, jobs look good housing looks pretty good. equity markets look good and bond marks we don't think yields will necessarily spike to levels destructive for the economy because the fed is not going to

tighten. they might hike rates but at a very slow pace an we're looking at easy financial conditions we think it's going to be a decent market even for fixed income even as interest rates rise because we don't think the rates will rise all that much. >> i got you i agree with you if you're looking for a drastically steeper kreeld curve, 201 may not be your year. melissa lee, back to you. >> rick, thank you let's send it over to john with a look what is coming up on "squawk alley." >> another day of trouble -- down 4% and up better than 6% this morning as the fallout continues over this vulnerability not just in intel op as, in multiple chips that pelere trying to figure out what to do about we'll dig into that coming up on "squawk alley. hi, i'm joan lunden with a place for mom

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welcome back to "squawk on the street." i'm dominic chu. another day, another record high for stocks with the s&p 500 on record highs the best performing sector today is the financials. among the leaders, etrade, moody's, american express. the sector is the fifth best performer in the past 12 months, 20% gain financials ones to watch, carl

back over to you >> thank you very much, dominic chu. let's get over to angie lassman with an update on the massive east coast winter storm. angie? >> yeah, we're continuing to watch this nor'easter massively move up the east coast it's been affecting the southeast, midatlantic, still is, and now, of course, really bringing its wrath to the northeast. here's what's going on let's peek at the latest radar over the last three hours, the swath of snowfall stretching down from virginia, up into portions of maine. we continue to see this through the day today. the good news is, by the time we wrap up the day today, we'll start to see the snow calming down that doesn't mean we're in the clear as far as winter weather, because we have a big cool down, frigid temperatures headed our way on the backside of this storm. we deal with the snow and decreased visibilities right now. keep in mind the blowing wind is going to cause a lot of issues it already is as far as travel goes if you notice our snowfall

forecast, we've actually upped it we are talking anywhere from a foot to a foot and a half up through portions of maine. you can see new york city right on the fine line where i think the long island area is going to be dealing with about eight inches to maybe a foot of snow maybe a little less for new york city, but still we have plenty of snow out there. and this is going to be the story through the day today. we've already seen the blizzard conditions lasting it has to be three hours we are seeing the decreased visibilities thanks to winds up to 35 miles per hour tough conditions out there like i said, guys, behind this much, much colder conditions you'll want to get the snow shovelled up today, if possible. back to you. >> we're waiting for the cold. thank you very much, angie the president has weighed in on the dow's big milestone today, tweeted "dow just crashes through 25,000 congrats big cuts in unnecessary regulations continuing." we thought he might press the button on a tweet when it happened at the open >> not the big button. >> not that button >> another button.

this lines up with what we're seeing in today's market dom was highlighting the gain in financials, leadership in financials we've seen. not just today, but in the past year or so interesting dom highlighted etrade, which was highlighted just yesterday as one of the biggest policy beneficiaries that notion of deregulation will help with the financials here. >> maybe the news reading should maybe not pay attention to dow and crashes in the same tweet. getting back to the winter storm, the arctic air and blizzards are sparking record demand, helping to send oil prices to the highest levels in two and a half years for more on the storm's impact on energy, joined by again capital's john kilduff good to see you. we got the eia numbers this morning. record natural gas consumption based on the cold. where do we sit with natural gas supply and demand for the winter >> this morning's number was a little below expectations, but

still the blockbuster number, mike, double last year's withdrawal, 206 bcf, 100 last year, 100 this time of year during the five-year average because of these epic weather conditions i can tell you, i was out driving in this stuff and some of the worst conditions i've seen in years. so this cold air mass that the weather folks have been talking about that's going to come in behind this storm is probably going to produce a withdrawal of gas from storage next week of over 300 billion cubic feet. now we're going to chew through upwards of 25% to 30% of the gas we had in storage, and we're not even into the middle of january yet. so the demand dynamic has spiked through the roof natural gas prices, mike, were $2.56 or so on christmas week, over $3 today and looks like they are heading much higher >> two follow-up questions one, can the utilities raise prices, or is that why utility

stocks have been down so much, and is it good for the exploration stocks >> it's very good for the industry natural gas prices have been more for years now this is good news. it also shows that the demand use intensity, the amount of gas that gets used when it's hot out or cold like it is right now has really displaced a lot of coal usage, so you're seeing that natural gas has truly become the fuel of choice for the industry. the thing for consumers, you won't feel it yet, but you will feel it in the months ahead, as the utilities go and petition for the rate increases that they have to eat right now. yes, this is not great news for the utilities. much better news for the producers. >> all right so is it just weather, anything else we have to keep in mind especially when it comes to crude at this point. >> well, keep it on natural gas for one second, the prospects for natural gas are improving by the day because of the increase

in exports of gas we're going to see from liquefied natural gas and also, too, we're exporting a lot more gas these days than we have before to mexico. but, yes, this demand that we're seeing for heat and electricity, because that's how a lot of folks heat their houses, is being met by heating oil and diesel fuels because some of the utilities have to get switched off. >> john, thanks very much. have to run. appreciate it. when we come back, more continued coverage of dow 25,000 back in a minute [ male announcer ] eligible for medicare?

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will answer some of your questions and help you find the aarp medicare supplement plan that's right for you. welcome back to "squawk on the street." i'm jackie deangelis we are waiting for the inventory report on crude oil. you can see prices trading higher today, $61.68 overnight we hit a two and a half year high of $62.21, coming from an expected draw in inventories this morning, but also on tensions in the middle east iran specifically and also the opec cuts are keeping us up. right now we are