so a dueling analyst note to combat his colleague or adversary, however you want to put it >> a friendly rival. i would just say, watch the "closing bell," because the next hour may be very, very telling, as we head into the weekend, conventional wisdom may be that people don't want to go into the weekend long, we shall see it has been relatively a modest response to the events overnight. >> thanks for watching "power lunch. >> "closing bell" right now. >> courtney, tyler, thank you very much. welcome to the "closing bell," everyone i'm wilfred frost here at the ca caterpillar post today, selling off today in light of the assassination of that top iranian military official. safe haven assets, oil prices, they are soaring stocks, though, are selling off. we're down just over half a percent on the s&p 500 59 minutes left of the session >> and i'm morgan brennan in for sara eisen let's look at what is driving the action today stocks falling from record highs after that military strike in iraq that ratcheted up tension in the middle east plus, a big slowdown in the u.s. manufacturing sector relights fears of decelerating economic

growth and fed minutes just released show some officials are worrying that low rates may encourage too much risk taking by investors. joining us for the hour is jim lacamp, senior vice president of investments and senior portfolio manager at morgan stanley. greg, great to have you here at post 9 >> great to be here. >> so major averages are lower, although coming back from the worst of the day it's kind of incredible. when you look at the year-to-date chart for the dow and the s&p, it's only two days, but given the fact that we saw that big rally to start the year yesterday, we haven't actually given up all the gains what does that tell you about the market >> i think the market will be fairly resilient, because there's so much negativity in the market there's a lot of cash on the sidelines and people haven't believed the story that being said, morgan, i think this is going to be a tough year, a shrug it out in a cloud of dust. go back to 2018, down year, thank god it's over. 2019, great year but this is a new year we had a lot of multiple expansion that occurred in 2019.

so the multiple expansion built it will the earnings come and that's where it gets tricky, because profit margins are decelerating and employee wage costs are going higher so we've got a big issue with how corporations are going to make more money this year. if you look at leading versus coincidental economic indicators, they're starting to roll over. doesn't mean we're going to have another 2018 nothing like that. i just think it's going to be a tougher year and i love it, because that means stock picking will be more important and not just indexing all in or all out markets and i love those kind of markets >> the ism manufacturing number that came out for december, weakest reading in ten years is that setting off the red flags and warning lights for you or no. >> a little bit, but not really. and the reason not really, we're still 70% of a consumer-driven economy and consumers are in good shape you look at their credit scores, they're going higher, their savings rate, going higher wages going higher, personal spending has gone up

i just think that we're not in a situation where the economy is going to really accelerate and i think wall street is banking on that acceleration, based on where multiples are. so i think you can be opportunistic in this market i think you can make money, but it's not going to be 2019 all over again >> jim with us for the full first hour of the show but let's drill down on today's top story, the rising tensions between the u.s. and iran. eamon javers has the latest on the u.s. strike. morgan brennan is watching -- we don't need a sir name when we're tracking nokes each other. mike santoli is having a look at the energy sector. but first, eamon in d.c. >> reporter: a couple of developments to bring you up to speed on one is that the pentagon says it's sending additional troops to the region. these from the 82nd airborne, about 3,500 troops will be heading out to the middle east, that according to the pentagon earlier today. and mitch mcconnell taking to the senate floor this afternoon and saying that senators will be getting a classified briefing on

this strike. all senators will be getting that briefing and that will happen early next week some staff may be getting briefed before that, but all the senators will be getting access to classified information about what happened here, exactly. mcconnell urging senators not to react too soon, until they get that briefing and understand more about the context of whatever it was that u.s. intelligence was seeing surrounding this iranian general's visit to baghdad and what he planned on doing while he was there meanwhile, ft. has been on twitter today, offering some of his reaction and commentary about this, but we have not, as of right now, seen the president on camera yet. we do expect that the president will be speaking in florida, early this evening at a pre-scheduled event for evangelicals he may top those comments with some explanation of the iranian strike, and of course, the president always travels with the media, so he has the ability to bring them in, anytime he wants to so a lot of people will be focusing on the president's tone, when and if he makes any

comments there exactly how he lays this out and what it means for any potential iranian response and what his plan is for that so all of that still to come at this point, wilfred. all tbd. >> and eamon, this particular action from the trump administration clearly slightly at odds or slightly in a different direction from a lot of their recent action and rhetoric in the region looking at other comments today in particular from the secretary of state, the suggestion being is because it was a preemptive attack, as opposed to just a retaliation in its own right >> sure. that's right that's what the u.s. side has been saying all throughout the day, is that they had information that soleimani was working on something that they needed to interrupt. and so that was the sense of urgency as to why they needed to act now and act in baghdad but it goes against snof cooling of tensions we had seen months ago. and of course, it goes against the president's sort of stance towards the middle east. he's been a president who campaigned on the idea of getting out of what he calls endless wars in iraq and in

