big bets when he needs to. couple of years ago in a championship game, when his team was losing, he did an onside kick at halftime big gamble, it paid off, they won. last night, he changed quarterbacks at halftime big gamble paid off won. that's what great ceos do. thanks for watching "power lunch. >> "closing bell" starts right now. hi, everybody. welcome to the "closing bell" on this tuesday, i'm kelly etchivaa the new york stock exchange. >> i'm bill griffeth another record day for the stock market this is my favorite stat, i don't know if you've seen this yet, for the s&p so far this year, its best start for a new year since 1987. >> i did see that. thanks to the magestical robert hamm 1987, it's a double-edged sword. >> it is, you wonder if it's leading up to something. >> a lot happened that year. >> anyway, we'll talk about that

coming up. >> we do have quite a rally with the dow in particular. >> the transports continue higher all the major averages are in record territory. we also have big calls on the airline sectors today and the banks as financials get set to report. we're heading into earnings season we'll have you up to date on those. let's start on the floor of the new york stock exchange, mr. robert pisani joining us with a recap of what's going on as we get ready for earnings, right? >> yeah, a lot at stake here, but -- six-day winning streak, just six days in a row since december 17th p nasdaq has the best six-day winning streak since the end of january 2016. we're starting earnings on friday, there are very high expectations that's my theme. a short-term risk. the markets. just on earnings, analysts are

much more optimistic we hardly got any last quarter here we're expecting bigger beats, not by a penny or two pennies but more than that if you're disappointed you're going to get hit more. also, we have guidance here. now, a lot of people are expecting companies to raise taxes. be a little bit risky. finally there's the whole issue of buybacks and capital investments. because of the tact cuts, everybody expecting more aggressive buybacks but they're also expecting more capital expenditures folks, this is a lot to expect they want the whole enchilada. here's my one worry, guys, they're going to be reluctant to give a lot of forward guidance because they're still uncertain about the implications of the tax cuts and that may be an issue. by the way, 1987, remember, as i recall, did end as an up year

for the market back to you. >> bob, thank you. >> and mike santoli was mentioning yesterday, i mean, you really could argue that the bull market start the edtheed i. after the crash of '87 that's when the leg started and lasted until fwou 2000. >> joining us to talk more about this is kevin o'leary from o-shares etfs and dennis berman from the "wall street journal. welcome to you both. kevin, what do you expect out of earnings season? does this explain the rallies we're seeing, people excited about what they're going to hear >> no, i don't expect to have vi remarkable upside on the earnings i think they're going to be middle of the road i think what's really driving this market, why volatility continued to decline, you made about 10% in 6 days if you shorted volatility at the beginning of the year which is just absolutely extraordinary. but what i think's really going on is the calculation on how much dollars and what's the size of what's going to be repatriated? is it $1 trillion, $3 trillion, is it somewhere in the middle? and what percentage of that, if

it comes back, let's call it $1.5 trillion, ends up in stock buybacks because the real math here in the next 18 months is, the number of shares outstanding in s&p companies, and floating in the market right now, have not actually increased in a decade the constant buybacks that have been occurring for all of this time have really made this really interesting in terms of lack of supply, so if you got $1.5 trillion, which, say, only a third is in buybacks, it will be the biggest buyback in stock history. i think that's -- it's pretty hard to find a reason why stocks go down in addition to what's going on in free cash flow in small mid-cap companies in the u.s. they're going to be giving a lot of upside surprises on new earnings and that's where i'm putting the majority of my money now. >> dennis, i mean, we have earnings, we have the tax bill all these things, and the things that kevin's mentioning. but you have to be impressed with just the strength this market is showing again after all it's been through the last

seven or eight years, huh? >> well, i tell you, that was a very nice and concise analysis there. i'll add another thing to that maybe i'm a bit more optimistic than that view, and i've been reading through the actual statements of ceos and other top executives, literally reading through the transcripts seeing what they're saying about taxes and it's pretty remarkable, you know, you can just take a sampling of it, say, our tax rate is going from 28% to 21%. or our tax rate is going from an effective 33% to 25% and on and on and on. we know that a lot of that is priced into earnings i think that if youare a company, though, you have probably played it pretty conservatively up until this point about forecasting anything about what your tax benefit may be so i would at least sort of -- at least based on what i read so far, kelly and bill, i'd say there's probably some positive upside at least just on the tax cut, alone >> what's interesting about that, dennis, i think it was ubs that highlighted this yesterday, said eps, earnings per share,

estimates had only changed 2% since -- to take that into account, so that's a pretty small change it means people either don't know what the impact is going to be or they think it's only going to be that small so if it does surprise to the upside, i could understand why people might think there's good news coming out of that earnings season >> yeah, and, look, they're continuing to price the market accordingly, i think as bob said previously, this idea that if you don't meet or beat those expectations, the downside will be higher, is certainly true because the expectations are high >> kevin, not every sector is going to be able to repatriate cash in equal portions are there some sectors you like over others as a result of all that, yo that you're talking about >> it's not sectorial anymore. let's forget about repatriation. leave that off the table let's talk about companies that have 100% of their revenue domestic here's one no one's ever heard of, a mid-cap company, sits on the russell 2000 index

it's currently paying over 35% tax. its tax rate is dropping to 21% this quarter its cash flow is going to go up over 15% no one even has ever heard of this company and there are 350 more of them like that that have 100% of their exposure to the domestic market they're going to get between a 15% and 20% increase in free cash flow, as a direct result, and they're in every sector of the economy. and, i mean -- >> if only there was an etf, kevin, where you could take advantage and own some of these smaller -- >> thank you for that setup. there is -- >> she tees it up for you. >> i think you were teeing it up for us yeah >> low and outside he's swinging at it, folks. >> i get where you're going with this is what i'm saying. real quickly, dennis, in a word, do you think it's true people are giving too much credit to the big companies and overlooking the effect on the smaller ones >> yes. >> hey, that was my question >> effective tax rate. the effective tax rate of an s&p company is basically 23% because half the revenues are overseas

47%. it's time to think domestic. i love small town companies, in fargo, in champaign urbana, in compton. in places where -- >> i'm going to let kevin have the word i do think he's largely right. and the question is, though, if you're a ceo, where do you invest that money? does that really push up the business investment in the consumer sentiment as well i just don't know where the money goes so it will be fascinating to see what these companies signal out of this earnings season. this is going to be one be one of the most fascinating earnings seasons i encourage people to stay tuned to cnbc and the "wall street journal. >> i agree and read the "wall street journal. thank you, guys. . >> thanks. >> she you later turning now to boeing. let's zoom in on some of the stocks which are boosting the dow today. it's getting a lift above more than 2% and already turned in the best performance of any dow

name last you remember it was up 90%. today the company announced new data which could keep those bulls happy. let's get to phil lebeau, he's in chicago with the story. phil >> kelly, it was the best performing dow component last year, and it had its best year operationally in 2017. the numbers the company issued today deliveries are record high of 763 orders coming in, seventh best ever, 912. those 912 get added onto the existing backlog take a look at this, the backlog of planes for boeing commercial airplanes, 5,864 that's a record level. it basically works out to seven years' worth of production in other words, if you wanted to go and order a 77 right now or 737, you're not getting it until well past 2020, that's when you would take delivery of it. if you take a look at shares of boeing, this is a stock that has hit on all-time high remember, later this month we will get earnings as well as its guidance for 2018.

