acceleration and i think when you look historically when you want to buy amazon, it's after they've spent a lot of money. >> o' reilly automotive, i think it's a strong performer. >> that is your list of final trades nice to see all of you, and especially see all of you as well that does it for us on the "halftime report." "the exchange" with joe kernen starts now >> thanks, scott welcome to "the exchange." i'm joe kernen and here is what is ahead despite the sell-off, the markets are on pace for a blow out year, with gains of more than 20% with such big moves, we're going to ask the question are stocks too expensive? we're asking it, maybe they're not. plus 2019 saw the biggest jump in wages for employees in a decade we'll look at whether the trend can continue and what areas we'll see the biggest growth and c suite changes, menu revamping and a huge tech push the restaurant industry is going

through a revolution what will 2020 bring and what names should you buy we're going to begin with today's markets and bob pisani at the new york stock exchange. >> happy new year. listen, joe, we are way off of our lows let's take a look at the major average. all three of them still down, yet things are moving in the right direction. apple turned positive. nasdaq down here today dow industrials, you'll see they're down 95. s&p we were 3216 was the low there. take a look at the s&p 500 essentially the lows were at 10:00 a.m. and buying came in. it's not heavy buying. the volume is about average for a day. but remember, this is supposed to be a very light volume week, so even average volume is better than normal. what has been weak in the market we're way overbought, so big momentum names would be selling off. so semiconductors, home builders have been really strong, tesla

is weak. master card and visa, big momentum names, all of this makes a little bit of sense when you've had the price run-ups what are they buying instead the stuff that's beeen moving in the last couple of weeks it looks like some of the selling probably exhausted in the names. oil service names, halliburton, oil and gas exploration and companies, steel stocks haven't had a very good year, they're up and even bank stocks, the important thing is up, but really the outperformance has been in the fourth quarter as yields have moved up joe, back to you. >> a lot of people talking oil, bob, for this next year. only up 7% for the year. maybe that's the place to be we'll see. thank you, bob pisani. as the markets continue to hit new highs, are stocks becoming overvalued? i just like that we're asking that question. when let's bring in chief investment

strategist and senior markets km commentary number one, where were me. do you get to see paulson's stuff? are you one of the select people that get to see what jim is saying >> i sure do. >> because he says stuff that actually there's a method to his madness. politics, he's a socialist, but in terms of what he knows about the markets, you have been right, jim and the last thing you said -- do you remember i was talking to you, you said we're starting to act like we're coming out of a recession, even though we weren't in a recession now your point is the market could act like it did have a bear market last year because we got close enough, and you super imposed that's what happened every time we had a 20% break and it pore tends 18% for the next year, right >> well, i think right now we've traced out as you said, joe, this year has been right on the average or really close to what you do in the first year of a

bull market. i'm not really necessarily saying we are in a fresh new bull, but the market move this year is very comparable to that. in the second year of a bull things do change the fear sort of gives way to some doubt about the recovery persisting and gives way to more optimism that maybe this thing is for real, and you're starting to see some of that pick up. and fundamentals start to come back, where i think 2020 we'll see earnings pick up again and if it does that, joe, then this year the s&p 500 may reach an area of 3500 to 3600 would be the average second year kind of bull market run since post war period. >> so you're talking about the 20% was in december of 2018, so that's last year as of, what, thursday, we're already through the first year following the bear market. does any of that make sense to you, mike, or are you finally --

>> yeah, it makes a lot of sense. if you look at the way this whole kind of ten-year span has gone, there have been two other of those periods before where you had a pretty sharp correction, folks thought there was going to be a heightened recession risk bond yields made new lows, both in 2011 and 2012, 2015-16, and then of course late 2018 so all of that sort of fits together although it seems as if the fourth quarter -- and i know jim has been on this, too. the fourth quarter 2018 sell-off was kind of telling you about the slowdown scare of this year and so it seems like the the question now is where does it leave us, how much more is in that tank to take us higher in terms of we've already burned off the pessimism and now it is a matter of i think very, very strong corporate bond markets supporting higher equity values. >> the other thing that i read over paulson's stuff and i almost memorize it the stuff that he's saying now, i don't think -- jim, i do think

you've changed your attitude about inflation. because i think you were early on that a couple of years ago. mike, his point is multiples, it's not just -- they're not just affected by interest rates. maybe they're more affected by inflation, and not inflation for like a month or two or a year, but you average it out over a period of years. so even if we did get a little inflation, multiples could still stay relatively high if inflation stays low and it would take a couple of years to burn that off so maybe year not overvalued, is that your point? >> what i've taken note of several times is that we've been in a new valuation range here in the last 30 years. if you look at the shiler, we've been trading kind of above the upper range of where they used to trade for almost 100 years during the last 30 years i think we're in a new higher valuation range that says the

downside risk is not necessarily anymore going back to the average of what maybe it was between 1870 and 1990. it might be the average of the new range and we're really not that far above that. >> is it based on inflation, jim? not interest rates they're related, obviously. >> yeah, just the level of valuations have persisted at higher levels. and what i did to look at that i think it's not only low inflation and low interest rates, joe, but the real thing that's caused this is we've had this remarkable record-setting low volatility of inflation. so this is the most predictably low inflation we've ever had in u.s. history and it's not surprising that that has led to persistently higher valuations that i think could persist until volatility of inflation picks up, which could take several years. >> i guess we've got to end it, mike i've just got to ask you one thing quickly. bernie versus trump, what do you

do you love higher stock prices, you love your money, you love your stock market. tell me, i want an answer. bernie, trump, what do you do? bernie, trump? >> i have to go trump. >> really? >> i can't handle a socialist, i don't think. >> did you hear him say that did you say trump? oh, my god just about anyone would go that way. thank you, jim. >> i'm still holding out for amy klobuchar. >> i knew you would have an asterisk there somehow thank you. am i going to see you tomorrow, mike >> probably so. >> good. turning to tech, microsoft so far outperforming amazon this year and landing the massive $10 billion cloud computing contract from the pentagon, a decision amazon is legally contesting how will this battle play out in 2020 josh lipton is live in san francisco with more. we did have a long conversation this morning already, it seems like hours ago

have you thought over what i said have you decided maybe microsoft -- >> i have been ruminating, joe, long and hard about your analysis unfortunately, it's now before a judge, joe >> so it doesn't matter. >> so the battle, it was fierce in 2019 and it is going to continue, joe, in 2020 remember in october that's when microsoft had secured the new massive cloud computing contract with the pentagon. jedi, worth up to $10 billion over ten years amazon, as you pointed out, it is contesting the pentagon's decision here saying in a lawsuit that president trump launched repeated attacks to steer jedi away from amazon web services in order to harm jeff bezos and it wants this decision reversed the pentagon counters that the dod is confident in the award. these two are big cloud power houses and just to put some numbers around that, aws generate revenue last quarter alone of about $9 billion.

