color blindness or something, i don't know >> what do you see there, what color's on the left? >> mars. >> i think taking away the word "card" is the important thing. what is the use of a card when you can use your phone thanks for watching "power lunch. >> "closing bell" starts right now. ♪ good afternoon welcome to "the closing bell." i'm wilfred frod frost. >> i'm sara eisen. apple, a lot to catch up on, and the markets, it's been volatile. the dow swinging more than 350 points in today's session alone. 254 was the high on the dow, now trading up 76, though we've been in red at multiple periods during the day as well >> we lost ground when the president said he'd make the prime time address and it continued to slip since then,

whether that was the cause or not that was a turning point of the day. coming up on the show my exclusive interview with secretary of state mike pompeo we'll bring you that interview in just a couple of minutes. you don't want to miss it. >> we have many more great interviews for you as well, cig cign cigna's ceo and chairman mart martin feldstein, a great line-up. let's kick off the final hour of trade, our "closing bell" exchange paul detrick from fairfax global markets and rick santelli from the cme group in chicago matt, it seems like the focal point is u.s./china trade talks, which are back on in beijing is there optimism? >> there certainly is optimism when china sends such an important figure, you know, to be the delegate, that was a sure sign the market would respond

passively this morning we lost a lot of steam at 1:50 when the news broke about trump talking about national security, so it's not a coincidence. >> why is that, the feeling a longer shutdown, day 17. >> potentially we'll see how argumentative this becomes. the market does not want to see that right now we want to focus on the positives right now. we've seen the market have a 900-point move in the last two trading days why is that? because of optimism in china >> matt, previously traders like yourself said shutdowns don't matter so much are we starting to think this one does >> the market hasn't reacted as such i think the longer is goes, the more it's going to hurt the economy, the american, the psyche of the american public, but i don't think the market itself is really looking at a shutdown at least from the trading aspect of it >> were you surprised to see the rebound we had on friday and today or do you think the s&p 500 is undervalued now >> i think it's undervalued. if you look at it kind of

long-term forward pes, and you can't look at trailing pes anymore, because they don't, only reflect three-quarters of the tax cut, we're at about 14.1 forward pe on the s&p 500. the historical average is about 14.6, 14.7, so this market is undervalued. >> what are you doing at fairfax? >> we're trying to look at the best stocks and buying them at low valuations apple as of friday was at a forward pe of 9.9. i can't remember when that has happened, and you look at even facebook is at 15, which is kind of like at the average of the forward pes, even google is at 21 which is a bit above. you look at disney, 14 again,

undervalued, one of the great brands you got verizon at 11. you got walmart, these are, this is a great time to buy >> just to dive in on one of those, on apple. are you fearful at all their recent issues are not so much something that may prove to be temporary, china, and something more structural that the smartphone boom phase is over? >> no, i don't believe the smartphone boom phase is over, and i'll tell you why. i think this year is going to be a little bit tough for them in 2019 why would anyone spend money for an iphone before 5g is rolled out into the united states i've been to south carolina where they have 5g it is unbelievable i've been to south korea where they have 5g we can't imagine it in the united states because we don't have 5g. it takes apps we use every day and transform them, once we have

5g it's the no just about super fast streaming it's not coming in until middle of this year apple will probably put its first 5g phone in at the end of the year, so 2020, and 2021, think about this everybody who has an iphone in the world is going to have to get a new one. nobody's not going to want to have this 5g technology. >> so looking for catalysts, broadly speaking, rick, we did get the services number, hit a five-month low which you brought us earlier it's a busy week we have minutes. powell speaks again on wednesday, cpi data. what signals are you getting right now on the economy front >> well, i think i was impressed with the u-turn in rates it wasn't large but we did see nice reversals back over 2.5% and 2s, 3s and 5s, and with respect to 30-year bonds, longish maturity it's ready to test 3% so we're moving higher

on the high yields of the day. i also think $78 billion in supply with 3s, 10s and 30s, tuesday and wednesday and thursday is important to monitor after yields dropped dramatically since about the second week in october as for catalyst, there's more of a calm in the markets. it's evidenced in the dollar index. the dollar index looks to be if it stays where it is to have its lowest close since about mid-october. >> yes, oil up a percent guys, thank you. paul dietrich, matthew cheslock and rick santelli. you have a big interview sitting down with secretary of state mike pompeo on the eve of his mideast trip >> we covered china, brexit, the government shutdown but started with the middle east the secretary due to travel following the president's decision to withdraw troops from syria.

i asked him what message he'd deliver to the eight or nine different nations he's visiting. >> we're traveling to share with them a couple ideas first and they know this, america's there, we're there to continue to do the things that need to be done to protect the american people and to ensure middle east stability. second, there's been noise about the withdrawal from syria. there's no change in our commitment to the defeat of the caliphate or isis globally, no change in our counter iran strategy america is committed to taking down the maligned influence the islamic of iran, those activities, the risk to the world there's no change. the change in tactics we're going to with draw are 2,000 soldiers from syria but the mission, that purpose for which

we have been involved for the 24 months of the administration remains in full. we're going to continue to build up the alliances with those partners in ways that are very important for the security of the american people. >> i guess some of your allies in the region are a little more nervous than others. how sure are you that the turks won't slaughter the kurds? >> well, president erdogan made a commitment to president trump as the two were discussing what this looks like, that the turks would continue the counter isis campaign after our departure and ensure the folks who assisted in the counter isis campaign would be protected that's what ambassador bolten is there tomorrow to have a conversation with the turks how we will affectuate that. >> do you trust president erdogan personally president trump has gone from considering him friend to foe, back to friend again in fairly

quick succession >> my sense all of these things in my world internationally, it's about actions on the ground it's what we actually do commitments are important and making sure we follow through on the commitments matters an awful lot. that's true for lots of parties, including our nato ally, turkey. >> you mentioned you're visiting lots of countries, jordan, egypt, aman, kuwait, saudi arabia, uae, is this the anti-iran tour >> so again, we want great things for the iranian people. that's the mission of president trump's administration we want the iranian people to have a voice and to be able to control their own leadership to take the revolution area activity of iran and stop the risk associated with the risk to the world and the risk that comes with the money and lives that have been spent by the iranian people to effectuate policies we don't think are in line with what the iranian

people want. an element is to continue to build up the coalition, including gulf states, includes israel the coalition that includes european countries and asian countries around the world that understand the world's largest state sponsor of terrorism needs to cease that. i'd like to see everyone in the world continue to assist the united states and the gulf states and israel in this effort it's an important campaign and the revolutionary nature of the iranian regime presents a real risk to the entire world >> i want to move on to talk about china. mr. secretary, has the trade war with china made your job harder? has it hurt diplomacy? >> trade is an element of what it is we do so we have many challenges that were identified in the president's national security strategy on china trade is certainly amongst them. we're making progress there.