>> what happened what -- why now? i mean, why are they experienci experiencing such a surge in orders and backlog right now >> well, lorders have been building over the last five years. the orders, 912, that's the seventh best go back three, four years ago, they were rack ing up well over 1,000 orders a year. expansion of demand from airlines around the world. that's been going on for some time in terms of deliveries, this is them ramping up the 737 production line. remember, we were out in renton where they build the 737 they are cranking those planes out at a faster rate they're going to increase production later this year, early next year, so this is them bringing all of that to fruition remember, deliveries are important because that's when they get paid. it's one thing to have the order, it's the delivery of the plane, that's when they cash in. >> 90 days, i'm sure they have to wait to get that invoice, phil. while we have you here, let's pivot you from planes to cars

because we get this new data showing this spike in auto imports from mexico to the u.s not something the president has been looking for, i guess, huh >> no, but it shouldn't come as a surprise the automakers were bashed but didn't change their production plans, in fact, they continued ramping up protection south of the border mexico exported to the u.s. a record 2.33 million vehicles last year, that's an increase of 9.4% here's the reason why. suvs and trucks are in demand. you have gm, you have fiat chrysler, other automakers they're making a lot of their trucks and sufficievs in mueximo because of that demand they're keeping production rates at a high level mexico, auto exports, a record 3.1 million. not just to the u.s., that's worldwide. 75% of what they build down there ends up in the u.s speaking of gm and fiat chrysler, gm will be giving its guidance for 2018 next week. so that will be highly anticipated to see what general motors has t

blank blank expecting for this year. >> phil, what changes that >> i don't think they change until nafta changes. if nafta changes, you bet they're going to change. until that changes, they're not going to change how much they're building down there. they are investing in building more in the u.s. they are expanding production here in the u.s. but they're not cutting back in terms of saying, well, cut it off, stop it completely. the demand is there. and they have those existing lines. that's why they're going to continue >> all right, phil, thank you. see you later. phil lebeau joining us from chicago. we have 48 minutes left in the trading session if you're just joining us, yes, look, green arrows across the board here we are still in record territory for all the major averages on wall street. and we have much more coming up today on the "closing bell." next up, the five stocks one top stop picking wall street firm says buy today. plus, the top airline picks. we're looking at a sector one analyst says has a lot of

upside e-mail us at closingbell@cn closingbell@cnbc.com follow us on twitter find us on facebook. the "closing bl"el with kelly evans and bill griffeth is back in two minutes

welcome back we have a market flash morgan brennan has those details. morgan >> hey, kelly, that's right. shares of akamai are soaring on a headline from "bloomberg" that akamai is said to be working with morgan stanley on a strategic review what exactly that review potentially entails whether it's a sail or restructuring, something else, remains to be seen shares are up 4% right now after spending most of the trading session fractionally lower back over to you >> all right, morgan, thank you very much. by the way, if there are any fifth graders watching us today, hi, guys. >> hi, everyone, at orchard school sorry for making up the word, magestical anyway. the jp morgan health conference is under way in san francisco. it's a big one cnbc's meg tirrell is there. she's been covering the event all week she joins us now with an exclusive interview with john milligan, the ceo of gilead. meg? >> reporter: bill, thanks so much john, thanks for being here. >> thanks for having me, meg. >> reporter: gilead's stock is

moving big in the green direction after your presentation yesterday one of the things you said for 2018 is a key focus is m&a and building the pipeline. does tax reform change the size and the nature of what you're looking at there >> well, first of all, i think tax reform is very good for us i think it's very good for the economy and for companies like gilead, which allows us to flpln long term. as you know, our businesses are a very long-term cycle of approvals of our drugs in terms of order, it real i will doesn't change anything i talked to you last year, talked about how m&a was important to replenish the pipeline and still intend to invest in m&a, tend to invest in our pipeline and compounds going forward to broaden our pipeline for short-term, medium-term and long-term growth for the company. the priority doesn't change. it allows us to focus on returning capital to shareholders through dividends and allows us to pay down some of the debt we took oun for the kite transaction to clean up our balance sheet, some ways simplify the business. >> tell us about the decisiont acquire kite last year, one of the only major guy you tech dbil

of the year. the technology that was approved at the end of last year. one-time treatment using patients' own sells to treat their cancer why was that the right deal for you? >> that was very revolutionary one-time treatment to cure patients we were seeing, it was a the this conference last year we started to see the data mature, the business mature and the opportunity to get to the point where we believe that this would be a disruptive cutting-edge technology that we wanted to be part of. and right now, we couldn't be happier with the way the transaction has gone, the people we brought in to gilead and the performance of the product we just recently unveiled some data, a.s.h., american society of hematology, showing that with longer-term follow-up, 40% of patients have no evidence of cancer and are in complete remission from their disease this equates to about a 72% reduction in the risk of death for patients, with a very severe illness. so i think this is the first of many things in this area, but really the most important new technology tole come out of this meeting last year was car-t.

>> of course, with the new way of delivering cancer medicines come new kinds of price tags and paying for met sdicines, gave ia price tag of $373,000. a "bloomberg" article said two months after the introduction of the product to market, only five patients have been treatment because there are reimbursement issues with government payers. what can you tell us about that? >> so with any cutting-edge technology comes all sorts of difficulties this is a different kind of model, one that's unlike anything that's happened since probably bone marrow transplantation so the centers are trying to adapt to how do we get patient in, how do we process the list of patients that we have, how do we keep them on label, how do we make sure we put people who are not too severely ill it's a triage process for those centers. secondly, what will the commercial payers versus the government payers say about this therapy? what we know right now is commercial payers are covering 95% of lives so they are covered. it does seem to be a negotiation between a hospital and a payer for each and every patient which probably slows down the process

a little bit so i do think patients are going -- won't confirm it's five, we do know we're taking cells out of patients at a regular rate and as we increase the numbers of centers, more and more patients are getting access, and we are seeing that that process smooths out as the centers and the -- sorry, as the centers and the payers learn how to work together on this technology. >> we're almost out of time. i have to, of course, ask you about hepatitis "c," this has been a huge area for you guys but also one that's caused pressure among investors seeing that growth slow in hepatitis "c. how are you looking at the longer-term health of that franchise? >> you know, it was unlike any kind of market we've ever been in, with a lot of patients cured early and a smaller number of patients coming to care later on so as we enter 2018, and the message that we put out to investors yesterday in my presentation, was that the world is slowing for hcv, it's becoming a less important part of our business. an important long-term business where millions of people can be

cured. we're turning our attention to our hiv franchise, on the cusp of launching new products where we will be able to have even greater benefit for patients going guard and that is really the story coming out of this conference is, you know, gilead is changing back into a company that for the long term will be a growth company. >> we look forward to hearing more about that in the year ahead. >> i look forward to talking to you, meg. >> guys, we got another great sbrir co intery interyou coming up in the next hour stick around for that. back over to you >> thank you, meg. see you later. thank you, mr. milligan, for joining us i truly believe, we're in the early ages golden age for biotech bnology. >> absolutely right. the kibnds of cancer people hav, lengths of time, the curing we're seeing happen is transformative interesting thing to me, as well, a company like gilead who had come out with this dramatic hepatitis "c" treatment as well but the market is relentless it wants its next act. it's been fascinating to watch them buy kite and figure out what that will be. >> great stuff. all right.

we have 39 minutes left in the trading session here off to the races again the dow up 130 points right now. it is the best performer of the major averages the s&p, the nasdaq, the russell also in record territory now, you know, target's stock underperformed in a big way last year, but one wall street firm just named target as a conviction buy for 2018. you'll find out why coming up. plus, one of the most successful investors of our time, bill miller, joins us in a must-see interview about amazon, ttcoin, whether he thinkshe bull market will rage on in 2018 2018 more "closing bell" in two yeah, since birth. that drives me crazy. yes. it's on all your email. yes. they should know this? yeah. the guy was my brother-in-law. that's ridiculous. well, i happen to know some people. do they listen? what? they're amazing listeners. nice. guidance from professionals who take their time to get to know you.

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lot of rain in california, as many of you on the west coast know we have news alert on the mudslides they're causing there. sue herera, what do we have? >> bill, as you know this is the cycle for california you have wildfires then you have the rainy season and those are pictures of basically the malibu area earlier today five people have been killed and there are numerous people unaccounted for at this point. take a look at that car buried in the mud a record amount of rain falling in southern california in a 15-minute period that is a live picture for you now in los angeles parts of freeways have been shut down u.s. 101 on the border of santa barbara and ventura counties basically was shut down for much of today, full 30 miles of the highway has been shut down and as we look at those live

pictures, they're trying to perform numerous rescues in this particular area. they're actually bringing in helicopters. the problem is a lot of this part of los angeles is a canyon area, so it's very difficult to get people in to rescue those who have been cut off. that's a great -- actually that's a great helicopter shot from our knbc affiliate in los angeles. you can see how those are canyon areas and it's very difficult to get in there and perform those rescues they have to do. more rain is expected. the mudslides are expected and keep in mind, in the santa barbara county area, which is north of los angeles, that was the area of the thomas fire, and massive amounts of debris is being brought down by those mudslides because, of course, those areas were scorched in those fires, and now it's the rainy season with more on the way. kelly, bill, i'll send it back to you >> i was just reading they have closed topanga canyon for two

days. >> yes. >> that's a major thoroughfare i'm guessing some of what we're seeing is parts of topanga, north of the malibu area. >> it could be they just announced they were closing topanga canyon we were looking for confirmation on that. for those that know the los angeles area, that's a major thoroughfare to get from one side of los angeles to the other and that's going to make the commute impossible for many people they'll have to take alternate routes of course rg , on the freeways also have flooding >> right. >> a vicious cycle for southern california this year and northern california, too. >> again thanks, sue. >> you got it. >> see you later >> wow what's next? people living out there, they've had so much to deal with already. bank of america is picking winners and losers in the airline space it has to do with tax rerm 're going to tell you which companies topped their list when we come right back