syria. he's been pulling out troops from kurdish regions in syria. the president very much does not want to be a wartime president nonetheless, he's taken this action eyesterday, he clearly saw something there that he felt he immediated to deal with and needed to deal with very quickly and very directly. >> eamon, thanks very much for that switching focus, morgan's been tracking the impact on defense stocks so far today. >> yeah, and those defense stocks have been oaring. it's been a sea of red for the broader markets, but not for this particular group. lockheed martin and raytheon hitting north of 52-week highs military dronemakers like aerovironment and kratos and leidos which hit a fresh 52-week high so cowen's roman schweitzer puts it like this, this is marking a shift from proxy fight to direct

confrontation. from an investor standpoint, here's an implication of this. this could purr greater military funds, be it the overseas contingency operations fund for the current fiscal year or maybe a higher defense budget proposal that hadn't been expected for fiscal 2021. we're expected to get that as soon as next month according to jeffries, the names that could benefit the most, raytheon, lockheed martin, and possibly general dynamics, especially if you we see this start to play out in more of a ground war fashion i don't want to use the word "war", but because of their combat systems, a lot of this will depend on what happens in the coming days and coming weeks. >> definitely some big movers to the upside let's get to bob pisani on the floor here at the exchange with a look at the broader markets. >> and we cut our losses in half from the open from the dow jones industrial average, but several sectors that had big runs in the fourth quarter weaker today. among them, metal stocks,

freeport mac ircmoran they're a little bit weaker today. another group that had that great fourth quarter, emerging market stocks like south korea, south africa, turkey's saudi arabia, all of them a little weaker today the dollar is strong there as well as concerns about the overall global situation with the uncertainty in the middle east finally, bank stocks, yields moving to the downside banks moved up rather notably in the fourth quarter as yields improved they're all reversing today, although stocks like jpmorgan have been at new highs for quite some time. guys, back to you. >> bob pisani, thank you let's send it over to mike santoli for today's market dashboard and a look at energy >> the energy sector has been on a bit of a slippery slope for some time. only the most tentative and arguably unconvincing signs that that's turning around, even with today's news take a look at the xle relative to the s&p 500 this is essentially the relative performance of this group, it's one divided by the other one this line is going down, energy

is underperforming and what you're really going to see, it's not really broken any kind of down trend line, if i want to try and draw that, it just kind of shows you how much this group has to prove. that's not an official down trend line but basically, this is all you've got here for the little 8% bounce we've got off the lows that has not done much in terms of cutting into its deficit into the overall market a little bit better is xop this is the exploration and production subsector of energy and here are the balances. a little bit more pronounced, but over the two-year basis, you can see there's a lot of accumulated losses that have built up now, look, goldman sachs, strategy note today says there's almost no earnings growth built into equity sector -- equity vaemgss, energy sector, rather so it seems like it's cheap, it seems like it's neglected and the group is washed out. but right now i do think if it can't rally on relatively bullish news like the commodity today, you have to question when's going on. by the way, the xle have bigger finding operations they're not a really great place

on crude that's why you see the likes of exxon and chevron to the downside today >> mike, thanks so much for that jim, what's your take on these energy stocks? last year as well, fantastic rally in wti, not in the energy stocks can that go on forever, that dynamic? >> the last ten years, we've seen the growth stocks absolutely dominate the value stocks what's in the value index? you have a lot of energy and a lot of financials. and they just have been dead but now we're seeing some signs of life, particularly as mike pointed out in the exploration companies. the rig count is down 26% year over year and it's down -- >> that's a big drop >> yeah. >> and you've got depletion, too. and bear in mind, when you hit the permian basin with all the fracking, they went after all of the sweet spots. so you're going to get a lot of depletion. the dollar isn't as strong and it may be really weakening in here, not today, of course, but it hasn't been as strong so you could see energy provide some value for the markets, some financials and i haven't liked

financials, but starting to come around to them, i think energy has a place, as long as you're in the right energy areas, and again, you want to be exploration first and come around to the other names later. for income investors, a lot of the energy mlps are very inexpensive right now with some very fat yields. that's another area we're overweight >> crude is up 3% today. let's talk more about the rising tensions between the u.s. and the broader middle east. joining us now, hillary man lev leveritz, former u.s. negotiator with iran. thank you so much for joining us what's your summary in terms of what we can expect in terms of a response from iran >> i think we can expect iran to react as they say they will react. as a country who had the united states declare war against them. they had been preparing for this type of war not just for the past two years since president trump withdrew the united states from the iran nuclear agreement,

but they've been preparing for this, in fact, since i was negotiating with them in 2002, when then president bush designated the entire country of iran as the axis of evil the iranians i know talk about this and have talked about it with more and more frequency the iranian military planners, they know every inch of where every american has been in the middle east and not just americans, but our allies. every desalination plant in the united arab emirates in saudi arabia every embassy, every business. the iranians know that territory extraordinarily well it's a country of 85 million people, highly educated, a really developed country in many, many ways, and they can mobilize millions of men between the ages of 18 and 35 very, very quickly. >> and to that point when you say this is a country that has been preparing for a possibility like this for years, preparing how? what would this look like?

