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quintanilla with morgan brennan and john fortt on the new york stock exchange the social network looking to emphasize posts from friends and family mark zuckerberg writes, i expect some time on facebook and measures will go down. as facebook deprioritizes news, the former president obama was on the first episode of letterman's new show on netflix, where he addressed the issue of news on social media listen to that >> whatever your biases were, that's where you were being sent, and that gets more and more re-enforced over time that's what's happening with facebook pages where more and more people are getting their news from. at a certain point, you live in a bubble and that's part of why our politics is so polarized i think it was a solvable

problem, but i think it's one that we have to spend a lot of time thinking about. >> two conversations here this morning, one is about the ad revenue impact and the share price, obviously, we're going to coff cover that but longer term it's a question whether or not zuckerberg sees this political risk we've been talking about for months as a real danger. >> seems like he does. i think investors are probably taking this a little bit too hard this morning. facebook has so many levers that they can just pull at will, that just because they are deprioritizing a certain type of content in the news feed, doesn't mean they have another level they can crank up and ramp up advertising it's interesting, this announcement from zuckerberg felt familiar to me, so i looked, january 2015 facebook cuts back on promotional posts from pagers users have liked, saying we want more of your friends in the news feed june of 2016, news feed prioritizes friends and family

and other core values versus things like news now once again we have basically the same announcement all over again. this is just something facebook does every once in a while, they pull a lever, push another one, and the revenue still continues to go up >> great you're prioritizing friends and family, but what happens when friends and family are the ones sharing inaccurate information or crazy opinions and that is now dominating your news feed? i want to see how that actually plays out. >> that never happens. >> never >> for more, let's bring in david wolf and michael graham. guys, good to have you with us michael, i guess let's start with the very near term. why some of the downgrades today, why the shares are down having their worst day since september. >> facebook's revenue model is built on user growth and engagement growth, and then ad load and ad pricing. those are really the four growth levers facebook has. i think what this announcement

does today is puts more burden on that add pricing to fuel some of the revenue growth. just to give you a quick example for 2018 we're modeling 15% user growth and 45% ad revenue growth so to make up that difference, what we're seeing now is based on this announcement, users should be spending a little less time on facebook, but the quality of that interaction is going to be higher therefore, you would think that advertisers are going to be willing to pay a little more for that interaction, and i just want to say i totally agree with the earlier point, facebook does this from time to time, they recognize that the core is to protect the user experience, and i think that's what they are doing. >> are we forgetting, perhaps, that facebook is not just facebook there's instagram, too, and they are, perhaps, not affected by this as much >> that's a great point. we know that the ad load on instagram is quite a bit lower

than it is on facebook, you know, we think that's by design. and if you put this in perspective, all media types get to a point where the ad load gets too high, and we've seen that in radio and television we've seen it on search ads in the past, so i think facebook is going through a natural evolution where it's trying to balance the need to grow the business and to grow revenue, but at the same time protect that core user experience. >> and, david, you own apple, you own google, a number of other stocks you don't own facebook why not? >> well, quite frankly, it's been a mistake we came close to buying it a couple of times. we were too conservative in our valuation expectations of pulling the trigger, and while i'm sitting here listening to the commentary and seeing the recent news, hopefully the market will push the shares down maybe even more and we'll finally get our chance >> where would that level be for you? >> i'm not prepared to say right

now, but we'll welcome any weakness to sharpen our pencils. >> david, overall, impact? it's been a week of interesting -- couple downgrades of snap in the last couple weeks, twitter is back above 25.25 this morning when you look at the push and pull of interest from adbuyers among these different platforms, how would you rate them? judging from your interest, i guess you're of the opinion facebook is in the poll position >> oh, absolutely. we would certainly go with the leader on that front we really have not had much exposure in that area. again, we probably should have, and hopefully we'll get another chance to swing a fat bat, and we would stick with the leaders. >> michael, is there anything to take away from former president obama's comments, combined with some of the concerns that we've seen about the way false information has been used on social networks as regards to

