powell giving remarks. that will be something to watch. reaction to the fed. the fed seems to be calling the tune these days in the market. >> let's hope jay powell stays on script. thank you so much for watching "power lunch." >> "the closing bell" starts now. ♪ good afternoon and welcome to "the closing bell." coming up here on the show, ken fisher and liz ann sonders we will have them here to discuss the latest market moves and strategy >> nike getting a rare downgrade today. first, check out the market rallying the fourth day in a row the winning streak continues good for a gain of a half percent for the dow jones.

optimism around china's trade talks. the center of the fed is leaning closer >> the hike came earlier the dovishness came today. dow up 125 high was 200 just wanted to point out the dollar as well that is seeing the dollar slip to a three-month low against the euro the dollar down 0.7% let's begin with the top story moving the market. in washington president trump is meeting with the congressional leadership and michele is here from merrill lynch to break down the fed minutes. >> lawmakers just arrived here at the white house for the meeting with the president expectations for any sort of breakthrough are pretty low here because over the past 24 hours

we have seen both sides really digging into their positions president trump was just over on capitol hill selling his strategy to republican lawmakers and told reporters the gop has his back >> i want to tell you the republicans are totally unified. if you would ask the same question to the democrats, you let me know in some of those districts where i won or a little more towards sanity you want them to run saying we don't have border security you have plenty of democrats that don't want to be in the battle >> there has been grumblings in the senate who wanted to end the shutdown and still continue the discussion overboarder security. the president said he is weighing calling a national emergency in order to build a wall without congressional authorization. some lawmakers do not think the president should take that

route. democrats continue to slam the president over what they are calling a manufactured crisis with nancy pelosi saying the president cares more about the wall than he does federal workers. the meeting at the white house will be taking place in the situation room the press won't be there we will see if the tone shifts once they are all sitting at a table behind closed-doors, but i have a feeling that it might not. >> ylan, thank you if per that the u.s. is in danger of losing its aaa credit rating if the shutdown continues we will talk to the ceo at fitch later in the show. >> federal reserve releasing their minutes from the december 19 minutes some gradual increases in benchmark fund rates would be appropriate and the fed can afford to be patient about

further policy firmingly >> minutes with downside risks ahead including sharper than expected slowdown in growth, and escalation in trade tensions tightening the financial conditions also. >> let's bring in michele meyer, chief economist at bank of america. i was surprised to see the patience and muted inflation and it sounded like jay powell last friday and not at the news conference from which the minutes came from that meeting what is going on here? how do you make sense of all of this >> yeah. i agree with that. it could be that jay powell in the actual press conference, you know, maybe he did not exactly strike the tone he wanted to subsequently he corrected himself and we heard the idea of caution, patience. there are a lot of questions out there. that was very obvious in the minutes. there is downside risks. we don't know how the financial

conditions are going to play we don't know how the weakness in global growth will factor into the u.s. baseline either. there is a lot of caution. and that suggests a much more cautious hiking cycle ahead. i don't think powell really hit that in the actual meeting >> michele, i guess we are reminded with this particular meeting and set of minutes that minutes is a misleading title for this release it is not verbatim what is said in the meeting they had time to adjust the messaging. the bottom line is that the messaging has been adjusted. we are seeing that reaction in the dollar and the equity market way fewer hikes than they did a few months ago >> yeah. i think the fed wants the minutes to be a reflection of the actual discussion in the meeting. but they are not a transcript. they are a summary of the discussion that is in the meeting that is edited and goes

through several iterations before being published if things and markets are shifting between the period of time from the meeting to the minutes, you can see the sentiment shift a bit. i think that is natural. i think we are supposed to take the latest message because it is consistent the fed is aware of the risks. they are not blind to it they are going to be cautious. they are going to be patient the intention is to hike further. that provided the economic data and the market to allow them to do so. >> you are referencing all of the fed speak. we put it together for everyone. there is a lot of it today across the country, sounding off on rate hikes. here is a sampling for you rafeal bostic saying should conditions play out i see little need to engage in restricted monetary policy and push the fed rate above neutral charles evans. i feel we have a good capacity to wait and carefully take stock

of the upcoming data and other developments rosengren says i believe we can wait for greater clarity before adjusting policy james bullard said the fed is boardering on going too far and possibly tipping into reception if rates go higher bottom line, will we get any rate hikes this year >> i think so but i do not think they are imminent by any means if we are right on the economy and we have a growth moderation but not a growth recession inflation around the 2% target if the markets settle down they will be able to edge rates higher they are not going to be able to get above the 3% rate. but i think they are skewed towards the additional rate hikes from here. >> summing things up, what is your gdp forecast for the year and the biggest swing factor to

make it go higher or low >> yeah. that is how the fed looks at the world. 2.1% growth forecast for 2019. 2018 is shaping up to look like the 3.2% that is growth moderation and the fact that the fed has tie-in it is a different global backdrop all of those factors together suggest an economy running close to 2%. i would put business investment as the downside risk that is why we are paying so much attention to surveys and sentiment swings are companies feeling confident to invest in capital and in labor and there is a question with the bigger ticket investment given there is so much uncertainty right now in businesses which we are seeing from the surveys >> great to speak to you thank you for joining us michele from bank of america and

merrill lynch. closing bell exchange joining us now. your interpretation of the minutes and whether it changes anything i guess not since we heard from the fed chair last friday. >> i think it has changed things not so much the statement specifically but the moonwalking that is done by fed officials. rosengren moderating how many hikes we think we will see the issue is not the static interpretation of what they say and holding them to it, which is always the standard. i think the new standard, the feedback loop has got to exist and be refined between the markets, the economy and the central bank is an ongoing work in progress. i think many see progress in that regard. i just think that fed officials

need to be cautious not to run away too much from kind of what they think of as the master plan i think balance sheet runeductin is a good thing and that they could stop it. that is a good thing they have to quit being trapped by their own words they are the guardians the market and the investors are childlike in how they behave markets move based on. >> daryl: -- emotions, just like children i think that is a good thing we are data dependant, but everybody knew the plan was more important than the data. that is changing >> i think it comes down to, lindsey, what the economy is doing and what corp ragorationse doing. there have been very mixed signals with constellation brands today >> there has been about 20 names. look, the fourth quarter is good it is all about guidance

we have seen huge cuts to 2019 outlooks i think you will get more of that as the earning seasons unfolds. because of that -- >> where specifically? >> industrials and financials. i know the financial numbers came down for the fourth quarter. but they have not moved much for either sector for 2019 that is where my concern is. you think of all we heard about china and the slowdown we are getting there. you are going to see the industrial numbers cut >> that is interesting do these downgrades to come lead to another big pull-back or last year the market can take a couple of these. >> i think the individual stocks will be negatively impacted. it will hurt the higher quality names that you are going to get the cuts from. but i think after the earnings period is over, usually the market does well in the month following.