we keep hearing the term asymmetric warfare today on the heels of this strike >> well, iran has both an incredibly developed conventional military capability they have millions of men that they have currently under arms and can call up very quickly they've developed an indigenous military force with missiles, ammunition, all sorts of guns and every type of military armament that other very developed countries have they've created that indigenously. on top of that, we have developed networks all over the region and really all over the world, but first and foremost in the region general solesoleimani, the genel who was killed, me personally and everyone in the revolutionary guard developed these networks whether they're in iraq, turkey, lebanon, syria, yemen, saudi arabia itself, the united arab emirates throughout the region, iran has

these type of networks and they constantly surprise the united states in their capability pi capability i would argue that iran is perhaps the most capable foe that the united states has set to go to war with since world war ii we're really in for a quite stunning year ahead. >> we should mention, we are expecting in fact to hear from the president fairly soon. we will join him in fact, he's starting now let's listen in, speaking in florida. >> at my direction, the united states military successfully executed a flawless presicision strike that killed the number one terrorist anywhere in the world qasem soleimani. we caught him in the act and terminated him under my leadership, america's policy is unambiguous to

terrorists who harm or intend to harm any american. we will find you, we will eliminate you, we will always protect our diplomats, service members, all americans and our allies for years, the islamic revolutionary guard corps and its ruthless quds force under sole ma soleimani's leadership has injured hundreds of u.s. servicemen the recent attacks in iraq that injured four american servicemen very badly as well as a violent assault on our embassy in baghdad were carried out at the direction of soleimani soleimani made the death of innocent people his sick passion, contributing to terrorist plots as far away as

new delhi and london today we remember and honor the victims of soleimani's many atrocities and take comfort in knowing that his reign of terror is over. soleimani has been perpetrating acts of terror to destabilize the middle east for the last 20 years. what the united states did yesterday should have been done long ago a lot of lives would have been saved. just recently, soleimani led the brutal repression of protesters in iran, where more than a thousand innocent civilians were tortured and killed by their own government we took action last night to stop a war we did not take action to start a war. i have deep respect for the

people the iranian regime's aggression in the region, including the use of proxy fighters to destabilize its neighbors must end and it must end now the future belongs to the people of iran, those who seek peaceful cooperation. not the terrorist war lords, who plunder their nation to finance bloodshed abroad the united states has the best military by far, anywhere in the world. we have the best intelligence in the world. if americans anywhere are threatened, we have all of those targets already fully identified and i am ready and prepared to take whatever action is necessary. and that in particular refers to iran under my leadership, we have destroyed the isis territorial caliphate and recently americans special operation forces killed

the terrorist leader known as al baghdadi the world is a safer place without these monsters america will always pursue the interests of good people, great people, great souls while seeking peace, harmony and friendship with all of the nations of the world thank you, god bless you god bless our great military, and bless the united states of america. thank you very much. thank you. >> mr. president, mr. president -- you say you -- >> the president of the united states there speaking in florida at mar-a-lago, addressing, of course, the assassination of soleimani overnight, describing him as the number one terrorist in the world saying that he had made the death of einnocents his sick passion. let's outline that this action was not in order to start a war and not seeking regime change,

underlining, ever, that the u.s. is ready and prepared to take whatever action is needed. eamon javers still with us, as is hillary mann leverett >> i think that last point that you made was the most significant, that we heard from the president just now, suggesting that the united states does not want regime change in iran that point had been a little bit fuzzy after we saw john bolton tweeting earlier today that he did want to see regime change in iran that was a former official suggesting that. now he's saying that his policy is not to have regime change in iran also suggesting that he's willing to take whatever action is necessary with regard to iran clearly, a warning to that nation, as it contemplates whatever military response it is working on to this attack. the expectation among the sort of foreign policy expert class here in washington is that the iranians will feel they have to

do uh something militarily to respond to this. the question is, what will they do and where will that happen? what form will it take will it be military? will it be kinetic, as they say, or some kind of a cyber strike or strike in the region. all of that unknown, but the president sending a clear message to the iranian leadership that he is prepared to respond in kind depending on what they plan to do next. the president saying that he is a friend to have the iranian people, but soleimani was wound of the world ea's worst terrori and should have been dealt with a long ago >> i want to bring hillary mann leverett back in the conversation i want to get your reaction to the president's comments just now, including those about the fact that we do not seek a regime change, but that targets are fully identified and they're ready to take whatever action necessary based on how iran reacts to this