targeting? because more and more it's not just when you pick up your phone that you're being targeted now we've got voice command devices like the echo and, you know, cortanas in the home, apple is going to have the home pod soon if we're able to be targeted even when we're not actively holding a device, are there dangers there for tech companies, or just opportunities? >> i think the whole voice-activated device area is going to be an increasingly important one. we saw a stat the other day that 16% of u.s. adults now have some sort of voice-activated home speaker like an echo and some of the other products that you mentioned. i think facebook has also discussed the possibility of launching some products like that, so that's going to be a huge area that's going to continue to drive some of these major search and social media platforms further into our lives. it's absolutely incumbent upon these platforms to balance wanting to have content that is

real and valid and useful with not censoring the content. and that's always the problem when you have a lot of user-generated content, like you do on twitter and snapchat and facebook, you have to present that content to users, because that's why they are there, but at the same time you've got to be careful to make sure there's some integrity and not fake news i think all these big companies are applying artificial intelligence to this problem in a major way. i think we'll get increasingly good at curating content that makes sense for people to see. i think we'll get increasingly good at protecting users from dangerous content and from fake news types of content. and i think it will be an ongoing evolution. clearly, these major social media platforms have the resources to keep investing against that issue and a whole bunch of others. >> guys, thanks so much for that discussion huge story getting buried by

some other stories today, but it's important to note david, michael, appreciate it very much. still ahead, a lot more on facebook as the stock continues to slide on the news feed revamp we'll talk to owner of the milwaukee bucks wesley edens and get his thoughts on the markets, taxes, and more, including the new passenger rail he is launching in florida today and the president, we do expect to hear from as controversy swirls about the language he may have used in the oval office yesterday. we'll bring that in a few moments. best two-day gain r fothe dow since november 29th and 30th alerts -- wouldn't you like one from the market

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take a look at the shares that reported earnings, jpmorgan and black rock are rising, wells is down. wilfred frost has more on the results. >> yes, despite taking a $3.25 billion pre-tax litigation expense in the quarter, wells fargo ceo tim sloan can't guarantee all costs are now accounted for. >> i think we've made a lot of progress in terms of looking at the operations of the company, but i can't provide you with a guarantee or absolute assurance that we won't be making additional changes in the future to anything that we might find and i love to live in a world where i can give you an absolute guarantee and certainty, but that's not the world we live in. as i reflect on my first year in a quarter in this role, i think

it's fair to say that one of the mistakes we made at the company was that we didn't have a thorough enough review of the businesses on an ongoing basis, so our review will be continuing >> the fully adjusted eps to wells fargo was below forecast shares down about a percent. despite giving specific cost reduction targets, loan growth also is soft, but credit quality is strong. jpmorgan shares have rallied due to the constructive tone from cfo marian lake and ceo jamie dimon, particularly on investment banking, credit, and loan growth. trading is poor, particularly in currencies, which was down 27% year on year equity trading, though, was fine both banks optimistic about tax reform, estimating 2018 tax rates will be 19%, well below last year's roughly 30% effective tax rate guys >> thanks, wilfred wilfred frost. america's first privately

funded intercity passenger railroad, brightline, is finally opening to the public. the first leg of service starts this weekend between west palm beach and ft. lauderdale, with service in miami coming in spring and expansion to orlando also in the works. the $3 billion project is being closely watched as infrastructure, again, gained momentum on the hill and in the white house. for more we're joined by wes edens, co-chairman and co-founder of the firm that owns the privately operated rail system wes, thanks for joining us today. >> thanks for having us. very happy to be here. >> so, this project has been seven years in the making for you, and certainly when you look at passenger rail in the u.s., historically it hasn't been a money making venture look no further than amtrak, but you believe you can turn a profit on this railroad, what's the plan >> absolutely. it has been seven years. you know, there's a great history of profitable rail lines around the world