i hope we make progress on all the other places where china is not behaving the way we wish it would, whether it is the cyber activity, the theft of intellectual property, which has hurt american businesses, of all of these things and trade on top of it are part of what u.s. diplomats are confronted with each day and so it's been a part of our conversation for an entire time in office. >> is china's cyber capability stronger than the u.s.'s >> i don't think there's anyone that rivals u.s. capacity to deliver whatever mention of global power is needed that's certainly the case in cyber as well. >> when it comes to north korea, full denuclearization, is it possible before the trade dispute is settled or are those two issues linked together >> the chinese are clear these are separate issues, their behavior demonstrated that as well china is a good partner in their efforts to reduce the risk from the world from north korea's

nuclear capability i expect they'll continue to do so >> i wanted to touch back in the middle east and ask about saudi arabia and whether or not oil prices low has affected the level of rebuke you placed on saudi arabia from the khashoggi murder would you up the ante? >> they're disconnected. we've taken a very clear message to the world with respect to the murder of jamal khashoggi. this was a heinous act, it's unacceptable, it's inconsistent with the way nations ought to behave around the world. we told the saudis we've held saudi citizens account abable fr the murder of jamal khashoggi. at the same time we're going to continue to do the things that protect the american people and that includes a deep and lasting relationship with the kingdom of saudi arabia >> has the shutdown made your job a lot harder

>> no. i hope the shutdown will end because i think it's better, but we have an important goal there, the administration has an important goal there the president's trying to achieve, but the state department willen is so twmpl its stunkss around the world in a way that keeps the american citizens safe and performs its diplomatic function >> with the shutdown itself, with the democrats taking control of the house, the departures of the likes of general kelly and general mattis, has there been a sense of pressure in the administration has it been the toughest couple of months yet since you've been in your role >> every day is tough, and i expect every day going forward will be difficult as well. it's a complicated world, america is an important player across the globe we're doing well we're performing our mission and the team at the state department is prepared to continue to do that throughout 2019 >> we'll have much more from

that interview next hour, including what the secretary said about brexit, and specifically prime minister theresa may's leadership >> i thought it was interesting that he was kind of optimistic on china, said we're making progress he sounded pretty cool and collected, wasn't going after them in any sort of hard core way. he is part of the delegation that's going to accompany the president to davos to the world economic forum, where the south china morning post is reporting he's going to be meeting with the vice president of china. clearly trade is linked up with what the secretary of state is trying to do, and it wasn't a sort of tough message that we're coming after them, which we heard from the administration a few months ago >> i think it was tough backward looking on china but relatively optimistic whether progress can be made on trade unequivocally hard line on iran, as we would imagine and the sort of tone we got from mr. bolten as well, we are there to support the rest of you in the middle east shutdown optimistic, he laughed it off, saying it doesn't affect how we're doing our business

anyway, let's discuss this, cliff cupkin who just published his list of top risks for 2019 joins us thanks for joining us. let's kick off on the topic sara brought up in terms of china do you think a trade deal solves all the other issues that are out there in temples of the geopolitical risks between the u.s. and china trade from here >> i don't think so at all i think we may well get some cosmetic deal, more ip protection from china, they buy more ag and lng from the u.s., but this deal is, this relationship i think is fundamentally broken there's little trust for the chinese among the trump administration we're turning toward a much more confrontational policy across the board. i think markets and geopolitical observers would make a mistake to see euphoria in a trade deal that could be short lasting. >> i don't know if it's euphoria but it's progress away from

terrorists which are hurting the chinese economy, which hurt the global economy and now potentially starting to hurt the u.s. economy so i wonder if there is some sort of trade deal, cliff, if they can build on that progress toward some of the more diplo t diplomatic efforts they're trying to smooth over with china. >> i caution we haven't seen progress away from tariffs yet the trump administration feels -- >> correct >> -- as if it's in a position of strength right now. the chinese economy is reeling, so they're showing mag nan nnan. to get there from here is tough. we have to deal with non-tariff barriers, with the south china sea with taiwan. sure, we might get some momentum but we're still going to be walking uphill with this rising power, which is china. >> cliff,a couple of things to note on the middle east from the

secretary there, clearly mentioning the withdrawal of troops from syria, also the hard line on iran do you think the u.s.'s other european and western allies will come round to those points of view in the future, or is america somewhat isolated today more than it has been in recent years, when it comes to its middle east policy >> well, on iran, the trump administration is america first and america alone. the europeans support the nuclear agreement. they want to keep iran in the nuclear agreement. they don't want to renegotiate it and not moving towards the trump administration's view of that deal. own syria, i don't know what the policy is john bolton said there are preconditions, we have to beat isis and the turks have to promise not to massacre the kurds. president trump again said today that we're going to be leaving syria quickly.

so i think the secretary is trying to straighten what is a twisted policy in your interview and i don't get a clear sense of that of where we are >> cliff, we have to leave it there. thank you for joining us. >> thank you >> cliff kupchan of the eurasia group. we have 42 minutes left until the closing bell the dow up 150 points, recovered some of its earlier optimism in the last half an hour or so. we're up a percent on the s&p, more than that on the nasdaq we have more big interviews coming your way. up next cigna's ceo, david cordani about the state of the health care space. >> later joined by larry summers, and chairman mainrt feldstein "the closing bell" after the break. the dow is up 150. what do advisors look for in an etf? don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio.

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sir, thank you very much for joining us. >> good to be with you today. >> david, you increased your global medical customer growth estimates for the year ahead to 300 to 400,000 about a 2% growth from the 2018 outlook. talk us through where that comes from, the balance of domestic and international. >> sure. broadly that's a domestic number we talk about international business beyond that we've been fortunate that we have organically or without acquisition growth the medical customers each of the last eight years and will step into 2019 with another very attractive growth year. it comes from commercial employers in the united states, first with outstanding retention and then good new business adds for small, medium and targeted large employers and couldn't be happier with that outlook. >> i noticed in some of the write-ups that the range offered 300,000 to 400,000 is tighter than normal and some suggesting that you therefore have less confidence you're going to be

able to come in at the top end and beat it. is that a fair assumption? >> oh, i wouldn't read into that at all we have a track record of outstanding result delivery and eight years of skeuccessfully growing that business and we view that the u.s. commercial employer marketplace is a growth market by sub segmenting the market, getting deep and consul tative to work with them and we're excited to step in with another year of client retention and targeted new business growth and it is another strong year beginning in 2019. >> i mean, let's talk about the deal that is first time talking to you since you closed the big express scripts deal, david. talk to us about how consumers are going to be impacted and whether they'll be able to see lower prescription drug prices as a result. >> sure. our number one objective closing the transaction in the last ten days of 2018 was to ensure that both organizations remained

passionately focused on making sure the clients and customers got the right service stepping into january which is an exceptional exceptionally busy time for our business and the results are outstanding. make sure smooth, consistent delivery of the promise and both companies deliver in that. two, both companies are delivering very strong medical cost results or slowing the rate of growth with outstanding clinical quality programs and we'll begin to get the additional contribution of the business very importantly, when we announced the transaction we said the preponderance of the medical cost savings go to the clients and customers while the administrative cost savings to the shareholders and benefit to the shareholders but a significant benefit to the customers and clients and starts in 2019. >> come back soon, david we have to go because we have braeblgi breaking news. david cordani.