>> my reaction to both what the president has just said and from having spoke to those at people at the white house is that the president is very much focused on domestic politics and this decision was taken in a very hasty, rash way. the concern very quickly developed over the past week, it was almost shock that iraqi militias could get so close to the u.s. embassy in baghdad, could essentially storm the u.s. embassy in baghdad, burn it down, and president trump would be looking at his own benghazi moment that time back in 2012 when the u.s. diplomatic compound in benghazi, libya, had been stormed and our u.s. ambassador there killed both president trump and his 2016 campaign, and even more significantly, secretary of state pompeo, when he was a congressman, they used that incident to vilify then secretary of state hillary clinton and president obama as feckless leaders that didn't stand up for americans my understanding is that

president trump and secretary pompeo were scared that they would have their own benghazi moment with the embassy -- the u.s. embassy being stormed in baghdad. and they rushed 750 u.s. troops there to prevent that from happening. and they have now -- they're now sending thousands of more troops this really puts president trump in a corner. he now has to justify legally that he took this actionbecaus of some imminent terrorist attack that general soleimani, the iranian general, was going to carry out but general soleimani is a strategic planner. he's not the person that does -- plans every incident or goes down to the minute details he's not the person who would have been planning any particular incident. he's the strategic planner for iran so this idea that he personally was planning some imminent terrorist attack, that really doesn't hold water i think they're trying to backpedal now to come up with a legal justification, where their concern was really much more

april. my concern, as someone who looks at political risk is that their political concern of having another benghazi has opened the door to have an all-out regional war. >> we hope that went be ton't b case, but thank you for your time still ahead, we'll have much more on the rising tensions in the middle east and the impact on your money when we speak with william cohen and council on foreign relations president richard haass. >> after the break, tesla's a bright spot hitting new highs. what it means for investors in the new year that's coming up next. prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.

welcome back to "closing bell." tesla hitting all-time highs phil lebeau has more in chicago. >> 360,000, the number tesla needed to hit for full-year dlo deliveries and they actually came in a little better than expected, full-year deliveries at 367,000 now the attention shifts to the model 3 in china they will be starting deliveries to the public. these were ones that were dloif delivered to employees the price has dropped about 9%, because there are now subsidies in china and in terms of tesla and you take a look at this chart here,

look at the stock. what a run this has had. we'll get the full-year 2020 sales guidance when they report earnings likely by mid-february. one last thing, guys, when you look at the market cap of tesla versus the other u.s. automakers, tesla now tops $80 billion. that is the market cap for tesla, above $80 billion there you see gm, ford, and fiat chrysler, far lower market caps. guys, this is not something people expected just a year ago when tesla had a lot of questions about the model 3, ramping up deliveries and productions. but clearly, a blowout end of 2019 for them. >> i guess apply the same multiple, though, phil, to the others, and you've got a slightly different chart there >> you're right, absolutely. you're right look, i don't think people expected tesla ever to have the third largest market cap of any automaker in the world toyota is number one, then you have volkswagen. but by the way, tesla is nipping at the heels of volkswagen

volkswagen is like $88, $89 billion. so they're not far away from volkswagen >> phil, thanks so much for that jim, what's your take on tesla >> here's the thing. he brought up the multiples. so place that same valuation on the other car companies. let's take a whole lot of these big cap companies, particularly the tech companies, and you have stocks that have moved over the last six months from 150 to 300. then you look at the multiples and say, how are we going to push this any further? the other thing they need to be aware of, i don't care if it's the company you're talking about, and they haven't been through a correction, you better be careful, because most astute investors, i know, particularly hedge fund guys will wait until there's a consolidation. when you're buying a stock that looks like that, you've got a lot of people that could step in

and take profits right after you. you're in for a big air pocket >> the broader market down about 211 points about 0.6% on the s&p. stocks are falling from record highs after the military strike in iraq ratchets up tension in the middle east. plus, weak data from the u.s. manufacturing sector rekindles fears of slowing economic growth and the fed minutes show some are showing that low rates may encourage too much risk taking by investors >> it's time now for a cnbc news update we go to sue herrera for that. >> here's what's happening at this hour, everyone. the senate was gavelled into session after the holiday break. and senate majority leader mitch mcconnell took to the floor to celebrate the operation that resulted in the death of military commander, qasem soleimani. >> for too long, this evil man operated without constraint and

countless innocents have suffered for it. now his terrorist leadership has been ended >> a federal judge has allowed an indicted associate of rudy giuliani to provide data and documents relevant to the impeachment proceedings against president trump to the house intelligence committee lev parnas was arrested last october on campaign finance charges. and ten people, including five children, were hospitalized after suffering carbon dioxide poisoning in jacksonville, florida. police say the ten were inside an apartment where a charcoal grill was being used you are up to date that's the news update this hour wilf, back downtown to you >> sue, thank you so much for that see you again next hour. but now let's get over to mike for the second installment of the dashboard. >> i could have taken it straight from sue, but we can do it this way, as well we've talking about the relatively contained risk off response today in the equity

markets and it also applies to the bond markets the yields are staying on somewhat higher ground this is a one-year chart the significant thing here is that you have these series of higher lows that's preserving this up trend, not to get too charty on you, but that basically tells you it's not at the moment at risk of losing this yield rally, which has obviously come as people got more confidence about the economy, we got out of this idea that it was going to be an imminent recession that seems like it's okay, it's in tact, not too far from breaking that trend. but so far, it's okay. look at the two-year treasury yield. this is a little more sensitive to fed expectations and what the fed might do next. and it's something similar, but i would say it's actually closer to kind of breaking back below this recent high i don't think it's a critical moment nobody is saying the fed will be forced to ease, although the direction of surprise will be probably more ease than not. it's also helping to keep the yield curve a little bit steeper. this isn't the way you want to do it with the short-term yields

going down more than longer term yields are going down. for now, it's a pretty steady, firm response by the bond market nothing too much additional to worry about. >> after the break, a closer look at the energy stocks to watch as tensions ramp up in the middle east. "closing bell" back in a couple of minutes plp blp