grab a pencil and paper because bernstein added five stocks to its conviction ideas list here they are. they are eog resources target tapestry, of course, formerly known as coach broadcom and delta. the firm says eog resources is a great defensive name, it wins on strong management, fast

improvement and best geology in the shale industry bernstein says target is undervalued, plus its rich 4% dividend yield makes it an attractive buy for tapestry, bernstein cites brand turnaround, and the kate spade acquisition. the firm said that strong organic growth increased cash return, and m&a factors are too powerful to ignore at broadcom and finally, bernstein says that delta, it sees it as the most profitable u.s. airline and the stock has 20% to 25% upside room to grow according to bernstein >> and target, by the way, that 3% gain today, they did put up stronger than expected holiday sales. 3.4% comps seen that from some retailers. >> i've never seen this before, on eog, they pointed out they're probably the most expensive in that category. they have the highest priced earnings ratio they said that's a good thing because it shows quality >> yeah. >> in that area. >> widely seen as having very skilled management so, we'll see if it's worth that

premium. just about half an hour left to go in the trading today always check the bottom of your screen there in case you're wondering. here's a check on markets and sectors as we head into the close. the dow the best performer 117-point gain here are all the sectors of the s&p right now. health care is leading the way bunch of the best performers are biotech names in the s&p today better than 1% gain for health care financials, up there, too. and industrials. only four of the sectors are in the green and, in fact, most are in the red including real estate, utilities and telecom, and that deten-year yield did creep higher today. let's get to our "closing bell" exchange, joining us, larry glazer from mayflower advisers that, folks, in the middle, is kenny from o'neal securities no longer the most interesting man in the world and rick santelli joins us from the cme in chicago larry, i'm going to start with you. you -- i mean, we've said the s&p now has seen its best beginning to a year since 1987 you called this panic buying

why? >> you know, off like a rocket ship it's certainly been an impressive start to the year in our conversations with clients they want to participate in the global recovery story that's what it's really all about. in the conversations we see not continued love for the faang names. they are in love with them that love trumps valuatiovaluat. that love is no men omentum. we try to remind the investors, beyond that love they need to recognize we may be getting ready for the seven-inning stretch. overseas you may be in the top of the third inning. some of the overseas markets that were dogs were years up until 2017, may see better valuation. so for 2018, it's the year of the dog, bill. and in the year of the dog, we want to buy the dogs the dogs continue to be the overseas market because every dog's going to have his day. and that's what we're going to be here today. >> all right >> speaking of kenny, oil's made quite a comeback it's up another buck 62, almost 63, i think we touched 63 since time -- >> we did. honestly, i got to tell you, i,

for one, will be the one to say i didn't see $60 a barrel. the issue in venezuela, the economic crisis causing a lack of production down there although at this point u.s. shale producers and u.s. oil frus producers are going to start overproducing. so it's curious to me that oil is even run this far it feels like a little bit of it's getting exhausted like the overall market feels it's getting exhausted. >> do you feel that way about the overall market. >> i do, because, look, we're up, but we're on lower volumes, right? we're making new highs on lower volumes which is a little bit skeptical to me, right running in front of this earnings season, buying these stocks up ahead of what's expected to be this great earnings season. what are they going to do? any slight disappointment, any slight lower guidance is going to cause people to reassess. i think that's going to be the problem, you know, next week starting next week >> all right rick, i bet you know where i'm going here the ten year

2.54 today highest levels since last march. what's going on? >> reporter: you know, i think finally, finally, all these big waves of these equity moves that have been going on for the better part of over a year have finally unmored interest rates we talk about the channel where there's a lot of buyers. not all rates around the globe with good credit are running nearly as high as some of our rates. that's important, but so is the strength in the economy, so's what larry was talking about and kenny with regard to europe. all of this is coming and actually making a difference on rates. what's particularly interesting is is that if this momentum continues, you know, every close has been above 2.40 for 2018, now we're actually mid 2.50s should we take out 2.63? i'm not sure that we will. i think that's going to be big-time resistance, but, boy, you get through there, it's a whole new world that could open up with respect to rates and i know there's a lot of

reasons out there, you know, how china calculates value, its currency, the japanese may have done something subtle to give us a hint about changing, buying with regard to their quantitative easing. all that, i'm sure, did figure in, but it's only because the market is moving in other words, there have been plebt plenty of days, where, god, why aren't interest rates up i could have given you a litany of reasons they should be up keep it simple listen, i think this high tide is going to raise the ships and i think there's a lot more tide coming in. >> rick, are we dragging europe up with us rick -- >> pardon? >> i was going to say real quickly, are we dragging europe up with us, or is that spread getting wider? >> no, no, as a matter of fact, great question we're still hovering just above 200 basis points because as we moved up into the 2.50s, we're getting very close in european rates so we are dragging them up i ink think that's important also, give mr. macron credit,

good article in the "journal" yesterday. what he's doing with the french economy and reforms is unbelievable don't underestimate some of these economies in europe doing it the right way. >> rick makes a really good point, he uses the word, momentum that's what's really key here. every risk to this market is also an opportunity and that rise in rates which is momentum driven as rick said is also we're seeing it in the commodity prices, in energy prices, potentially see it in the dollar all of those are potential headwinds to the equity market right now the market hasn't budged at all. those may all be opportunities for contrarian investors to invest in energy, invest in mlps, invest in commodities if you believe infrastructure is real there's a lot of opportunity here watch that momentum. everyone's watching faang. watch the momentum, watch the bond market, watch commodities and energy markets there's a lot of excitement going on in those. >> a lot of things to watch. >> a lot of momentum across the board yoepwhen you look at everything in terms of equity, in terms of oil. all the stuff is momentum. that's where it gets a little

tired for me which is why i'm cautious going into next week. >> very good, guys thank you. larry glazer, kenny, and rick santelli thanks, guys and it's time now for a cnbc news update, let's get back over to sue herera. hi, sue. >> hello, guys, thanks so much here's what's happening at this hour alex azar, president trump's pick to lead health and human services appearing before the senate finance committee he said his knowledge of the drug industry, as a top exec at eli lilly, can help bring drug prices down. but then oregon senator ron wyden asked him if he ever lowered the price of a drug while at lilly. >> i don't know that there is any drug price of a branded product that has ever gone down from any company on any drug in the united states because every incentive in the system is toward higher prices and that is where we can do things together working as the government to get at this. no one company is going to fix that system. that's why i want do be here working with you. spacex defending its rocket performance during the weekend

launch of a secret u.s. satellite. this comes amid media reports that the satellite was lost. spacex president gwen shotwell saying the falcon 9 rocket did everything correctly asserting that suggestions otherwise are categorically false. and leaping lemurs take a look at this poor reporter a british news reporter found himself mobbed by several lemurs while taping a story at an english zoo. they jumped on his shoulders as you can see there. one got on his pants leg another nipped at him. no animal or reporter was hurt although i don't know, that reporter looks like that nip was a little bit more than a nip >> do they normally behave like that >> you know, i have a very good friend out in california who has a pet lemur. i'm serious. >> you would >> well, i -- >> no -- >> do they normally act like that >> they apparently can be pretty affectionate >> oh, there's a big one. >> what was that one >> there you go. >> a giant lemur. >> that would be the rare browned lemur.

>> man i might look into one of these as a pet, myself. >> there you are. >> no, no, no, not with the cat. no, no, no >> well -- >> not a good combination. >> see you later >> thank you, sue. >> oh, this is me. let's see. 20 minutes left and 3 seconds. the clock is working right now the dow up 141 we were up 156 at the high of the day. but we are in record territory again. cable companies hitting consumers with new video and smart products to avoid cord cutting. when we come back, the ceo of cox communications talks about his company's latest efforts in that regard. and legendary investor bill miller has wound up with half after his hedge fund's money in bitcoin but he says no the for long ahead, we'll find out the status of his investment in that fluctuating cryptocurrency stay with us most etfs only track a benchmark.