we have breaking news. elon >> the irs will send out tax refunds despite the government shutdown that is being attributed to the acting director of the office of the management and budget. that's been one of the big concerns in this government shutdown that the irs would not be able to send out those refunds and people would be losing out on potentially hundreds of millions of dollars that would be delayed but now omb saying that the refunds will be issued even if the government shutdown is ongoing. back over to you. >> okay. thank you very much for that what about the latest on the broader question of where we stand on the shutdown following the announcement of making a prime time address increase or change people's expectations of how quickly this could be resolved? >> well, we will have to see exactly what he says i think that right now both sides are dug in democrats planning to go ahead

with the votes in the house to open up each agency that's closed down and see if the president makes good on his promi promise, potentially to declare a national emergency to build the wall will he have to go that route? we'll tune in tuesday to find out. >> all right thank you. we've got 34 minutes to go here before the closing bell rally mode for the major averages s&p 500 up a full percent. small caps leading the day and that has people talking positive sign potentially up 1.8% still to come, former treasury secretary summers will be here why he says we must prepare for the likelihood of recession. and later, former council of economic advisers chairman e adtas t utein to weigh in on thtre lkofhe.s. and china.

welcome back time now for a cnbc news update. hi, sue. >> hello good to see you. here's what's happening at this hour, everyone president trump announcing he'll address the nation at 9:00 p.m. eastern time on tuesday. he's expected to speak on several things including the government shutdown. the white house also saying the president will visit the southern border on thursday. mourners in france paying respects on the fourth anniversary of a series of

terrorist attacks in paris 17 people were killed at the paper "charlie hebdo" and a supermarket. over 3,000 people in australia receiving medical treatment for highly venomous man of war stings. the jellyfish -- that looks evil -- forced the closure of beaches in the gold coast and the sunshine coast of queensland. mardi gras season kicked off in new orleans it began sunday on what is known as 12th night. the party will keep going until fat tuesday on march 5th of this year that is the news update this hour, guys i'll send it back to you sara >> sue, thank you. half hour to go in the session. bob pisani here on the floor, bertha coombs at the nasdaq. bob? >> we have a rally and well off the highs.

i want to show you just closer to 2:00 eastern time we were sort of just plateauing right at the highs we had a treat from president trump announcing that he was going to address the nation tomorrow on border issues. market seemed to take it negatively they want it to end, the shutdown and to the extent to intensify i think that was some of the concerns of the market important thing about the dow gainers today, kind of a mixed bag here exxon and chevron with good energy commentary of saudi arabia visa and intel also on the upside and not a lot of pattern to it. the volume is somewhat on the moderate side. all the defensive names are laggards trying to buy more on the cyclical side is good and negative on the defensive names and retailers are having a great day today. it is not because they're buying intensively. there's not heavy volume exhaustion volume on the light side and so

much selling in retail that we saw the prior month even just a little bit of buying interest moves some of these names nicely >> thank you very much for that. let's send it down to bertha at the nasdaq bertha >> yeah. the retailers and bio tech, that's part of the reason seeing that outperformance in the russell 2000 up for the seventh day in eight bio techs very much on fire leading the rally. among the biggest movers today is loxo oncology a 60% plus premium and this is not a beaten up bio tech stocks. it was up 66% last year and up even more than that the year before but we're also seeing some research propelling stocks higher sage therapeutics with strong results for postpartum depression drug. this is a loser last year. today a big lift a number of other companies

announcing results at the jpmorgan health care company and bob mentioned retailers. look at the gainers here not just tech stocks beaten up but chips like amd and invidia and ulta beauty. and dollar tree. starboard looking to get it to reportedly up its prices from a dollar and get rid of family dollar which it had acquired i guess it's that time, guys some acquisitions in bio tech and others leaving back to you. >> bertha, thank you very much for that now, the u.s. and china restarting trade talks we have the latest on what it means for your money next. plus, tesla breaking ground in china we he e avthdetails coming up on "the closing bell.

. u.s. officials are in beijing this week to hold two days of trade talks. we have the latest what do we know? >> day one wrapped up and hoping more details will leak out but this is the first face to face meeting between the u.s. and china since the g20 but it's really more of a technical meeting of senior officials.

jeffrey 2k3w jeffrey gerrish is leading the delegation liu he met and may come to washington if all goes well now, today, commerce secretary ross was on cnbc saying that u.s. trade policy is working and china's economy is suffering as a result >> what will come out of it is a resolution are we going to go the negotiated route or are we going to go and go on the original direction of higher tariffs? it's really a binary set of decisions. >> there's a report that president trump could meet with china's vice president the white house not confirming the schedule of meetings just yet. we'll see if they sit down and talk back over to you. >> i'm sure it's lots of interesting conversations that

week not least between the chinese and the u.s. ylan, thank you for that. >> thank you. all right. we have got 22 minutes here before the closing bell. solidly rallying here with the dow up 158 points. s&p up 24. that's good for almost a percent. small caps are really shining in today's action tech's doing well today, as well up next, an exclusive interview with larry summers with an alarming economic warning out today. >> and later, more from my exclusive interview with secretary of state mike pompeo his thoughts on brexit and theresa may's leadership we're back in a couple you always pay your insurance on time.

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welcome back there's the dow up 143 the swing up, the high down 131. the final half hour or so seen's a positive impetus back 0.6% former federal reserve chairman alan greenspan on cnbc saying stocks may have room to go lower listen. >> we have a complex system and trying to evaluate price

earnings ratios and what our data systems shows is that the market is probably still a bit too high not great. not a great deal but somewhat. >> so should investors be concerned? in a new piece in "the financial times" larry summers is warning that we should prepare for the likelihood of recession. he joins us now to discuss welcome, secretary summers nice to see you again. recession? why are you jumping to that conclusion >> there's no certainties but the recovery's been going for a long time. financial market conditions as measured in the stock market, credit spreads, inversions in part of the yield curve with flashing very cautionary signs there's lots of signs of economic difficulty in china some of the more forward looking economic indicators are

suggesting a cause for concern all of that suggests to me that the risks are now more on the downside than on the upside over the next two years and i think the odds are now better than 50/50 that we will have a recession in the next two years. >> all those thing that is you mentioned, i mean, wi talk about them on cnbc all day long. they point to slowing growth i'm not sure about recession, though there's increasing chatter of a soft landing can you go from a year of 3% growth all the way into recession very quickly >> well, my -- my prediction was a prediction over the next two years. i don't think it's likely -- >> got it. >> within the next few months the mbr will ultimately assess the recession began but if you allow two years i think that's