. welcome back to "closing bell." oil prices getting a boost as tensions rise between the u.s. and iran joining us now by phone, pavel molchanov with raymond james thanks for joining us today. in terms of the move higher we've seen in crude, how sustainable is this? and how likely is it that we see some sort of counter reaction from iran that actually disrupts supply >> well, the key question is,

indeed, whether iranian retaliation will cause a physical display disruptisupply. we have seen this movie before, last september, iranian backed hewi houthi groups attacked oil fields and shut down supply and that was the biggest supply disruption in almost 30 years. if iran were too play that card aga again, we could see a repeat of that the ultimate would be if iran were to try blockading the strait of hormuz, because one sixth of the world's oil supply, about 15 million barrels a day goes through that every single day. that would be an extreme reaction it would crush the iranian economy. classic example of cutting off their nose to spite their face but nonetheless, that is in the realm of possibility >> to what extent is that

likely, versus military response in your assessment >> it's not likely, precisely because it would have the effect of crushing iran's own economy iran would be completely cut off from all international trade, oil, and otherwise, so it seems very remote possibility that the iranians would want to pull that, you know, play that card, unless their back were well and truly to the wall. you know, more like, tit for tat retaliation, perhaps attacking, you know, u.s. bases in saudi arabia or afghanistan or turkey. you know, something along those lines. whether directly or using regional proxy groups controlled by iran. that would not cause any direct effect on oil supply, but it would keep the risk premium

evaluated for the foreseeable future >> question on the actual stocks that could have the most exposure are there names, particularly i guess among some of the integrated oil majors that if you see these tensions really begin to ratchet up and see impact on the actual energy infrastructure in the region, that could really feel the effects of that. >> the obviously is saudi aramco which just went public last month. as far as u.s. or european oil companies, they do not typically have significant middle eastern exposure certainly, there are some companies in qatar and azerbaijan, but generally speaking, their assets tend to be more western hemisphere, europe, australia. i will say this. all of the companies that have oil production outside the middle east would stand to benefit the longer this risk premium stays high

so permian basin or north sea, australia, indonesia, russia, it really does not matter the longer this geopolitical tension remains as high as it is, the higher oil prices will be, even without a physical supply out aage. >> pavel, thanks for joining us. we have 21 minutes left in the session and currently down by 234 points on the dow around 0.6, 0.7% now a little bit more than that. 0.8% on the dow percentage terms. up next, we've got your last chance trade >> plus, we'll break down the geopolitical risks and economic impact of the air strike with former defense secretary, william conew hampshire, and counsel on foreign relations president richard haass. they're going to join us that's coming up on closing. with a better way to track where you spend. a new level of privacy and security.

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♪ ♪ ♪ don't get mad. get e*trade, dawg. 18 minutes left of the session. time for the last chance trade what have you got? >> i like bioteches this year. i like them on corrections and i think you have to be very careful buying individual names, because they can be very news driven and volatile. use that volatility to your advantage. buy the biotechs, maybe the etfs if you don't want to go out and hunt and peck for individual

names. buy the biotechs on strength, not on weakness. >> it's interesting that you say this that we are in this election year and drug prices are once again in focus. >> that's why i like the biotex. i think they'll be more immune to political pressure. the drug companies will be under a lot of pressure, but the biotechs are generally going to be research and development heavy and they usually are not attacked by the politicians, so i think they'll be immune. health care is an area that's underperformed, a lot of it is, because of political reasons, but a lot of biotech companies have great drug pipelines, great earnings pictures moving forward and i think we could see some big moves in the sector this year >> all right the one to watch when you have names like the ibb, biotech etf down 1% today in this broader market downdraft we have got less than 17 minutes before the bell. here's where we stand with the major averages, all lower, though off the lows of the session. the dow is down 225. s&p is down 0.6% and the nasdaq is also down about 0.6% the transports are the big

underperformer, down about 1%. up next, we'll bring you up to speed on everything an investor needs to know in the final minutes of tdera we'll take you inside the market zone that's coming up next. stay with us legendary terrain in telluride,