but it will depend on the extent and the breadth of these cuts. >> do you get the feeling some are using the trade battle to get away with downgrades or is this the fundamental cause for the weakness they might be seeing >> yeah. it is a little bit of both you are seeing economic data in china slow down auto and retail sales. production is contracting over there. that will impact some of these companies. i don't think it is as much of an excuse as a reality but there is a lot of uncertainty because of trade getting to michele myers's point it makes it really hard to plan. >> we are seeing a lot of big moves beyond stocks today. oil jumping 5% more than 20% from the recent lows big move for the dollar. full percent there treasure what correlations are you watching right now >> you know, i personally think that oil had a much bigger role in some of the volatility that

the equity markets and thus transferred to the fixed income treasury markets late last year and a good chunk of that is the inventory u-turn and how iran and everything played into that. i know there is global influences on demand but anyone that spoke to energy traders realized that was a culminating moment with a lot of reversals. i think it is a channel of the fed that is much less aggressive to put investors globally long in the dollar, but i think the dollar is suffering from a lot of logistics predicated on technicals that morphed over the last three weeks for two and a half months at about a penny and a half, penny and a quarter between 96 to 97 now for the last several sessions we are well below that. the move, do not underestimate the pressure we could be down to 94 handle

easy in terms of the fixed income market, the 255 closed the low for the year and now we are 273. we moved away from it quickly. i think that is the low close for a while. the long end will firm the shorter end is hard to calibrate. we have steepened in the last several sessions fitting with the fed's statement today. >> singled out industrials and banks as one to watch for for downgrades which sector is best protected >> i think consumer really has been strong. you see the numbers there stabilizing and moving up. as long as the consumer stays strong it will be a good holiday season >> thank you lindsey, rick, the exchange today. dow up 143 points. still ahead, a rare downgrade for nike the analyst that made the call joins us to say why and which stock they think is a better

bet. >> 12 years since this iconic moment in tech history >> this is one device. and we are calling it iphone >> up next we will tell you t ult a new report thacod spell trouble for the iphone's future stick around, back with the closing minutes. alerts -- wouldn't you like one from the market

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that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. welcome back to "the closing bell." the dow is up 158 points and leading the charge is apple. also energy names like chevron energy is the best performing sector now on the s&p after a 5% jump in oil. >> 23% up. >> now it has been 12 years to the day since the iphone was first announced. >> these are not three separate devices.

this is one device we are calling it iphone today. today apple is going to re-invent the phone. >> i have to say i was skeptical. >> you loved your blackberry keyboard >> i had a nokia both my brothers had an iphone for a year >> you never had a blackberry? >> for work. i did not like it. i didn't like my old job as much so i did not look at the blackberry >> upgrading ever since. >> slowing down the upgrade cycle and now it has been quite a ride the company sold its 1 billionth iphone in june and the stock is up 1200% since the iphone came out. >> the company is facing headwinds. last week they slashed their

revenue guidance for the first quarter and cutting iphone production for the next three months by 10%. has apple peaked that is something investors are asking right now brian merchant, the author of the one device the secret history of the iphone secret history of the iphone." brian, so many people are asking whether the new updates, are innovated enough to charge $1,000 and get people to keep upgrading. what's your take >> the iphone has always been sort of the standard bearer for the industry it's always been sort of the best and i think it remains the best in terms of usability, in terms of a status symbol as sort of the best smart phone that money can buy. and it remains to be that. so as long as somebody is looking for that particular product, the iphone is going to be the easy answer. >> brian, i don't know if you

saw jim cramer's interview with tim cook on "mad money" but he said loud and clear our ecosystem is as strong as ever do you agree with that statement and is that really the key when it comes to the iphone >> it's an interesting choice of words to use i think it is the right word to use in this case it is absolutely the ecosystem for now. demand is slowing down for the handsets themselves. pretty much everybody in certainly wealthier markets like the u.s., who want an iphone, have already bought them that's why we're starting to see sales fall off in more vl till markets like china now he has to turn to that ecosystem, things like the message app, which is beloved and wuvent things that keeps people coming back of course, the app store and the way it curates apps will be more

a focus, the whole services package for apple going forward. >> so, brian, it's interesting we were sort of chitchatting about the early skepticism when the iphone was released, whether it was your blackberry keyboard. apple is no stranger to the so-called naysayers, which cook talked about with cramer last night. doesn't have a new trick, doesn't have the next big thing. talk about a little bit about that in relation to the book you wrote and what they're facing right now. >> yeah. i think it's interesting just in that clip you played when the first iphone was announced, listen to the crowd react to that. there was skepticism whether this untested product could become a hit early doctors, apple fans erupt

with pure joy. i can't remember the last time we've heard a reaction like that the answer is yes, apple's fans and its stockholders are eagle for apple to produce something that is just as wow inducing as that first iphone was which, you know, may really be folly, because how often -- once a generation,maybe you get a product like that. apple managed to do that on the heels of the ipod and followed it up with the ipad. of course, there's this expectation that apple will continually reinvent the wheel and continually surprise us. personally i think apple has entered into the next phase of its development, next phase of its growth where we should get use used to maybe not being as excited by apple and look to ways that we're merely satisfied in getting the absolute best for

our money. >> is there something that they could be doing that they're not yet doing, some low-hanging fruit perhaps? >> there's a number of things they could do to better integrate the beloved services that they have there's two things they can do to look to growth areas, i think. one is that apple has never really succeeded in rolling out a lower-cost phone for, you know, a market segment that doesn't want to shell out $1,000 or $8 h00 or even $700. so they can look to that as a potential growth area or they can double down on their services they can look and say, hey, everybody loves the message app. how do we get this on google phones how do we monetize that? there are a number of ways that apple can super charge its growth, using the resources and talents it has on hand. >> good perspective, brian thank you for joining us brian merchant. >> thank you. >> author of "the one device: the secret history of the iphone." coming up next governor bill

ri richardson will join us with the latest trade talks on china and his thoughts on the government shutdown. ces in las vegas, what the ceos of discovery and viacom said authebo t border media said authebo t border media landscape when we come back. you remembered that too. yeah, i'm afraid so. knowing what's important to you... it's okay. this is what we've been planning for. thanks, bye. that's what's important to us. it's why 7 million investors work with edward jones.