plenty of time and i think we need to recognize that in almost every case recessions were not anticipated nine months ahead. and in that context, it seems to me given history, given the length of the recovery, given the other factors, that i mentioned, that that's the direction where our concern needs to go. e especially in the light of the fact in the united states, europe and in japan in all the cases inflation is now running distinctly below the target 2% level and is expected to do so for quite sometime to come. >> mr. secretary, is that change in direction for the economy now inevitable or are there policy responses that could prevent the slowdown or the recession you recommend to the administration right now? >> just to repeat, what i said was i thought the odds were

better than 50/50 to have a recession. >> sure. i said or slowdown. >> definitely have a recession i think the direction the fed has been moving towards signaling that its greater concern is with slowdown and maintaining the flow of credit is the right one i think there's no question that signs for the united states that it was going to be an international cooperator on issues of global finance, on issues relating to support for the imf, support for developing countries that have financial emergencies, i think all of that would be a contributor to confidence i think a sense for policy to move quickly if a slowdown comes to start spending more on

infrastructure, i think all of that would be welcomed and i guess a sense that we're not going to shoot ourselves in the foot with protectionist steps or with measures like keeping the government closed for months or with other thunder bolts of unpredictability would contribute to confidence. >> and then there's the fed. last time we spoke to you, larry, you were somewhat critical and said the fed didn't need to raise interest rates in december are you pleased to see that powell changed his tone considerably when it comes to flexibility around policy, the balance sheet and looking at the market risks >> i think i -- i said a moment ago that i thought the fed's movements towards showing concern with slowing and opening up the possibility of flexibility were very welcomed and we'll have to see what their

signals are in the next few months and even more important what steps they take but certainly, right now i think we're at a place where for the foreseeable future the data could change at some point, but on current data the risks of rate increases i think are far exceeded by or far greater than any benefits that might come from rating increases. >> mr. secretary, talk to me a bit more of what you said at the top of seeing signs of slowdown in the chinese economy how severe are those signs and do you think we're going to see a big fall in their gdp in the next year or two >> the data from china is substantially managed. and that means it's hard to know what figures will be ultimately reported and that also means that even smaller signs of deterioration in the reported statistics are a

greater cause for concern than they would be in the united states but whether it's the purchasing managers indices, whether it's the sales of apple phones in china, whether it's figures on industrial production, whether it's indications of consumer sentiment, all of these are flashing grounds for concern in china and i think it goes way beyond the dislocations associated with the ongoing trade conflict china has had an issue for a long time that its growth has been dependent on the somewhat

indiscriminate provision of credit and there's a conflict of financial rectitude and doing the right thing in terms of assuring that the loans that are made are valid loans rather than to cronies that's an important objective. but at the same time if you curtail lending too much you will slow growth and that's a very difficult balance to get right. the chinese had been tilting more towards the side of financial rectitude but there are signs now that things are starting to move the other way. >> yeah. very quickly, just to take it all back to the markets in the u.s., secretary summers, a lot of people look at a jobs report like we got on friday, 300,000 plus, more than 3% wage growth and say there's a disconnect of the economy and the markets and really it is not just jobs but also -- because some of the consumer numbers how do you answer that who's usually right? >> in the economy is what it is

at the moment and certainly the economy in december you can't say that it was a stagnant economy. in december. but it's important to understand that the retail sales statistics or the employment statistics look backwards and markets albeit imperfectly are trying to look forwards. so i think it's a mistake to slavishly follow what the markets are saying but it's also a mistake not to pay attention to signals that come from markets. >> always valuable to get your thoughts thank you. >> thank you. >> the former treasury secretary of the united states. >> which is in tomorrow's newspaper and hit online well worth the read. ten minutes to go before the bell and we've got the dow up 126 points s&p up off the highs and

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tesla breaks ground on the new factory on china phil has the details for us. >> reporter: this is the second plant. first one is in fremont, california this is a giga factory for batteries and final assembly of the vehicles elon musk was in shanghai today with diplomats and other executives they basically said this is where we'll build the factory and the production expected to start by the end of the year and most importantly, unlike other joint venture, this is wholly owned by tesla >> the opening of policies have been a steady movement towards opening and we feel very optimistic about the long-term future we think the direction has been great. >> by the way, take a look at model 3 deliveries and how they

increased quarter by quarter keep in mind these deliveries from essentially only in north america and plan to start sales in europe in february and china in march and this will really ramp up getting the production of the model 3 started in china. taking a look at shares of tesla over six months. right now, when tesla sells a model s or a model x and ships it to china, guys, there's a 15% tariff on the vehicle and they lop off 15% on model 3s sending over there when they're building them and selling them in country and that's the whole idea here >> i know it's important, phil, that those individuals press those buttons on stage at the same moment to really truly begin the building anyway phil, thank you as always. for us in chicago. up next, we'll be back with the closing counowtdn. population is self-employed. lobster fisherman is the lifeblood of this town. by 2030, half of america may take after stonington,

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don't get mad. get e*trade, dawg. welcome back to "the closing bell." two minutes left of trade. let's start with this. we are off the highs of the session but look back right at the open we were negative briefly and we shouldn't complain about where we stand at the moment similar sort of intraday chart nasdaq leads the charge. still up over 1% the dow up about .5% the dow up 111 the high of the session of the

dow up 245 the low 134. that's the moment. about half of 1% sectors, interesting to see those bullish and cyclical sectors outperforming today. technology and energy. staples towards the bottom i guess encouraging the defensive stocks being the ones that underperform shanghai, that was strong. asia whereas european markets, germany suffered today crude having a strong day and helped - >> very strong. >> and the dollar very weak and of course helping -- >> interesting on that good job on mike pompeo. >> thank you very much. >> very interesting. here's what's important. what we saw today, notice the volume not very big today so several things are happening. we are seeing some seller exhaustion the markets up not because they're buying hand over fist but not a lot of selling going on we have seen progress on the fed

and trade talks and still very sensitive, the political risk. you notice the market came off the highs and the president wanted to address the nation on the border crisis and the issue and i think people are senned that ongoing political risk is still a factor in the markets. >> thank you very much for that. there goes the bell. we have up 94 points on the dow and slipped below the 100-point mark of the close. that does it for the first half of "closing bell." back to you. ♪ strength continues for u.s. stocks welcome back i'm sara eisen let's take a look at how we finished up the day on wall street starting off the new week with a rally across the board the dow closing higher by about 99 points. but it was also a lot lower. down at many points. s&p 500 ended up with a gain of

about .7%. strength in consumer discretionary, energy, real estate, technology only two sectors lower is utilities and consumer staples the nasdaq outperformed with the tech rally up. bio tech with a nice day and it was the small caps that really shined today up 1.8%. some real outperformance there we'll talk about it. we have more from the exclusive interview with the secretary of state mike pompeo including his take on brexit negotiations. leading the dow today was home depot, coca-cola a big decliner on the back of underperformance. advanced microdevices business was the leader and p & -- pg&e was a laggard. positive signs for the bull? >> it is net positive and saw

relaxation across all markets. dollar down. credit was firm. treasury yields back up. so a lot of the fear trade that seemed to culminate last thursday continued to relax so the s&p got up to this level where it was about 1% away from what by the way everyone will be saying is a potential area it might stall. up to 2650 and so and burning up the overshoot to the downside in the negativity that built up beyond that, yes a net positive and can't declare anything too decisively just yet. >> the dollar softening is a big help >> i think it is reflective of sort of all around having a little bit of that defensive crouch people are coming out of it a little bit so all of it fits together in that sense but i don't know that -- i don't know what's driving what but seems like across all asset markets. >> lowest level since october.