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you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading commission free today. 13 minutes left in the trading day. we are now in the "closing bell" market zone, commercial t-free coverage of all of the action as we head into the close >> mike santoli is here to to break down these crucial moments of the trading day and we have jim lacamp from morgan stanley here as well. let's kick things off with how

markets are trading following a military strike. >> the risk of a retaliation from iran is being reflected in higher oil prices that came very close to breaking above $70, right now in the high 60s, 68.63. the big question is if iran attempts to disrupt the flow of oil through the strait of hormuz or take aim at iraq, the fifth largest producer of oil in the world. both options could lead to substantial supply delays and higher shipping costs. the energy producers like bp, exxonmobil and chevron initially tradered higher. since then, some of them have given up their gains and exxonmobil confirming that it is tightening security over fears of retaliation at one of its refineries in iraq >> still some way off from when this would start to be a fear for the economy? >> i think so. in terms of price, i think so.

most of 2018, we were above 70 or thereabouts in terms of crude oil. so right now, it's a manageable expense. even in the consumer price index, it's not a particularly heavyweight. so i don't think that's the necessary concern at this point. although the energy sector obviously has not been able to capitalize on this commodity move >> in the meantime, you had that weaker than expected ism manufacturing number as well, and i can't help but think that some of the macro data could put a lid on the move higher in crude as well. >> i'm glad you brought that up. you think, maybe it's a perfect storm. a dollar that was recently weak, a rig count that was down. but if you don't get global growth, you're not going to have a sustainable move in oil prices over a long period of time you can also point to the valuations of the sector and say, in many ways, the sector looks good, but a lot of it banks on this trade deal, creating a reacceleration of global growth, fiscal stimulus

in europe. none of it's happened yet. so i think you have to wait and see there and we think gdp will be somewhere around 1.8 and that's not going to really beget higher oil prices. >> we're down 0.7% on the s&p 500. only one sector in the green, that's real estate everything else is in the red, including airline stocks bob pisani is diving into those for us >> and airlines are weaker on a somewhat knee-jerk reaction to the higher oil prices, but this is a very different world than it was 10 or 15 years ago, some of the big airline stocks down 3 to 4%, american, delta, all off of their lows. there is an etf for this, we had a nice move up, up 15 to 20% in the fourth quarter and there were some hopes of trade talks improvement and a better global economy. there's the fourth quarter for that jets, that global jet etf, but it's a different world, because the operating expenses are a lot different than 10 to

15 years ago today, it's only 10 to 15% labor is the biggest component 55% goes other things. a very different world than ten years ago. >> bob pisani, thank you mike, i think about every component of the dow transports right now is in the red. it's down almost 1%. how much of this is iran and how much of this is just the fact that this is an average that, quite frankly, has lagged everything else up until now >> it has lagged it suffers on a general day where people are suffering a little bit and higher energy prices are not the main mover, but it doesn't help it came into this, but they have been up off the lows airlines have been a little bit of a struggle. they had a 20% move as a group,

but i think they get a margin squeeze. a little bit more capacity and all the rest of it i don't think it's basically an economic bellwether cause, saying, oh, no, people are woif worried about travel industry. >> jim, your take on these names? >> again, it goes back to a global growth story. there's an expectation that we're going to get it, but it's really slow in coming, and there's really not a lot of hard evidence that it's happening yet. we are expecting fiscal stimulus again out of europe. that could boost certain parts of the global economy. we think it's going to be sluggish so for airlines, that are naturally volatile and a kind of cyclical group, i think it's going to be tough to play these this year. >> yeah. do you put any stock in dow theory or do you think that's just -- >> i'm glad you brought that up, because a lot of people now are using the transports as a surrogate -- i mean the information technology stocks as a surrogate for the transports, saying a better reflection of

global economic is the semiconductor index. they're using the dow and the stocks instead of the dow and the transports and i think there's a lot of validity to that >> interesting all right. u.s. military action in the middle east has raised the chances of an outright conflict between the u.s. and iran, according to capital economics that firm could shave half a percentage point or more off of global gdp earlier today on cnbc, fed president charles evans and also robert kaplan weighed in on the escalating tension and the political economic fallout >> the fmoc has positioned us well for 2020. we've got some risk management positioning in the current setting. and i think it's one where inflation can go up above 2% that's without any oil price that put another story into play >> in terms of energy production, we're a lot more energy self-sufficient so because of that, you'll see these events in the middle east.

they'll have an effect, but it's going to be more muted than we might have seen historically >> meantime, mike, we did get those fed minutes. looks like risk of recession seems to have dulled quite a bit, at least from the fed standpoint >> for sure. and most of the commentary within the minutes is that the committee is very comfortable with the fed doing nothing from this level and the real hope and the expectation and the intention, all of those things come together, we hope that the data coming in substantiates that stance and you know wing the market should be good with that, too. there was a little bit of commentary about some members saying, looking, we don't love the idea of promising low rates for a long time because of financial balances that could develop. but that's really almost like a standard disclaimer, i think, that central bankers will throw out. >> they've expanded their balance sheet. and you can tie the move in december to right after they expanded the balance sheet and so a lot of people are wondering whether the repo market is going to continue to cause the fed to be expanding

the balance sheet. and while it may not be qe, sure looks like it, breathes like it, walks like it and talks like it. >> it certainly coincided with that move. but also coincided october 11th with the, hey, we have a trade deal you can't draw the line between the balance sheet and people buying stocks very directly. maybe it's an atmospheric condition that has helped, at least. >> we've got five minutes left we're down 219 points on the dow. shares of retailer "l" brands are jumping after an upgrade at bank of america. courtney reagan's got the story for us >> so bank of america upgrading victoria's secret and bath and body works parent "l" brands from buy to neutral. shares are down since last year, but bank of america says the inexpensive valuation is part of the attractiveness here, along with that high dividend, 6.5%. the firm kpauls bath and body works, quote, one of the best stories in retail with its sales trend and contribution to the overall total. bank of america calls for a potential stabilization.