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there we go, with the sectors of the s&p 500 today, the s&p, itself, up about seven points the big story is the dow a lot of that, of course, the gain in boeing over here you get a better sense of what's happening in the market today health care rallying nicely. more biotech thames leading the

way today after being the big laggards yesterday but still several sectors in the red, most notably those rate-sensitive ones. >> ten year has gone to 2.55 today, highest in almost a year. and that's why you got telecom, real estate and utilities pinned to the bottom of that list there. meantime, under armour shares down 5% on a downgrade at susquehanna to negative from neutral. susquehanna says the company is at risk, may suffer the same fate as reebok says reebok was once driving more than $1 billion in annual revenue. it's now driving under $200 million. we all know that under armour has been having problems. >> reebok, that's an insult, man. >> yes. >> given what happened with the company. we should remember under armour a founder led and controlled company. i'm sure kevin plank does not want that to become his reputation he may have his work cut out for him. meantime as you know the consumer electronics show has kicked up in las vegas where some of the biggest names in consumer technology are

gathering. a big topic of discussion is how media content is changing and what may be next for that landscape. let's go to cnbc's julia boorstin who's in vegas live with pat esser, ceo of cox communications jul julia? >> reporter: thanks so much, bill, yes, certainly a lot happening in the cable communications space pat esser, ceo of cox communications >> thanks so much. >> what are you going to do with all this consolidation, do you need to get bigger, do can you need to be part of some of this m mv m&a? >> first off, to many incredible things going on in this place. i don't want to miss an opportunity to say we power ces. we power las vegas convention center with all the technology we've invested in here now, i'll go back to your -- i don't want to miss my opportunity -- >> at&t buying time warner, how do you compete with those giants >> we've done a pretty effective job competing up to this point, we still compete in our markets. i don't think you have to get

bigger to compete. i think we have to invest. we're a company that's continued to invest. look back at the last ten years, we invested almost $15 billion in capital i look forward to the next five, alone, we'll invest $10 billion. we're a company that's committed to our markets committed to serving our customers. and bringing some of these incredible innovations to our local markets. >> i mentioned at&t buying time warner do you agree with the department of justice that that is an anti-competitive deal for some of the smaller players like yourself >> first off, i'm not an antitrust attorney, so i'm not qualified to answer that our only issue with the deal was i want to make sure we still have access to content directv has a history of making things exclusive make sure that content is still available to our customers other than that, no, i'll let the courts figure that one out. >> speaking of content, there was an announcement from hulu today, hit 17 million subscribers. they're all part of the trend of cord cutting all these alternatives driving cord cutting how concerned are you about cord cutting? what does the trend mean for you and your business? >> first off, remember, they

still have a cord, a brad baoad connection those products work well when we provide the broadband services that's important you have to accept the fact the marketplace as it relates to video is in full disruption. our customers have more choices today than they ever had before. i think that all being said, we have to continue to build more flexible packages than we are. we have to build bigger libraries. over 100,000 hours in our library today. we are we brought to the market the best user interface there is next-generation contour with a voice remote -- voice-controlled remote it's incredible. if you've not seen it. our customers love it. satisfaction scores are through the roof got to continue to invest in your video products -- >> more smaller skinnier bundles? >> yes, that's part of our flex packages last but not at leasleast to yon we integrated netflix in into our offering customers can easily access products we offer and over the top service they love. >> certainly a fascinating area

to watch with so much going on in your space. pat esser, president of cox communications >> julia, good to see you. >> guys, back over to you. >> thank you, julia. julia boorstin much more to come. 12 minutes to go dow up 117 today outsized compared to the other averages still pretty much everyone is rallying it would be records i think for everybody here dow over 24,400. bank of america, talking about the airlines today, upgraded a couple, downgraded one. we'll name names when we come back in just a moment. cnbc sector sport is sponsored by sector spdr etfs. there he is. your new brother-in-law. you like him. he's one of those guys who always smells good. his 5 o'clock shadow is always at 5 o'clock. you like him. your mom says he's done really well for himself. he has stocks and bonds. your dad wants to go fishing with him.

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listen to this, art cashin told us a market on close orders show an imbalance to the sell side of $1 billion with a "b" dollars. we have seen a little bit of a comeback i wonder if there's enough demand out there to meet all those sells coming into the close here. >> great question. >> we'll see up 123 on the dow right now. bank of america/merrill lynch, the firm upgraded low-cost airlines allegiant travel and spirit to buy from

neutral. saying that tax reform is positive for corporate spending. could drive industry pricing both those stocks are higher on the flip side, "b" of "a," merrill lynch downgraded southwest airlines the firm even as it's downgrading the stock, it's upgrading the price target to $73 from $68 a share nonetheless, the stock is down on that downgrade today. >> i always love that, the downgrade with the increased price target. >> how that works. go ahead. >> i was going to say i learned a lot about, you know, southwest is not a major new york airline, but it is -- denver, where i have family, getting an education on how their whole system works now in terms of, you know, you got to get -- >> first come, first serve. >> you have to log in on the thing right away, you're an "a" or "b" and "c. "can. >> i hate that. >> the people who love it really love it. i'll say that about southwest. >> that would not be me. i need to know where i'm sitting

ahead of time. so as we move on here to the close, we got about 8 1/2 minutes left 7 1/2 minutes left coming right back with the closing countdown already for this tuesday. yeah, after the bell we will be talking exculusively with legendary investor bill miller he'll weigh in on how high he mke cldo 28 in01 and much, much more. keep it here you're watching cnbc, first in business worldwide 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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about four, coming up on -- four minutes left. we'll call it that there as we head to the close. we're in record territory. i got this longer-term chart again of the dow, this takes us back to the beginning of the year so these are the six days we had that minor pause yesterday. but now we're off to the races again. here we go again the big question that's often asked during this bull market is, exactly why is the market going up so we have a litany of reasons why stocks should be going higher right now is it the tax bill right now is it the expectation for better earnings is it panic buying as larry glazer said from those people who have been missing this rally that has been going on since march of 2009 you know, is it infrastructure play that's coming is -- you know, regulations that

are being pulled away? whatever we're going higher here and we're in record territory for a lot of these major averages. it's not just here, it's been happening in asia and europe as well the biggest gainer for the dow today was boeing that accounted for roughly 60 points in the dow today with gains there, they talked about those record deliveries. got a big backlog on their jet orders and intel continues lower. microsoft revealed today that this patch that's coming to fix the flaw in the intel chips is going to, perhaps, significantly slow windows pcs that use windows 7 and 8 operating systems. but we will see. at any rate, intel continues lower. the ten-year yield continues higher now we're at 2.55. highest level since march of last year. we have the price of the wti crude, it settled at $62.96. it's just below that right now that is a high that we haven't seen since december of 2014, bob

pisani so as i was just saying, a lot of questions about exactly why are we going up right now? >> yeah, look, the key here is the expectations for earnings are exceptionally high not just that they're going to beat by a few pennies but they're going to give guidance above expectations i've been noting all day in typical earnings season, one-third of the companies that give guidance give upward guidance and two-thirds give downward guidance. the expectations seem to be reversed partly because of the tax cuts, global economics and all the things you mentioned investors seem to be thinking there's going to suddenly be a spate of upward guidance that's above and beyond the typical guidance that we get. >> are we at the point now, though, where the little investor is starting to come in in a meaningful way and what does that mean for the market? we typically know that that's about the end of a cycle. >> yes, and we talked about this yesterday. notice every day this year, market on close orders had been exceptionally strong those are retail orders. because the people who have mutual funds put in their orders

during the day, that say i want to buy, i want to sell thy aggregate the orders and put the orders for market on close art cashin, you report this every day, these have been unusually strong >> except today. >> except for today. this is the first day we've seen a drop-off now, this is interesting because normally we have a better macro story to say why is the market up 100, 120 points there isn't any big macro story today. the volume is about average. and this -- when you see this, the typical answer is, there really are more buyers than sellers. the sellers are reluctant to let go of the money, they don't belief the market is going to drop significantly. >> look at this, the russell has just turned anything pnegative those mid-caps, kevin o'leary was talking about this, expected toproportionately from the tax bill >> you mean the small caps. >> the small caps, they have been benefiting. now they turned negative as we head to the close here. >> we do, however, also if it you'll notice, tech stocks have generally been fairly flat

performers this is part of that rotation we keep talking about where weaker names tend to do better. that's one of the reasons the markets held up so well. >> all right heading to the close with some records. not all of them, though. the parent company of the new york stock exchange, ice, ringing the closing bell at the big board. stay tuned for more of the second hour of the "closing bell," back to the consumer electronics show, with kelly evans and company. i'll see you tomorrow, kell. thank you, bill. welcome to the "closing bell", everybody, i'm kelly evans records across wall street again today. the big gainer is the dow up 106 points on the bell that puts it about 23,588, record close for the dow, first time over 25,300 managed to gain half a percent today. a lot of that was boeing little idiosyncratic s&p 500 turning in a four-point gain 2,751, good for a record for the broad market nasdaq up ever so slightly just enough to inch into further