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their fourth straight day of gains. we'll be right back.

welcome back to "closing bell" consumer staples at the bottom of the pile down 0.8% time for a cnbc news update with sue herera hello, sue. >> hello, wilf hello, everybody mike pompeo is in iraq on an unannounced stop on his mideast tour, meant to promote the white house's hard line position on r iran toyota recalling 1.7 million vehicles in north america to replace potentially deadly takata passenger air bag inflaters from 2010 to 2016. at least 23 people have been killed worldwide and hundreds more have been injured it's been one year since a massive mudslide devastated parts of santa barbara county in california came after more than five inches of rain fell over the thomas

fire burn scar it claimed more than 20 lives and destroyed more than 100 homes. and a new harvard report shows the drinking water at your child's public school may be contaminated with lead researchers found nearly half of students live in states without lead testing programs. schools that were tested showed 44% had at least one sample with unacceptable lead levels that's scary stuff that is the news update at this hour, guys i'll send it back downtown to you. >> not good news. >> no. >> sue, thank you. under half hour to go in today's session. bob pisan on the floor, bertha coombs at the nasdaq bob, let's start with you. >> oil company earnings in the next few months, in the low 40s a couple of weeks ago, in the low 50s. oil companies every day they're up 1.5%, 2%, there's oxy,

anada anadarqa they're all going crazy. you can't estimate earnings estimates right now. in terms of the markets right now, look how far we've come in the past few weeks, s&p up 10%, oil up 20% vix down 45% how about the start for the year important thing. up 8 of the last ten days. guys, back to you. >> thanks very much for that let's send it uptown for bertha coombs at the nasdaq. >> theme here, too, is the bad news priced in apple cutting its production of iphones, ostensably worse still for chips. we heard this and anticipated this we're seeing apple today really helping to lead the nasdaq higher and chips are higher as well look at some of those gains for the likes of micron, cirrus

logic and others really, quite spectacular today. also tech overall looking fairly strong facebook now about 10% year to date and also seeing some really nice gains since that bottom december 24th. mark zuckerberg saying he is going to be doing more public things now on facebook live. back over to you. >> bertha, thank you very much for that. >> s&p 500 is up 10% since the lows hit on christmas eve. 10%. pretty nice bounce our next guest says the market will continue this recent uptrend through the rest of 2019 let's bring in ken fisher, executive chairman at fisher investments, to discuss his case for the markets. i have to say you called it even before this sort of upturn we had. you said you were optimistic about 2019, it would look different than the end of last year is that it have we seen the bottom? are you willing to go there?

>> i've been expecting the vconcept it's been fundamentally a little less steep than that there's so many reasons that stocks should rise this year i don't have the next 7 1/2 hours i need to cover all of them the fact of the hour is -- >> just give us the top two. >> this should be a very happy year >> s&p 50044% in the next 12 months the fact is we have valuation contraction last year, obviously. every year when you've had valuation contraction, the next year you get valuation expansion. unless earnings fall you get a

positive year. positive every year since 1939 and averages positive 17%. you can go on and on some people believe we've had a yield curve inversion. if you look at how it's defined in the past, four of them where there's a yield curve inversion without a subsequent recession and the fact of the matter is they're all positive and they're all double-digit positive. actually, they're all over 15% you can go on and on and on and on the aftermath of bad years for the market is good years, unless you get a global recession or you get a world war and neither one of those are in the cards. let me go back to one more point real fast. look at leis around the world and pmis around the world. people poke at negatives but the fact is that sentiment is looking for negatives overall they're overwhelmingly positive,

speaking to growth. >> does it concern you at all that the government is shutdown? >> i love that you ask that. it's particularly the long ones are double-digit positives fears in the market now -- i don't want to speak to what happens in the next few days or weeks, i don't have a clue the aftermath of all these government shutdowns, you can lay them all out and the aftermath is positive and the long ones, super positiv positive. >> get through the rest of it for now. what do you think about the global growth outlook and if we see a slowdown of other international markets, do you think the u.s. economy and stock market can shrug that off? >> let me go back to that.

again, if you look at leis in china and leis in europe, they're strong, high and positive they bounce around a little in trying to be too precise about little bounces is a wrong-headed way to do it but if you look at the leading economic indexes pan european, they're strong if you look at the pmis in the countries where they're individually weak, the pmis are strong we have a growing world with minor pockets of negativity, but most of it, 85% of it is growing. 15% of it is not the 85% will pull the other 15%. and if it only pulls it this much instead of that much, it's still positive and in a world where people are looking for the negatives, that's enough that's all you need. higher valuations with higher earnings is plenty. >> ken fisher, making the case to buy the market in 2019. thank you for joining us. >> thanks for having me.

news on the shutdown, senate majority leader chuck schumer and nancy pelosi leaving the white house where they say no progress was made on ending the government shutdown. >> well, unfortunately, the president just got up and walked out. he asked speaker pelosi, will you agree to my wall she said no and he just got up and said then we have nothing to discuss, and he just walked out. again, we saw a temper tantrum, because he couldn't get his way and he just walked out of the meeting. i asked him to open up the government, that tomorrow so many people will have trouble paying their mortgages, paying their bills, dealing with situations when they don't get paid and i said just why won't you do that we'll continue to discuss. we're willing to discuss anything and he said, you -- if i open up the government, you won't do what i want.

that's cruel that's callous. >> the president, of course, confirms it was a very short meeting. a different spin on it here is his tweet moments ago. just left the meeting with chuck and nancy. a total waste of time. i asked what is going to happen in 30 days if i quickly open things up, are you going to approve border security, which includes a wall or steel barrier? nancy said no. i said bye-bye nothing else works! let's see what this means for the market fractional decline as this broke but essentially no real reaction we're still up half a percent on the day in the s&p. >> it appears that there doesn't appear to be any sign of bridging the gap over this border wall and in an attempt to reopen the government, despite the fact that economists say it is costing our economy the latest estimate was .2% of gdp per week small. easy to gain back but still hurting. >> slight impact

not much on the market we will talk to the s&p sovereigns economist responsible for that, whether or not this could lead to a downgrade or not, we'll discuss that a bit later. >> n kichlt e got a rare downgrade today, speaking of downgrades the analyst who made the call will join us next. kb homes and bed bath and kb homes and bed bath and beyond coming up 44, 45, 46... how many of these did they order? ooh, that's hot. ♪ you know, we could sell these. nah. ♪ we don't bake. ♪ opportunity. what we deliver by delivering.

today i've got a couple of banks, reporting next weekend. we've got two upgrades today, one for bank of america, one for morgan stanley bank of america upgrade comes along the theme of good entry point, not too full valuation compared to the likes of jp morgan the morgan stanley upgrade comes along the lines of the valuation, again, for this they do think earnings coming up will be very tough for morgan stanley, given a tough quarter of capital markets interesting, morgan stanley down