but then in a twist, they're suggesting to sell "l" brands on the ally, spurred shares still up more than 7%. back over to you >> court any rney reagan, thank. >> it's been a sense of two retail sectors names that continue to outperform and have outperformed versus the ones that have done poorly and are continuing to sell off >> big box omnichannel, everyone loves it they have a higher valuation than discounters, but "l" brands, if you have a lot of mall stores and are leveraged towards clothing, gap or something like that have not worked this is an interesting call, because victoria's secret has been so weak for so long that now bath and body works is a more material part of the whole company. >> which really says something >> which turns a positive out of a negative it is interesting, these stocks look really cheap, but it hasn't mattered for a long time >> how are you positioned in

retail in the year ahead >> it's a real bifurcation and brand names have a real thing to do with it they're talking about brick and mortar sales overall retail sales have really been pretty good so i'm constructive on very, very select retailers. particularly those that have very strong brand loyalty. >> mike, back to the broader markets. the level of selling we're sigh today, down 0.6% on the s&p 500. is that all because of this strike in iraq on an iranian leader, or is there some profit taking >> that was certainly the catalyst and the excuse. there's no doubt about that. and you can see the parts of the market that are backing off are manufacture about curtailing of risk appetites that may have gotten a little bit more overheated but this is a market that was perfectly set up for a 60 to 70 basis point pullback on a given day, on no news. that was the push that we got from the news overnight. but in really, this is pretty much par for the course after we have not had any pullbacks to

speak of in three months >> jim, i see you nodding your head >> valuations are stretched. we're very late in the cycle and have going to be news driven there's geopolitical risk. probably going to be a little heightened we'll be reacting to a lot of things i think this will be a big part of our reaction. >> two minutes to go. mike has more on the market internals. >> they're not really all that skewed to the negative side, despite the fact that we started down pretty substantially and have been negative all day you see on the new york stock exchange, slightly more decliners than advancers, but you can see there's not really a wholesale comprehensive selling going on under the surface and then take a look at the last month's action in the s&p 500 against the equal-weighted version of the s&p this shows the s&p is outperformed by about a percentage point that's the megacap stocks are doing more than their share to hold up the index. keep an eye on that relationship still both positive, but

definitely the big guys working more and volatility index, the vix, over the last year, it's gotten up to above 14 right now so a little bit of anxiety building, maybe there's a hed hedging stwinhedg hedging instinct as we come into this week at an all-time high. >> let's get a check in on the nasdaq frank collin >> the nasdaq on pace to break a two-day win streak, kind of putting a cap on a holiday index. tesla the best performer also benefiting from concerns that fuel costs might get higher after that iraq attack trade -- tech names trading higher as we approach the closing bell the ibb and smh etfs both trading down about a percent f.a.a.n.g. names trading lower still facebook and alphabet trading near all-time high now over to bob pisani at the new york stock exchange.

>> we're ending not far from the lows of the day, 268 points or so, the lowest point for the dow jones industrial average metal stocks, the emerging market stocks, bank stocks, all weaker today oil stocks mixed there's the "closing bell" dow jones industrial average ending down 220 points for the day. if you're just joining us, welcome to the "closing bell." i'm wilfried frost and i'm morgan brenna, along with mike santoli. >> let's dmcheck in whether the markets finished lower the dow down 0.8%, as was the nasdaq two sectors within the s&p managed to eke out some gains. utilities and real estate, materials and financials, down more than 1%, as was technology. >> and looks like the s&p and the dow both finishing the weak

ever so slightly lower as well, while the nasdaq composite did hang on to its gains fractionally joining us now, liz young, a director of market strategy at bny investment management, and still with us, jim lacamp, senior vp of investments at morgan stanley but first, we go to mike santoli, for a look at what we saw in the market today, especially given the fact that still year-to-date, only two trading sessions, but we didn't give up all the gains in the rally we saw yesterday >> not quite down for the week, but definitely not giving up all the gains that we saw yesterday. the way i would characterize it is this is a little bit of a test of a market that came in with a lot of momentum to this year and to arguably a little bit stretched to the upside. you had a little bit of complacency in terms of trader sentiment. it could have used an excuse to back off more than it did. it did not apple down 1% not because of anything going on in the middle east, but because it was the leadership stock one year after that big collapse it had and i hat a lot of profits in there to

be taken >> liz, what's your take in terms of the set-up we have for these markets here ahead >> for the year ahead, i'm still pretty optimistic and i tend to not be an alarmist. so what happened today is an idiosyncratic event. that's something that a lot of traders should take advantage. so going through 2020, we're probably going to have a lot of headline risk. and things that come in and shock us day to day, it's going to take more than this to scare investors out of the market. >> geopolitics could be something that evaluates volatility >> and i think one of the biggest risks that investors face right now is that going into -- or the end of 2019, everything was looking so good, and everybody was so optimistic that i'm not confident that everyone was diversified properly so once we go through parts of 2020 and we have our own political risks here and everything that's going to go on around the globe, you have to have the right kind of diversification in a portfolio to withstand that. but you still have to stay fully invested