record territory at 7,163. russell 2000 couldn't hold on to its gains. dropped two points on the bell down to 1,5 60 let's get straight to our big guest this hour, miller value partner chairman bill miller he's on set with us exclusively at post 9. rick santelli is, of course, with us. cnbc senior market commentator welcome to you both. bill, especially you were talking about a market melt-up as a risk years ago. are we finally seeing it >> not really. i think that's still to come if we're going to get it, it will be driven, if we get it, you mentioned earlier about the ten-year yields. those ten-year yields go through 2.60 and head toward 3.00, we could have the melt-up we had in 2013 where the market was up 30%. >> so that's interesting because a lot of people would say a risk to stocks going higher is that interest rates would go higher you think that would actually push the rally, keep it going? >> that's the evidence that we saw that in 2013

and the reason was that in 2013 people finally began losing money in bonds for the first time in 30 years and took money out of bond funds and put it into equity funds. that's the only year that's happened i think if we, again, get toward the 3% level, yol su'll see the same thing get flows into equity tunds ffu the first time since 2013. >> this is a weird question, is it a good thing? i mean, we don't want a repeat of the dotcom era, do we, we don't want a repeat of the housing bubble, do we are? are we inevitably headed to a crescendo event like that? we talked about this yesterday, ho how long the rally has already been, how strong it's already been and if that's where we're heading. >> i don't think we're headed forward a 1999 or housing thing. those things were narrow, remember you had in 1999 and 2000, i think the median p/e in the market was around 10 or 11 put the telecom and dotcoms were in stratospheres. again, with housing prices

outstripped incomes for so long, and people were flipping houses, so we don't see that kind of activity in the market yet and, again, we don't see, i think, one of bill griffeth might have mentioned earlier, mainly beginning to see the small guy come back. we're not seeing that in our funds. we're not seeing inflows i think that, again, will be a sign you may be getting close to the top. again, the market -- the economy is strong. you're getting -- you're getting a strong wage growth you saw, for example, last week, i think african-american unemployment's the lowest in history now. >> ever, yeah. >> and the tax cuts are probably partly in the market, but maybe not all -- wholly in the market because, again, we're seeing things like companies raising the minimum wage, giving bonuses, and the people are getting those thousand-dollar bonuses probably have a marginal propensity to consume99%. >> the way the market is set up, certainly true, not narrow at all, in fact, if anything, it's sort of the everything rally on the one hand, one of the drivers is these huge kind of deflationary tech consumer boom

type plays as you know, then also all the kind of traditional cyclical stuff is working well, too, because of economic fundamentals i pointed out earlier that if you look at the forward p/e, facebook and boeing are at the same place so is that a sustainable setup right now? does one of those legs have to give way >> it's interesting, i was short in the hedge fund cat at the beginning of the year and never went down. i said this doesn't make any sense, so i just covered it and it's up i think 50% or 70% >> beginning of last year you mean. >> beginning of last year, yeah. cat's around 30 times trailing earnings. >> exactly. >> that makes no sense that, boeing, compared to something like a facebook or google >> but you don't think -- so how can that be the case but we're not in a melt-up, what does that mean, what's happening with those stocks >> it means if there's a very large amount of money that's investing, what i call a macro thesis basis global synchronized recovery means own cat, which is a global synchronized cyclical company. boeing's in its own cycle. a lot of cash. buying back stocks

again, that's -- sort of all systems go for those kinds of companies. >> can you own delta and america, right you've talked about being -- >> yes. >> -- positive on the airlines you still feel that way? >> oh, yeah, yeah. those have been laggards those are still single digit p/es with 12%, 13% free cash flow yields. dealt do has belta raising the a year all the big three have been buying back stock. they generally lagged for the last couple years. i think delta is down a percent or two this year. >> you're going to stick with those names for quite some time. >> yeah. we made eight times money on them, still trading at single dint digit p/es >> same thing for the home builders >> pulte, lannar, those last year got a big boost at the end of the year because of the tax cut because they're 38% taxpayers. still they're trading at low multiples, again, compared to the overall market they're not as attractive as they were probably going into last year because the home building group is one of the best groups in the market. >> yeah. >> but they're still fine.

>> do financial stocks or make just specifically the banks feel like a consensus trade right now? everyone seems to have a kind word for them. are they valued in such a way they seem crowded or is it as easy as what everyone says, tax cuts, rates, decent economy? >> yes, it is. >> again, the valuations are not demanding at 13 times earnings back in the 1950s, kind of a similar period that we had, the banks traded at market multiples. again, i wouldn't expect that necessarily. we can see the banks getting to, you know, return on tangible common equity in the high teens and they're not there yet. that would -- and that -- again, with the fed raising rates, that helps them, they're all super liquid the rollback of regulations helps. all the stuff that people are pointing to are good for the banks and if they reflected it in the valuations, we wouldn't be so keen on it, but they don't. >> jpm, own any others >> yeah, own jpm, own bank of america, own citi. the cheapest one we own is one main financial, it's got a big

boost last week, when apollo bought out fortress' position and removed the so-called overhang and got a 30% boost still trades at seven times this year's earnings. >> that's like more consumer finance, right >> yes that's -- >> the old citi -- >> old ci ti, old beneficial, household finance of the 1980s. >> made a lot of sense now we got to talk about bitcoin. i mean, you know, i've just been waiting and waiting because it's so interesting how something that is completely in a world of its own has come from nowhere and who knows where it's going you've let it expand and become such a big part of your portfolio. so when did you start buying bitco bitcoin? >> 2014, 2015. so our average cost is about $350 >> okay. so, i mean, you can just kind of sit in this thing and just -- but how long, how far, are you going to let it go it's, what, half the hedge fund

right now? >> it was. we actually spun it off into a separate fund. >> okay. >> so we retained about a 10% weighting in bitcoin and bitcoin cash together. and the other 90% is now in a separate fund. the partners can decide to do, they can hold it, they can sell it, they can put the money back into the hedge fund, whatever they want. >> are people coming to you because they want that exposure. >> we're getting people calling about that we told them it's not really the right way to think about the product, yeah. >> is it just bitcoin? or is it now ripple and, you know, are there others that when people talk about new entrants on the market and the advantages that they have relative to bitcoin, do you think, okay, that's attract if, tivattractiv? is that it for you guys on the cry crypto front >> we haven't made up our mind on an institutional perspective. you see waves of enthusiasm run through for various kinds of things so ripple being the most recent one i saw somebody tweet out the other day saying that he had issued an ico of 1 trillion coins and sold one to his buddy

for $1 so he's worth $1 trillion now. if you look at something like a -- like a ripple, i mean, i think that that's way overdone, let's just say the xrp thing doesn't have to be used on the ripple network you can use other kinds of things the company, you know, if you look on coinmarketcap.com, says there's 38 billion of them but there's actually about 100 billion because the company has retained 61 billion on their own balance sheet. so, you know, the market value as of a couple days ago for the ripple company, alone, was around $300 billion. >> totally normal. >> yes so, but, you know, amidst all those thousands of alt coins and kodak announced one today, right? >> oh, yeah. >> there's probably stuff out there that makes sense, but it takes a lot of digging to find it and the expectation, at least that we have, is that what people are doing, as i'm sure you know, probably reported on, is they now decide that they want the lowest priced ones, so if it's 20 cents, it's good, if it's $200, not so good

so it's not exactly, i'd say, careful evaluation going on. >> so sticking to bitcoin, then, and that little piece of the ecosystem, how do you -- how do you draw the connection between the opportunities for the underlying technology, for the buildout, the adoption of things like the blockchain, and the value on a near-term basis of the bitcoin, itself? i mean, essentially what are the analytics, the metrics you want to focus on? >> well, i think you raise a good point, mike, because i think you have to have a context in which to figure this out. and so the one that i think is probably the dominant one right now is the store value because bitcoin doesn't function well as a payment system for all kinds of reasons, it doesn't function well in terms of medium of exchange for all kinds of reasons. it may in the future but do that well now we tried to put it in a broader context and say what is this like historically? well, it's like all of the great technological booms going back to the railroad boom back in the -- the electricity boom, the

