resolve their considerations and then they move on to a settlement with apple. >> all right. >> no doubt with the world's largest company, microsoft a name that works well for technology moving forward. >> see how long that lasts if apple can get to the top of the heap thank you for watching see you on monday. that does it for us. "power lunch" starts now i'm kelly evans. here's what's an the menu today on the final day of the trading week has the market gotten tired? we have had a series of whiplash moves. we'll see if today's calm is just before the calm before another storm. betting on the banks with the sector deep in the correction m of the stocks in a bear market, will we see banks bounce back in 2019 or will this continue and if the volatility has you frustrated, well, maybe visiting a wrecking club will help you get the rage out. "power lunch" starts right now ♪

welcome to "power lunch. i'm melissa lee. a very volatile day with the dow seeing a more than 300 point spring a move higher today would be the third day of straight gains. intel, walmart are your dow winners. it has been a great week for retail stocks. etf that tracks the sector on pace for the best week since june and a semi stock, look at those, ending an positive note on pace for the best week since november for more on the market action let's get to bob pisani at the new york stock exchange. >> we only had a 200 point move from high to low, remember that used to be a big thing that meant like -- it's like boring today we like boring because the traders are exhausted. i'm exhausted. we are looking forward to the new year here. the sectors are kind of flattish health care, banks, energy materials. nothing really sticking out dramatically again a lot of people are quite relieved about that.

melissa rightly brought up retail and faang it has been a good week overall. let me show you some quick numbers. kohl's and macy's, footlocker. 6, 7, 8, 9% moves. gap had a good week as well. mastercard also had a good week. so is visa faang, flattish today, but facebook, alphabet netflix, apple these are all nice moves this is one of the reasons that nasdaq 100 is the best performer this week. so remember what we have been talking about the last couple of days what's the elements of a rally what does it look like where do you find the bottom first and most importantly the drastically oversold conditions. i think that's the most important factor in the snap backs we have seen tax laws abating it's been quite an intense month. a little bit of short recovery i think that's a bit of a factor and the pension funds. the asset reallocation what to look for this afternoon. what we saw yesterday.

let me just show you the chart of the s&p and the treasuries. that big white line is the s&p 500. that orange line there of course is what was going on with the treasuries we saw big selling in treasuries in the middle of the day and then we saw big, big moves up in the stock market that's called an asset allocation white line going up big. that's the s&p 500 they're buying stocks. that yellow line going down that is bonds they're selling bonds. that's an allocation program sell bonds, buy stocks that's likely pension funds they don't send out a press release that's what i'm going to be watching for this afternoon. see if we still get some of that back to you. >> thanks bob pisani after the markets plunge on christmas eve a high ranking administration official contacted at least one well known investor and we have the details from scott wapner.

>> you know how important the market has been to the president on performance and we're learning now about that sharp pull back. how it was playing in the white house. i'm told a high ranking trump administration official reached out for advice on how to get stocks to go up. and that call took place after the christmas eve sell-off of course the worst christmas eve session ever the administration was said to be determined to get stocks to reverse and go higher. i'm also told the investor who was called told the administration the following get president trump to stop criticizing fed chair powell on twitter, stop the turnover in the white house, strike a deal with china and get peter navarro to stop saying incendiary things with china and that we're at odds with what others have said publicly at well. >> maybe around the time of this call, we had kevin hassette come out, commenting on jay powell. there was going to be face-to-face administrations with the administration officials in china i mean, it seems like they

really took that heart -- that list to heart. >> i think we have all seen how important this stock market is to the administration. who knows what was really, you know, going on inside of the white house as the stock market was plunging we were down 20% in bear market territory for the s&p. i think it was sort of on everybody's mind what can we do to get stocks to go higher the words that were used to me, desperate to get stocks higher trying to do anything they could to think of -- >> he or she what does it rhyme with? >> can't do it. >> arl mikan >> no. don't ask me any others. >> they use the exact terminology how to get the stocks to go up? >> yeah. >> by the way, it was the same

refrain we have heard over and over again but maybe it counts more if it comes from the horse's mouth. >> you want to know -- he was asked, you know, how are we going to get stocks up, okay, tell the president to stop attacking powell on twitter, have navarro not saying incendiary things about china, well, peter speaks for himself. >> the president doesn't like being told what to do so it's interesting if he was told about the conversations or if this person is trying to, you know, just present the message as himself. >> he doesn't like to be told what to do i think that's fair to say and he doesn't like to see the stock market go down maybe one sort of overtook the other in this instance we'll find out, you know, if there's another tweet in the days ahead about jay powell and his job and the job he's doing we'll see if it was taken to heart or not but they must be feeling better at least in the last few days of trading. >> we haven't heard about powell

himself. we have heard about the government shutdown though it doesn't seem like the president is backing down on his demands for border wall funding. elan moi has the very latest. >> well, right now, all the negotiations over the shutdown they're happening over twitter here's thepresident this morning. we will be forced to close the southern border entirely if the obstructionist democrats do not give us the money to finish the wall and change the ridiculous immigration laws that our country is saddled with. this is a battle that's already been fought and lost the last time the white house and democrats thought they had a deal, it included a pathway to citizenship for young, undocumented immigrants in exchange for more money on border security and that deal fell through the proposals failed in the senate and now the president appears to be trying to broaden the scope of the current talks once more. he went on to tweet this -- the united states loses so much money on trade with mexico on nafta over $75 billion a year he references some drug money as

well and he says that he would consider closing the southern border quote, profit making operation. so now trade is also part of the equation remember president trump threatened to go back to pre nafta in the tweet and he'd withdraw in order to force congress to approve the new mca. the administration is looking for other potential leverage points beyond money for the border wall. >> if they had the other things and they're able to get a couple of other things and not the border wall i guess they can call it some sort of a victory then. >> well, the point is they have tried to get those things in the past and it hasn't gone so well. it's pretty clear right now we are at an impasse and both sides are looking for a way out. >> all right thank you. well, it's been quite the whipsaw holiday week on wall street and an impressive late stage rally on the heels of a record 1,000 point gain the day before has the market found the bottom

or will the new year bring new pain bespoke's paul hickey is with on set with us. >> good to be here. >> is that the bottom? >> i don't think so. i think, you know, you look at all of the conditions and we do a lot of historical analysis when we see the types of reversals we had and the oversold conditions that we had and we see the readings the way they were, if you look a year out you see the better than average returns going forward. that's why we're starting to nibble and find some stocks that look interesting here. but in the shorter term, every one of the periods, the periods you good morning to september 2001, july of 2002, october of 2008, july of 2010, august of 2011, january of 2016, what all of those periods we saw similar conditions, but those -- at that time we saw those conditions we ended up seeing a lower low.