23%. goldman sachs is down more, but not that much more 30%. >> a lot of suffering in that space. i'm watching nike today. the retail got a rare downgrade from neutral to outperform let's get to the analyst that made that call jonathan joins us from baird what is your best guess, that their -- >> the stock is one of the better performing top ideas in 2018 and top rating the last four years prospects from a product in digital perspective is as strong, perhaps, as we've ever seen that said there's always an appropriate price to pay for any stock. we think, given our sector view, that could come under further pressure in 2019 we think 70% current premium

under nike trades could come under pressure and hence, we are stepping to the sideline. >> where else in your coverage universe can you see growth like nike has seen globally, no apparent impact according to the last statement, innovation, technology, direct to consumer these are all the reasons your fellow analysts love this stock and this company where else are you finding that? >> yeah. you make a very good point the growth prospects are strong and we've seen the results acti accelerate, driven by product innovation where we think nike has carved out a leadership position a lot of those aspects we wouldn't dispute i would say, however, the market appears to be pricing in a lot of those positives, in our view. if you look, going back to the current valuation for the stock versus the market is near all-time peaks while short interest is near all-time lows

we think with the company where more than half of revenue comes globally, given the low degree of visibility to the macro environment globally, we think there is some risk that you can see that multiple contract with any hiccups, despite the many positives from a company standpoint. >> given that 55% of earnings coming internationally, jonathan, how important is the u.s. dollar to nike's prospects in the year ahead? it has, of course, started to weaken in recent weeks. >> yeah. it's always an important factor to watch in terms of currency and cost pressures nike, perhaps, has one of the more complex currency hedging platforms across our portfolio so, in terms of the next six to 12 months, we would expect to have very little impact on the bottom line in terms of any movements from the dollar. on a longer term basis, certainly a weaker dollar could help the earnings prospects. it's not something we're taking

an explicit view on today with our group but it's certainly something to watch. >> finally, jonathan, give us a name where is the better value? >> part of our move today we also simultaneously upgraded footlocker, which goes a little hand in hand with our nike call. footlocker is an excellent way to play the product strength that you see at nike in a much more attractive valuation. we see the fundamentals accelerating forefootlocker due, in part, to the nike cycle, and we think it's good stock. >> jonathan komp, thank you for joining us. >> thank you. >> so foot locker is already in the valuation for nike. >> it is historically a little bit high. >> amazing those analyst calls on a single cell. >> it's about 70% say buy the stock at this level. >> we have 11:30 left of trade higher a quarter of a percent

now. s&p has slipped. whether or not it was that failed meeting between the democrats and president trump on the border wall, on the government shutdown or not, we have slipped in the last ten minutes or so. >> still, tracking for a positive close fourth day in a row. let's see what happens in 12 minutes. discovery ceo david lazlov speaking out we'll bring you his comments. plus liz ann sndors from charles schwab will be joining charles sc[leaf blower]joining [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated.

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including nights and weekends. so you can do more of what you love. my name is tito, and i'm a tech-house manager at comcast. we're working to make things simple, easy and awesome. xxxx welcome back dow jones reporting to sources that the white house is considering canceling president trump's trump to davos to the world economic forum which, of course, is due to set january 22nd that is, if the government shutdown persists. we'll have to wait to see if that trip does get canceled. last year he certainly stole the show with america first does not mean america alone message we'll see. >> set to go with a huge delegation, secretary of state, treasury secretary, homeland security, number of cabinet secretaries.

he was also reportedly in talks to meet with the vice president of china while there more indications potentially of progress on the trade talks front. >> nonetheless, it promises to be an important gathering either way. anyway, moving on, media titans gathering in las vegas for the annual consumer electronics show julia boorstin is there with highlights from her big interviews today with various media giants julia, over to you. >> well, wilf, on the heels of such media consumption, the question is where the remaining media companies fit into this new landscape with streaming services launching this year david lazlov stressing cycling and golf and adding his channels into other bundles. >> we added our channels to hulu hulu is growing significantly. one of the reasons is that hgtv, food, i.d. and tlc are four of the five top channels for women. they didn't have them.

if these skinny bundles start to grow, if hulu grows, directv now grows, there will be more channels we will be a beneficiary. >> viacom's bob bagdesh saying disney pulling back its content from netflix and amazon opens the window for viacom to be a big supplier. >> for viacom it's about adapting to that ecosystem, creating opportunity, continuing to have the largest portion of our original content and volume in a traditional ecosystem but making sure these flagship brands are represented in other component components and that's what we're focused on. >> bakish says he sees driverless cars very much in focus here at ces, giving people more time and opportunity to stream videos, good for the media companies. you can find more from our

interviews here at ces on cnbc.com back to you. >> great innovations and great interviews thank you, julia boorstin. we're coming back with the closing countdown. >> your closing countdown. >> done by yours truly, first time ever. >> i'm looking forward to it. the u.s. is in danger of losing its aaa rating if the shutdown goes on too long. we'll talk to one of the people behind that call behind that call don't go anywhere. ...like college... ...while helping plan, invest and protect for the future. so they'll be okay... without me? um... and when we knock out this wall... imagine the closet space. yes! oh hey, son. yeah, i think they'll be fine. voya. helping you to and through retirement.

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welcome back to "closing bell." i'm sara eisen up for a fourth day in a row, started with some optimism around u.s./china trade talks. then we got the fed, reiterating in its minutes from the last meeting the whole patience on interest rates theme, leading the market to rally, liking that patience stance. and the price of oil helped to lift sentiment you can really see that fed impact on the dollar, which took a slide earlier today on this view that the fed is not going to be in a hurry to raise interest rates bob pisani joins me. all these factors are leading to gains. >> eight of the last ten days were up. we're up 3% on the month. >> 10% from the lows.

>> 10% from the lows, up first five days of the year up 2.5%. it's the best showing since 2010 we've gone from dow 4,000-point drop from december 4th to december 24th to a 110-point return right now and regain 55% of the losses. >> does that quiet those people who say, look, the biggest bounce bounces -- >> when you look at how the sentiment around tariff and trade and powell's speech was the most important thing, clarification. the biggest drops occurred right after the fed meeting december 19th when that press conference was perceived not to be very successful powell's clarification was a major factor in bringing us back from the lows. >> earnings are coming up.

now .4%, the dow double that for the nasdaq technology leading the way and there is the closing bell here at the big board. the nasdaq astro nova, incorporated second hour begins right now. that's the loudest bell ringer we've heard since i've been on the show, kudos to ice services here is how we are finishing the day on wall street just lost a little bit of steam there at the close, dow up .4% and s&p led the charge, russell also outperforming the s&p, up .85%.

charles schwab chief investment strategist explains the key technical indicator could be a very bullish sign for the market but first here are the top stories on the radar of investors, concerns about the government shutdown pressuring the market in the final minutes of trade the latest fed minutes show the december 8 hike came with reluctance and members said they can afford to be patient with future hikes apple rallying, despite ongoing sales concerns and waiting earnings from the retailer, bed, bath and beyond as well as k.b. homes. joining us to talk about those and much more nancy tangler. let's start with the markets losing steam after a contentious meeting at the white house, ending the government -- the topic was whether to end the government shutdown. senate minority leader chuck schumer. >> the president just got up and walked out he asked speaker pelosi, will you agree to my wall

she said no. and he just got up and said, then,we have nothing to discuss, and he just walked out. again, we saw a temper tantrum, because he couldn't get his way and he just whacked out of the meeting. >> that was followed by a tweet or slightly preceded by a tweet by president trump, just left a meeting with chuck and nancy, a total waste of time. i asked what is going to happen in 30 days in i quickly open things up, are you going to approve border security which includes a wall or steel barrier? nancy said no. i said bye-bye, nothing else works! we're no close to a resolution on this. is it weighing on the markets? we saw a fraction of pullback. >> we did see that it has a greater chance of weighing on the markets the longer it goes if it seems fully intractable, interfering with other things, reports that the president might not go to davos, where the next phase of the u.s./china negotiations might happen.