in fact, the northeast corridor of amtrak is highly profitable and we thought the characteristics of miami to orlando, miami the heavily visited international city in the united states, it's too far to drive, too short to fly that was the genesis of the project. >> why invest in this? i know the max speeds are going to be 135 miles per hour when the orlando leg comes on in two years. why invest in this rather than high speed rail or newer technologies like hyperloop? >> it's a really great question. the rail lines that are behind me are rail lines put in place when henry flagler built the railway originally you can go at grade a maximum of 135 miles an hour. if you want to go high speed, true high speed over 200 miles an hour, you have to build a bridge for 250 miles and then put a train on that sounds hard and expensive, and it's both of those things, so this is much more cost effective. we lose a little time, but to put it in context, it will take

us three hours to go from miami to orlando, high speed train might be two hours and 20 minutes or 30 minutes, so a huge difference in cost and time to build and not that much of a reduction in service so it's really the right model, i think, both for here and other corridors like this around the united states. >> certainly, there's been a lot of talk about bringing the private sector in to help fund infrastructure in the u.s. d.c. is starting to talk about what an infrastructure plan would look like. do you have plans to invest in other projects like this around the u.s. >> absolutely. i think that one of the things that became very clear in doing this project was that the only way it was going to get done was to privately finance it, which is what we have done i think the government has got some initiatives and programs to try to create more of a debt-funding capacity for infrastructure that i think catalogs a lot of growth i'm not intimately familiar with what the details are, what they are proposing to do, but with a few tweaks and access to

capital, there can be a lot of infrastructure developed in the country. >> and fortress was recently acquired by softbank i know you've told me they didn't invest in this project, but are there plans to invest in future infrastructure projects what's that relationship look like >> the relationship is one where we're an asset manager, they are our parent now they actually bought the stock of the company and took it private at the end of december, and we have a very good relationship with them in terms of the objectives for the firm, but on the individual investments we're quite separate from what they do. >> i know there's been a lot of reports in recent months that you were acquired as a quote, unquote, brain trust for softbank are you advising them on some of these investments with this fund >> i'm not optimistic enough to describe myself as part of a brain trust. i don't know the answer to that. i think we'll find a lot of ways to collaborate with them i think there's some terrific investment expertise they've had a tremendous track record over the years and we

think there's a lot we can learn from them and hopefully vice versa, as well >> wes, we're sitting here on the floor of the new york stock exchange, we have u.s. equity indexes at record highs again today. certainly, your focus in florida right now is infrastructure, but what is your take on the market right now? is it getting irrational >> well, i think that tax reform is, obviously, a big part of the picture today, but just the reduction in regulation has been incredibly positive for u.s. companies, and that's something we see in lots of things we're invested in, so i think it's very well based in that sense. i mean, frankly, certainly outpaced my expectations over the last year or so, but i'm not surprised when you look at the underlying businesses how well that's doing that it's reflecting itself in higher stock prices >> wes, something i didn't see in these announcements is exactly how tickets will be handled on a system like this, in an era where more and more is being done through apps versus with paper tickets how have you planned that out

for a pretty young tech savvy area where you expect people to be buying tickets? >> that's a great question there's an app, obviously, we've spent a lot of time developing a consumer interface we think is going to be, obviously, terrific that's one of these things on the consumer side you start with something and hope to improve and improve and improve it we know the standards for airline apps, other transportation apps. we're very mindful of that and want ours to be just as successful very focused on it >> and, wes, i have to ask you, one of your former partners, mike, very outspoken champion of bitcoin and cryptocurrency what is your take on it? is this the future coming into play here, or is this a bubble >> you know, mike is a big bull on it, they've done very well financially. the firm made a big investment in it that's been successful financially. i take none of the credit for that, because it was those guys. my view is i feel like the

underlying technology, the blockchain technology, has got tremendous applications. i think there will be a lot of very interesting ways to commercialize that as far as the crypto coins themselves and the valuations of them, it's not really my area of expertise, so i'm not really the right person to have a view about it >> i know you're about to board that train and take it up to west palm beach for one of these first rides here as service kicks off this weekend, but i got to ask you about the milwaukee bucks. one of the rookies, sterling brown, got pranked earlier this week there was a lot of popcorn involved and a nice mercedes, what's your reaction to that >> it's so fun yannis is not only a tremendous basketball player, but a very, very good guy, funny guy sterling was delinquent in his rookie duties, so he got a car full of popcorn as a result. we're excited about the future for those guys and excited about the present. i hope it's going to be a great season we hit the halfway mark with a