what we want to see going forward we want to see if we see a lower low. we want to see the internals show less baby out with the bath water. >> is there a pattern to those lower lows in other words does it take days or a process that may take months or maybe even years >> well, so, i wouldn't say years. it's weeks to months so 2016 we saw it in january. we saw the low just a few weeks later when jamie dimon, the dimen bottom they called it. in october of 2008 it took to march 2009 until we ended up seeing the ultimate low. so if you have a strong stomach i think you can start to nibble here we have sentiment that's gotten completely washed out and valuations we're going into the new year 2019 which is the first year in a while where we have been able to say the valuation aren't above average. we have average valuations so relatively attractive here and unless you think we're going into the imminent recession, which we don't necessarily think at this point that there's more

evidence pointing towards a slowdown than there is a recession at this point. >> speaking of valuations intel's forward p/e is 9 1/2 times right now. >> that's one of the names so what we're looking for is stocks and sectors that were faltering earlier this year when the market was doing great that are now showing signs of stabilizing and aren't making lower lows so intel is one of those names it pays over 2% dividend it was faltering before the semis started to falter. it hadn't gone on to make a new low so that's one name one name, hallty home builders let us down. that's up considerably since e the -- so that's another name. 2% yield the third name along that line is emerging markets. the eem has not go on to make a new low. it's below the 200 day moving

average for 140 trading days that's happened two other times. 2008 and 2016. eem was up - >> i think eem should go away as an investing class at this point. it's decades since the financial crisis -- the performance has been woeful. what is it really? do you think people can truly make money in this emerging markets thing over time? >> i think you certainly can it's -- what's going to happen if we do see the fed start to take the foot off the gas and start to ease a little bit that's going to put pressure on the dollar and put -- and that's going to help out emerging markets. you know, you look back to early 2001 when commodities went on their big boom, nobody even knew what some of the companies were. the symbol for u.s. steel no one knew what that was in 2001 for about three years it was a great performing stock when you see that type of mentality and sentiment that hey, i mean, who in their -- >> leave it for dead means -- yeah. >> it's maybe a period you want to start to get interested in.

it pays over 2% eem. >> which sector or sub sectors are value traps right now? >> i think as far as value traps are concerned, we tend to see the consumer staple sector which has been -- you know, i always think there's cheaper areas of the market where you can get more growth and have better dividends. apple i think is more attractive than a lot of consumer staple sector stocks at this point. then along with the tech netflix isn't a value stock at this stage, but the company is transforming tv. and it is in our surveys it is by far the most popular streaming service and most importantly they have pricing power. we asked people what they were willing to pay for netflix, they can raise it by $3 a month easily. >> you don't care it's trading at 60 times -- >> most are ten times earnings,

intel, pulte netflix isn't cheap. >> for netflix it is, but not for anybody. >> all right paul hickey from the bespoke. >> the s&p 500 is down 20% from the recent highs how good are bear markets? he meic cahd.ea weavso pksoming up on "power lunch." a business owner always goes beyond what people expect. that's why we built the nation's largest gig-speed network along with complete reliability. then went beyond. beyond clumsy dials-in's and pins. to one-touch conference calls. beyond traditional tv. to tv on any device. beyond low-res surveillance video. to crystal clear hd video monitoring from anywhere. gig-fueled apps that exceed expectations. comcast business. beyond fast.

welcome back to "power lunch. one major reason for the big stock declines at the end of this year -- fears about a slowing economy, possibly even a recession on the horizon but how good are the markets really at predicting recessions? steve liesman is all over the story. >> the answer when it comes to bears markets terrible in terms of predicting recessions and a bit better of a flip of a coin if we're in one now. to make a technical note first by the bearest of margins -- a pun, you get it? >> yeah. we got it. >> it's not -- thank you very much. >> we're just not laughing, sorry. >> by the bearest of margins it's not a bear market we only closed 19.78% from the september 20th high. not the 20% that unofficially/officially tells us if it's a bear market. close enough to ask the question -- how smart is the average bear how good at predicting the

recession? thank you very much. in the post-war era 13 declines of 20% from the prior high five times no recession within 24 months and eight times we were in or on the verge of a recession. here's a couple of the examples. 1987 you remember that big decline, no recession 2001, you know, we were already pretty much in it. there would be one declared in three weeks' time. 2002, no recession after that. '08 and again in '09 we were already in a recession then when it happened. the bad news -- okay first of all, a big question here you can write in we believe that's a grizzly bear on the left. that's the worst of the two bears rather than the brown bear or black bear. if that's a grizzly that's not good 8% decline on average after we we hit that 20% mark 52%, that's the worst, the grizzliest of bears we could fine, '07-08 and then the nicest bear of all,

21% decline in 1956-57 we are 15% below the september 20th high. so you can take your cue from the market that argue so far, recession is not imminent and the market and the economists do agree. >> let's talk about that, steve. stick around we're bringing in heather long the economics correspondent for "the washington post. and joe lebornia let's show your household wealth chart which shows that we have passed the previous bubbles and we're heading ever higher. what does that tell you about the economy? >> the stock market has not been a very good predictor of a recession and the fed has been worse. however with financial assets so high as the share of income, kelly, any downside in equities posed a significant risk to growth that's what worries me. >> so you think it might be

unsustainable. heather, what do you think >> i think the key to watch is the consumer right now they look very good. wages are growing which is a great sign but certainly that consumer confidence data that we saw yesterday was very alarming. particularly that sentiment about what the economy is going to be like in six months usually what's driving that is feelings about the job market. so i think it will be key to watch that job market data going forward. >> joe, are you bearish, do you think we're going in a recession? >> i'm real worried about one. the answer is no but this depends a lot on what the fed does this fed balance sheet unwind, the rate hikes, this obliviousness to what's happening in the rest of the world and the fact that inflation is low is a problem. so if the fed continues on the current path, we'll be in a recession by 2020. and i'm hopeful -- hold on, steve. i'm hoping that the fed will relent and let this economy run

high. >> joe, what impact if any do you see from the tax cuts next year i find it interesting that many of the people who were big proponents of the tax cuts and believe it's a gift that will keep giving into future years are the ones arguing that the fed should stop right now because the economy is too weak to withstand it. what do you see happening from the tax cuts next year >> i liked the corporate side, steve, very much i always did we'll know in five to ten years who it was good policy the answer is we don't know. i don't like what they did on the individual side. too much of the economy is on the coast where you have the real estate market that will get hurt i think it was done haphazardly. so we'll see. >> does it matter -- i'm curious, steve, maybe you have an answer to this. that it seems like corporations did spend most of their tax wind fall on buy backs? does that sort of alter how you filter that through to the economy? we are reading about apple buying $63 billion of stock, losing $9 billion in the trade.