weakness there. >> john, your take on this rebound? clearly, inspired by friday but good to see it continue on today. >> yeah. i think we are in an air pocket. the last two weeks of the end of the quarter and the first two weeks of the next quarter the market is pushed around by the headlines. earnings season is over. that's when we find out companies forecast of what's actually happening in the economy and impacting corporate cash flows. >> how are we set up for earnings do you think it's an easy beat or sort of bearish sentiment and any cut in guidance spooks the market >> what we saw more true than any other quarter is future guidance this quart's innings will be really sloppy and cross currents and the price of oil down 50% in a quarter. you have the dollar strengthening and impact fx rates on conversions right? you have now the tariffs have marinated and impact company margins and i expect the

quarter's earnings to be mess sy what's the future guidance >> where's retail investor sentiment right now? >> we came out measuring that and we saw our clients pull back about 16% last month in terms of exposure the interesting thing about what they have done recently is getting out of equity names and rolled it into more index names etfs and fixed income so obviously a little bit of fear, you know, in which makes sense three months in a row, the entirety of the fourth quarter of 2018 every month was less exposure than the month before and if i look at the stocks they did buy, one of the ones leading the way is at&t which hit a 52-week low and provides some -- >> is that a dividends play? >> exactly apple which, you know, they came in to buy. it's a stock that people -- it was our number one held stock last two years

the first dip they bought they stopped for a while and then the last dip again they came in and bought again and, you know, ulta and ge getting to $7 and below and people still want to believe in that story overall. >> mike, we were talking with larry summers before the break about the prospect potential will have u.s. economic growth slowing down does that always mean bad news for the u.s. equity market >> no. i would say how much of a surprise would it be at this point i think is the point slowdown is almost the new bull case because the bear case is -- >> avoiding a recession? >> yeah. "wall street journal" today saying the fed is trying to engineer us off. that's what they're trying to do every cycle and at 2006 for more than a year after the fed stopped seemed like a soft landing. i think that's where we're at right now. in terms of earnings and the macro data, tell me what the

market's going to do in the next week or so leading into bank earnings that will tell you how much is built in in terms of negative guidance. >> we have seen a rebound and plenty of big worries weighing on people's minds. mike, you have been looking at what the concerns are out there. >> yes and how it manifest in wall street sentiment and fit in with what j.j. was talking about. up investors, professional, retail clinch up to a historic degree i don't mean greater than ever but given the speed of the decline, if you look at sentiment surveys, options activity, in terms of downside protection, all of it you saw a purge of risk into january and so i think there's enough there still to burn off with further upside and almost without the news flow getting that much better what we're doing is feeding on this. by the way, the s&p's up almost 9% off the low in a couple of weeks so it shows you how can

happen and until you get to the next test, i think we're in okay shape. i'm still watching the credit markets. talking about this later and to ratify what the stock market is doing right here you want to see maybe junk bond issuance and that will del you that it was really an overshoot to the downside in december and not really the market pricing in something nasty in the economy. >> have we seen the bottom >> i hope so to mike's point about the credit markets, the difference between now and 2008, is that the banks have been regulated to the gills. right? stuffed with capital and all the central banks globally really have their hands ready in the holster to fire away if there is a hiccup in the credit markets so, you know, there are enough entities that stand ready to act if there's an issue in the credit markets. >> do you think if the banks come out with decent commentary on that particular point, on the fact they are -- the thing is we have it from them for four

quarters and the markets not focused on it. >> that's right. >> how do they shake off the pessimism around them? >> the key issue is what's going on with the loan profile are they starting to see more defaults on the margin because then it dovetails into the idea that the u.s. is hitting the recession and things are deeper than we currently know. >> j.j. what sort of ownership are you seeing around the banks? they were positive to finish out the day. >> yes last month buyers overall, back to some of the comments that mike's just made and john, i think the biggest thing in the earnings calls is going to be what the companies say about tariffs. that's what matters. we know it affects the quarters for last quarter what do they see going forward and the biggest wall of worry is ceo's hands are tied and don't know 25, 0, whatever it might be, they don't know the rules of the game and when they know they can win the game >> mike, on that topic, i mean,

i love -- missed apple news. love following it from afar and other companies report, if they fail to strike a similar bearish tone and reasoning for softness on china, does apple stock get hit more or rebound? >> the stock is trading very heavy. down today in an up day and i think apple's in its own zone of people losing faith. but yeah i mean, i do think it sort of works against the idea that apple is caught in the same wind everybody else is. again, tell me where the other stocks are going into the reports to help you figure out the response. >> let's move on and talk about the government shutdown now in the 17th day the third longest in u.s. history. i spoke with secretary of state mike pompeo and here's what he had to say about the government shutdown >> i hope the shutdown will end because i just think it's better but we have an important goal there. the administration has an important goal there that the

president's trying to achieve. but the state department will continue to perform its functions around the world in a way that keeps the min citizens safe and performs its diplomatic function. >> i guess, mike, for a long time as we were discussing earlier, people say a shutdown itself doesn't hurt the equity market do you think it does as it gets longer there for the operation of the state department, secretary pompeo saying we have obstacles. this is another one and deal with it and move on. >> i think it ends up being a net negative and looking at it from kind of the market's brutal bottom line for how it metabolizes the economic information, it is going to provide a little bit of cover for any weak economic numbers we get in coming months. >> helpful >> i don't think it's helpful. >> excuse. >> offset. one of the these -- you have the ability to set some things aside. >> j.j. does it affect sentiment? >> you saw today perfect

evidence the fact that good progress on the tariffs, et cetera, have a much bigger sentiment indicator than what's going on with the government people have kind of -- i hate to say used to government shutdowns and then the second longest i believe and so we'll see how long this lasts. i don't see this having a big affect on the market overall some of the ceo iz might be able to use it. >> it doesn't now but i mean eventually sets a bad tone for new congress and didn't expect any cohesion to begin with and eventually they have to come up with an agreement on the debt limit. >> no question about it. you feel terrible for those people working without pay and provides a ton of news in the gdp data this quarter and then once the government's back into work providing noise into the next quarter but listen. dysfunction in d.c. is here to stay the democrats have control of the house. remember all too well how the republicans stone walled president obama in 2012 and the

president has no goodwill with did democrats and expect dysfunction to continue. >> i guess the biggest market related government issue today is the talks with china, mike. to what extent is a small positive out of this week's talks already priced in? >> i think the idea it's moving in the direction of something on paper that both sides can live with is pretty much priced in right now. i also think, though, with the market down still double digits from the highs, the stakes have become a little bit lower in terms of damage on the margin. to the stock market right now. but i don't think -- i don't think anything specific is priced in this terms of progress or help for business. >> john, are you waiting for specific milestones in the trade talks before putting money to work >> i have learned through the process that we'll see it when it happens opposed to guessing or hoping. my hope is that the parties come together something gets done before chinese new year and that each side takes a step back

right? the chinese can concede to a couple of trump's demands and instead of taxing $110 billion of u.s. goods, maybe cut it in half and trump goes from 250 billion down to 150 billion. something along those lines. neither party backs away entirely hopefully before chinese new year but -- >> february 5th? >> exactly. >> in terms of your retail investor survey coming out today, what's the topic of interest >> i would say the number one question i got, about 400 clients there, was what does it mean for apple and i think that that's really the stock that people see most in the news. you guys talk about it and suppliers and should this be a bott bottom for apple by far the number one stock and again, you know, obviously what it means for the s&p 500 but i think so many people have related the trade issue to what it means for apple individually.