game against golden state tonight, so everybody is very excited about that i'm going to ride a train and then go out and watch a basketball game tonight. >> wes, thank you for joining us here on cnbc enjoy your train ride, and thunk again. wes edens from fortress. >> thank you when we come back, you can get some hints about amazon's future from looking at its patents. our deirdre bosa is reading the tea leaves and see what the company might have in the works. and president trump is about to speak in honor of martin luther king jr. day. we'll bring that live. "squawk alley" back after this (daniel jacob) for every hour that you're idling in your car, you're sending about half a gallon of gasoline up in the air. that amounts to about 10 pounds of carbon dioxide every week. (malo hutson) growth is good, but when it starts impacting our quality of air and quality of life, that's a problem. so forward-thinking cities like sacramento are investing in streets that are smarter and greener.

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amazon ceo jeff bezos announcing he's donating $33 million to a scholarship fund for daca d.r.e.a.m.ers the donation comes amid the debate over daca in washington bezos noting as part of the announcement that his own father came to the u.s. at age 16 as an immigrant. meanwhile, another story on amazon, the company has filed

for a lot of patents, and they've revealed perhaps what ceo jeff bezos has in the works. our deirdre bosa has more from san francisco. hey, deirdre >> good morning, john. amazon has about 500 patents pending, not all will come to fruition, but amazon has had notable patents successes over the years, like one-click shopping and technologies that have come the foundations of cloud computing, now its most profitable business. we looked at recent patent issues to get into the head of bezos and find clues about the inventions and technologies that amazon might be looking at next. with the help of m cam, an analytics firm, we found ideas that could be straight out of black mirror, like an augmented reality mirror, technology that would mute the echo's video mode by pixelating the image and would detect hacked self-driving cars the smart mirrors would let users try on clothes in a

virtual setting. amazon's echo right now is already halfway there, so an a.r. mirror would bring the fashion world deeper into customers' homes at the same time amazon is pushing deeper into the fashion space also the patent to detect hacked autonomous cars. it imagines a scenario one driver-less vehicle is taken over there's another patent amazon has never said they are getting into autonomous driving, it could be important for tesla, alphabet, and uber also a video pixelation patent as it ramps up video communications guys, these are specific cases, but themes do emerge when you analyze patent activity overall. m cam analysis reveals amazon is ramping up a video-connected home and a.r. technologies guys, back to you. >> we need a reporter just to cover amazon patents, i think. that's a lot of information, thanks, deirdre bosa as we go to break, look at

stocks at this hour. dow is up 190. just slightly off session highs. president is about to speak in honor of mtiarn luther king jr. day. we'll bring that live when "squawk alley" continues in a moment

hello, everyone, i'm sue herera here's your cnbc news update at this hour. president trump heading to walter reid military hospital later today for his first medical checkup as president

the fairly routine exam taking on outsized importance given the debate about his fitness for office trump has pushed back on that criticism, saying he is a, quote, stable genius southern california authorities say the number of people missing after the mudslides is down to five. the number dropped because people were located, but it could continue to fluctuate greatly. the number of confirmed fatalities remains at 17 china reporting its trade with north korea shrank 50% in december from a year earlier, as it tightened sanctions against pyongyang. china's custom agency says imports from north korea shrank 82%. and google deleted 60 kid-themed apps from google play app store after security firm checkpoint found they contained malware that could display pornographic material. the malware could also trick users installing fake security apps or induce them to sign up for premium services