>> there's a lot of inconclusive research about the macro effects of buy backs i think it's not negative. i think for sure it's not as impactful as if they went out and bought new plants and machinery or broke ground on new plants what it is is it's putting money into existing assets it's why by the way previous benefits to the corporate taxes were done for only new investments. so you didn't reward old investors because one of the negatives of that let's say you have a guy that was kind of on the fence or a company on the fence. you have rewarded them and maybe you kept them in business then we they wouldn't be in business. so there's a lot of stuff about that it's good because anything that raises stock prices ends up reducing the cost of building new plant. but it's not the same as building new plant. >> heather, joe just mentioned the obliviousness of the fed what is the view in washington and at the white house we have heard the administration now reiterating that they have 100% confidence in fed chair

powell do you think that's true >> i think the key we'll look back in a year from now on this week and all of the volatility is that the president himself never came out to quash those rumors and reports in "the washington post" and elsewhere that he would like to fire fed chair powell it seems like this whole debate between trump and powell is shaping up a lot like trade a year ago where you have some of the same people in the white house, same top aides like secretary mnuchin, who are backing powell, sort of doing what the market would like and then you have another contingent that would like to see powell forced out or like to see more pressure on powell as we know what happened in 2018, the side that ultimately won was the side that wanted those tariffs and wanted more aggressive trade policies. >> heather, here's the interesting thing. i guess i'll ask this to joe joe, your critiques of the fed make it sound like you'd like to see powell go.

is the street saying we's dissatisfied with the performance of the fed and maybe we wouldn't mind that person being replaced >> no, this is an institutional bias that stems from the fact that the fed many decades ago abandoned all pretense to look at money and credit variables and focused on the phillip outcurve gap meaning low unemployment rate is what drives the inflation process. that cannot be further from the truth. so it's this bureaucratic mindset of a model driven forecast that i have the problem with whether it's powell or somebody else unfortunately it probably won't matter - >> who would you like to see >> because monetary aggregates are predictive of nothing. >> hold on that's not correct. >> i don't have to have this discussion on table television but -- >> if the fed focused on money and credit they may have missed, they may not have missed what happened in the shadow banking system who would like rich clarita is good

larry -- >> would not be a monetary policy acolyte. >> no, rich would not focus on the unemployment rate. they would not focus on the unemployment rate. the singular biggest mistake they make. i know you love the fed, steve. >> i don't love the fed, joe i just dislike ideas that would be disproven joe, you're going back to something that no monetary policy - >> -- does it cause inflation? >> i'm not a big phillips curve advocate but i know -- joe, you have to get with it. >> we're not talking monetaryism. >> this debate is actually, heather, reflective of the debate in the market to some extent it goes back to the president and whether or not, you know, the kind of person who he thinks might be a better fit for the fed chair is probably not along the lines of this discussion or maybe it is. >> well, i don't think that the president has really thought about who he would attempt to replace powell with. obviously, his short list that

he was looking at last year included a lot of people who would probably have hiked rates even more aggressively than powell or taken more aggressive stances. in many ways the people he would like and who agree with him most on monetary policy are actually more left leaning academics and more left leaning economists which we don't want to do the president any favors >> it's a good point the irony. thank you heather long and joe and steve liesman mixing it up - >> i'm going to send you some charts, joe. >> does this have to be off line you can include us all too >> i'll include you melissa and kelly. >> all right, thanks. time is running out to sell your stock losers for tax purposes but what you would how is do if you think that dog of a stock is ready to turn around? we have some last minute tax cuts coming up if nothing happens by 4:00

p.m. today sears can enter liquidation. what went wrong? what could still save it that's coming up on "power lunch.

today is the second to last trading day of the year so there's time to sell your losers to offset capital gains in other areas. leslie picker has some tax tips and tricks >> there's one key rule, if you're disposing one security

you can't buy a substantially identical security within 30 days before or after the transaction. this is known as the wash sale rule but what happens if you still like those positions for the long term? well, bob wilins, a tax adviser shared some legal tricks to maintain exposure to stocks you might like without losing the deduction. first he liked alibaba shares, the e-commerce giant has plummeted 20% year to date so if you want to sell those for tax losses, wilin says you can buy ataba. you still get exposure to the chinese e-commerce giant there and others are stock based mergers. investors have been locking in the disney stocks and buying the 21st century fox

and lastly, any etf, you can buy the underlying holdings if you want that market exposure although you cannot buy all of them because that would imply significantly similar. he would not advise buying more than 450 stocks out of the 500 in the s&p for example guys >> 505 i learned >> there you go. >> i think we had day recently -- i think it was the rebound day. more than 500 stocks in the s&p 500 were all up. a lot of wacky things happening. maybe it's related to what you're talking about, leslie people trying to position, you know, ahead of the year end. the market is down 84 points we haven't had a day since september 15th that it was less than 1%. looking inside the dow jpmorgan is one of the gainers. we'll look at where the banks could be headed next year. stay with us

(sounds of race cars) the same iot technology on the ibm cloud that helps race teams improve performance and safety. bye. girls, don't wave at strangers. can now be built into everything we drive. when you apply expertise across an industry, bye! you can put smart to work.

allow you to take advantage of growth opportunities with a level of protection in down markets. so you can be less concerned about your retirement savings. talk with your advisor about shield℠ annuities from brighthouse financial, established by metlife.

hi i'm contessa brewer. here's your update wells fargo will pay $575 million to settle claims made by states that the bank created phony accounts of other to abuses. they agreed to pay $190 million to pay federal claims. up to a foot of snow has fallen on kansas some roads that were previously closed due to snow are just now starting to reopen. the liberty bell is back in business though just through the weekend. it was closed because of the partial government shutdown, but it got a reprieve when the tourism marketing agency visit philadelphia donated $32,000 to reopen independence hall and the liberty bell centre. >> we were really happy to do this this was a last minute quick effort done in conjunction with the park service and the city and it was a really doable thing. and everybody just did their

part and we were very thrilled to get the doors open of independence hall of this busy weekend. >> seems kind of central to having philadelphia visitors keep their plans to visit philadelphia that's your update now. >> thank you so much 2018 was supposed to be a great year for banks the economy was strong and interest rates were rising didn't quite work out that way to say the least, the s&p financial sector down more than 15%. what's on tap for 2019 wilford frost has the playbook >> the shape of the yield curve, credit risks and valuations are the key things to look out for to decide whether sentiment towards banks can improve in 2019 but first, the shape of the yield curve. banks tend to borrow short and lend long. so a steeper curve creates bigger profits for them. but questions as to whether the fed will keep hiking and still historically low rates in china and europe have flattened the curve. will that continue in 2019

second, credit risks while loan growth has been soft in 2018, there's not any rise in credit costs for banks. this suggests the economy may be stronger than some fear. if those risks remain low in early 2019, investors may regain faith in the economy third, valuations. banks always trade at a discount to the rest of the s&p 500 the 25 year average is a 75% discount currently trading though at a 60% level compared to the s&p 500 average. yet have made profits every quarter in 2018. if they do the same in 2019, we'll then enjoy a higher p/e rating finally, one wild card to keep an eye on, politics. with a democratic house of representatives could executives be dragged to d.c. to face more grills about possible past behavior

so guys, here's the share price performance as we round of the year the s&p 500 is down 7% jpmorgan only down 8.7%. bank of america is down 16 and the likes of citi is down 30%. that highlights why banks sum up this market right now, will we see a recession in the next 12 to 18 months if not the banks look well priced. >> the consumer has proven on the resilient but when you look at the credit card issuers they have raised reserves in case consumers default. have we seen that from the bank? >> we have seen it fractionally, but nothing major. i think this is what happens in the earnings, you'll start to

see a continuation of that theme from them that they think the economy looks fine and maybe people are fretting about it a little bit too much. >> all right thanks to give you an idea of how bad it was for banks check out the year to date performance, kre down 21% while the financial second sector is done. the biggest loser is goldman sachs and wilford outlined them. will 2019 be a better year let's bring in eric compton, the equity research analyst over at morning star 2018 seemed like it should have been a good back drop for the banks. so will 2019 be better when we're facing a slowdown, a possible recession a yield curve that doesn't seem to be budging? >> yeah. so i think you guys have hit on a lot of the main points you kind of divided it up between the two, you know, on a