radio boom in 1920s, the dotcom boom, a biotech boom all of those things if you look through sort of the academic literature, look through the book "the diffusion of innovation," for example, look at brian arthur's work, path dependence, technology our the work on economic webs. one of the best ways to understand bitcoin i think is to understand through the philosopher, john serels' book, "the construction of social reality. pointing out basically, this is an important distinction, brute facts, facts which are true without -- if no one ever lived. the sun is 93 million miles from the earth. most other things -- many things are social facts and they're only there because people have them there he goes through how those things are constructed. property rights. marriage monetary systems that kind of thing >> okay. >> so if you look at that, what's happening is this is following a very traditional path it's gone faster and bigger than

any other path for probably reasons, the only type of innovation of its type across finance that we've seen technologically in several thousand years and really can't tell how far it may go it still may disappear it may not work at all at the end of the day. >> so as -- when are you going to sell? >> the answer is going to be, it depends, you know? we're not selling -- i'm not selling now. we're not recommending to our partners to sell now because you're not seeing anything in the underlying -- the development of the technology, the adoption of the technology it's been on a, what we call a path to respectability, it followed a very normal kind of thing. so we saw futures -- we saw japan make it legal tender, then they had the exchanges then you had the futures come along. now goldman is going to have a crypto desk. and there will be etfs probably, maybe not this year, but all of that stuff brings in -- makes them respectable, makes it have institutional appeal we've seen some governors of -- like the former governor of one

of the central banks of south africa saying you got central banks at some point would hold those the same way they hold gold or more special drawing rights. >> wow you're not near that point yet >> we don't see any -- bitcoin could go down 50% or 75%, right? you know, that's a different matter but we don't see anything, and i'd say the underlying structure of what's going on, not the price, but the underlying structure of the technology that tells us there's any severe fundamental risk at this point. >> all right very final question. since it kind of came up earlier, what do you think of the president so far, and how important have his policies, specifically, been for the market rally that we're seeing and for what's happening in the economy? >> you know, it's interesting, all that expectation he wasn't expected to be elected. w when he was elected people expected there would be a lot of volatility because he's a volatile personality what we've seen is is it looks almost like metaphorically the volatility has been transferred over to the political and social

realm. we had low volatility and smooth going. that's mainly because there's been low economic volatilitvolay none of the noise in washington or the noise globally has actually had an impact on earnings cash flows or anything like that. the market wants -- you see the market wants to go up, right we've got the tax cut bill, i think, was great from a corporate standpoint most the rest of it was typical political, you know, christmas tree ornament doing. i think that the economy looks great and usually even if we get the economy accelerating, i think that inflation is probably a year or so away from becoming anybody's concern. i do think that the curve is probably going to continue to shift up i think that one of the things that's interesting, i mentioned the african-american unemployment rate and also the wage growth. larry summers wrote a great piece i thought prior to the election where he said the problem with the democrats and the progressives is they have no growth strategy, it's all redistribution, end inequality, that kind of thing he said growth solves so many

problems and the inequality problem is one if you get enough growth, you'll get wage growth at the lower level and inequality will come down. i think right now the path of least resistance is higher i think there are things this year that could change that. we've got, you know, a debt ceiling bill and if we get a contentious thing like we had several years ago, that can cause problems. >> yeah. >> the election, itself, is going to be a lot of uncertainty around that. if we've got mueller's investigation -- >> yeah. >> so if that stuff comes through, just raising the level of uncertainty, you'd expect -- you'd see some blow-back in the markets. >> i like what you said, we transferred the volatility out of the marketplace into washington bill, thanks for joining us. >> sure. thanks for having me thanks. >> that's bill miller. speaking of which, we have some breaking news on steve bannon john harwood, what's happening there? >> reporter: kelly, more fallout from the new book by michael wolff, "fire and fury" in which steve bannon was sharply critical of others in the white house including president trump. steve bannon, former chief white house strategist, former

director of president trump's campaign, is now out at breitbart which is where he had landed he had been, of course, running breitbart before the trump campaign he landed there after leaving the white house, said he was going to lead the trumpist movement, the nationalist movement he is now out in the wake of those comments there have been a lot of pressure on breitbart from rebecca mercer and the mercer family who are big funders of breitbart, also suggestions from sarah sanders, the white house press secretary, that they might want to cut ties with steve bannon well, that's exactly what's happened today i reached out to steve bannon and his assistance this afternoon to get their view of exactly what precipitated this in the last 24 hours or so have not heard back. but this is a significant move in that alt-right nationalist space. steve bannon had said he was going to run primary challenges to a lot of republican incumbents, of course, he had a huge setback in the state of alabama when roy moore, who he

had backed, lost that senate race so steve bannon is now looking for a political home we'll see if he finds one. >> absolutely. john, thank you for bringing us that news. john harwood in washington we have a news alert on nordstrom, meantime. morgan brennan has those details. morgan >> hey, kelly, that's right. nordstrom releasing some of its holiday season numbers the retailer saying that comparable sales for the holiday season increased by 1.2% for nine weeks ended december 30th. that's compared with the skame period last year if you dig down deeper, it looks like a lot of the growth was powered by the nordstrom rack brand which saw comparable sales increase 2.9% versus nordstrom full line and nordstrom.com which increased 1% the company saying based on the holiday results it updated its fiscal 2017 expectations for an increase net sales of approximately 4.2% and is raising the lower end of its full-year earnings guidance

range to 290 per share to 295 per share. take a look at shares of nordstrom, they're slightly lower right now. again, we saw some increases in comparable sales for the holiday season back over to you >> all right, morgan, thank you. yep, down fractionally right now. we'll keep an eye on it. second hour of the "closing bell" is just getting started. next up, are the never trumpers and the gop really starting to fall in line behind the president? >> my positions are going to be what the people in this room come up with. >> or is michael wolff's book right? >> the thing at heart of this book is that everybody around the president thinks he's dysfunctional. plus, much more on the markets after another record-breaking day. as we start getting ready for the banks. will they lift us to the nt ex leg? the "closing bell" is back in the "closing reallyis back in putting their money into is what they hope to get out of life. but helping them get there requires a real refusal

to settle for average. because when you approach investing with a tir to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more.

welcome back some of the republicans once in the trump never movement appeared to getting if line. aime eamon javers is at the white house with more. >> reporter: that's right. real quick, there's no reaction to the white house to the news that bannon is -- steve bannon is out at breitbart. just talked to a couple white house officials who said they're working on a statement they will have some. you can't imagine the president will pass up the opportunity to

comment on that. all of that, the continued fallout here from this michael wolff book, "fire and fury" you guys were talking about on the air. michael wolff, himself, was on "squawk box" this morning on cnbc talking about this. he made the case, the central point of his book, is the thing that has been driving this trump white house absolutely nuts. here's what he said. >> the thing at heart of this book is that everybody around the president thinks he's dysfunctional. and i would say, i would go you can hold the gun to my head on that literally, everybody >> reporter: so michael wolff making the case that he thinks literally everybody here doesn't think that the president is effective or able to be effective in the job the white house pushing back on that today effective willly by g the president open up one of his strategy sessions with top republicans and democrats on immigration, show the entire thing on camera for almost an hour that showed the president, the white house feels, very much in command, not only of his

faculties but of the negotiations here. there might be some political fallout from it. wo wolff on cnbc this morning going on to say for the business community, ultimately, even though the president might seem undependable, or erratic, it could be a good thing. here's what he said. . >> in a sense that that's good for the -- i mean, has been relatively good for the business community because -- because there are -- there are forces -- he's not that interested in this stuff. so, so he can -- he can move -- move this. the tax legislation, you know, really doesn't come from donald trump. it comes from, i mean, it really comes from mitch mcconnell >> reporter: all that prompting david brooks to write this in "the new york times" today in his opinion column. he says, "the anti-trump movement of which i'm a proud member seems to be getting dumber it seems to be settling into a smug fairytale version of reality that filters out discordant information more anti-trumpers seem to be telling themselves a madness of

king george narrative, trump is a semiliteral madman surrounded by sycophants who are morally, intellectually, psychologically inferior to people like us." that's david brooks in "the new york times" this morning arguing the never-trump movement is running out of steam intellectually and embracing a theory that trump isn't fit to govern the white house feeling today that the president pushed back on that very effectively by demonstrating he is governing and opening up one of those strategy sessions to camera letting the whole world see it all, kelly back over to you. >> yeah, eamon, thank you. eamon javers let's talk about if and why more republicans are falling in line with the president joining us now is sarah fagan, advocacy partner, cnbc contributor. along with john harwood, our editor at large. sarah, you a never-trumper >> i was -- i would call myself someone who walked right up to the line of never-trumpism i was not supportive of him. i've been troubled by much of what i've seen out of the without. but there's a lot i like as well i think he's done really well on this tax bill.