you are up to date this hour, back downtown to "squawk alley. carl, back to you. >> all right, thank you very much, sue. europe is closing even as we speak. let's get to seema mody. >> hello, carl european stocks finishing the week on a positive note, and same goes for the euro, which is now at a three-year high against the dollar after german chancellor angela merkel and her conservative bloc struck a deal with the social democrats to open coalition talks earlier today in berlin merkel hailed the breakthrough as a new dawn for europe. her failure to form a coalition government caused a lot of uncertainty since the german election took place back in september. that hitting the markets specifically in the currency world. let's is switch to stocks, as a result of a new tax law in the u.s., fiat chrysler will invest more than $1 billion to modernize its truck plant in michigan, adding 2,500 jobs. fiat also announcing $2,000 bonuses for tens of thousands of

employees in the u.s we should point out the carmaker joined the list of european companies that have spoken on the tax law. oil giants bp and shell expecting a positive impact, despite big fourth quarter charges. deutsche bank and credit suites sees a net loss in 2017. puma down sharply after its partner planning to focus on its luxury core business puma down 6.5% in today's trade. john, back to you. >> all right, thank you, seema for more on the regulation now of bitcoin and other digital currencies, we are joined by former s.e.c. chairman harvey pitt, as well as former s.e.c. commissioner and potomac global adviser ceo paul atkins. gentlemen, welcome to both of you. >> thank you >> good morning. >> harvey, tell me -- you said you expect a regulatory, i don't

know if crackdown is too strong a word, on bitcoin and other cryptocurrencies do you have an expectation on exactly when that might come and what the impact will be to the pricing of those >> well, i think what one can say is that there is increased regulatory scrutiny on the part of the s.e.c. and cfpc, which is a very positive development, and the s.e.c. has already brought some cases as to when additional cases will be brought and when a so-called crackdown will occur, i think that's speculative at the moment, but it will take place, i believe, in the coming month or two following now >> okay, that's pretty soon, paul what's your expectation of what this is going to do of the price of particularly bitcoin? because every lyft or uber i get into, if they find out i work for cnbc, they are asking me about bitcoin. it's certainly become just a

broad consumer, at least question, should people have their money in this? >> well, i think that's a great point, and i think, you know, the speculative fever has taken over among many people i just had a friend yesterday tell me that one of his assistants asked if she and her husband should invest in bitcoin, because when he talked to her husband, he's in the military and he was saying that so many people on his base, you know, have bought bitcoin and they are millionaires, at least on paper, of course. when you have that sort of thing going on, where people are kind of blindly investing and, of course, my friend advised his assistant and her husband not to invest in it. it's, you know, a cause for a concern, where people are putting money into things they don't necessarily understand and they are just doing it because everybody else is doing it >> gentlemen, we're going to take a short break

hope you'll stay with us as we take you to the white house. i guess not quite yet. harvey pitt, my question might be, do you envision a global standard for these currencies, and maybe among a bloc of countries? how much can ask various countries agree on some kind of regulatory framework >> i think there's a real likelihood first that the more responsible elements of the cryptocurrency community will themselves develop standards i think paul atkins is working with some folks in that direction, which is a very positive effort, but i also believe that there will be a very positive effort made in the global community to come up with standards and discipline, and i think that there will be a real

success in that effort once the countries start focusing on this >> paul, initial coin offerings have been coming under fire lately good or bad? >> well, you know, not every initial coin offering is cut of the same cloth, and so i think people have to be -- have to scrutinize them very carefully, and harvey just mentioned on part of a group called the token alliance, we were trying to come up with some guidelines and best practices for people who are buyers of these coin offerings, also issuers and get government input, as well so we're hoping to come up with some of our white papers as part of the digital chamber of commerce effort here in another month or six weeks or so >> harvey, do you think this is going to end up at a point where the anonymity feature of a lot of these cryptocurrencies, at

least maybe at core doesn't get voided out or is the government going to want to know the nature of these transactions and be able to follow the money, perhaps even globally, when all is said and done here? >> in theory it's a distributed ledger, so you can go back and identify where things have gone, who's bought and sold to whom, at least, you know, if you do some work on it so that part -- these things should be, like bitcoin, it's basically a peer-to-peer payment system, and so, therefore, you know, there's some utility in that unfortunately, you know, there's been speculation around the value of it and that has created a lot of the other, you know, aspects of it that are very concerning >> harvey, there's been some notes out this week looking at where it's gained the most traction around the world. i think it's goldman that points out it's really taking a hold in countries where there's already