stock return basis, banks have not performed well in 2018 how on the operational basis i would say banks have performed excellent. you know, returns on equity is are higher than they have been in over a decade you have nim expansion before rising interest rates was a good thing and now it's a bad thing. credit costs remain low. overall, i would say the banks operationally are performing quite well in 2018 and moving on to 2019 i would expect barring a drastic turn in the economy or unforeseen risk event, it will look the same. >> so operationally good and stock performance bad? same in that way what else can banks do if operationally banks are great in 2018 what are they going to do to move the stock performance needle >> operationally good in 2019

you may see a slowdown in overall growth numbers 2019 i'm projecting as the last year of any meaningful net interest margin expansion. so i think that's going to begin to slow. as far as stock performance tough to predict exactly, you know, when sentiment will change or exactly how that will play out over any short term period but i will say this. at the start of 2018, i was having a very hard time finding any bargains in the banking sector at the start of 2019, let's see prices are much less optimistic. so i think things are looking cheaper does that mean we get a huge rally in 2019, maybe, maybe not. the odds look better from today's valuations >> how about wells fargo which had the big settlement and you know here we are ready to close out the year does it go back to the status it once held? here is the bank that had done

the best of the bunch until it fell from glory. can it ever get back there >> well, wells fargo is one of my top picks for 2019. largely i think the story that's going to play out here is what you actually see happening today. wells is going to continue to navigate through the legal issues, through the past scandals and hopefully and eventually it will put that behind it. you know, all of the big four have at one point or another kind of been in regulators or different, you know, lawyer crosshairs right now it seems to be wells' turn eventually they all come of it it has taken a little bit longer than i may have originally expected i don't think the franchise is fundamentally impaired and right now your current valuations, you know, the bank is trading at 1.4, 1.5 times tapg jibl book.

there's no reason it couldn't go high teens return on tangible. that reason that that valuation shouldn't improve over time. the timing of that, tough to predict. but you're not paying much for it right now. >> eric, thanks. eric compton, morning star. rick santelli is tracking action over at the cme. >> you know, interest rates continue to melt away and there isn't the type of volatility today that we have seen over maybe the last six or seven sessions though it isn't over yet but we're melting. if you look at the two year chart starting the 13th of december and i picked that because several sessions later was the fed meeting, note the right side continues to aim lower. wow, as you go to the farthest end of the curve the 30 year bond during the same time period it's fighting on the right-hand side that's because just for the week two's are down 11, 30s are

unchanged. if we look at tens minus two, the spread from early december it's trading 20 basis points you can see it's steepening a built and what does that mean? steepening, when all rates are moving down? means we're taking fed out of the equation and when you take the fed a little out of the equation with potentially future activity, that's going to weigh on the dollar you can see the same dynamic in the dollar index to some extent. it's riding towards the bottom of the recent rather choppy range. the key may be that we need to close under 96 even to really get things hopping and we haven't done that since about the third week in october. "power lunch" gang, back to you. >> rick santelli, thank you. stocks rising again today building on yesterday's huge late day turn around was christmas eve the bottom or is this a bear market bounce plus -- ♪ i came in like a wrecking ball ♪ >> eric janney getting a close look at the business of breaking

stuff. that looks fun "power lunch" continues.

welcome back it's been a rough year for investors especially lately. do all the wild swings have you wanting to break something good news. there's somewhere you can go eric chemi checked out the wrecking room. >> the premise -- breaking stuff. people are spending money to come to places like the wrecking club in new york city to let out their rage and have a good time. >> oh, man. >> got dishes, laptops and you can go nuts. ready to break some stuff?

>> i'm ready to break some stuff. >> reporter: the founder is a former accountant. he quit the day job and sold his car and invested all of his life savings to start this business. >> a couple of house rules then you can go nuts. >> reporter: he says he's never ben happier. >> i do end up hard accounting work now and i'm buried more in spreadsheets but numbers mean more. >> reporter: from family get togethers and corporate outings and first days, the concept has caught on quickly. >> we set up the room for them what they do with that room is up to them. >> reporter: i decided to check out the wrecking club firsthand. i admit i was a little nervous ♪ i'm okay i don't need to break any more stuff. the pricing starts at $25 and it goes up from there depending on how much you want to break

tv's, dishes and furniture, those are typical things to break. i had a smashing time. >> so this - >> there you go. >> not bad this is one place in manhattan right? >> there are others around the world that have popped up. so when he started he thought oh, this is an original idea then i found out it's been done before in the '70s places would come and go places around the world. but in manhattan seems to be the only one. >> we were saying this seems like a simple concept but it sounds like it's pretty complicated. >> it's complicated because think of city hall, all of the departments related to city hall do they want a business like this where are in town are you getting zoned for that all the stuff you have to break, a lot of them have chemicals and things because you break a government rule on that. this is really a regulatory issue more than it is a commercial issue in terms of the amount of problems that he has to deal with. >> if you're not a wrecking

location, you can get a head start on the demolition, smashing things in the backyard. >> demo day has been a huge thing. >> the clean-up is the big thing. when i was done, i get to walk out. >> how much did it cost? do you know how much i >> i literally said that while you were laughing. it was the first thing i said. it starts at $25 and it goes up to depending on time you don't even listen! >> thank you, eric transports are big this year it's even worse for the airline etf which is down 22%. will the sector get back on track in 2019? we've got your playbook. shield℠ annuities from brighthouse financial allow you to take advantage of growth opportunities with a level of protection in down markets. so you can be less concerned about your retirement savings. talk with your advisor about shield℠ annuities from brighthouse financial, established by metlife.

welcome back to "power lunch. the trading year is drawing to a close and the dow transports are down 14% this year they'll break a two-year win streak how do things look for 2019? john is here welcome, john. we look as transports as bellwether for the economy what do you see going on >> it's an early sector in the economic cycle, kelly. i think we've just seen the economy growth rate peak here in

the second and third quarters. i think it's going to be tough on the transports in 2019 but there are good values. i see some opportunities. >> some of those names are the rails, you like csx, union pacific, norfolk southern, airlines like southwestern, delta, and fedex why fedex? it's been slammed this year, john. >> i know. they made the mistake of guiding lower during some of those awful mid december days in the market. stock is now down 40%. the earnings outlook isn't that bad at all it's going to be high single digit growth this year back on track next year. trading about 8 1/2 times earnings i think fedex is a good buy here. >> what is shocking about the guidedown about fedex, they were taking down numbers in the outlook and concerned about europe as well as china. but it sounded like they were shrinking their footprint in terms of the network that doesn't -- it's one thing to take down numbers it's another to shrink your footprint. does it cause you more concern this is not being conservative

about their outlook. >> well, they certainly are taking steps to align their expense structure with the demand slow down they're expecting in europe. i'm not seeing a big pull back in the fit print, though and i do expect double digit growth to pick up in about another year. >> how about the railroads why do you have the names on the left side -- list for 2019 >> well, i think you have a couple of stories here in the railroads. you have an activist investor, for example, in csx corporate that is pushing for increased profitability. you have a company like norfolk southern in the middle of the plan to improve profitability. i think that's going to drive earnings growth even if volume growth slows a little bit. we're not expecting a recession or anything in 2019 or 2020. >> big picture, john, would you say you're recommending these stocks because the evaluations have gotten so compelling or are you recommending -- in other

words, is this they got so cheap and you don't see a recession so you would be an ownerof them if people are worried about the economy they should stay away? >> no, i think these are the better names in the transport sectors. each of these companies has increased its dividend at least 10% over the past five years that's pretty rare that signals a strong balance sheet a focus on shareholder returns and management confidence in the outlook. you see that in these companies. >> if the u.s. is the best growth globally, john, do you want to pick transports that are more u.s. centric? >> yes and so that would lean you more toward the rails than some of the air freight. however, the rails do serve global customers so you're not going to be completely immune. i think that price point, the low pe ratio for fedex discounts a lot of global problems. >> maybe some help from lower

fuel costs, too. john, thank you. the countdown to save sears is on if nothing changes by 4:00 p.m., sears will likely enter liquidation. joining toys "r" us in the retail graveyard what went wrong for the iconic brand? is there any hope that it could be saved that's coming up next.