microsoft's azure business $4 billion. in 2019, microsoft has been the stock to be in about a gain of 55%. amazon up about 20%. joe, back to you. >> josh, i'm actually looking forward, are you going to talk about amd and the battle interests intel on power lunch is that coming up. >> that is coming up. >> and here's what else is coming up ahead on "the exchange." >> announcer: coming up, 2019 saw the biggest gains in wages in a decade. will the trend continue next year and what sectors will see the biggest growth plus, another staggering stat about disney this year that should make investors happy. and c seat shovels tech innovation and delivery wars 2019 was a year of change for the restaurant industry. what will 2020 bring we'll explore. tom: my mom always told me

this is "the exchange" on cnbc md d helped prosecute the nazis in nuremberg. their values are why i walked away from my business, took the giving pledge to give my money to good causes, and why i spent the last ten years fighting corporate insiders who put profits over people. i'm tom steyer, and i approve this message. because, right now, america needs more than words. we need action.

beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity. every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. welcome back to the exchange shares of tesla down nearly 3%, after a note that the automaker is going to miss deliveries and for the stock to get cut in half

a heck of a run above elan's number tesla's biggest competitor shares are soaring the china-based vehicle maker reporting a lower than expected quarterly loss, a bigger an expected revenue and shares of lyft down more than 4% as investors appear to be getting nervous about new contractor rules starting in 2020 companies in california could be forced to reclassify independent contractors as employees, which would entitle them to broad labor law protections. lyft is among one of the companies that fought the state to be exempt from that law shares of hpe dropping after a "wall street journal" ve investigation found the company was overrun with hackers they say they have since worked diligently to mitigate the

intrusions and we've reached out for comment. you don't say that every day, sue, do you >> i know i did that >> we've got some people working that that's got to tb an advanced degree. >> i would think so. let's get to the news update here's what's happening at this hour federal prosecutors have charged grafton thomas he is the suspect in the stabbing at a rabbi's home in monsey, new york, with five counts of federal hate crimes. the fbi says when they searched his home they found handwritten journals which contained several pieces and pages of anti-semitic sentiments hundreds of protesters condemning the u.s. air strikes on iraqi hezbollah basis in iraq and syria. they burned the u.s. and israeli flags. the u.s. carried out military strikes in iraq and syria over the weekend. turkish police detaining at

least 124 people suspected of links to the islamic state group. it's an apparent sweep against the militant group ahead of new years celebrations police were searching for 17 other suspects as well and nasa officials say christina koch has set the record for the strongest space flight by a woman. she broke the record on saturday, her 289th day in space. she is expected to spend 11 months on board the international space station. i think it's fantastic. >> i walk off a plane and i can't even imagine it's an amazing feat and i guess that's a congrats. >> absolutely. >> sue, thanks. >> good to see you. coming up, it's the best performing tech stock of 2019. it's up more than 330% can the company keep the momentum going the name, i have to look in the

rundown. we'll know in a second, and what's in store for 2020 is right ahead. plus abc has been watching from the sidelines as its competitors cash in on the nfl could the media company make a play for the nfl once again? a look at who can win the race sure ortoecspts media rights coming up. "the exchange" is back in two minutes. predicting the next step for them can be challenging. today we're using the ibm cloud to run new analytics tools that help us better predict and plan a patient's recovery. ♪ ♪ ultimately, it's helping thousands of patients return home. and who doesn't love going home.

well, if you're a worker, it's been a great 2019 for you

unemployment is at 50-year lows, hitting 3.5% wages for rank and file workers are increasing more than a decade now, the momentum, can it continue and where will the jobs be in 2020 let's bring in founder and ceo of lasalle network i've got to hand it to you, tom. you come on a lot and we talk on "squawk box" about this. i would have known some of this wage gain stuff i could have extrapolated from some of the things you've been saying for the past three or four quarters and the opportunity to move up or get a raise >> well, all we have to look at is the overtime exemption is going to allow workers to get more overtime. so for the rank and file hourly workers, they're going to be able to make more money. we've got 21 states that have increased the minimum wages above the federal guidelines so now the main street, as

people like to say in their complaints that aren't making enough, they have the opportunity to make more money than ever before the economy is still going crazy, as you and i have talked about a lot, joe this is the best economy that we've ever seen and people are taking it for granted. >> tom, there's more states coming, too. but you have the actual breakdown of companies that have gone up way before t states where they're operating went up on minimum wage. has it been organic because of demand and companies have done it on their own, or do we attribute the recent gains in that part of the market to the states and to actual government action that is causing the wages to go up i wish it was organic, because i don't know about any wage price controls i don't know if they work or whether sometimes they're counterproductive. >> it's really an interesting way to look at it. and i think you're dead on, joe. i wish it were organic, too. a lot of it is being fueled by regulation and by the government

but think about this if unemployment weren't at 3.5%, if it were what it was five, six, seven, eight years ago, if it were 7%, 8% unemployment, people wouldn't be talking about higher wages they would just be talking about getting jobs so while it is done by the government, they're doing it as a result of the organic economic growth it's an indirect result of the great economy and of the companies doing this so whether it be amazon or walmart and the big box retailers that have had to do it to attract a different level of people, or it's been the local guy down the corner, companies are having to do it because they need to attract people and you only have to do that in a low unemployment rate. >> and there's a difference between state and national i think, anyway. like i can't imagine trying to do a blanket national $15, because that could be counterproductive, and i think there have been estimates -- a lot of people might benefit, millions benefit, but there would actually be some jobs that

go away and the minimum wage is zero if you don't have a job. >> exactly right and even if you look at a state like california, san francisco it's $15 an hour, but should it be that much in sacramento maybe not. and those are the types of things and then you get to looking at san francisco versus tulsa, oklahoma, and you're exactly right. the days of a national minimum wage are really over and that's why the interesting thing about this economy is now you're seeing companies out of new york and out of san francisco specifically that are opening up other offices in other parts of the country. amazon didn't go through the whole extravaganza of a second headquarters because it was fun. they did it because they had to get people at different cost structures in different environments to attract different types of workers and now that's happening across the board with high volume hiring tech companies. >> so tom, it's a good economy, as you point out

the stock market isn't always correlated with the economy, and when that goes up -- and there are people in 401(k)s, but sometimes it benefits the haves, the wealthy get wealthy in a good economy because the stock market goes up we're seeing some gains on the lower end. but should we be concerned that there's too much wealth being accrued on the top end >> i think there's a different narrative, joe i think it's really a case of a rising tide lifts all boats. yes, in a great economy that's growing both on wall street with the stock market, but just in company growth profits and so on, that the wealthy are going to make more money it would be weird if the economy was growing and the stock market was up and they weren't. the issue is that right now with the statistics i pointed out about overtime being an increased revenue stream for the hourly workers, about companies in silicon valley opening up offices in other parts of the

country, is that main street is benefiting, too. it doesn't have to be an either or the fact that the richer people are growing and the middle class and the lower class are all growing at the same time is really a further signal of how great the economy is. >> mark zuckerberg got a $27 billion raise. we've got that going for us. can you imagine? $27 billion. >> you should probably look at the board of directors. >> although, if it's based on performance -- we don't like mark zuckerberg? you don't think they would like him in france, germany, anywhere else at least it happened here, tom anyway, thank you. >> everybody has got to have an enemy somewhere. >> we'll see you later thanks here's what else is coming up on "the exchange. >> announcer: ahead, disney's domination continues spotify gets in on the political ad debate. some bad news for hedge funds.