>> so many other people asking does what it means for apple mean for the u.s. economy and the u.s. stock market. >> yeah. >> which - >> i mean, i think you could say it's an exaggerated version of what it means for both those things right now and hard to say that many other companies relying on china for that big percentage of the incremental growth as apple was this time. >> but how many other companies force to a massive price rise? such a great debate. sad to miss it last week. >> you missed a good one don't go away anymore on volatile days. >> great discussion. thank you very much. up next, investors encouraged by the new round of trade talks between the u.s. and china, we'll get the latest on negotiations and how a deal could impact the economy straight ahead. plus, chief international economist slot with the top risks in the market in 2019. you're wchating cnbc, first in business worldwide

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the talks are all about laying the ground work of more high level discussions later on the chinese foreign min stristra it's happening with good faith and leading the talk is jeffrey gerrish and officials from treasury, agriculture, energy, state that just gives you a sense of how wide ranging the topics will be a good sign is china's vice premier liu he joined the talks and he could follow up with the visit to washington to speak with treasury secretary mnuchin or ambassador lightheizer and the u.s. is gearing up for talks here in washington european trade commissioner will be in d.c. on wednesday to meet with lighthizer and japan's ministry is joining the discussion, as well. all of the agencies in the talks

are currently shut down and that means a lot of the staff level subject experts are furloughed and would help out with prep and research an expert compared it to going into a nba game with your five starting players but no one else on the bench and he said you can bet china is playing with a full team back over to you. >> i think i got it. despite the nba reference. thank you. thank you very much on the shutdown joining us to discuss more, ron kirk, former u.s. trade representative and martin feldstein, former chairman of the council of economic advisers under president reagan here at post nine. welcome. nice to see you. how much of the trade war is the u.s. economy feeling right now >> i would say very little stock market is nervous about it but i think the economy's still doing extremely well >> what about the chinese economy? >> chinese economy seems to be suffering more exports are a bigger deal for

the chinese. their stock market is down dramatically and that's bound to hurt their economy so i think - >> critical point for them or not yet? >> i think they'd like to get a good joutd come from these talks and i hope that we don't capitulate and say let's talk about the trade balance because that's not the real issue. the real issue is china stealing technology from american firms' wi hear that from the administration, a lot of that from the administration is one of the priorities. >> it is on the list but the question is, when they actually go to do a deal, will they say, oh, look, the chinese have bought so much of this and so much of that and they've promised to lay off on the stealing but i'll believe it when i see it they promised that once before and didn't do it. >> ambassador kirk, you have been on the other side of some of these negotiations with the chinese. can you take them at their word? if that is included in a deal.

>> well, historically once they've made a deal because they are such a top down form of government they do adhere to it but i have to agree with martin that we have to get the focus just off of the trade balance and look at the underlying issue of getting china basically to fulfill all of the commitments it made when it ceded to membership in the world trade organization and particularly respecting intellectual property rights, stopping the forced transfer of trade secrets and allowing a more open investment environment similar to what we've done but as the previous reporter noted these are the preliminary talks. i would disagree with martin just a little bit. i know -- i mean, we have to be careful to judge the impact of the tariffs of the markets because i happen to talk to those involved in ag and small

business and they're feeling the hurt from these tariffs. so i think the opportunity lies in the fact that tariff wars tend to be punitive to both parties. and as that pain increases, that can create the incentive for them to try to find a way to make a deal but a substantive deal. >> you said these are preliminary talks this week but how important are they in shaping for what might come for the rest of the year and is this year a realistic target for a full trade deal to be finished up >> we have to be careful we don't have a trade deal with china. what we have is an escalated trade war by both sides levying tariffs on everything from cars to steel and our administration impacting other consumer goods but as you know at the last meeting of the leaders they put a 90-day deadline in place and typically the senior staff get

together and see how much of this they can work out ahead of the principals meeting and presumptively between the vice premier and either ambassador lighthizer or secretary mnuchin next week so they're important and as noted and having been in that position i am concerned that u.s.t.r. is krirtd ccriticy shorthanded and the office of u.s. trade representatives had 250 people to begin with and so, they're stretched thin negotiating all of these agreements and they need all of the talent that they have. so we go into this at a little bit of a disadvantage because of how shorthanded we are. >> marty, isn't the exact type of deal you said you hope the u.s. doesn't settle for seem more likely than not it's a great headline to say china's agreed to buy this much,

maybe boeing aircraft and promise other things on the back end and seems like the shortest path to resolution or perceived resolution resolution. >> attractive for the administration and the chinese would be happy to do it and accomplish almost nothing. so it wouldn't deal with the critical issue of the chinese stealing through the internet or forcing american companies to transfer technology as a condition of doing business in china. >> finally before we let you go, we have to ask you about a plan out there of ocasio-cortez to tax the top 70% to fund the new green deal >> nutty idea. i mean, we've got a tax reform in place we have seen the tax rates come down they have helped the economy i don't want to see us going back to where we were ten, 20

years ago. >> all right thought you would have something to say about this. >> thank you. >> thank you both very much. ambassador kirk and marty feldstein. >> thank you. more from my exclusive interview with mike pompeo embarking on the trip to the middle east. the turkish president making news this afternoon. we will have that development and the secretary's take on what's going on with turkey and the rest of the middle east. wee ckn colef minutes.up o hey, darryl. would you choose the network rated #1 in the nation by the experts, or the one awarded by the people? uh... correct! you don't have to choose, 'cause, uh... oh! (vo) switch to the network awarded by rootmetrics and j.d. power. buy the latest galaxy phones, get galaxy s9 free.