i'm melissa lee. the dow on pace for the best three-day gain in seven years. are we finally turning a corner? the death of an icon, sears may be down to the last couple of hours if no bids come in today for the company. a look at how it got here. and health care is only one of two sectors in the green this year will it continue to deliver in 2019 we've got your playbook ahead. second hour of "power lunch" starts now welcome to "power lunch. i'm kelly evans. we have another 300-point swing for the dow today. it seems kind of calm after the wild moves this week the dow is up 161 at the highs today. 155 lower at the lows. and right now it's up about 26 nasdaq hanging on to a 23 point

gain and s&p up seven. how about intel? walmart and pfizer are the biggest gainers in the dow now going the other way are goldman, exxon, and proctor and gamble. we'll go down to bob. >> what a quiet day comparatively. 200 points a little more swing that's nothing we're used to more volatility than that. let me show you where we are in terms of the markets and what going on semis we're up almost 8% since the bottom on wednesday. a lot of these have turned around the bank stocks from 6% or so. retail is probably up 5% even energy, which is down today, is up a few percentage points from the lows where are we in the middle of the day? i'll watch the close carefully but we had a narrow trading range, we have lighter volume than we've been seeing recently. here is something, i don't see any new lows on the s&p 500.

we saw several hundred a couple of days ago. i'm looking for are the late-day allocation, more accurately a reallocation remember it happened yesterday and i pointed it out take a look at the chart here. the important thing is late in the day all of a sudden there's that orange line those are bonds. that's big bond etfs sold around 2:15 and 2:30 dramatically at the same time that's the white line that's the s&p 500. went up dramatically in other words a number of people came in and sold their bonds and bought stocks. this is likely that legendary pension fund reallocation that we have been talking about i'm not sure, but obviously somebody reallocated money out of bonds and into stocks i'll be looking to see if that happens late today guys, back to you. >> thank you, bob. according to some new data, stock funds are attracting cash for the first time in six weeks. u.s. investors adding over $5 billion to those funds tech sector funds saw $2.2 billion of withdraws the

most since early 2015. does it mean investors are getting more or less confidence in the market? we'll bring in our panel welcome to you both. kim, let me begin with you we mentioned the withdraws in the tech sector. you're the second person telling us you like intel here what is compelling about the evaluations and opportunities? >> well, i don't think it went down quite as much as the other tech wreck of 2018, but i think that's because it's really on the rebound. some of it is strength this year has come from increasing pc sales and did i say that yes. it was from pc sales but more than that, looking into the future we think that there's a lot of data out there that needs to be collected. it needs to be processed and how do we do that? we do that on servers. i don't care if they're on premise or in the cloud but

intel makes those products that's why i like it. >> ernesto you like microsoft along with pfizer and lily microsoft is already the biggest company in the world, basically. even though we've seen the sell-off, is that driving this for you? is it looking at names you like and now they're cheaper? is there something more specific to microsoft going on? >> well, microsoft has a great business going on. it's had great turn around the last five years with the cloud computing business growing very fast, gaming and console staying very strong, and office sales staying strong the smallest part of their business is windows anymore. but they have a great operating model. a great business model and they've got really cheap -- but they're cheap 19 earnings. we like them even more when they're cheaper because their fundamentals haven't changed that drives them at the end of the day.

stock prices and overall market prices >> have you made any changes to your portfolio rebalancing or adding to positions of, you know, since the market downturn started in late september/early october? >> no. we have not. we have steadily, you know, pretty much -- we added a couple of names but they're too small and i don't want to talk about them that's the truth there we go. but more than that, what we've been doing recently is taxless selling. i don't think i'm alone. i think that's finally come to an end that's a really nice thing just personally but also for the market, as well. the selling pressure feels like it's off to some extent. >> yeah. same question to you, ernesto. i ask this because i think when people hear you like these stocks and the stock market is down, they think you're buying into the weakness. people want to know if they should be buying lily or microsoft in this weakness what do you say?

>> well, first of all, we like our funds because that's a good collection of stocks in a portfolio to own rather than just buying individual stocks. we recommend our clients buy funds because you get diversification and the lowerered risk that comes with that having said that, the whole market got more attractive even though we are fully invested we're selling weakness to buy strength in terms of our comprehensive evaluation and fundamentals scoring card that we have for every stock in the market so we are not changing what we do given market weakness or market strength. we're just always continuing to buy higher rank stocks to sell and selling lower ranked stocks and we're doing that in this environment, as well it's just at the attractiveness overall of the market just got stronger because of the hit to prices close to 20% that they took in the last couple of

weeks. >> ernesto, am i being too hard on emerging markets? i know they've had a tough run the past decade but they did well going into the financial crisis was that just a quirk? can you make money in the asset class over time? >> absolutely. i think emerging markets is comparable to small caps in the u.s. versus large caps there's a premium to be gained by owning riskier assets and stocks that are less well understood, less efficiently priced such as emerging markets. you're getting compensated, to some degree, by higher returns of course, the timing is always the tricky part. that's why just stay invested. change your allocation infrequently, and rebalance to your targets every so often so you sell your winners and buy some of your losers. >> all right kim, same question to you. what looks most attractive to you? investing in other parts of the world or staying in the u.s. >> well, we like to stay in the u.s. because we do our own

research and we understand the accounting rules here. a lot of our companies like microsoft and like intel are exposed, certainly, to the rest of the world in a big way. so that's how we play that. >> yeah. you can't avoid that exposure. unless you go way down into the small caps thank you. the government shut down is now in the seventh day the president is threatening to close the southern border entirely if he does not get the funds for the wall elon moi is live in washington with the latest. >> reporter: the shut down is all but certain to last until 2019 both the house and the senate are adjourned today. they won't be back in regular session until january 3rd. it means no votes and no end to the stalemate. it's clear, though, that lawmakers are just getting tired of this. republican senator marco rubio said today he wants to secure the border but that both parties share the blame for the shut down. >> we can't have 60 votes in the senate then, now, or next year

without cooperation from the democrats and they're clear they're not funding anything that involves the wall so i think the white house shares responsibility, the house and the senate do, as well everyone does. there's no winner here and there's a lot of losers. >> reporter: over at the white house, president trump is trying to ratchet up the pressure on democrats. he tweeted this morning we will be forced to close the southern border entirely if the obstructionist democrats do not give us the money to finish the wall also, change the ridiculous immigration laws that our country is saddled with. remember, this administration democrats already tried to hammer out a deal that would trade funding for the border wall with protections for the so-called d.r.e.a.m.ers. also, remember it didn't work. so, we don't expect to see the president in public today. it doesn't mean he can't keep tweeting. >> thank you coming up, deal or no deal the time is running out on another american icon. if there is no bid for sears by 4:00 p.m. today, the retailer is

set to lick decade we'll take a look at what went wrong. plus, semiconductors stocks on pace for their third straight positive day and the best week since november they're having the worst year in 10 is now a good time to buy? i'm a veteran

and the army taught me a lot about commitment. which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar credit. my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome.