for example. >> do you think it's true, though, and i wonder if you are picking up on this as well, that people are getting more comfortable with the president even as stories appear day after day about whether he's sane or not? >> i think a couple things first of all, you played the clip a couple times of michael wolff saying everybody in the white house thinks the president is dysfunctional that's just not credible i know many people who work in the white house or closely with the white house who liked president trump who find him very affable and intelligent when you hear statements like that, they really should give you pause. politics is rarely that black and white. but to mr. burke's point in "the new york times," which i do think is true, that many of the never-trumpers, which i think are a strong conservative intellectual class in many of the conservative republpublic c all of them very bright people they're sticking to their guns on this and don't have new information. it's the same article over and over again it's temperament, it's

character, it's, you know, trump lacks intellectual curiosity some of those things are true. he's demonstrated time and time again he will fire off on a twitter rant that is unpresidential but it's not new information. we knew that before he was elected. >> so, john, the interesting thing to me about this is, you know, we have this happening at the same time, sort of discredited by the white house, now he's even out at breitbart and as the midterms are approaching, which the republicans really need to do really well given the president's poll numbers in order to do well in those elections, so is this going to possibly turn into a better outcome for the gop than might have been thought a few months ago? >> well, i don't think there's any reason to expect that at the moment, kelly. i think sarah put her finger on the actual situation here. i don't think never trumpers are becoming more comfortable with the president. i think they don't really have anything else to say or anything else to do unless bob mueller comes up with

information that generates some sort of change in the president's status, they've got it he's there they do like the fact that they got their tax bill through that was a top priority of theirs and now they've got to get through this election season republicans, if you look at the early polling, they're not in a good position. you saw it just yesterday. ed royce, major committee chairman, became the seventh committee chairman to announce he is retiring so republicans have a difficult political landscape in front of them donald trump is overwhelmingly likely to be in the white house while they try to keep their majorities and there's really no alternative but for them to work together among other things to try to keep the government open through some sort of accommodation with democrats -- >> i do think -- >> sarah, go ahead. >> i was going to say, i think one of the things the never-trump movement fails to fully give the president credit for is just how successful he's been in the policy arena the tax bill's significant

repealing the obamacare mandate, significant. you know, the defeat of isis, largely the defeat of is is, vey significant. conservative judges. many conservatives running near office in this land who would only dream of having that record at the end of the year he deserves credit for that. they should call it out. >> at what point do you think the entire establishment gets on the trump train? >> i don't think ever. i don't think that's going to happen i think until the president changes his behavior, because there is a class of political leaders in this town, and in this country, who will never accept a president on twitter saying the things that he says who will never accept, you know, b the president giving very deep policy speeches. it's an aknack -- the two do nk together and so i think there's going to always be a class of the establishment that will never accept donald trump. >> and kelly, there are also a very short list of things that

they're entirely in sync on. remember president trump's views on trade are not with that of the economic and political republican establishment his views on immigration are not consistent with what republicans think they need to do for their own political futures. they're worried about primary challenges, but they've got a lot of disagreements with him as well as some agreemt on policy accomplishments sara refers to. >> we'll see how the major issues play out. john harwood, sara fagen joining us the end of the never-trump movement. jp morgan health care conference is under way out in san francisco. we had a lot of stock movers the last couple days lot of great interviews. meg tirrell is live with the chief medical haurofficer of alphabet's health care company hi, meg. >> hi, meg, joining us is dr. jessica of varley. trying to work on disease-carrying mosquitos to smart contact lenses to surgical

robots, you have so much going on how should we think about the role that alphabet is playing in health care now? >> what we're trying to do is take incredibly large problems and think about organizing information. we know that google and alphabet spend most their time organizing the world's information. but the same can be true in health care and life science so as a company, we make -- need to collect information in an entirely new way, think about infrastructure and the most important thing is activating health data in a way that benefits patients and physicians. >> one of the cool things you announced in the past year is project baseline, you're enrolling 10,000 people, you're going to follow them over four years tracking basically everything you can track about a person tell us about that, what you're hoping to discover there. >> many people know about the association between something like glucose and diabetes. we have a number of products focused on patients with diabetes maybe it's looking at ways to help support them, maybe it's ways to doing diabetic retinopathy screening. i think every person knows

someone who's suffering a health ailment where we don't know the connection and something like baseline is really that initiative to look very deeply at biology we're looking at sensor data, molecular data, the microbiome in addition to traditional health data. the idea is we can create the infrastructure to deal with this multidimensional data and surface insights we will think not only about today's problems but the future. >> does it take a company like alphabet that is so, so huge and doesn't require maybe the same timeframes as some of the biotech companies here in terms of return on investment. you can do a longer-term project like this without worrying when are we going to be making from this >> what we dry to tro try to do the needs patients have now. we have projects that are going to start to launch in 2018 and 2019 we're looking forward to our launch, for example, of our product for patients with diabetes as i was mentioning but you're right, the ability to

tackle big problems, and partner with companies like gsk, johnson & johnson, to think about these long-range issues is something that gets me out of bed every morning. >> you come from the world of medicine you're a cardiologist. over the next five years, what role is tech going to play in medicine is it going to be that big partner to the pharmaceutical industry >> as a cardiologist, what i like to say is we've been using new technologies for centuries if you think about it, the stethoscope 200 years ago was a new technology where we are today is thinking about new ways of exchanging information. even just looking around the conference today, i'm seeing more and more digital tools that can be used. so as a cardiologist and someone who really tries to think about tools we bring to patients i would ask the same question i would a stethoscope, does it help me do my job, does it help me take care of patients that's what we're going it be asking of these new tools and technologies. >> we have a lot more questions for you on that. we'll save it for another time hopefully soon thank you for joining us.

>> thank you. >> kelly, back over to you guys. coming up on "fast money" stay tuned for our last interview >> wow almost a wrap. meg, thank you very much meg tirrell. cnbc will be hosting our first ever health care conference on march 28th it's called healthy returns: investing in health care innovation it will feature top government officials, ceos, innovators and investors. go to cnbc.com/healthyreturns for tickets and more information. coming up, financials lag the broader market so far this year now goldman says it's time to buy in, when the "closing bell" comes back in two.

welcome back another record close across the board pretty much on wall street today. the dow is up 102 on the bell. 25,385 the s&p up six sorry, the s&p up three. the nasdaq up six. the dow is outperformer by far the russell closed down a couple of points today. it is time for a cnbc news update now with sue herera hi, again, sue. >> hello, again, kelly thanks so much here's what's happening at this hour, everyone the death toll has risen to six after a powerful storm triggered mudslides in southern california those mudslides unleashed a torrent of mud and debris. sweeping some homes right off their foundations. blocking roads and burying vehicles about 21,000 people are under mandatory evacuation orders. toyota is expanding its recall of takata front passenger airbag inflaters it involves more than 600,000 additional vehicles in the u.s

the automaker says affected vehicle owners will be notified by mail in early march. during a break in his meeting with congressional leaders at the white house, president trump telling reporters he'd defeat oprah winfrey if they met in a 2020 presidential election. >> i'll beat her oprah would be a lot of fun. i know her very well you know, i did one of ther lhet shows. had donald trump -- this was before politic her last week. she had donald trump and my family was very nice. no, i like oprah i don't think she's going to run. >> we will see let the intrigue begin that's the news update at this hour kelly, back downtown to you. >> yeah, the intrigue is well under way. sue, thank you very much >> got it. retail has been roaring this year after target became the latest company to report stronger than expected holiday sales. up next, we'll get the "fast money" trade on whether now is the time to take some of tseho retail profits off the table retail profits off the table stay with us we should move.