it also hit a market that was perhaps getting a little bit winded, getting to the point where it made sense after this big long rally, to sprint higher, to take a bit of a rest. it has the market's attention. a lot of the things you saw today had waves of selling hint. and even after the fed minutes there was a little hesitation. i think that's a market that was almost looking for an excuse to slow down a bit. >> but ended higher. >> it was higher. >> are you encouraged by the recent action? >> yeah. i'm relieved and encouraged. i think there's a lot -- we've got more clarity than we had at the end of the year. i thought the fed minutes were comforting for those of us who felt the fed had lost its way. it was a communications problem more than it was a policy problem but, yeah, we're picking away at stuff at these levels. >> i feel like, mike, you ended that last comment not with a negative tone but not as encouraged, perhaps, as nancy was. we had four positive sessions in

a row. >> that's exactly what i'm saying i honestly feel it wasn't as if the markets said wow, this is new information. we have to be very worried about the shutdown or anything else going on but more that after you go up 10% in eight trading sessions or whatever it's been, the market is just very much prone to say, let's maybe wait and see for a little while so i wouldn't make too much of any softening up or pullback right here the market, i think, has behaved very well. the right sectors have led credit has fully participated and the credit markets have been very firm. the dollar down. >> the question is how much longer are you going to get that relaxation trade >> let's talk about what the fed said, latest minutes showing an increasingly dovish stance by the central bank ylan mui. >> reporter: we got a little bit of a vocabulary lesson in those minutes. the sentence that caught

everybody's attention was this, the fed judges that some further gradual increases are warranted. the use of the word "some" was and use of the word judges to convey the fed is data dependent. all of this just underscoring the fed is uncertain about how this economy is going to evolve. there was a lot of debate in the minutes over the solid economic data versus the wild market swings that we've seen lately. generally the fed believes the economy is doing well. but when they look at the market volatility, the slowing outlook for global growth, they look at trade tensions, the flattening yield curve, all of those weighed on fed officials there's a downside risk, coupled with the fact that the december rate hike put the feds fund rate right at or about neutral. policy-affirming less clear than earlier. the minutes talked about the

fed's desire for patience. they want to see how these play out in the economy, they they affect future economic activity and how previous rate hikes ripple across main street. all of those factors help to contribute to the fed lowering its estimates and the lower estimates for fed rate hikes in the future the minutes show a few participants did not want to raise the fed funds rate in december and there's little sign of up ward pressure on inflation. they also want to see the markets calm council before they had any further action we know that the doves lost that argument in december, but there was discussion about removing forward guidance in the statement and moving toward some more data-dependent language more broadly obviously, the fed's outlook is going to evolve. they want their language to evolve, too, guys. >> quick question, ylan, on the minutes and the process. i don't know if we know the answer to this, but i found it

so odd to hear that the some of the members didn't want to raise rates because of inflation rates. we accountant get that from powell why didn't he reveal that in the news conference or in the statement? where was all that >> reporter: one quick clarification. it was a number or several participants who said that they did not want to raise rates at the december meeting so, participants referring to the full roster of fed officials, not just -- >> i get it. >> reporter: but all the other reserve bank presidents as well. powell represents the committee, not necessarily all of the fed officials. >> yeah, okay. that's fair. ylan, thank you. >> mike, i guess -- >> i guess it doesn't matter now it's where the market wants it to be. >> the minutes confirmed what we already heard, the change in tone from chair powell clearly, therefore, we didn't see a massive reaction in yields and stocks the dollar, though, has reacted a lot today. quite a big move in the dollar. >> the minutes showed you that

at the time it seemed as close a call as the markets perhaps thought it was, right? in other words, it seems like they're that much farther along the path of pausing, if that's such a thing i also, though, think that the minutes remind everybody that we're all celebrating the change in tone that jay powell gave us, but what does it mean? it means we think the economy is a little bit fragile and perhaps is one 25 basis points mistake away from something nasty. >> it could also mean, to push on that a little bit, that the fed tightening is doing more harm than good on the economy. >> has already had its effect. >> and making it worse. >> agreed. >> and would be a lot worse if they just kept going. >> the last 25 could have been the mistake. >> correct nancy? >> yeah. listen, i was glad just to see that they were thinking about the things that the rest of us were talking about, and that they considered them and that -- i don't think there's a change in policy. i just think there's a change in tone that gives the market more

confidence and i don't think the yield curve is pricing in a recession. so i think we're at a point where we can say, hey, let's see how this plays out over the next six months, and i think it will be fairly positive. >> we should keep in mind how much things could change over the course of three or six months. >> right. >> a year ago, we thought it was gangbusters growth and nothing could stop it. now it's very touch and go it could change. >> mike, when we also weigh in, as we summarized earlier in the show the fed speak -- the word weight appeared in everyone's tone did that suggest that they are influenced by the stock market, that they are listening to people on cnbc as opposed to just looking at the fundamentals of the country >> when they say financial conditions, it means all those things, i think. stock prices, volatility, credit spreads and the rest of it i think they listen -- that's their out. financial conditions are part of our -- on our dashboard all the time and it doesn't have to be

about hearing criticism, just watching the markets themselves. >> if the federal reserve has changed its stance, nancy, there's optimism building around a u.s./china trade deal. going through some of the risk factors that led the market into this correction to begin with, are you getting them checked off your list? the higher yields, they've come down as well. >> listen, the only thing i'm worried about now -- there's always something to worry about -- is earnings we got the warning from fedex and we got the warning from apple. despite all that we said about it held up pretty well after the announcement yeah, i think china is doing all the right things to kind of enhance and nudge the economy along. and if we get an extra 50 to 100 base points in gdp growth in china, that will have far-reaching implications and i think that had something to do with the dollar coming off you've got easing, the announcement on autos and the announcement on rail infrastructure, all stimulative, all good for prodding chinese

growth that, to me, is important. >> let's move on and talk about apple. nikkei saying apple plans to cut iphone production by 10% are we starting to see a pause for the tech giant i guess it had fallen back already on general fears that things aren't going as well as could be expected. does the stock price encourage you? >> it contributes to the idea that the iphone is much weaker than we thought months ago is no surprise the only hesitation i would have in terms of declaring this is look at the dramatic v that you got in facebook when we thought all the bad news is in we finally piled everything on this stock and it didn't go down anymore and had this huge recovery there was another shoe or another recognition moment i don't know if we can really say it's up and away from here but it did reach a very low

valuation. i do think it's priced for very little growth out of iphone at this point in the next year or two. that's all encouraging. >> are you a buyer >> yeah. we actually added recently we owned a good chunk already. we had been net sellers in the first half it kept getting overweighted that was in the 220 range. we bought some at 160 and some at the bottom. the one difference -- i agree with what mike said, because these things take a long time, when the constituency changes from growth to value, the growth managers get out fast and the value managers pick along like i am tim cook is front and center and not hiding behind the veil like zuckerberg and sheryl sandberg did. >> that is a big distinction. >> it is important and gives comfort to those of us who think -- >> the very different issues, though. >> yeah. >> i was interested to hear lindsay bell earlier say there's much more of these to come,