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turkish president erdogan published an op-ed in "the new york times" saying it's time for all stakeholders to join forces to end the terror unleashed by the islamic state. and to preserve syria's territorial integrity. turkey's volunteering to shoulder this heavy burden at a critical time in history we are counting on the international community to stand with us. >> earlier today i did sit down with the secretary of state mike pompeo here's what he had to say about the united states relationship with turkey and president erdogan. >> president erdogan made a commitment to president trump as the two of them were discussing what this ought to look like that turks would continue the counter isis campaign after our departure and that the turks would ensure that the folks that we'd fought with, assisted us in the counter isis campaign, would be protected that's what ambassador bolton is

there later today or tomorrow to have a conversation with the turks about. how we'll effectuate that. >> do you trust president erdogan personally it seems that president trump has gone from considering him friend to foe back to friend again in fairly quick succession. >> my sense in all of these things in my world internationally is it's about acts on the ground it is about actions. it is what we actually do. commitments are important and then following through on the commitments matters an awful lot. that's true for parties and the nato ally turkey. >> joining us now, brett bruin, president of the global situation room, he was also director of the global engagement under president obama. thank you for joining us what is your take on that final question, posed to secretary pompeo can the u.s. trust president erdogan at his word? >> america cannot outsource the national security. the problem of what president erdogan is saying or for that

matter what president trump is saying, there's interesting beyond what america's trying to achieve there. turkey obviously has a longstanding conflict with the kurds. the president's talked about saudi arabia other gull nations coming in and doing our dirty work essentially and at the end of the day it is going to create more problems for us and not get us a safer or more stable middle east. >> and in terms of the likelihood that the u.s. will achieve its aim here, where do we stand on that particular topic of stability in the region and getting other western allies to back their position >> well, i think what we have seen throughout the first two years of the trump presidency has been a mix of negligence and this is really shaken the confidence of a lot of our allies in the region and around the world. the problem now is no one can take what trump says to the bank and that's why quite frankly

secretary pompeo is headed over there to try to aassuage some o the fears. >> what about saudi? lowering the price of oil in part of the good relationship with the saudis. >> unfortunately he seems to have put the u.s./saudi relations in a state of imbalance. unfortunately, he seems focused very much on a few economic issues and not on the broader relationship which is what is created a lot of these problems with jamal kohashoggi and elsewhere in the world we need to reprioritize the relationship and create the stability, the kind of structure that we used to have. >> brett, in terms of china, do you think that we're making progress on that front and do you think it's a

standalone trade issue or linked >> i was speaking at a trade event in shanghai just a few weeks ago. i think folks there are cautiously optimistic. they see trump ultimately as a dealmaker. somebody who may talk tough but at the end of the day as was the case with nafta, with the eu, he's able to strike a deal and i think the chinese are pretty clear eyed about that. and going in with cautious optimism. >> and finally, on the sort of geopolitical picture for europe, do you think that risk is over or underestimated by people in the u.s. >> i think the risk is significant and quitefrankly another example of where pompeo and trump are not helping matters. they're egging on the brexiteers, egging on the movements in europe. that's undermining the pillars of the atlantic alliance and that is scaring investors and

leaders across the atlantic ocean. >> okay. brae brett, great stuff. >> thank you. sue hererar as the news update. >> thank you here's what's happening at this hour vice president mike pence alleviating some fears over the government shutdown today. the vice president ensuring americans to receive their tax returns this year. pence also commenting saying the tuesday address will focus on the border crisis. the uk transport minister calling the drone disruption dib rate, irresponsible and calculated. going forward ux uk police will be given additional powers to land, seize and search drones that could pose a security risk. a survivor of the boston marathon bombing in the hospital after being struck by a car on saturday ballroom dancer adrian lost her

left leg in the bombing and became a symbol of strength and performed on "dancing with the stars. and the birmingham airport getting a rush of last-minute fliers as the crimson tide fans rushed to catch the last-minute flights to the championship game the witnesses say it was a sea of crimson i can only imagine and the fans were chanting "roll tide." that's going to be a highly anticipated game that's the news update tonight guys, see you later. >> all right see you later. sue, thank you. still ahead, stocks have been making a comebam and a stop economist explains why he thinks there's major red flags investors should be watching this year. plus, congressman woman ocasio-cortez wants to raise taxes on the wealthiest americans to 70% we'll look at what impact that could have on the econy, tomax revenues and much more still ahead.

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boy, what a difference a week makes stocks rallying again as new trade talks kick off between the

u.s. and china and bob pisani is here to say there's been a fair amount of progress on the other market risks you have been watching. >> i see my father or three or four days and completely different. remember what happened - >> nobody's allowed to go away. >> well, no. it improved the market sentiment. we should leave permanently. we won't sorry for you, sara. >> it's remarkable how much market sentiment changed the big three worries have been, number one, the fed, numb two, tariffs and number three, china slowing. so now the fed has said it's listening to market concerns and would be flexible coming to rate hikes. that's interesting trade talks are picking up we had high level officials of the u.s. and china meeting today, tomorrow to try to hash out the terms of a deal. and there's hope for the chinese economy again. this is a separate story china announced stimulus programs to boost its infrastructure spending. all in the last week or so

beyond that, there's ore i think good news. has anybody talked about the gas prices down 20% since october that's a huge tax cut for the american consumer. fears of a recession, maybe. but stronger job growth and the comments of powell last week seem to be fending off the fears at least for now political risk i think remains a major issue both in europe with brex it and a slowing economy and here with the government shutdown and broader concerns of jim mattis and others gone perhaps president trump lost several key appointments that are a stabilizing force. the bottom line is we are not out of the woods and the trend is definitely improving. december 31st, i walked away one of the crumbiest closes i have ever seen and disappointing for everybody and now come back and look at it change. >> stay with us. going to continue the discussion joining us, tostin slot with a set of risks to impact the market the first one to focus on which

you differ from the street is on inflation and bob thinks is tame >> our view is wage inflation and labor cost went up and remember last friday, excited about the headline and the par t participation rate going up and in that sense this is important for the fed. it's important generally for the market that labor cost continue to creep higher an enkeeping an eye on this. >> and even the fed is not with you. powell, just on friday, called inflation muted. >> i know. so there's a big difference between inflation of consumer price inflation and cost inflation which is wage inflation. we have been talking about this for a while and happening and slowly going up for a while and still continues to be very important across the sectors labor shortages in retail and health care, transportation. even home building all those tell us something very important. you can't say the fed to look at

markets and not what's going on -- >> how many hikes this year? surprise on the upside >> we think they will have two hikes in the summer and december so i think that's very important because it's very critical the labor market is doing very gangbuster here and so ism was weak and bob talking about the trade issue is incredibly critical for the outlook and why -- the reason why the market is spread to be positive and good to do with meetings and doing something and trying to hash out some deal we'll see how far it gets. >> 3.2%, the wage growth on friday >> highest level since the recession. >> i know. but we have a roaring economy going and we are still only 3.2% that's hardly ringing alarm bells. even powell didn't seem to be overtly concerned about it. >> and prices coming down across the board. >> why is he so worried about markets and not worried about the dual mandate inflation and wages. >> it's fallen, though. >> fully understood but should