♪ it started as a joint venture by two men richard sears and al robuck in 1893 it's been a staple for more than 125 years. it may be down to the final hours of life. the chairman eddy lambert must submit to buy sears out of bankruptcy today with us to break down the latest on the fall of sears is lauren hirsch and the head of investment banking and restructuring at riley fbr lauren, what exactly needs to happen and eddy lambert is very deep in this sears trade, at this point. >> he's very deep. he has owned both equity and debt for a long time it seems like he's the last person who could save it so the deadline is 4:00 p.m.,

according to our clock that i saw somewhere, it's about two hours out from that. by then, assuming he doesn't get the deadline extended, he needs to have financing for a $4.6 billion bid to buy sears, and he needs to submit it. as of the last i checked, he was working hard but hasn't yet done either. >> who would want to give him the financing to save sears? >> well, i think there's a combination of folks that think you have the lenders there's billions of dollars of inventory. it's a safe loan ins a asset-based loan and term loan there are investors that believe in the concept this is a company that has been around forever since the 1800s it has a place it has a footprint and it also has 50,000 people that work for it or more than that but 50,000 people whose jobs could be saved. i think that's an endeavor well worth doing. >> and we should focus on the sears equity he has the real estate company,

lands end, as well neither one of those are positive since they've been spun off. he's made several attempts to try to realize some gains from the investment is he going to be approved to buy these assets well, how it works -- >> if he submits the bid. >> sure. how it works in bankruptcy and what is called a section 363 sale is the bid higher or better than the alternative so if there are no other bidders for the footprint of the store, then they have to look at the liquidation and which is higher or better. there are many different variables that go to defining better such as, you know, the saving of the jobs. >> what about the fact he got into this position in the first place? you know, it's going to be a little hard to say, okay, here is somebody who basically sold and now buying back but whose value drove down >>well, that'll be the decision of who would provide his

financing and his own financing, his own fund, presumably it's not just one thing or person that could drive a company that big down. if you look at what happened in the past 15 years or so, since he's owned it, you've had walmart and target just expand completely maybe sears was weak and they were able to expand because of that but they expanded you have the internet that happened the online business. and you have a changing trends that people shop at and other alternatives it happened in every retail industry remember years ago there were electronic retailers in every strip mall now there's one or two there was a lot of regional home builders and now there's home depot and lowe's it's evolution so a lot has happened to cause that and including the leverage that the company has retailers were never designed to have a will the of leverage

until jump box came and michael milken, that's when leverage started. >> the irony in this whole story is sears, it was sort of the original amazon. it was the threat, right, to every single mom and pop store on main street with the catalog that became so ubiquitous and here we are in a situation where it's being put out of business, almost, at this point almost by the new way of shopping. who benefits is there a beneficiary, at this point, if sears goes out of business >> it's a great question and one might think it would be j.c. penney but j.c. penney hasn't been doing that well either i think one thing that retailers and retail advisors often talk about if a business goes away, does the business shift or evaporate? and what it appears might be if sears goes away, it appears it may evaporate rather than have the business go somewhere else.

>> j.c. penney isn't in danger of being removed from the new york stock exchange. there's some real estate value people are watching, as you reported, close many more stores so they're not exposed to the losses people have been thinking this company could hang on and now all of a sudden it doesn't look that way. >> eddy, just before i stepped on stage, it's still working some people think there's a chance it hangs on the problem is, and you mentioned it earlier, the guy who seemingly is the last option to save it has a rocky track record he is in very deep there are creditors who don't want to sell it to him part of his bid is being financed by credit debt he held while he ran it and some people don't like how he ran it and the transactions he did under it there's potential value there but the way in which, you know,

lampert is trying to extract it, i think people are a little bit weary. >> what is the most valuable asset of sears, at this point? >> its footprint is probably number one its name meaning footprint it's the stores that it has. >> the physical stores >> the physical stores where they are and, also, i keep coming back to this it's the 50,000 employees. right. i mean, it's very difficult to assemble that type of infrastructure the whole supply chain and i'm not so sure that the clock counting down maybe will get extended i think the board of this company has a real duty to explore every option, take it to the very end to save those jobs. >> i don't mean to -- i mean, this is going to sound flip, if there is true value in the foot print and the distribution network, why doesn't anybody else step in >> it's complicated. it's been through a lot. i think in these situations, the more you know the history, you

know where to take it and where to go. listen, there's, you know, to lauren's point, don't trust the person that brought you to this point but the person that brought you to this point has been trying to do the right thing and he may be the only one. >> lauren, on that point, is there anyone that the creditors say we don't want him to be the buyer. who else is there out there? >> there's always a chance that we don't know about. with conversations with my sources, i haven't found anyone else willing to buy and save the whole thing. >> wow the count down continues thank you very much. coming up semiconductors on track for the best week since november still the worst year in a decade is this a good opportunity to buy? that's next. as we head to break, a look at the markets picking up a little bit of steam the dow up 150 points and s&p up 19 and nasdaq up 60. ything -

bike, wheels, saddle. that's why i switched to liberty mutual. they customized my insurance, so i only pay for what i need. i insured my car, and my bike. my calves are custom too, but i can't insure those... which is a crying shame. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

chip makers heading higher today. extending a recent bounce. stocks like applied materials,

nvidia leading is it safe to get back into semis? craig, the group is down more than 20% from the highs. obviously, surrendered whatever the leadership position it had earlier this year, but can you sound an all clear yet >> well, mike, i think it is time to put some ships back on the table as the market is shifting from more defense to beginning to shift into more of an offensive move. if you look at the smh we pulled back to around $80 we're starting to see on a ratio chart the smh outperforming the s&p 500. i think now is a time to put some back on we probably will be range bound. probably $80 in the lower end and $100 on the upper end. we have to trade them in 2019. thing is a good way to trade it, at this point. >> all right 25% range with this as the bottom probably doesn't sound too bad. boris, can you buy into that

>> i think it's range bound but dead money for the time being. i think the cap x cycle is really behind us at this point we have trade tensions with china, the stocks got hammered in october, and november because of those views i don't see anything changing going forward. as a matter of fact, if you look forward in terms of cloud services, i think clouds are going to be big slow down at the beginning of 2019. so until we get a 5g, i don't see a big upside i would rather be selling the rallies than buying the dips. >> all right quickly, craig, any particular seminames you would focus on >> i think broad come and qualcomm are two of the most interesting looks names inside the space. charts are looking great starting to invert and turn higher. >> all right well, we'll look for that move higher in fact, we go on offense, as you said, craig. craig and boris, thank you for joining us today for more "trading nation" head

to our website or follow us on twitter. melissa, back to you. >> thank you coming up 2019 could bring big changes for real estate. to determine the amount you're willing to risk on any given trade. some traders use a 2% rule where they try to limit their loss on any given position to no more than 2% of tir talheot trading capital.