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stories that should be on your radar. it's time for your rapid fire. here with their takes on three or four, five, let's see how many we get through. >> it's up to you, by the way. >> do you have to do power lunch? >> i have the great pleasure of being at power lunch. >> rapid fire. >> this, for me, i have mixed feelings about this. i wish it was universal, but i'm glad first, the numbers are putting disney's box office dominance into perspective i don't like saying that the company's films, which include 20th century fox, accounted for 40% of the u.s. box office this year disney had six movies surpass the $1 million mark. likely has a seventh on the way with "star wars. >> why does that pain you so

much >> i overpaid for a bunch of really good assets >> they're all bearing fruit right now. >> universal had an unbelievable year, too. >> this is how it works on rapid fire you present the headline and we talk about it. >> go ahead. >> i'm just going to put this out there, joe can you give credit where credit is due because in 2008 disney had only accounted for about 10.5% of the u.s. box office. in 2008 to 2019, 40%, that's crazy. >> they're getting it, too, on remakes of the lion king. >> aladdin they're going to do it next year so some of it is not that original and they're like, hey, this works, let's do it again. >> there's nothing original in hollywood. rarely does an original title do very well. >> i thought you were going to say nothing new under the sun. >> we've got to do something about that. >> don't you think this is how the world starts to end, where we have nothing but sequels?

don't you think that the purists out there in hollywood are thinking all we're doing are superhero sequels and none of it is original stuff we see it in streaming services. >> and snapchat, we're going to geow. >> i like it all i'm glad. >> when was the last time you went to a theatre for a movie? >> i do go we just went and i saw "once upon a time in hollywood". i've seen that four times now. i put in my top ten already. >> same year >> might be watching steve mcqueen in bounty hunter, that might be part of it. they're telling me i've got to move on. why? he's doing power lunch. >> you thought you didn't like the disney story. >> no, i like the story. i don't like disney. next up, spotify is pressing

pause on political ads, taking the opposite stance of facebook. at this point in time we do not have the necessary level of robustness in our processes, systems and tools to responsibly validate the review the content. they go on to say that they're going to reassess the decision as we continue to evolve our capabilities political ads will, however, still be allowed on podcast that apparently don't have video that aren't exclusive or owned by spotify. did you know that? >> i think this is a mistake first you're admitting you have no control over your content, that you can't have enough control to verify anything the nature of political advertising is you're not there to tell the truth anyway you don't tell the truth in commercials, period. you tell one point of view that's the nature of that type of advertising i think it's a mistake to prohibit it. >> but then look at the backlash and the credibility sort of hit that facebook took, with the not

fact checking their political ads. so maybe it also costs money to lose your credibility in showing ads that may not be factual. >> this may also be about assessing risk and deciding that it's less risky just not to accept political advertising than to accept something that's untrue and then be sued for it and face litigation down the road or get fined the way that we've seen facebook with, you know, data in the cambridge. they're in all kinds of hot water and now facebook has decided that they're going to accept ads but not fact check them spotify is just saying forget it, we're out. >> that's not the solution >> i'm a big boy, i know what day election day is. you can put it's the next day. i'm going to show up on the actual day i'll look at what's real and what's not i'm fine, give it to me. you know what i mean >> it's an even bigger issue than that. whether joe kernen is smart or not. >> no, it's not being smart. it's that i don't want it to be

spoon fed and i don't want someone deciding what i'm a big enough boy to see. >> it leaves the door open to other things. >> spotify, do they actually have ads >> they have tiers, yeah. >> topic three, it's been a rough year for hedge funds new reports show that the industry is now on track to report more closures than launches for the fifth straight year you know why because the emperors don't have any clothes. i can lose money for free. >> hedge funds traditionally take advantage of outliers in the investment community and inefficiencies and we have fewer inefficiencies in this market when the computer is doing a lot of the trading right now so yeah, they're under performing and you're going to spend 2% of your assets and 20% of the profits to allow them to underperform in this market. there's no secret why these

things are going out of business right now. >> in every mutual fund and hedge fund, no guarantee of futures. if you're down 30% a year, you know you need more than 30% to get back. >> he couldn't make money and had to give it back. >> you've seen 4,000 plus funds liquidated in the last five years. and they yanked $81.5 billion, that's more than twice what we bitmoji. g pulled off last year >> i was giving joe a tutorial snapchat is launching a personalized cartoon show. >> this is why >> it would have a bitmoji of me >> do you have an avatar >> no, do you. >> are you sure? >> i'm positive. >> i don't but i think you would like this because who doesn't want to see

theirself in a tv show and you were just talking about original content. what's more original than yourself as an avatar and bitmoji? >> doesn't this remind you of the jib jabs where you could upload a picture of your face and then send the link this is basically like jib jab for a new generation, where instead of your actual face you take the cartoon that you've made up that you think represents you really well. >> you put like a cat nose on someone and it was worth $4 billion, i don't understand. >> this is something that they own. it's something that they can't be copied. and these bitmojis are now being used on vinmo. they're being licensed for clothing this is a way that mthey can monetize it. >> let's do it out on the golf course because i promise you, i'm going to take you out.

>> i've heard this for how many years now? >> you remember, i get up at 3:00 in the morning? >> contessa, i feel like we're not even here. maybe we should just go. >> do we have time we do. >> you're the anchor, buddy. >> that's right. and finally, elon musk is hoping to hit the jackpot with his boring company's latest venture. i'm not sure how this works. you've been to vegas tweeting that the company is completing its first commercial tunnel in vegas that goes from the convention center to the strip, which needs a tunnel. he went on to say that the vegas tunnel will hopefully be fully operational in 2020. >> this is the las vegas convention and visitors authority. it's a first of its kind concept. we got a look at it when we were out there in october under construction it's going to be two tunnels moving people across basically two miles of this massive

convention center in las vegas it's a much better proof of concept than the one mile test facility and in nevada and in las vegas, the city and state leaders are already thinking, okay, we need to a alleviate some traffic on the strip. he's coming in far lower in budget than his nearest competitors for both underground tunnels and above-ground options for transit. and can they connect las vegas to los angeles >> with a tunnel >> part of what they're dealing with in washington , d.c. and chicago and maybe the bay area is multiple agencies to deal with in nevada going to l.a., it's mostly desert and you don't have as many layers to get it done. >> why do you need a tunnel from l.a. to vegas? >> much faster. >> what? why? >> i'm telling you, it's the end of the world get to vegas faster.