massive currency instability, and i assume that you consider that a lot of fuel for this run we've had so far and maybe in the future >> i think that's true i think that there is a real appeal where there are weaknesses in currencies, but even in the u.s. we are seeing an enormous outpouring of interest in both bitcoin and other cryptocurrencies >> harvey, let me interrupt you. take you to the president in the roosevelt room >> -- and the many distinguished guests for joining me here today. it's a great honor earlier this week i had the tremendous privilege to join isaac and alvita to sign into law legislation redesignating the martin luther king jr. national historic site to the

martin luther king jr. national historic park. the new law expands the area, protect it, and historic sites for the future, generations of americans are becoming so important. and this is a great honor for us and a great honor to dr. king. today we gather in the white house to honor the memory of a great american hero, the reverend dr. martin luther king jr on january 15th, 1929, martin luther king jr. was born in atlanta, georgia he would go on to change the course of human history. as a young man, dr. king decided to follow the calling of his father and grandfather to become a christian pastor he would later write that it was quite easy for me to think of a god of love, mainly because i grew up in a family where love

was central. that is what reverend king preached all of his life, love love for each other, for neighbors, and for our fellow americans. dr. king's faith and his love for humanity led him and so many other heroes to courageously stand up for civil rights of african-americans. through his bravery and sacrifice, dr. king opened the eyes and lifted the conscience of our nation. he stirred the hearts of our people to recognize the dignity written in every human soul. today we celebrate dr. king for standing up for the self evident truth americans hold so dear, that no matter what the color of our skin or the place of our birth, we are all created equal by god this april we will mark a half

century since reverend king was so cruelly taken from us by an assassin's bullet, but while dr. king is no longer with us, his words and his vision only grow stronger through time today we mourn his loss, we celebrate his legacy, and we pledge to fight for his dream of equality, freedom, justice, and peace. i will now sign the proclamation, making january 15th, 2018, the martin luther king jr. federal holiday and encourage all americans to observe this day with acts of civic work and community service in honor of dr. king's extraordinary life, and it was extraordinary, indeed. and his great legacy thank you, god bless you all, and god bless america.

and with that i'd like to ask a great friend of mine, secretary carson, for remarks. then we're going to be signing the very important proclamation. thank you very much. ben? >> thank you, mr. president. it's an honor to be here today celebrating this solemn occasion >> that's the president, along with the vice president, ben carson, secretary of housing and urban development, signing a proclamation for mlk day busy day for the president ahead of his yearly physical, before going to palm beach tonight. eamon javers covering that at the white house. >> you're right, this would normally be the kind of event that sort of pro forma for the president of the united states, an opportunity to engender warm feelings ahead of martin luther king jr., day, but on this day he comes to the podium with a

debate in the country swirling around whether or not the president is a racist based on some comments that he made yesterday in which he apparently insulted the country of haiti, el salvador, and countries in west africa. the country put out a tweet this morning seeming to back off of that, but it's not clear whether or not he's denying he made the racially charged statement and then followed up by saying he wants fewer immigrants from haiti and more immigrants from countries like norway. i've asked white house officials several times throughout the morning whether or not they are denying the president made those comments they simply won't say. they don't know what the official white house position is on whether there's a denial here of the president's comments. dick durbin, number two democrat in the united states senate said the president did, in fact, make those controversial comments yesterday. he called them racist and vile so there's a debate here swirling around how the white house is going to handle this for the rest of the day. that turned this event this morning, which normally, as i

say, would be pro forma for a president, into something that a lot of people are paying a lot of attention to. we just saw the president staying very much on script there with some very warm and welcoming words. and now we see dr. ben carson also speaking, as well carl >> eamon, there's a lot of heat around these comments and whether they were made or not and what the implications are, but when it comes down to it, what's the political reality does this change the chessboard at all when it comes to immigration or other policy? does this really shift anyone's position in congress >> well it does, john, it shifts the politics around the immigration debate we saw something early in the week between democrats and republicans, saw the president leading a 55-minute session discussing daca and comprehensive immigration reform, seeming open in that meeting on live television to compromise deal on immigration after daca if he gets what he wants, which is wall funding and