particularly singling out industrials. clearly the day apple came out we saw a big sell-off in apple and the broader market if we had a bigger sway across nontech sectors, do you think the market is priced out >> in aggregate, the market has priced in lots of earnings disappointment where we've come the last ten days is you've added a full pe multiple point, from 14 to 15 on, expected 2019 earnings that suggests it's not exactly a rock bottom valuation on the consensus. i think you still have the possibility of a mine field when you do get reports, even if people say well, we expected earnings to come down. when you get in that moment when the earnings are actually being cut and the guidance is going down, sector by sector or stock by stock, you're going to have the pain. >> there was a lot of strength in the semis today this was a group that had been battered during this bear

market, steep correction, whatever you want to call it. >> they topped in march last year they were so early in rolling over yeah, most of the pain came in the fourth quarter i agree that now you're seeing some of the ones that led you in going out. micron responded with a pretty good pop on the samsung news yesterday. so you can kind of look at that and say that's encouraging as well. >> an earnings alert right now to hit on k.b. home. diana oleck with the report. >> revenues were in line at $1.35 billion, orders down, though, 12%. also we saw an average selling price decrease to 5% primarily due to a shift in the geographic mix of homes delivered but affordability is everything we've been talking about today earlier today with lenar we saw weaker home sales. k.b. homes jeff metzgar said

we've taken proactive steps to reposition many of our future and existing communities to make our product more affordable. our business model enables us to efficiently move with demand to add smaller square footage options to our communities and addressing specification levels within our homes that should help them going forward as we look at the potential for rising mortgage rates which, again, could cut into affordability nice earnings for k.b. >> can you put it in a broader context, diandiana? we know you spoke with one of their executives. >> absolutely. we spoke with stewart miller on the exchange he was talking about how mortgage rates had shot up at the fall and came down in december he said they did see a boost in demand in december of people coming through their model homes just because mortgage rates did drop, about half a percentage point in december. so you can expect that that will help the builders. k.b. is not an entry level builder. neither is lenar

mostly they're a mid-level move-up builder. their price level is between $4,0$ $400,000 and $500,000. how much will the buyer being able to get in the door on those homes? how much wiggle room in their wallet is very little right now. a survey put out yesterday saying a quarter percentage point up bump in interest rates would knock a million potential buyers out of the new home market that tells you how tight the margins are for new home buyers. >> thank you for that. this is a great example of the improvement in market sentiment we've seen in the last couple of weeks. it's now up with this after-hours move year to date. >> the stock went from 38 last january to half, 19 in november and has been working its way higher sense. >> to wilfred's point is zeroing in on the positive views and not focusing on the negative, that was not the place we were in

just a few weeks ago. >> absolutely and where the stock is helps contribute to that reaction. >> it's a very rate-linked stock that got dragged down and is now seeing improvement. >> at ten times earnings or seven. >> do you own k.b. homes >> i don't i'm playing that through home depot and lowe's they're too volatile for us. one of my millennials bought a home in december because rates came down and the affordablity factor was much more compelling. at the margin that's what we're seeing. >> want to keep millennials for research purposes around. >> is that a family member >> a child you're smart millennials yeah, one of my children. >> there we go. >> in the new york area? >> no, in arizona. yeah. >> thank you very much for the insight on that particular topic. nancy tengler there. up next, charles schwab

chief investment strategist liz ann sonders tells us whether she thinks the recent rally is for real or whether there are opportunities and risks that remain. plus outlook on trade talks llig china as well as the border wa fhting as we speak to u.n. ambassador and former new u.n. ambassador and former new mexico governor bill richardson. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blan's be, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪

major averages closing higher the last four days in a row. is it a good sign for the markets in 2019? joining us now to discuss, liz ann sonders, chief investment strategist at charles schwab welcome back, liz ann. good to see you. >> thanks. >> you're sounding very cautious on stocks last time i talked to you maybe a few weeks ago. are you feeling better given the recent action? >> it's not just the action in and of itself. momentum is always a good thing, but what was most intriguing to me over the past couple of weeks -- and i'm a bit biased with this indicator, but we got what's now known, named after my first boss that i worked for in this business. that's when you have at least

90% of volume going into advancing stocks so technically that's a very strong sign. we also saw really, really washed out sentiment those tell me that this rally, at least in the short term, has legs we have relieved some of the fed uncertainty, though not all of t if we get two more strong jobs reports march is on the table. there are still some uncertainties. but at least from a technical and sentiment perspective, this rally looks pretty decent. >> liz ann, i read all the notes you sent us earlier about this breadth trust. >> zweig breadth thrust. rolls off your tongue. >> i didn't want to butcher the first word so i left it off. this is the cycle of a bull

cycle, right >> i don't know. we've had exceptions, though, notably a few of them in the mid 1970s and again in the 2007-2008 period clearly those are notable exceptions it is not an all-clear sign. some of these more macro uncertainties plaguing the market for some time now, they're not new, haven't dissipated to a certain degree we still need answers to some of those questions. we are late in the cycle as well the chance that this is some sort of off to the races, new leg of an ongoing bull market, i think the chances of that are relatively slim. >> liz ann, i was going to bring that idea up of where we are in the cycle and how it relates to where the market might go. it seems we did get a bit of welcomed clarification on the fed, as you say. we are kind of on board with the idea that earnings estimates have to come down but it doesn't seem to liberate us from this idea that good news leads

relatively quickly to the possibility of a tighter fed or something else how do you think the market is going to digest all of this as we go along the rest of this year >> i think we're in a bit of a narrower point in time here. there have been times in the past -- not that we want to cheer for negative economic news but times where weaker news seems to be -- times earlier in the cycle where you unquestionably want to cheer for economic news because you're not having to worry about the fed. i'm not so sure we're in this binary situation anymore i think we have a narrower opportunity for the market i don't think the market would necessarily cheer much stronger economic news because of what it means for the cycle, the yield curve nor do i think they would cheer weak economic news, it would mean likely a shorter runway between now and the next recession. it is a different environment than what you tend to be in, earlier in the cycle. >> give us a sector, liz ann, of

where you want to be given you're encouraged in the short term by this rally, but not so sure whether it's going to last and still have some big question marks on the macro factors where do you want to be? >> in august we downgraded technology and financials from outperformed to neutral and we upgraded from underperformed to neutral both utilities and rates. that left just health care as an outperformer and communication services, a brand new sector at the time as underperformed we've not made changes to those. that's clearly a bit of a defensive tilt health care, i would say, is a hybrid sector. it has those defensive characteristics, strong balance sheets but it still has that potential growth component we think that's the kind of area you want to be focused on right now, not purely hunkered down in nothing but defense but that opportunity to get some upside because of decent growth characteristics. >> liz ann, thank you very much for joining us appreciate it.