>> if you're going to build a tunnel between l.a. and vegas, there's a huge project >> this is just speculation at this point there's no plans in place for that but the las vegas strip, as anybody who visits there knows you spend 20 minutes getting to the resort next door this is a real possibility. >> i saw something that a 50-minute walk would be a one-minute ride. i think there is a demand for it. >> what is is next an infrastructure company that bores tunnels. i don't know. >> you know what state has more gambling revenue than nevada >> new jersey. >> i have three bets today i have a bet on cal against illinois >> hate to see it. >> i started with $500. >> you bet the giants over the eagles yesterday

>> only because -- i'm not sure why. i'm always on the wrong side. >> i'll tell you off camera what joe said to me the first time he met me wearing an eagles t-shirt. >> no, i like the eagles but a couple of weeks ago i saw them and i guess people were hurt because they didn't look that good. but they have looked good recently and i hope cramer is not -- we're going to talk about the nfl deal coming up, because based on draft kings, i think nfl teams are worth more, i think that the ratings and rights are worth more because i watch every game now. >> just to clarify, the segment is over? we've moved on now to nfl franchises >> it's like a late lunch. >> we've drifted over the years to testimony a tea all right. thank you contessa brewer. >> it has a little ring to it. >> good to see you griffith, let's do it. let's make a plan.

let's do it. i'm telling you. >> bring gary mccourt or something? >> we've got to go 2019 saw everything from chicken sandwich wars to ghost kitchens. a look at what's on the menu for restaurants in 20 d 02anthe best names to buy next. "the exchange" is back in two. (upbeat music)

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major changes are on the menu for the restaurant industry in 2019, from the adoption of fake meat to the debut of delivery robots. we have a look ahead of the next year >> 2019 was a year of change for the restaurant industry. so what will restaurants be serving up in 2020 technology takeover. restaurants are becoming increasingly tech focused to speed up and personalize

service. mcdonald's, starbucks and young brands all made acquisitions or investments into tech companies this year. analysts say this will continue. second, delivery wars pick up with more companies getting into the delivery game. competition is increasing not only between restaurants looking to entice customers, but between the delivery platforms from door dash to grubhub. third, menu innovation continues to the chicken sandwich class between pop eyes and chick-fil-a, the internet is buzzing. expect that to continue into 2020, as well as more collaboration between restaurant change and alternative meat companies like beyond meat and impossible foods. >> kate joins me now i'll ask this question because it's okay, but then i have another question can i ask one of my own? >> please. >> what delivery strategy do you think wins out, going at it alone like dominos or teaming up >> so i think we're going to see more teaming up.

we saw a lot of companies get into it with an exclusive partner like mcdonald's did with uber eats. dominos has spent a lot of time and money on building out its own delivery infrae and it's not likely going to pivot away from that in the near o see what happens. >> if you had to go from zero to ten in terms of digitizing orders and making it fast and fresh, are we done where are we are we at five, seven? is there more work to do there because it's still not perfect >> i mean, that's a fantastic question i think there's always more improvement that can be done on the restaurant side. chipotle has done an amazing job and mcdonald's has made investments into its drive-thru

operation. >> they're not perfect. >> they want you out even faster. >> let's bring in bob. managing director at the advisory group i was at one, bob, where every time i went -- i went a couple of times and they said pull over into one of those spaces and then iwent and waited like 10, 15 minutes and really fast food is not what it was and i mean, i still think there's work to be done there getting their act together no >> listen, i think you're dead on part of the problem for the industry is just the lack of sufficient help. this industry is struggling to keep its restaurant staffed and without sufficient staff it's hard to provide the level of service that especially people like you, joe, expect. >> and he's gone now, but when easter brook came in at mcdonald's specifically, he wasn't re-inventing the wheel. i said you're not going to

double the stock price by getting faster and fresher and cleaner. >> if we're talking about stock performance, mcdonald's was only up about 10% it had done really well. it's in the midst of this big turn around plan it is looking to get you in and out ooeven quicker and have you order different ways the transformation is still happening so they're not quite there yet. but they've made big tech investments. a lot of analysts are looking to see what that looks like next year and in 2021. >> is it innovation still, bob do i need a molded pork slew thing that looks like a rib to get me in? do you still need to keep innovating or fake meat or something? can't you just do what you're doing better, fresher, faster, or do we need -- i don't know, what's the latest chicken wars >> yes and yes and yes you need product innovation to keep the consumer interested faster, quicker, better, yes, all of those things are really important and better service

especially but you really need that catalyst to keget consumers in e door to come and try something fresh and new. that i think is especially important. one thing i think that kate didn't talk about earlier, that this industry is going to see in the coming year, is going to be higher prices, joe i mean, that's a common theme we're going to hear across the industry. >> and in a couple of days you're going to see margins squeezed and kmcommodity prices are going to go up do you think there's a point where they start noticing? >> menu pricins up a little over over year. if we see the kind of pressure with commodities in the coming year, there's a risk that we could see much higher menu pricing or considerably a lot of margin degradation so i think it really is yet to be seen. what's the appetite in china going to do to our commodity

prices and how will that affect ultimately what restaurants have to pay, and ultimately have to charge consumers >> what are your best picks for the year >> quite honestly, one of my favorites is brinker international for a number of reasons, valuation, dividend yield, the fact that they understand their consumer, they sell value really well i also think mcdonald's is going to do well i think the technology initiatives, as well as the improvement they're making particularly in chicken and in breakfast, will ring the dinner bell for consumers and i think jack in the box is very well positioned, especially at these valuation levels. >> and now at least they're called jack in the box anyway, bob, how much do you get charged -- someone charged them to come up with that, change your name from foodmaker to jack. >> that goes way back.

>> okay, thank you. >> you said it. >> i did, because i'm allowed to say it i think i'm allowed to say it. >> you're the host. >> thank you take another look at we'll reveal the name and etr e gains will keep streaming in 2020. that's next. machin so it's simple and transparent with a new level of privacy and security. it lives here and here. and it will save you 6% on products at apple; like iphone, apple watch, airpods pro and so much more. ♪ apply in as little as a minute, right in the wallet app.