also some security spending in terms of the borders for the united states. that seemed to be a moment where a deal was possible. the question is, as we reach the end of the week, if it is still a moment where a deal is possible in the wake of the president's words. we'll wait and see what all the parties involved have to say about it >> indeed. the market, clearly, not rattled by any of the controversy. dow is up 200 points, eamon, even as the spending deal deadline is fast approaching thanks to you at the white house, and we'll monitor the comments out of the roosevelt room take a short break with the dow up 200, s&p up 13. "squawk alley" will continue in just a moment. don't go away.

coming up top of the hour on half-time, unstoppable dow after another day of new highs, which stocks are still worth buying and ones you should stay away from. plus, facebook plunging on a major change to its business is that stock's record run now in jeopardy? and widely followed banking analyst with us today on whether the banks will live up to the hype this earnings season after the big rundown in those stocks. see you top of the hour, carl, ten minutes away >> see you then. let's get to the cme group and get the santelli exchange with rick. >> good morning, carl. i'll tell you what, it really has been a wild ride for foreign exchange not in the terms of traditional volatility volatility in some ways is actually not been that great between some of the major components of the dollar index, specifically the euro currency

they've been hovering, but the problem is they've been hovering at extremes. as you look -- we're going to have to go to breaking news. we'll be back. breaking news right now. >> rick, i apologize we take you back to the president. >> -- federal holiday, 2018, by the president of the united states of america, a proclamation congratulations to him and to everybody. >> reporter: mr. president, do you have an apology for the statement yesterday?

>> reporter: mr. president, are you a racist mr. president, will you respond to these serious questions about your statement, sir? sir >> mr. president, are you a racist >> we're waiting to see if the president would answer any questions posed to him about the comments that were attributed to him by "the washington post. clearly no questions being taken today. >> questions were asked though, as you might have heard. we apologize to any children at home who are interested in business news. they were quoting what the president has denied that he said but what senator durbin has said he did indeed use a particular expletive to refer to the places where some immigrants are trying to immigrate to the united states from. >> i suspect he's going to react

and have some commentary on this at some point. even if it's not right now at this moment in time. just total side notes, something that's got ebb overshadowed in all of this, my surprise that these sites tied to martin luther king jr. didn't have a higher ranking with the national park service that was kind of interesting >> well, they do now. >> yeah. >> markets continue to roar ahead as wapner just said. dow up 208 we're almost within 200 points now of dow 26k, and as you recall dow 25k was a week ago yesterday. back in a minute

let's get back to the santelli exchange at the cme hey, rick. >> hi, carl. thank you. so is the weakness in the dollar index and the strength in the euro going to continue in 2018 hooks like it all the big trends seem to be intact from 2017 take a look the dow, nasdaq and s&p. on the screen you see a 20-year chart of the euro over the dollar getting ever closer to 1.22 you're best served not to get caught up in the minutia on the board i have kind of the mirror opposite, the 20-year chart of the dollar and real quickly we know right now that we've basically violated this 92 area we have a 91 handle. this blue line represents 90, but the point of the matter is basically from 2004 to 2015 we did a lot of work under 90, and the point is that are this

formation certainly looks like you're going to spend time at the very least test 90 but most likely move lower. the euro looks exactly the opposite, like it's going to spend a good deal of time above 1.20, we're talking about 20-year charts so we don't want to exaggerate the time frame or the amount of volatility or the direction, the path. it seems there's a couple of things at work here on the "wall street journal" a couple weeks ago about how repatriation is going to be the bullish for the dollar and i don't disagree. the problem is in the times we live in, it really points to the old adage by rumor sell fact there are many reasons that tradeers have been accumulating dollars and taking a more bullish approach to the dollars. federal reserve may be at the top of the list, but also things like repatriation. the fact of the matter is knowing all those things hand knowing how traders like to get in front this is not putting a lot of optimism in that position working. i still think it's all downhill from the dollar index. we can debate as to how much