we ignore that wages are going up >> not that simple the answer is. powell is lenning that yellen had to learn which is, yes, you have a dual mandate but your message to the markets and to the -- people in the united states has to be a lot more nuanced than that and i thought the comments reflected a growing maturity for him, powell. >> true it is a lot more complicated for them ignoring the market drag down the outlook but it's a difficult balance of focus on the market and not much on the labor costs. >> the market rushed to a point where they think that perhaps there's a stall coming in the u.s. economy or something like that do you see a mismatch of how the markets have become set up and the growth picture >> absolutely. doesn't see a recession. i mean, ek til - >> does the consensus ever see a recession? >> that's true but the consensus is telling you the best predictor is individual

companies and the macro picture. it is fair that it's not good at capturing turning points and looking at the evidence, the data, any signs of recession just around the corner. >> why aren't we getting more wage inflation with a roaring economy >> because we are able to -- >> demand for jobs -- what's keeping it down? >> those outside the labor market, despite the crisis and many people on disability insurance, a lot of people are coming back and taking job that is a lot of evidence both in transportation sector, elsewhere in retail, workers are taking jobs and holding wage growth down so the good news if you will is that the labor market still able to drag people in to get jobs and in that sense that's an important reason why wages are not going up more. >> thank you for joining us. our thanks also to bob pisani. torsten slok check out the full list -- not

coming up. online now. cnbc.com bob's full list of worrys that have improved. taxing the super rich. that's the game plan for freshman congresswoman alexandria ocasio-cortez but it's a plan that may not get her desired results. we have dug into this and we'll have results next. alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time.

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alexandria ocasio-cortez went prime time last night pushing her idea to pay for some new progressive programs with a tax on the super rich. cnbc's robert frank is looking at the plan and joins us with the breakdown. robert >> ocasio-cortez with a tax rate proposal of 70% on income over $10 million a year she told "60 muptds," quote, people have to start paying the fair share in taxes and republicans saying it punishes work and success alan green spay saying it would be a terrible mistake. there are 16,000 tax fliers making $10 million or more in 2016 this isn't the top 1% but the top 0.5% and earned $404 billion in income and paid $120 billion in federal income rates. those millionaires would pay

additional $70 billion in taxes per year or about 700 over 10 years. that's if they pay the entire amount and didn't do any tax planning ocasio-cortez saying to use the money for a green new deal that would ban all fossil fuels from utilities, agriculture and manufacturing by 2030 but some estimate that plan could cost over 30 trillion in the first 10 years and more than 40 times the revenue that she would raise from the rich tax and right now tough to see how the math works out. guys >> robert, when you talk of those super wealthy deca millionaires, the term i guess you were using, a question of how many make the money through income as opposed to one off big capital gains. >> that's a hugely important point. as you work up the income scale, around 5 or 10 million that's where a lot of the income comes from capital gains so the tax rate for that group is usually in the 20s in terms of percent tile rather than 30s and that

group importantly can shift their income so in canada, they raise taxes on the top 1%. instead of the gaining $3 billion in revenue, they lost 4.6 billion. because a lot of those top earners shifted their income before the tax took effect or just delayed them so the reason that capital gains component is so important is that this group can manage their income around the taxes so that it tends not to raise revenue as people expect. >> robert, great analysis. much appreciated. >> thank you, thank you. >> sounds like countries overseas that have done this, right? sweden has a top rate. >> it is the top marginal rate not 70% of the first dollar you earn. >> the sweden model is very different, though. a kind of nation that really buys into having fantastic welfare state and state provisions different mentality. >> that's poithe point i guess. next, secretary of state pompeo laying outht e negative

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welcome back earlier today i sat down with secretary of state mike pompeo here's what he had to say about brexit negotiations. >> we've been clear from the beginning, the uk people made a sovereign decision with respect to brexit. we respect that. we hope that as between the eu and the uk they can come to an agreement so there aren't negative ramifications that flow negative ramifications from a hard brexit related to not only commerce and trade but importantly to the national security issues that we have with the british as well as with

the european union those are important national security concerns and so i'm hopeful all the leaders, the leaders in the eu, the leaders in the united kingdom will find a way to come together will-to-make sure this transition is effective. >> you made a speech in brussels for december and you said, quote, our mission is to reassert our sovereignty, we want our friends to help us and to exert their sovereignty as well a speech to brussels, no less. does that suggest a fuller version of brexit is something you think is sensible for the uk >> the speech wasn't aimed at any particular action, brexit was a small part of the remarks that i gave. what was really important about that is we think it's an imperative that multilateral organizations, whether that is the united nations or the international criminal courts are effective at delivering what their stated missions were and that goes for all of these organizations, the eu included they need to be sure in every n

instance that the purpose for which they were intended, taking care of the people that they have been entrusted to protect and to serve are actually being protected and served by those entities that's a what the remarks were about. it's about making sure that nation states exercise the sovereignty for the good of their own people so that wouldn't be drawn on the shape of brexit that the administration wants to go in. and that likely will have a big impact on markets coming up albeit we know it's coming. >> it will surface as one of the things we're fixated on. is there a strong way to hong kong how it goes

>> the pound has risen in the last couple weeks but it's 27 and i think that's been dollar weak weakness i think there's a three horse race some kind of manager brexit in the front. or turning the result remain third. listen a lot rests on that vote next tuesday that we know the date for. >> up next, coming back with final though otsn today's trading and what to watch tomorrow and the rest of the week on wall street. uh-oh! guess what day it is??

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can you help with these? we're more of the plan, invest and protect kind of help... voya. helping you to and through retirement. time for some final thoughts here on the market as we close out another positive day, see if the momentum continue k continue we'll get earnings record, jay powell speaking wednesday at the economic club of washington. what are you watching. >> some of that will come into the mix. the market is up almost 9% from recent lows. you're starting to hear people say it's building a case that maybe this is something substantive as a low but you have to keep an open mind

because friday and one other day we saw massive panic buying where 95% of all volume was up people saying that rarely happens except outside of an important low. >> also the sectors. that's an encouraging shape of the market performance today. >> right a lot of sectors were beaten down and the cyclical ones that have rebounded a little bit right here so right now i think we're in a mode where without the benefit of improved news flow the market is saying o.k., we'll take back that down side, overshoot that we saw. on the other hand, i was checking earlier but it's true, when the market is up sharply and pulls back 9% we say 1% more and it's a correction of the up trend. we had a steep down-trend. we're up 9%. that's an upside correction so that's where the upside comes from. >> you like the official terms >> the ones nobody agrees with that i can insist is the proper

way. >> so almost an upside correction in an almost bear market. >> but sometimes corrections become bigger so the rally can become a more enduring trend but honestly you have a few more tests to pass. >> without styx with garden-variety correction. >> that does it for closing bell today. thanks for tuning in. "fast money" begins right n now. i'm melissa lee. tonight on "fast," consumer, discretionary and energy on fire leading the markets higher but if you don't trust this, the chart master said there are three stocks you can own no matter what happens next plus, another wounded bull, canacord cut theirs 2019 target. the dow adding to friday's huge day, up another 1200 points closing off the highs of the session as it feels like st