. welcome back to the exchange it's been a blow out year nfor the nasdaq roku was the best performing name up 330% the stock suffered drops of more than 10% or more on six separate occasions this year. the bullish case the company is poised to report 4% revenue growth this year a rise in 2018's 45% even the second derivative is increasing roku is expected to show improvement in gross margins

despite all that the company is still losing money trend analyst expected to continue for another year. coming up, the $66 billion race to secure sports media rights is heating up more and more players want a piece of that pie. we'll look at what's at stake and whose best position to come out ahead, when we return. keeping me from the things i love to do. talk to your doctor, and call 844-214-2424.

nfl viewership is expected to jump this year following pair of down years. let's bring in jabari young. they still like big network slashy productions i see the nfl network. i see espn i see streaming. sometimes i don't know it's on, sometimes. i think the big networks are still going to pay up for these, aren't they? it's good for nfl. >> the nfl is all about reach. that's what they want. broadcast tv allows them to have that reach network tvs as well. talking about possibly having four networks that will have your product if abc decides to get back in the mix after the current deal it's like it's really, really intriguing for them. usually they like to keep

somebody on the outside because that's leverage for them so they can raise a price. this time around i would not be surprised if abc got that into it because disney want something to do with the super bowl and in order to do that they have to have a local broadcasting rights to air that game >> i'm trying to figure out whether they thought it got too expensive and then they watched nbc sunday night and you saw they beat cbs in terms of total viewers. even fox winning 18 to 49, whatever it was. that's partly because of football too how can abc sit there for 15 years without -- >> they had to learn a lesson. cbs learned that lesson in 1993. then they got the nfl back in '98. nbc learned that when cbs took their rights and got it back in 2006 abc is going through that. they are not looked upon as that network from when they had monday night football. it only make sense they would get back into it the package is would you

consider it to try to get monday night football or thursday night football you talk about ratings, nbc will release their numbers soon but i'm hearing over 20 million dollar -- viewers. >> i don't see zero sum. do some streaming. it's additive. it doesn't take away >> it doesn't. the nfl are not on the streaming. >> you don't want to do too much >> streaming doesn't have the platform for it either when have you saw a streaming company do 25 million viewers in one game right now streaming still has to develop that if they want to be a major player for nfl rights. nfl loves broadcast. >> how much could it be? pga was up like 50% because of tiger. >> that's chump change compared to the nfl >> percentage games could be what >> anywhere from 25% to 50, possibly even 100.

right now i'm hearing 8 to 10. >> i got to get going now. i have a game today. >> is it nfl >> no nfl. couple nca it's not even the playoffs it's a couple of bowls it's like 40 bowls >> football is big >> thank you >> no problem. >> that does it for the exchange power lunch is right now thank you, joe you hit it here is what we're watching new at 2:00. stocks have been on fire but will a hot december turn into a colder january we'll explain. it was the year of the corporate ka at t catastrophe from boeing to peleton from that ad nobody will stop talking about it could be the biggest tech battle of 2020 two of the best performing chip stocks will go head to head.

>> welcome to power lunch. stocks under pressure as wall street looks to close out a banner year. stocks on track for the biggest drop in three weeks. the dow was down 200 points with the lows of the day. energy is the only sector in the green today and it's also by far the worst performing sector of the year of just 7% while the s&p is up more than 28%. let's get to the bob at the new york stock exchange. >> we'll keep on eye on that this is an intraday at the s&p we were 32.16. i think that was the low of the day. you can see the buying interest is here.

procter & gamble has been a momentum stock this year i know it's hard to believe. those are the ones down. this signals over bought conditions what are they buying all this stuff that's haed a lou - had a lousy year steel stock, even the bank stocks have really only out performed in the fourth quarter as we have seen yields and the yields curves moving to the upside this is fairly average rally i call it classic, low volume. leveraging the existing up trend. hopefully on the maco backdrop that means the individual consumer is strong no recession in the united states and hope for a global bottom in the economic news here the bad news is we way over bought we're working off the over

bought conditions today. we seen japan retail sales disappoint this global growth story is very hard to figure out a lot of people on either side of this. tonight we'll get the china pmi numbers and the non-pmi. that's been a weak source for a while. friday usi manufacturer. we haven't been in over 50 since way back in october. it's kind of put up or shut up it's not clear right now whether just a bottom in the global economy is enough to move stocks forward. in january that's what we'll be debating beginning next week back to you. >> thank you very much are we in for a january reckoning or will this record rally keep rolling into 2020 joining us right now with their thoughts barry james you want to be defensive why? >> because you've had tremendous

run in conneequities they have ignored a number of head winds that exist. i think the u.s. manufacturing has been in the recession. we have uncertainties dealing with the slow down in global growth bob just talked about whether global growth picture had bottomed i don't think it has by any means. all of those have not yet figured into the equity price, bill >> i saw you're looking for -- you see storm clouds on the horizon. are they listed or are there others watching? >> there are some others when ever knows about a good deal, guess what, it's a little too late 30% run in stocks and everybody is jumping on board. we find the bull versus bear numbers are way out of whack

that setting is up it doesn't mean the market have to correct it's setting us up the other thing is the good news is out about trade deals and the economy coming back and the consumer doing great, et cetera, et cetera. all of those things are out there. you don't expect as much from the 2020 that we got from 2019 >> you come on and you're sounding this note of caution and yet we've had expert after expert over the last few weeks heading into the year's end talking to us about the positive optimism surrounding the global economy.

>> two answers to that question. i think what you ask is very relevant let me begin by saying those same individuals who are very optimistic today just about six weeks ago they were looking for the recession in 2020. they were worried about the growth coming down now everything has gone. the storm clouds have passed it's party time again. a lot of them have suspected bond market to continue the yields are about to go up over the years. we have heard them talk about being a 350 or 4%. bond market has been a better predictor of the economy both the recession of 2001 and the

recession that began in 2007 when equities were not aware of the recession going on at all. once again the caution is coming from the bond market i want to go where the data tell me to go >> how are you positioning the portfolios leading into that factoring what you just said >> i would love to be defensive. low in terms of high-tech which have done well be more into u.s. treasuries, look more into german bonds and gold has much further to run in terms of where to get returns from in 2020 >> barry, what are you buying? bearing in mind thoughts we'll go -- regress to the means in

terms of growth rates. where do you still see opportunities? >> we got the happy new year coming but it's been the happy old year where almost everything had double digit returns from precious metals to foreign markets to our markets even bonds has ayear this year in the come paperspac. we think that's good we like finance too. it's cheap and earnings are good and housing are strong lostly, we see in the industrial area some opportunities there. one is called mastech.