this is a tomato you can track from farm, to pot, to jar, to table. and serve with confidence that it's safe. this is a diamond you can follow from mine to finger, and trust it never fell into the wrong hands. ♪ ♪ this is a shipment transferred two hundred times, transparently tracked from port to port. this is the ibm blockchain, built for smarter business. built to run on the ibm cloud.

welcome back to "power lunch" a check on the markets now. we did hit a session high of 18 8 points to the upside we're up 107 on the dow. it's good for about a half a percent gain the s&p 5 shurks up by 15 points leading the s&p now is general electric, applied materials, nvidia your laggards are oil and gas, united rentals take a look at tesla those shares are moving higher

after naming larry ellison and kathleen wilson-thompson to the board. tesla shares are up 5.25%. here is your news now. violent protests broke out to in the democratic republic of congo after certain areas were excluded from voting in presidential elections they announced on wednesday it cancelled voting for sunday's election in opposition strongholds because of the ongoing ebola outbreak and malicious violence activists claim thousands joined in demonstrations in a string of neighborhoods across the pseudonews capital calling for a long time president to step down 19 people have been killed during these protests over the past 10 days spain rescued 147 immigrants who traveled in three boats in the mediterranean sea. they were coming from the cost of moreocco nearly 9,000 kids and teens

have died from opioid poisoning over the past two decades. that's according to a new study from yale university about 3/4 of those deaths involved prescription opioids. that's your cnbc news update at this hour. >> thank you the oil market is closing for a day. we get over to leslie picker >> reporter: what a roller coaster week for oil prices, but closing today in the green we've got a settlement for wti crude up about 1.6% and brent up about .01. now these prices leave oil little changed for the week. wti and brent are still in bear market territory crude inventories were down by 46,000 barrels in the week through december 21st. the energy administration said it today it was far few ore than analysts anticipated gas, on the other hand, down

6.7% via energy department found those inventory fell over the same period by 48 billion cubic feet back over to you. >> and the journal talking about giving gas away. paying people to take it away. thank you. the new year could bring some big changes in real estate. diane looks at what we can expect in 2019 >> reporter: 2018 was a rollercoaster for residential real estate, home prices overheated, mortgage rates rose a lot and fell a little, and home sales stalled 2019 we'll see big changes first, prices will pull back affordn affordability is is a bad word because low supply and high demand push prices over the top. now supply is rising slowly and the big price jumps will shrink. some markets could go negative builders could help with affordability if they put up more cheap homes but so far signs are they won't because of high costs for land and labor.

second, mortgage rates will rise they went up, they flat lined, they fell back last month. the trend in 2019 should be higher with rates passing back over 5% on the 30-year fixed and staying there. and, finally, rent will rise all this weakness in home sales means more potential buyers will stay put in their rentals. occupancies are already high, which means rents will remain pricey, especially in the sought-after urban markets our next guest has investors might want to look at the apartment sector headsing into the new year he said if we're set for a period of lower growth, it typically outperforms the market james, great to see you. so it's funny because a year ago we thought we would enter a rising rate environment and things looked more grim than they were. but at this point, things look pretty benign on the reits front. that should be good. >> definitely. i think what we've seen in reits

o outperformed the s&p 500 but still they pulled back and evaluations are very attractive we like reits on a yield basis and ffo multiple basis so reifs are adding a discount which is positive. >> you point out that health care reits outperformed. health care was a strong sector overall. why don't you want to stick with that theme >> i think it's fully prized what we've seen as the market got defensive beginning in mid year, the reets sector outperformed in the classic defensive sectors. i think those stories have pretty well played out we think there's better value in the other sectors. >> such as >> certainly apartments. dianna's comments about the apartment sector performing possibly relatively well compared to new home sales if you have a good job growth market and household formation,

and if you have household formation and new home sales are declining, that means people are renting. what we see with the apartment universe, which is positive, that the lease turn over rate is going down to all time lows. if people are reupping. >> this is still a relatively new sector, you know, for the market how do you think overall is it is it battle tested? are you getting a better sense for when investors want exposure >> i think to your point in terms of cycle tested, you know, the reits we like the companies are outperforming on a certain environment. what we're looking at in 2019 is probably lower growth and possibly higher rates. we don't know. certainly more uncertainty the names we like are names with good balance sheets. strong management teams, which have been cycle tested, and good asset qualities.

we're looking for that kind of a play we want to see sectors where the demand variable looks to be positive, as we think it is. >> in certain terms of the top quality reits. rethat's is a topnotch name. when you take a look at the potential store closures that have to come down the pike we talked about sears possibly going bankrupt and what a large footprint it has could those say it's a trying time for them? >> i think it will be a challenge for those companies that have mediocre quality real estate if you good quality rattle and sears is closing, that's a good thing. sears has been underperforming for a long time. the productivity is very low if you have a chance to replace sears that will draw more traffic, why wouldn't you want that >> simon property group is one of your picks there. what do you like in apartment? >> avalon bay and essex

property it's a west coast focussed company. in this sector, of course, the west coast has been the best coast, as we know. in terms of job growth and gdp growth both focus on better quality assets, have great management teams, strong balance sheets and we like both of them for 2019. >> i think the last time we talked we just learned that amazon hqt was going up in long island city. do you think the impact, i mean, now we've had a couple of months to actually sort of figure this out, is that going to be a real benefit to the reits who operate in that area. >> ting will amazon is talk abouting a lot of job growth but it's going to be slow initially but what is good in long island city, it was a market that oversupplied so the most immediate impact, which we talked about last time is put that market back in balance. clearly values have risen materially as any broker operating in the queens market can tell you so we see that as a real positive in long island city

we've also talked about alexandria which is one of our favorite picks for 2019. long island city is trying to develop a life science cluster with the new university that is going up on roosevelt island and the city behind this effort, companies like alexandria are investing in capital that could only be good for job growth >> the biggest risk for you, you mentioned a slower growth environment might help the sector what are the biggest risks then? is it if growth outperforms. obviously interest rates what else would scare people off? >> i think the real concern would be you know what is happening is the fed is trying to engineer a soft landing they don't always succeed. so if they don't succeed and we have gdp growth trending lower, i think that's a negative for everybody. on a relative basis, reits will outperform, but nonetheless, i think that anxiety -- >> will it underperform if it doesn't happen you know, this is is a place to be defensive, what happens if you don't need to be defensive >> well, if you don't need to be

defensive, in the yield on the ten year moves significantly higher that will have a negative impact on evaluations reits can continue to grow but if their cost of capital starts to move up quickly, that could be a negative. people will want to be exposed to the s&p 500. >> all right james, god to sgood to see you. health care is the best performing sector for 2018 will that trend continue in the new year we'll take a look at what to expect plus, more moves in the marijuana space. u.s. pot retailer green growth brands launching a hostile take over bid for canadian producer att anfothseorwh imes r e ct straight ahead

comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast.