>> thank you liz ann sanders from sharls schwab now we've got an earnings frort bed bath and beyond. >> up 20% after-hours. eps and revenues were basically in line. key items that the company is saying it's ahead of plan with regard to its longer term financial goals based on preliminary assumptions they believe the next year's fiscal earnings will be about the same as the previous year's earnings and that is a 20% jump from where the street thought it was going to be. street thought it would be a decline of 20% the fact that it's about the same, there's a big news item. it's not the quarter it's the future. >> quite a jump. eric, thank you. up 20% though this stock has been brutalized. >> it has been painfully cheap stock, priced for a decline, not just no growth, with about a quarter of the shares sold short. clearly -- >> priced at below five times

earnings. >> like 3 1/2 times cash flow. >> ouch, if you're short. >> short term right now. >> up 22% after-hours. next, whether there's a risk that the recent rally could stall. >> top executive of finch explains why the u.s. could be in danger of losing its aaa in danger of losing its aaa ratinghelp me meet a client's n. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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the winning streak continues for the markets, fourth straight day of gains mike santoli, which is signaling stronger >> i wouldn't say signaling trouble but it's a test or perhaps a challenge right ahead of this market here we are, this big v bottom we made january, early february, brought us into this zone right here, 2584 is where the s&p closed today that was pretty much the low here twice early in the year after this other big correction. it was also a level over here that everyone was hoping would hold in here and it didn't once it didn't, the flood gates opened, right? those things are in the back of traders' minds we're in a logical level to pause, pull back or slow down, maybe to test whether there's

any buying power at these higher levels most lows, really good bases, don't really look like a v like this if you see here, we did have a v. we got up not quite to the old highs, rolled over again that's the classic pattern that's why a lot of people are focused on this right now. i would say too many people are focused on 2600. we have to see in the coming days whether we have more behind this rally to get through. >> mike, we've seen a bit of calm the last couple of days. >> yeah. >> certainly relative to q4 last year does that mean that earnings can come and really play a factor? we're not moving in unison, that earnings could really be key >> they're going to be key one way or the other, wilf we are moving in a macro way right now. we have this intense selling, people are panicky there's a huge safety trade. that's being unwound markets have relaxed they finally dipped below 20 that doesn't necessarily mean we're set up for earnings to be

the next refreshing reason to buy. i think it's about a lot of corporate back and forth going to go as earnings come ut. and that's when we decide what's been priced in and what hasn't. >> do you credit the fed for all this repair? >> i think the fed is part of the backdrop i think the same message that the fed -- roughly the same message that the fed gave a month or two ago with prices up here are somehow more reassuring when prices are down here because they keep reiterating the idea that they don't want to go too fast. i don't give the fed as much blame for the downturn or credit for the recovery as perhaps many people do. >> financial conditions across the board are really loosening. >> credit spreads are coming back in and all the rest. >> mike, you said earlier this bounce we've seen in the last week or so has taken us from a 14 times speed to 15 times remind us where we were at the peak. >> up above 18 20% earnings growth compressed a

little bit, plus the market went down. >> there you go. mike santoli, thank you very much. up next, former new mexico governor and u.n. ambassador bill richardson will be here to tell us whether he thinks china and the u.s. will be able to reach a trade deal tc> and a representative at fih will explain why the u.s.'s aaa rating is in danger [knocking]

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welcome back time for a cnbc news update with sue herera hey, sue. >> hey hi, wilf. senator lindsey graham, incoming chairman of the senate judiciary committee says barr has confidence in special counsel robert mueller. >> it is a high opinion of mr. mueller, believes that mr. mueller is doing a professional job and will do a professional job, be fair to the country as a whole and has no reason for mr. mueller to stop doing his job and will allow mr. mueller to

finish. >> a court has denied carlos ghosn to be released from detention. he is under arrest for aggravated breach of trust for alleged wrongdoing. denver broncos have named vic fangio to be their new head coach. he coached the last 19 as a defensive coordinator. this past season he led the chicago bears defense to the league's number one ranking. you're up-to-date. that's the news update this hour guys, i'll see you tomorrow. >> see you then. sue, thank you. stocks losing some steam in the last hour of trading after contentious bipartisan meeting between president trump and congressional leaders over the shutdown president trump tweeting out, just left a meeting with chuck and nancy. a total waste of time. i asked what is going to happen in 30 days if i quickly open things up, are you going to approve the border security, which includes a wall or steel barrier? nancy said no. i said bye-bye nothing else works. >> joining us now to discuss the

latest on the shutdown and market impact is former new mexico governor and former u.n. ambassador bill richardson governor, thank you very much for joining us. >> thank you. >> are you surprised how long this shutdown has dragged on, or do you expect this to go on, given the very clear standoff between the two sides? >> i am very surprised when i was in congress, there was a shutdown that lasted a few days we are now into two weeks. i am surprised i'm a former border governor i live on the border i don't understand the president's tactics. i think just to walk out of the meeting with the democrats, i think there is a deal, though. it has to end, all of this i mean, we're talking about millions of workers, essential services, tsa employees, national security safety i think a deal is around the area of perhaps partial funding,

extra funding that is triggered by certain conditions in exchange for the dreamers, 1 million dreamers, temporary protected status of migrants who lawfully came in here, seeking asylum i know this is down the road it's not going to happen right away but, look, the government has to reopen. my state is suffering enormously one of the poorer states in the union with an enormous federal presence, tribal communities, food relief, federal food relief, national parks so i'm very concerned about how long this is taking and, really, the inflexibility of the president. >> but you're also a democrat, right? so it's interesting, because you are from a border state.

who do you feel has the upper hand when it comes to this issue? >> i know we have to be balanced i was a border governor. illegal immigration has dramatically declined. >> since when? >> the migrants either -- many have gone home or they're applying temporary status, asylum in mexico there's not 4,000 terrorists there is no border crisis. i know this is the president's signature campaign issue in the election, he lost the house. he lost governorships. i don't see the political -- i'm a politician i try to see, you know, the substance of the good question you asked. i don't see the plus for him except that he keeps his base happy, 30%, but he loses a lot of independents, suburban voters and federal workers. we're talking about 6 million people. >> do you think some kind of

wall or fence is morally reprehensible as some are framing? >> there's already some fence. what has been built with triggers, i think longer term it's an inefficient effort it's a signal that we're closing borders to a neighbor country like mexico. the new mexican president, i think, has proposed something sensible jobs for central america, jobs for on the border, the u.s. and mexico participate do it through jobs don't do it through like closing off borders. >> you mentioned maybe an exchange for something on the dreamers that doesn't even seem to have entered the active debate right now. >> not now not now. i know that. but i think the 1 million dreamers, those kids born in the united states that are here lawfully, and the temporary