it does you nutility and communication infrastructure that's looking strong. earnings are pouring in. you can still make money the golden rain bow fund is buying small two of those are small one is large >> bthank you both happy new year >> happy new year. word today the signing of phase one of the trade deal between the u.s. and china could come within the week kayla, what are you learning >> the trump administration suggested since the deal was agreed to that a signing was under discussion for early january with the country's ministers, not their leaders signing off. today the south china morning post says they may sign the deal two sources briefed on the talks

say the white house would prefer to hold the signing when congress is back in session to provide a contrast to the impeachment stand off on capitol hill the house of representatives returns january 7th and then there are two weeks before the economic forum in davos and the chinese new year it's honoring the commitments it made many the deal already improving permits for genetically modified crops that stock up 12% in the last month. president xi jingping gives a speech tomorrow and perhaps we'll get a little more detail then >> is there any reaction to the fact that it might be the vice premiere who comes rather than the administration >> they are trying to manage the expectations of this for several week

ambassador bob lighthouzer said you shouldn't expect the leaders to sign the deal it would be the ministers. china has yet to confirm that possibility. we have left to expect still it will be the ministers. as far as surprises i'm not surprised by that. >> all right thank you. coming up, 2019 was banner year for disney with billion dollar blockbuster after billion dollar blockbuster can 2020 measure up to that or will more streaming options keep people out of the theaters? your 2020 play book on media is coming up next in the fight between amd and intel, amd won this latest round up 150% this year. does intel have a plan to get back at s itrival? power lunch will be right back

brand new numbers are putting disney box office domination in perspective. their movies accounted for 38% of box office sales this year. further showing if it's not a huge blockbuster, people would rather stay home and stream something in their own living room disney and other media giants are betting big on streaming in 2020 julia has the play book for us >> in 2020, we'll see the shifting power dynamic between

media giants and tech titans battling for viewers first, netflix will lose more subscribers in the u.s. as a slew of new streaming apps gain traction with nbc universal peacock launching in april and hbo max launching in may, netflix will face steep competition for subscribers in the u.s. putting pressure to continue investing in content and focus on international growth second, ad supported streaming with peacock enter the fray will be the new front in the streaming wars with the ad free subscription business netflix pioneered now crowded consumers advertisers, and content creators will shift focus to streaming ad supported con te content for free the success of video will eat into the box office which will decline next year. all that raising the bar for going to the movies.

it's likely to put pressure on studios bottom lines >> remember when streaming as a verb meant something else. from the streaming wars to a big tech battle, shares of amd are the best performer in the s&p 500 this year. up nearly 150% the company has just stolen market share from its biggest rival intel. intel isn't taking that lying down josh has more on this chip showdown hi, josh >> as we wrap up 2019, amd is your top performer in the s&p 500 by a long shot with the surge of nearly 150% this year this company's chips make their way into more products he's a big fan of ceo lisa sue and telling clients the company will continue to gain ground

from its bigger rival. analysts say don't count on intel either it's a big company with vast resources. even if it loses some market share in 2020, intel does remain a force. even today controlling 94% back to you. coming up, which market laggards of the decade have the potential to be leaders in the 2020s. look at that plus we're looking at three major business blunders of 2019. what went wrong and how could it be fixed in the new year and were they all blunders i beg to differ on one of those. power lunch coming up after this so it's simple and transparent

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♪ ♪ ♪ ♪ welcome back fpower lunch. the s&p 500 looking to close out a dynamite decade but not all

stocks have been winners ge, gap, ford, macy's all lower than where they were ten years ago. whether the next decade hold promise, let's bring in the trading team gave you a list there of some losers of the last decade. pretty striking they can go through a pretty big bull market decade and still be down do any of them seem like they are worth a bet for the next few years? >> that's a great question we found, we never like to buy stock simply because it's down a lot. that hasn't worked out we like to see trend improvement. we like to see signs of base forming. when we look at ge we're starting to see those signs occur. the 40-week moving avenrage has slowly starred to hook higher. we are seeing signs of higher highs and higher lows in 2019. we're encouraged by the longer term chart that's slowly starting to improve.

we need to be patient but any pull back, i think you could slowly start to enter into this name >> all right obviously it's a bit of a mark of just how much of a contrarian you might be anything you pick up >> sure there's one on the list that's interesting to us that we started adding here in the last few weeks. talked about it on this show as well which was macy's. the stock has been trading like the company is going out of business when you take a dive under the hood you see there's positive free cash flow the balance sheet is okay. you would assume they are financing the fat dividend when it's a 50% pay out ratio as far as risk reward goes with a stop at lowe's, we think macy's presents an interesting opportunity. if the if fundamentals continue to deteriorate, you cannot hold

and hope you have to cut your loss. >> seems like they've been placed by the market in the disrupted pile but see if they can work their way off it in next few years thank you very much. for more trading nation head to our website or follow us on twitter. back over to you ahead, from wework to boeing, we run through the year's biggest corporate disasters. are these comeback stories in the making plus new year, new laws. starting january 1st, new rules and regulations go into effect across the country the key ones for the workplace markets in 2020. what's many store for stocks in this new year? the editor of the stock traders almanac joins us to give us his p predictions. if you listen to the political debate in this country,

it sounds like we have a failed society. but nothing could be further from the truth. americans are compassionate and hardworking. we aren't failing. our politicians are failing. that's why i'm running for president. to end the corporate takeover of the government. and give more power to the american people. that's how we'll win healthcare, fair wages, and clean air and water as a right. i'm tom steyer and i approve this message.

welcome back here is your cnbc news update. the defense department releasing video of the air strikes that were conducted against iranian backed malitia positions in iraq and syria. among the dead, at least four loccal hezbollah commanders they say they should arm con agree gaco congregants. >> this is the model for the future we can't prevent mental illness from occurring and every crazy person from pulling a gun but we can be prepared like this church was. >> the washington red sin skisk

expected to hire ron rivera as their new head coach he have let go by the carolina panthers this month. he led them to an appearance in super bowl 50 that's the news update back to you. let's get a check on the markets. we're all the lows of the day but falling a bit. here the dow down about 160 points at this moment or .60 points the s&p and nasdaq following a bit lower. >> we have some power movers to tell you about shares of neo could be the one to watch shares of the vehicle maker up 64% on the back of the company reporting a smaller than expected third quarter loss. another golden opportunity, shares up around 2% today as

gold prices traded around three month highs. gold is having its best year in 2019 since 2010. hewlett-packard enterprises dipping to session lows. it's come back slightly. the company's networks were over run by chinese hackers the wall street journal was told its work dill gently to remedy that issue contessa 2019 might have been a banner year for stocks but it was marked by major corporate disasters. boeing 737 max issues leading to plane groundings and the ousting of its ceo, wework pulling its ipo as its financial insecurity became more apparent peloton holiday ad going viral for all the wrong reasons plus the tech lash continuing as facebook and alphabet remain under public scrutiny as privacy concerns take center stage