once i started looking for it was a no-brainer. i switched to geico and saved hundreds. that's a win. but it's not the only reason i switched. the geico app makes it easy to manage my policy. i can pay my bill, add a new driver, or even file a claim. woo, hey now! that's a win-win. thank you! switch to geico®. it's a win-win.

health care hack one of the biggest bright spots in the market this year the s&p health care index the best performing sector in the s&p. it managed to gain about 4% so far. martha looks at the top issues this industry will be facing in the new year 2018 was a big year for business, regulatory, and legal

challenges in health care. 2019 is a year they're put to the test first, new business models cvs having completed its eat that deal will try to deliver on the model that saves consumers model. while amazon will try to ramp up its pill pack acquisition. second drug pricing pressure the trump administration's proposed medicare drug rules should take effect mid year, giving pharmacy benefit managers more leeway to press drug makers for big discounts. the middle men could feel pressure too with more regulation third, legal uncertainty from two big cases. state lawsuits against drug makers and distributors for their alleged role in the opioid crisis aimed to extract hundreds of billions of dollars in a settlement and the obamacare ruling from a texas judge calling it unconstitutional will weigh on health care until the case finally makes the way to the

supreme court. shares of canadian cannabis company up more than 14% today following a hostile take over bid by green growth brands >> hi, it's been an ongoing saga since yesterday. and aphria responded saying the bid undervalued the company, which was valued at about $1.4 billion before the offer. the canadian cannabis company said the board was approached by green growth yesterday morning about the proposal and green growth took the bid to shareholders fewer than six hours later. aphria's new board irwin simon was appointed to the position yesterday. he said the proposed offer is quite risky.

they were in an attractive target for green growth, especially after the stock plummeted upon a short seller report earlier this month. analysts expect more m & a activity in the new year and eyeing alcohol and tobacco companies for near term deals and consumer packaged goods and pharmaceutical brands as potential partners with cannabis companies down the road as the industry consolidates. as far as the green growth and aphria saga, we'll have to stay tuned. >> i have a question about the line about the financing that irwin simon had. he was worried the financing was double the share price but at the same time didn't the company say that the bid undervalued the company? >> yeah. they're saying, yeah, it und undervalued the company. green growth said it's a premium move about 45.5 percent. it's an apples and oranges

green growth is looking at premium upon with the shares were yesterday the key is because of the short seller report, they lost so much value in the last month. they paired back some of the losses but in a matter of two days, they lost about half their value before pairing back some of the losses. >> it almost sounds like simon saying that green growth financially can't handle that sort of financing at a high price. >> yeah. exactly. >> all right thank you. let's get toless leslie for market flash chipotle jumping 3% today. a steady climb throughout the day. one of the biggest gainers in the s&p 500. no real headlines to speak of here but you can see there shares up about 3.2% chipotle up about 8% this week and 45% this year. so clearly surpassing some of the major relevant benchmarks over those various time frames back over to you.

>> yeah. this on a day when consumer discretionary is leading the market leslie, thank you. today's market may seem calm compared to the wild swings in the last few days but the stocks are volatile the stock is up 200 points just over an hour to go now. we have the dow up by 158. we'll get the traders' take next

see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

welcome back this has been a crucial hour for the markets lately we're nasdaq is up 88 1.3% gain. let's talk to jack about that. art is here with financial services director of floor operations welcome to you both. arthur, i'll start with you. we enjoyed the 2018 poem anything poe etic about the markets today? >> let's say today rimhymes with yesterday. about 2:15 when you got the first indications of when what the closing orders looked like there was nothing to sell. that's when you had that swap

program came in. we start today the upside. there were not such heavy rumors about sellers. right after 2:00 when we got the closing indications there's nothing to sell. that's why we moved up a couple of hundred points. >> that may help explain the activity of the last couple of sessions do you think we created value here yet or no >> i do actually the big sovereign wealth funds that were selling out. it was what i would call a perfect storm. now you have gotten very digestible we can start to focus on fundamentals again the circumstans is behind us we can concentrate

the two things will drive stocks in both of those cases i think we are looking at good news. >> when you take a look at the week that was in terms of the sectors that got us here the leaders on the week, consumer discretionary and communication services up 5% what do you make of the characteristic of what has lead us to this point >> i think when you looked at the early weakness and who participated in the late rally over the last two days, that kind of tells you there may have been some year end tax selling related liquidation selling. if we can close up the way we are now it will have another update on monday to close out

the year administration official had reached out to a hedge funds manager to ask what can we do to get the markets to rally what would you said? >> pretty much same thing scott reported and that is that they should stop banging on the fed the president doesn't seem to realize that the more he talks about what the feds should do that's a bit of a problem. it would certainly have gotten things going maybe we lost a couple of thousand points because of disruptions that we saw. >> ho do you think traders are going to position themselves for the first week in january? it could be a very eventful one. we have face to face talks supposedly happening we have chairman powell who will

be on a panel in atlanta that's lot of stuff going on >> yeah. there is a lot of stuff going on the only thing that we really have to concern ourselves with is something we just mentioned if the fed looses its independence then all bets are off. we are k looilooking at a very constructive action. it is what you would see when you have huge orders come in i think what we want to pay attention to is this we will see the appetite for risk with market down at these depressed levels or is it not? >> art said we probably lost a couple of thousand points we didn't have to you're saying if people start to

look at those signs and feel like maybe things are okay that markets could turn around and use the term >> it's not only that. they happen when markets don't belong at those levels they are mispriced that seems to be what's happening here it will catch a lot of people by surprise people will end up looking at this 3 or 4,000 points away. it's the same story that we have been hearing over the last of the say year and a half or two years. one of the things people forget is when trump came into office the s&p was at 2,100 we have seen it move considerably by removing all of the barriers taking it and getting down to these levels is probably the healthiest thing we could ask for. >> all right we'll leave it on that uplifting note thank you both appreciate it. thank you very much. check please is next [leaf blower]

you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today.

don't get mad. (clock ticking) (bell ringing) it's time. time for a new kind of cloud. the ibm cloud. the cloud that proactively protects your business from threats, instead of just reacting to them. that lets you modernize and move more of your apps without re-writing. that unlocks insights from all your data and puts it to work with ai. get a faster, more secure journey to the cloud. the ibm cloud. the cloud for smarter business. ♪ ♪ helping the dow are intel and home depot

semi conductor stocks having a nice day for the third day in a row. it is on pace for the best week since november how about faang? shares up more than 3% it's time for check please i wonder about the rice rally. >> i'm not sure. potentially significant but small development. china will allow imports of rice for the first time he says china could chew through the entire crop in 14 days they are excited for it. >> i don't know how much of an appetite there was for american rice in china. interesting. >> don't you think maybe a sign? >> possibly. we'll see. >> we played that music,

wrecking ball. it is an unbreakable rally we had to play it again as we go into the weekend consumer discretionary up 1.7% thank you for watching power lunch. closing bell starts right now. it is time for the closing bell we have one hour left and what has been a crazy week for markets coming up we have the god father of technical analysis two new board members and what the move means for the future. we'll keep you posted on all of the late breakin