status of haitians, el salvadorans that have been fleeing because of oppression, gangs, restore those executive orders that protected them in exchange for maybe a little more funding that's not specific. this is how politicians think. you think of ways that you cover yourself. >> strictly from your governor experience to your experience as ambassador to the u.n., you dealt with china there's optimism that the u.s. and china can make some trade deal given your experience and knowledge of the chinese, do you expect it to happen? >> i'm encouraged there. what i saw today was specialists teeing up a special deal and the principles of the president, the big negotiators finishing up before the deadline of march 2nd. in exchange for the chinese buying more agricultural products, energy products,

manufacturing products. >> but that's the easy part, though what about state subsidies and property theft >> that's where the chinese have to make real progress, intellectual property, technology transfer. basically they steal our technology lastly, it has to be enforced. and from the national security standpoint i want a deal with china because we need their desperate support on sanctions on north korea and i think a lot of trade jobs are lost i'm a free trader, a democrat, endangered species, but i just don't see a trade war being in anyone's interest. >> governor, do you think the stock market calm, the relative calm of the past couple of weeks improves the u.s. hand is that something that the president is focused on? >> yeah, it improves our hand and china's economy is not exactly booming either, so that helps us china, i think, looks at its international economic trade

posture and wants to make a deal and i commend those that want to see china end a lot of their unfair trade practices, like subsidies or -- but, you know, it's the implementation. it's the enforcement but i am encouraged by what i saw today. the deadline is march 2nd. i don't want us to put two-fifths of the imports on chinese goods that come into the u.s. i don't want a big trade war. >> all right bill richardson, good to get your take. thank you. former new mexico governor, u.n. ambassador. new shutdown woes, as we were just discussing, the continued stalemate could deal congress a fiscal blow what's at stake, up next. and jeff bezos announcing a split with his wife today. what a divorce means for bezos' what a divorce means for bezos' net worth and for his company.

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finch rating send iing a warning as the government enters its 19th day and still no end in sight. they say the u.s. is at risk of losing its aaa rating if the shutdown continues how many more days does the shutdown need to prolong for you to downgrade >> first of all we wouldn't downgrade or review the u.s.

rating based on how long the shutdown lasts i don't know that i have any better idea of how long it will last than any of your other commentators i think what we said in our comment, which we put out on friday is that what the shutdown tells us is that there is a bit of a problem with coherence of policy making in the u.s that's really the concern that we have. and we went on to discuss the debt limits and that's what we're really more concerned about. it's not a new issue but something that recurs periodically it's a tail risk that we're concerned about. >> i'm sort of surprised you're warning about it now in 2011, your competitor, s&p, actually cut the u.s. aaa rating because we bumped up almost against that debt limit and some of the political dysfunction going on then. so why didn't you do it then why now? >> we actually did have the u.s.

rating on watch in 2013 when there was a similar debt limit issue combined with a shutdown so we have, in the past, sort of recognized the urgency of these issues and we still do for us out of shutdown and debt limit, the debt limit has us slightly more concerned. as i said it is something that is more of a tail risk. >> charles, it's interesting if you're kind of judging credit worthiness or solvency, we would be paying back any debt payments that were perhaps skipped even in a worst case scenario what do you think about what the rating conveys the 2011 episode, yields kept going down during that whole crisis. >> yeah. it's really about the credibility of policy making and

our concerns with the u.s. are not just short term. they're also medium term they're to do with the fact that why do we care that the u.s. has credible policy making because there are challenges in the medium term. you have the deficit rising, sort of growing mandatory spending how is that going to be dealt with growing interest burden. so there are problems that at some point the system will have to deliver solutions to, and i think our concern is that based on what we see today and previous evidence, that's something that concerns us a little bit when will it be done. >> charles, looking outside of the u.s. in 2019, which other major economy is most at risk of a downgrade? >> i think -- well, just looking, for example, at the aaa, all of our aaa ratings are on a stable outlook so there's a group of 11 economies that have been whittled down

the uk, france, austria have lost aaa status. but the group that we have is pretty solid >> very quickly -- >> i'm not concerned about any of the aaa countries. >> i want to know if you do downgrade aaa for the u.s., does that also trickle down to states and municipalities do they get downgraded as well >> i think those would be reviewed on a case-by-case basis. yeah no one can be raised better than the federal government but we don't think that this is something that's imminent. >> got it. got the warning. charles, thank you very much from fitch ratings the world's richest man may soon lose his title. amazon's jeff bezos is getting divorced, and robert frank will be here to break down the financial implications for the company, next.

investors were watching amazon's stock price today after ceo jeff bezos tweeted out some personal news. cnbc's robert frank joins us with the story. >> amazon shareholders largely shrugging off any potential impacts of jeff bezos' divorce but there's a lot of unknowns. jeff tweeted that he and his wife are divorcing after 25 years. amazon saying bezos remains focused and engaged in all aspects of amazon. now, so far this appears to be amicable divorce attorneys telling me that bezos have likely worked out all the terms in the private and likely will avoid any kind of court battle over the assets. under washington state law, mckenzie could be entitled to

half of his 16% stake in amazon. so her share could be $65 billion. the question is how will he or how has he settled this without actually giving up power as amazon's largest shareholder now, he could transfer ownership of the shares, keep the voting rights he could put them into a trust for his four children that he could vote, or he could pledge them or parcel them out over 10 or 20 years. that's what a lot of executives do but it appears scripted today to avoid any big immediate sale of amazon shares by its founder so right now little impact on the shares, but lots to still figure out here. whether it's been settled, whether they have divided the assets or whether that's still to come. guys, back to you. >> robert, thank you very much for that robert frank back at hq. up next, constellation brands sinking today what the company's ceo saidforecast, next lifeblood of this town.

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fidelity. and everyone i've ever opioloved away from me.thing everything. i blew my ankle out and i got prescribed pain pills by my doctor. if making my detox public is gonna help somebody i'm all for it. i just wish i would've had a warning. starts with looking buiat something old,nk and saying, "really?"

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outgoing ceo and incoming ceo. here's what sands said about the guidance. >> the change of our guidance is also totally a function of, i would say, a disappointing or anticipating a disappointing year on the wine and spirits side even more specifically, where the disappointment is, is in the low end of our wine business and that's our portfolio of wines that are under $11 basically. >> you can catch cramer's full interview coming up, 6:00 p.m. eastern on "mad money. >> he's had a busy week in san fran, mr. cramer we have one other story to tell you about that's been generating buzz on the ces show floor. check out this smart toilet that's alexa enabled it costs $7,000. users can control the toilet's features with their voice, including playing music,

adjusting lighting, as well as checking news and weather. the toilet will be available later this year. >> but does it heat and spray like japanese toilets? which are the best. >> either way, i think too much. keep it simple. >> i think you can innovate a toilet. >> an entertainment seat. >> an entertainment toilet. >> look how useful that would be in our prep. >> that's it for "closing bell" today. >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq, i'm melissa lee. tonight on "fast," the oil rush is on. crude up another 5%. it is on its longest winning streak in more than a year and a half and one trader says it is about to go even higher. plus the dean of valuation is here and he says stocks are cheap. he'll tell us where to find the best deals in the market first, we start off with a make-or-brea