mike, it's great to see you. >> 39 years to live up to that name >> i like it let's talk about this. what's the stand out blunder >> the stand out blunder for me is boeing. obviously boeing is a case for whatnot to do. they clearly had an issue with the two tragic incidents that happened with the 737 max and instead of really putting the emphasis on people, they came across as putting the emphasis on profits there was just a lot of dialogue they lobbied the white house to get the 737 max back on track. literally boeing was a disaster in 2019. >> does that remedy the problem with the krceo out is that case they can move

onwards and upward >> there's not a lot of competition. boeing being in that b to b pace i think they will recover. i think it really doesn't help them when they have this ad campaign using real employees to talk about safety in the midst of a pr disaster yes, ultimately they'll recover but the road ahead will still be bumpy getting the 737 max back on the road. >> i'm going to cut to peloton because i hear you and i agree on this. i don't think it was such a debacle. it came out to be we're all talking about it that's the purpose of marketing. it's good for the two actors they have been able to shine after that >> able to gift a peleton to a real life girlfriend >> he gave it to his girlfriend and didn't get hurt if that. it worked out. >> what they did is really did a

nice job up front really casting thn the spot it was very consistent with how they wanted to be perceived. in social media there was a lot of backlash but what i like is the ceo came out right away, kind of confirmed their goal what they were trying to establish. the brilliant execution of having the actress on the today show came across as being awe t -- authentic. she's a very real person in my mind it was a huge success for them >> i agree >> do you think that peleton gift the male actor gave to his real life girlfriend, is that still a publicity stunt in your mind >> i don't know. it's just an extension of the campaign i think what peleton did is they seized on a little controversy, if you will, to reenforce their

positioning. i just think it was just an extension of the campaign and got great publicity around it as well >> contessa you're so cynical. >> i know. >> amazing >> it appears investors were cynical too. it was kind of the biggest ipo blunder of the year. talk about what went wrong with wework >> boy, it's just a tough example of start-up trying to be a tech company as well at the top you've got really poor behavior that came out and as the news rolled on the behavior and the stories became even worse i think they moved relatively quickly. i think wework is a really great brand. i think they will ultimately recover. will they recover the value that they lost before this snafu, i'm not sure with the heavy handed investors like softbank, i think they will

recover. it was truly an embarrassment for the ipo. >> if they have an achilles heel, it's all the debt they occurred the amount of money that softbank has put into this, i don't know if they will get it back it will be a question of everybody will have to be patient and let the adults try and turn this thing around it's been a big problem there. facebook and others had all kind of problems this year. >> yeah, facebook had a tough year it's not going to get easier they still have major concerns around privacy and the lack of trust from consumers on the other hand they have this advertising business that's robust it works for marketers large and small. at some point and time i hope that zuckerberg can get his act

together i don't think it's that hard to protect privacy and fact check political ads. >> you had snap saying today or it wasn't snap it was the other streaming music service. >> spotify >> saying it's not going to accept political advertising because it doesn't have the wherewithal to fact check them if you were advising these social media companies on political ads, how would you advise them? what's the risk? >> i just think fact checking is very, very important to maint n maintaining credibility of the platform the no different in my mind than the very kredsable organizations like the new york times going through great lengths and the editorial to fact check and take advertising in a very, very responsible way. i would strongly advise them to

invest the resources on behalf of facebook. they are making billions of dollars. if they need to have the integrity organization that ultimately was fact checking both doing it, leveraging technology as well as having the right people in place, i don't think it's a difficult challenge and i applaud what snap, the positioning they have taken. i applaud twitter, the positioning they took from the out set and i have no idea what the reservation is on behalf of facebook >> my take on facebook is that the government coming after them, they will have to divest something eventually there are a lot of people that disagree with me on that they believe they won't have to give up what's app or instagram or anything like that. i think that for all they have been through for them to just pay yet another settlement will not be enough for congress what do you think? that's a tough one i think their behavior and

leadership, ethics need to change versus the divestiture of one of the assets. what's going to change they will continue to charge forward on one end driving profits through a very significant and very effective ad business and on the other end being disrespectful to consumers that populate the platform >> mike jackson, thank you so much for joining us. happy new year >> thank you happy new year you know 2019 has not been great year for juul either between government regulation and the disease potentially linked to its vaping product the company has had a lot to deal with and now it has an issue of a different kind. frank joins us to explain. >> juul can't get its own employees to stop vaping at work according to a report, employees vape at desks, hallways and

meetings they threaten to dock people's pay. the statement saying in part, our policies strictly prohibit vaping in our u.s. facilities where law do not allow vaping. we take this commitment very seriously and take appropriate actions against violations somewhat ironic. a company seen as a major contributor where an estimated four million high school students and one many middle schoolers are using ecigs is having its own epidemic of sorts. the industry predicted decline back over to you >> i just wonder whether some of this has to do with people who have adopted vaping so easily just don't see it the same way as smoking

my teenage niece got in my car and took out her vape and just, whatever i guess it's not lighting up she started yu eed using it in r without asking she doesn't see it in the same way as we would have seen cigarettes 20 years ago. >> i get your point. people are doing it covertly they know they are not supposed to be doing it it's a big part of the company overall. i think they just want to do it any way and they started off doing it and it's hard to get people to change >> they're like high schoolers smoking in the bathroom. >> except you're doing in in your aunt's car. now that you've outed your niece. >> she doesn't watch >> regulators and authorities watch. good for you, aunt >> i was trying to be cool >> happy new year. coming up, hedge funds are hurting. a prediction that tesla could

tank and tom shoes might find new owners

2020 brings a slew of new workplace laws in states coast to coast some expand protections against workplace harassment and discrimination new york's human rights law will cover all companies regardless of size. workers will have three years to file a complaint rather than the existing one year statute of limitatio limitations. the state banning non-disclosure agreements that prevent employees from disclosing facts in future discrimination complaint s of all of this just weeks before the trial of harvey weinstein which helped launch the metoo movement

we saw a lot of these issues come up not only in the harvey weinstein case but in stories that have results since then as well >> it will be interesting to see as with many regulations like this, the enforcement. how will you enforce something like this. >> allowing workers to have three years to file discrimination complaints is something that is tangible and easily to implement. in california which is mandating sexual harassment training for companies with five employees. now workers have protected from racial discrimination because of their hair styles. they want to protect people who may choose afros and braids. this is a first of its kind protection in nation lit it will be interesting to see whether other states follow suit >> isn't it silly that we have to legislate manager like this >> crazy in california there's this landmark this is something we have spent some time talking about. a landmark labor law that will

classify california, give workers as employees not as contractors. that means minimum wage protection, it means health insurance, benefits. uber and lyft combined to fight this law look at lyft down 5% >> there's an unintended consequence i'm not sure is talked about that much we focus so much on uber and lyft this is pertaining to many other industries where they have freelance writers. i have a friend who is a book editor in the industry she edits books on a freelance basis. she's not sure she will be able to get work next year because if she's hired to edit a book, they will have to pay her benefits at the same time and the price will go up. >> lyft is arguing this will hurt workers who want the flexible schedule. i talked to an uber driver in

california who was opposed because he says i make more by driving like this than if i'm on a hourly schedule and sit to wait to try to get that return trip rather than making the hourly rate. i'd rather do it myself and make the money. new york and new jersey will prohibit employers from asking job applicants about their sally history. this is a way to dclose the pay gap. >> haven't you learned if they ask you your salary history, just lie >> thank you that's great advice.