finally. i'm going to give you a little summertime in january, and it's cold in many parts of the country. larry summers recently at a brookings institute speech said that the fed normally raises to 500 basis points, 500 basis points when there's a recession, when the economy doesn't act well and obviously he was pointing out we don't have 500 basis points anymore the point is we haven't been calibrated right for a long time and in all deference to larry summers i do totally agree with him on this and the notion of the fed buying insurance and raising rates was something that many have been talking about a handful of years ago we should have taken out that insurance, like a long-term chart. i've had plenty of charts with cpi data that showed we had more cpi-type inflation prior to our first tightening at the end of 2015 the fed is offsides a bit, the metric isn't relevant in the form of 2%, but we do need insurance, but not 500 basis points worth you have to recalibrate both sides of the ledger.

carl can a, back to you. >> interesting times, rick thank you for that meanwhile, the s&p is now having its best start to the year since 2003 our commentator mike santoli is backhere at post 9 rates getting hammered. >> it is that kind can have risk-on movement anything that's a yield proxy is being sold. really the only things getting sold in the very defensive bond-like stocks 2013 comparison, best start over nine days of a year since 2003 is very interesting because that was kind of this thrust higher off the bottom of a bear market a few months earlier that was kind of the first rush, and what we're seeing now is i think closer to the other comparable which is 1987 which you had a similar kind of huge start to a year, when it was later in a bull markets you had a rush of enthusiasm and it really started to run hot and i think you're seeing that right now. yes, last year was a very strong year up 20% but the character of the mark is changed in terms of the size of the daily moves, the amount of urgency i think in the

flows into the market so that's where the vix is up. if the vix is above ten because the market is starting to operate with a little more energy to it. >> i feel the biggest story that wasn't this week was the selloff in trish rifles everybody was sort of waiting for that 2.6% mark in the ten-year and we never actually got it. everybody was so worried that rates would start rising and they who start rising faster than anybody expected. is that still a risk right now >> waiting for it for five years. that is the question is the bond market, whether the government, you know, bond market, treasury yield is going to inch higher out of their range farther, or is the corporate bond market going to soften up. none of those things have happened and so the stock market is effectively saying, hey, look, we're looking at the economic conditions and we're trying to price in an accelerating economy that's starting to run hot. the bond market is not priced for that, therefore, we're going to play -- until they tell us game over. >> i wonder how much of this, really from most of 2017 we have guests on cnbc asking them is

tax reform priced into the market or not? and when you look at indexes hitting record high after record high after record high and west eden has touched on this earlier in the show, maybe tax reform wasn't as priced in as everybody was thinking. >> it wasn't priced in in any kind of accounting sense it wasn't priced in in that mechanism of raising earnings estimates on these companies and having the market put a multiple on it but honestly i think that's only just working because it's one of many, many positive things going on. >> we don't know the causality to the bill, we don't know, and it's going to get some credit and it may deserve it. >> exactly. >> and maybe it deserves credit because it's creating this sense of we're adding fuel to an already hot fire in terms of how the economy was starting to roll and the stock market likes it for now because the bond market is not telling, it hey, there's risk here. >> what do you think of this move in facebook, down pretty sharply, 4% in does that mean that facebook is

resilient or people are randomly -- >> facebook is going to have a little bit of support here at some point i think in the price but it's a matter of, look, these guys are deciding to take their own hit and they will have to see it to do the numbers. >> next week is going to be busier with earnings we'll get ready for that have a good long weekend see you tuesdays let's get to the half. >> and welcome to "the halftime report." i'm scott wapner our top trade this hour. stocks at new records again and now on track for the best start to a year since '03. our question is simply this. if you haven't fully bought into this real should you or should you just wait for a pullback is a pullback ever going to come with us for the hour, josh brown, steve weiss, jim lebenthal and erin brown the head of asset allocation at ubs. let begin with the new records again for the major averages along with the transports, the small caps and bank earnings beat weiss, at some point you