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stocks are looking to ramp up their gains for the new year. the s&p, the nasdaq in the midst of a five-session win streak >> shares of fargt target- much higher this morning. stronger than expected holiday sales. >> boeing delivering 763

commercial airplanes last year, an all-time high the previous record was 762 in 2015 >> the thing at the heart of this book is that everybody around the president thinks he's dysfunctional. and i would say, i would go, you can hold the gun to my head on that literally, everybody >> we're very pleased to see the tax reform went through. i think the fact that we now actually have a competitive tax rate that we've got a construct in place to repatriate earnings and cash from overseas, is going to give us much more flexibility, make us much more competitive. >> the economy is growing. earnings are growing rates are at all-time lows i mean, it just seems like the market is just going to continue for a while. we are more invested today than we've ever been. >> records across wall street again today. the big gainer is the dow, up 106 points on the bell. >> with the fed raising rates, that helped them they're all super liquid the rollback of regulations helps. all the stuff that people are pointing to are good for the

banks. well speaking of those banks, earnings season swings into full gear later this week with the big-name financials set to report before the bell friday are the banks buy or sell leading up to that joining us to discuss "fast money" traders guy adami and dan nathan is that a pink shirt, guy? >> this i think is salmon or fuchsia. i'm not quite sure i can't spell either one of them call it red. >> well, it's a lovely one, nevertheless you like the financials, right, guy? goldman -- >> yeah, i do. dan's going to push back and he should push back my theory, my thesis all along has been banks should have never traded below book value. but they shouldn't trade up to levels we saw in 2007, 2008, either so i'm of the belief that somewhere around 1.7, 1. 8 time price to book is reasonable in this environment for example, a jp morgan which is probably going to have a book value of about 70 bucks this friday gives you about $122, $123 stock it's not going to happen overnight. that's the to jrajeo trajectory

banks. >> the bull case from guy, bull case from bill millers, bold case from goldman, dan give us the more cautious take on the banks. >> it's in the near term obviously since the election, plait 2016, bank stocks outperformed the s&p 500 pretty considerably to me, a lot of that had to do with enthusiasm about deregulation about tax reform which we did get about infrastructure and i think as we head into this new year, i think there's a lot of headwinds for the banks obviously rates have started to move higher. i think investors have anticipated that and they get excited about that they see what guy sees from a valuation standpoint from what i think about this, ten years on from the financial crisis, i don't think they should be ever sniffing the sort of valuations they had ten years ago. >> yeah. >> to me, i think that there's a lot of headwinds to the banking sector in 2018 so i would not be buying them before earnings next week. >> all right well, it's going to be an interesting one kicking things off here in a couple days. thanks, guys, for joining us early. appreciate it. dan nathan, guy adami. there's much more coming up at 5:00 catch all the "fast money" action beginning at the top of

the hour. self-driving cars are allegedly the way of the future. up next, ceo of allstate joins us from ces. how his mpcoany plans on insuring them. what that could mean for the bottom line right after this

the consumer electronics show in vegas is the global stage for innovation every year companies from around the world show off the latest technology and talk about what is ahead what's an insurer like allstate doing there, looking to change the future of transportation, actually in a first on cnbc, we're joined

by allstate ceo thomas wilson. hi, again, thanks for joining us. >> hi, kelly thank you. >> i guess the sort of big gorilla in the room, the 800-pound gorilla, whatever metaphor i'm looking for, you know, are driverless cars going to put auto insurance out of business how are you guys thinking about these questions? >> well, driverless cars are a long way away. what the technology is going to enable us to do is connect better with our customers. we're here at the ces which there are not a lot of insurers around here. in fact, i think we may be the only one it's because we have a very aggressive connected customer strategy we have a product called drive wise we connect with you either through your phone or in your car and we give you more accurate price and we make your driving experience better. we have a square trade products which can connect all the devices that are sold here so it's unusual, but we're a leader so we're here trying to -- we're the only people with a booth. >> yeah. no i appreciate that because, obviously, it's better to kind

of get ahead of that innovation than get hurt by it. you know, i'm thinking sl ining recent announcements we've had companies like volvo and many others now will let you use a car on a monthly basis and comes with insurance packaged in that price. this is a totally different delivery concept than we've been previously familiar with, right? what does it mean for allstate >> it is, and, well, first, it's a good thing for our customers so the personal transportation system's way inefficient a 20% improvement in productivity is $3,000 per household per month. it's 5% improving their household. the biggest single economic opportunity we have to create prosperity for people across america, and what we're trying to do is help deliver that some of the ways we do that by giving people more accurate price, but other ways we're looking at whether we help people share their cars, how people insure themselves when they're sharing other people's cars because today, it's all embedded in if, but there are some people who are good drivers, and some people who are not so good drivers.

and the people who are good drivers don't want to pay for the ones who are bad so we're working on a product called mile wise which would support that >> so i'm also wondering how you guys feel about being stuck in, you know, sort of the muddy middle, the murky middle, where there's never been more technology in the cars but the fatality and accident rate is up what trends do you foresee there? is that cresting now is it going to get better? are accidents going to go down >> well, it's a really interesting question because for about 20 years, they were coming down through anti-lock brakes, airbags, and then about in 2015, they went back up again. and nobody really knows why. we don't know if it's people are on their phones, there was too much technology people were doing other things in their car, but we do know they went up. so what we're doing is working with the auto manufacturers and others to improve the technology in the car but the other thing we're doing is working on the people because 90% of those accidents are caused by people

and with our drive wise application, we can help you be a better driver. we'll say, kelly, you know, you do a lot of driving over 80 miles an hour. got a lot of hard braking. you're going around -- >> not true. not true. >> -- those turns kind of fast we can kind of help you. okay i wasn't >> well, listen. i know what you're saying, that's why people say take the human out of the car, it will be safer. there's a whole host of other things we know you guys are thinking through this we know you'll join us again tom, thanks for joining us today. >> thank you >> that's thomas wilson of a allstate out at the consumer elections show a central bank has turned a bigger profit than apple last year we'll tell about you that next >> coming up on "fast money," howard lutnick tells us what he howard lutnick tells us what he sees next for the markets. is what they hope to get out of life.

but helping them get there requires a real refusal to settle for average. because when you approach investing with a tireless desire to beat th, with a tireless desire to beat well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. wedo you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

welcome back and it's time now for the takeaway we begin with kodak. kodak, the once premier humbled camera company is the late toast jump on the latest crypto crazy, announcing the launch of a major blockchain and cryptocurrency. kodak's shares jumped on the news it's a blockchain based image rights platform, got that? and a coin to empower photographers and agencies to take greater control of image rights management. michael, are they just crypto pandering? >> with the creation of this potential product i would say no, because that actually makes sense to me. image rights on the internet are very sloppy, you can't get credit for it and get paid for

it but saying you'll have a coin, this is of course kind of an orphaned legacy residual company based on the old kodak that points out the whole difference between thinking there's potential in this technology and nobody doing the work to say, okay, what are the cash flows associated with that product, if it happens, and who is going to get it >> totally people are just taking a flier shares more than doubled today next, maybe facebook can make inroads in china. a virtual reality division is launching in china facebook says it won't store or collect user data. could this be the anchor to crack this huge market >> maybe the issue here is not so much the size of the potential chinese market it's of the vr device market if you look at the absolute numbers in terms of what they can even think they can get to, $12 million in a few years, not huge to me the big question is the whole product category

is it just transitional? >> and if it does well in china, they wouldn't mind that either >> absolutely not. who knows if it helps long term the brand. >> especially partnering with a local handset maker. final, the central bank unintentionally makes more than apple. the swiss national bank has an $800 billion portfolio of securities after piling up foreign currency and getting approval to diversify holdings and stocks, now they have to share these profits that they're making from the holdings with the government there in order to benefit the citizens which makes me wonder, now that this has worked out so well, will they ever sell? >> do they feel they can ever sell are they ever going to be in a position where they want to actually strengthen the franc? >> is it a monetary policy tool? >> it's very cumbersome. this is a company where the financial sector has so

outgrououtgrow outgrown it really is talking point number one for central bank skeptics and conspiracy theorists everywhere, which is not good for the overall markets, to have people think it's all rigged. >> i don't see how they get out of it at this point when it's working so well. it will continue to be a thorn in people's side, i think. >> yes i sat down with bill miller earlier this hour, we'll tell what you he had to say about bitcoin, next.

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bitcoin could go down 50 or 75%, right that's a different matter. we don't see anything in the are under lying structure of what's going on, not the price but the underlying structure of the technology that tells us there's any severe fundamental risk at this point >> that was noted investor bill miller discussing bitcoin. mikey, he also talked about whether we're seeing a market meltup for now he's on the side of no, even though it's something he has warned about jeremy grantham has been recently more vocal about it >> jeffrey gunlock is giving a speech, saying we're obviously in an investment face. a meltup is a persistent right but probably one that gains

pace, not this racheting higher in small bites i think it's much more through public participation, money being thrown at stocks as opposed to just a slow repricing higher >> more like bitcoin >> exactly we're not entitled to it, necessarily. i think bill talked about, when people started throwing money at his fundsin the late '90s. >> that's how he knew. >> he doesn't know if that will happen yet >> thank you as always that does it for "closing bell." "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," ethereum goe higher, leaving bitcoin in the dust tom lee says it could double in 2018, he'll be here to tell us what has him so bullish. plus cantor fitzgerald ceo