>> those are among the regulations sfwlp there regulations. >> there's so many here is taste of the other stories we're watching now new reports out showing that hedge fund numbers have shrunk for the fifth straight year. specifically the number of hedge funds closing is now out pacing the number of those being launched overall investors have pulled $81.5 billion from hedge funds through november we're not finished yet that's more than twice the amount that they with drew in all of 2018. we talk eed about this last hou. they have been underperforming and over charging. they were expensive. they were under performing >> if the hedge funds would argue they do well for people in times of volatility and you look at 2018, they were still a lot of liquidation and money coming out of hedge funds in 2018 tesla will miss its delivery

forecast for 2019 which could devastate the high flying stock. cowen raised the price target to $210 a share to $190 citing growing demand from china and the netherlands. with the raise that's nearly a 50% drop from where the stock is sitting today at $413. we have seen a report coming out from electrix. >> this is a blog that tracks the city >> the tax credit is going away on january 1st >> sh which is unfortunate for them >> however, smart money knows that they have seen this coming they knew the tax credit was going away and the stock is near an all time high it's up 75%.

somebody is guessing it's not going to be a big deal when all is said and done we'll see. fi finally tom's shoes famous for giving away a pair of shoes to a child for every pair sold, has new owners the company has transferred ownership to a group led by jeffreys financial and brook field asset management some of the restructured $300 million in debt was incured during a leveraged buy out in 2014 so many different moving parts and pieces of this i was in santa barbara some years ago where there was a tom's shoe store i thought this is nice these look like casual shoes i tried them they were horrible they were poorly designed, poorly made. >> flthere's not a lot of suppot for people who want it one day and one hour left in the trading year it's been a great one with the

s&p 500 up 28% so far. there's one chart that says the markets will roar in the 2020s that is coming up next on power lunch. (soft music) - when i see obstacles, i create opportunities. - when i see adversity, i find a way. - when i hear never, i say now. - [announcer] southern new hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation.

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contessa was just reminding me that it was renowned philosopher santana who said, those who do not learn history are doomed to repeat it. for that, we'll take a look at past trends that could help us understand what we have in store for 2020 and there's one chart that points to more gains ahead. and joining us to share that is jeffrey hirsch, the editor in chief of stock trader's almanac and a chief market strategist at probabilities fund management. happy new year, jeff >> happy new year, guys. we take that quote and we flip it, those who study market history are bound to profit from it >> there you go! so it is a good thing to do! we've had a good year, as we all know >> fantastic >> and a really good december, until today. what are we seeing going -- clearly -- >> it feels a little profit taking >> as of today, santa has apparently left the building >> not just yet. and as of friday's close, the santa rally was up 0.7%. it was about 0.4 earlier looks like we give a little bit

back but it's not about it being a huge rally it's about after the seven days are complete, if we are positive for that seven-day trading period, there will be a little sigh of relief and in the first five days, the january barometer, the full month, as january goes, so goes the year and it's a pretty positive indication that the year ahead is going to be solid 30 times, we've had positive, triple indicators there. the trifecta indicator 27 years up, 3 down. >> so what's the january effect? >> that's small stocks outperforming large cap stocks in the month of january. we've seen that really begin in the last half of december. i'm looking at the russell 2000, which has been tracking the seasonal trends a little bit better we have a few strategies we used to trade that. there's a free lunch strategy, making new lows. but basically small stocks bouncing back last half of december, sometimes rolls into early march. >> and it's a year quizable by

two next year, it's an election year >> it's a presidential election year >> so what typically happens during an election year? even though the last four years have been anything but typical, right? >> well, i mean, more typical -- >> traditions falling by the wayside? >> some, but seasonally, we've seen something especially this current yearor re-election tip the scales a bit in election year most election years are about 6.7% for the s&p, 5.3 for the dow. but when a sitting president is running for re-election, you see a gain of about 12.5% for the s&p, 10.1 for the dow, versus when there's an open field minus 1.5% loss or 1.6%. >> what will the back and forth politics do for volatility >> it will create some more. probably during that worst six months period, we'll see when all the primaries are going on, some sideways action january has been weaker in

election years as well even dipping a little negative for the dow. we're here, valuations are up, there's that old january break that seems to be materializing a lot these days i wouldn't be surprised if we have a little bit of a pullback from january jeff hirsch, good to see you of always at the trader's almanac of which we have a new copy. the ink is still wet there >> jf,ef thank you >> happy new year. >> check, please! is next. legendary terrain in telluride,

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car company, nio that's skyrocketing today on a smaller than expected loss i'm wondering as they take on tesla next year, what kind of competitions we're going to see between u.s.-based and chinese-based companies. we've already seen this competition between starbucks and lucken, which has really come out of nowhere in the last few years and doing very well over there alibaba has been a major competitor for amazon. >> and i was just interested in what happens with, say, melco, which has traded here. but when you compare that to las vegas sands or wynn resorts and it's having about the same ride as its u.s. counterparts, partly because a rising tide lifts all boats when it comes to casinos >> but the chinese government is trying to create a consumer based economy right now.

>> that's right. >> and these are examples of those companies that are trying to do that >> also look at tesla. it's received support from the chinese government in building that new factory over there and being able to run up the production line and being able to deliver those cars so it can avoid the tariff situation i think it's impressive. >> i agree >> thank you for watching "power lunch" >> happy new year. >> happy new year to you >> "closing bell" starts right now. >> yes, it does! welcome to the "closing bell," everyone i'm wilfred frost here on the floor of the new york stock exchange we had record closes on friday we were meant to have the best annual return for the s&p 500 for two decades, but today profit taking, all three indices lower. all 11 sectors of the s&p 500 lower on this, the penultimate trading day of the year. >> i'm courtney reagan in today for sara eisen let's look at what's driving the action today chinese media and the white house suggest the phase i trade deal will be signed within the next week, but are we seeing investors lock in gains for the