>> i want to get into that a little bit more, too but first, jim, i want to get your take on the market today. perhaps not surprising to be -- we're not ending at the lows of the day, but perhaps not surprising to see some of this risk come off the table, given the fact that we are going to weaken >> there's still an underlying bid in this market and all of our sell-offs have been rather contained. one of the reasons for that is there has not been an irrational any exuberant market at all. we may have had some complacency, but retail investors have been selling this market all year and buying bonds with interest rates at all-time lows you don't have a lot of people that are giddy about this market at all, so you've seen people step in and buy when the market is down. that being said, i agree with liz, we need to diversify this year, values should do better versus growth, which it hasn't done in a long time. i think the dividend players are going to be pretty attractive names to be in, emerging markets, and i think energy again should be an okay sector this year on corrections

>>. >> all right, with that diversification word, when i ask you, what does diversification look like to you, what are you telling your clients >> diversification on a broad asset class level, number one, looks like the stock and bond mix. and you have to have the right kinds of bonds in a portfolio to actually offset stock volatility and what that is is traditional duration it's not high yield, it's not leverage loans we still see quite a few risks in that space. so you have to have traditional bonds in there, which are going to feel like a ball and chain, a lot of times corporate investment grade is a place to be. and on the equity side, i think it's okay to own cyclicals and growth i don't completely buy into the value is going to start outperforming, just because it hasn't for a long time i need more proof than that. and we believe that there's going to be a trade deal in 2020, whether it's in january or at least by summer if that happens, you really would have to make the case that financials would somehow do better than technology and i can't make that case >> so let me challenge that just a little bit for you, because we

have seen some evidence. in the fourth quarter, we saw financials move, saw energy names move these are a big part of the value index. secondly, technology has already priced in a whole bunch of growth if we look at where valuations are, particularly on large cap technologies, man, they're priced to perfection so how are we going to play that out? at some point, we are seeing some moves with value. we're seeing very stretched valuations on growth how do you reconcile that? >> but the thing is, just to step in quickly, when have we been at all-time highs for the s&p and value just grabs the baton and goes that's kind of not the why -- >> when was the last time you saw a ten-year bull market of growth it's been a while. >> but you have to have a nasty correction in the jofrl market usually to surface that rotation >> i agree, but we had a lot of leadership out of utilities skpf consumer staples so this is not your grandfather's market at all. this has been quite a different rally, all the way through >> but we had that leadership,

because of a fear trade, right fm wh when investors are afraid, they're going to buy consumer staples and utilities. financial started to recover because a lot of that fear came off the table as well and we saw the yield curve steepen. that makes sense i'm not saying the financials won't do well, i'm just saying if we have a trade deal in 2020, technology still does better health care might have some volatility, another big part of growth drivers there, but i don't think that health care is going to be the topic, the biggest topic in the election. >> everyone, stick with us let's get back to eamon javers in washington for the latest on the u.s. military strike that killed a top iranian general eamon? >> yeah, wilfred, the president offering his first on-camera comments about that u.s. strike that killed that iranian general in baghdad last night. the president saying that qasem

soleimani's reign of terror is over >> we took action last night to stop a war, we did not take action to start a war. i have deep respect for the iranian people they are a remarkable people with an incredible heritage and unlimited potential. we do not seek regime change >> so wilfred, the people there saying that the united states doesn't seek regime change in iran that despite what we had seen earlier in the day from john bolton, the former national security adviser who said that he personal did. but the president also sent a warning to the iranians, suggesting that the united states is prepared to respond militarily to any provocation from the iranian side and already has targets picked out if they need to take that action >> eamon, thank you very much for that and keeping us updated throughout the day mike, back to the impact on the broader markets. clearly, we did see a bit of pressure on yields, the ten-year back below 1.8 it's been rare for us to see equities rally if yields have

been under pressure. >> it has, generally i think yields have to at least stay firmly bid in order for equities to make fresh headway but i think it's okay at the moment, if it doesn't go below about 1.7 on the ten-year. that is very true. i think this is definitely a little bit of a gut check for the risk trade and that's what's going on but i think the market is probably correct in taking the probabilities and saying, look, over the last 50 years, how many skirmishes and prof indicativoce there been in the middle east. how many have been very sequential on a market basis and only a couple have the odds say that perhaps this is nothing to start pricing in a rash way right now >> jim, we saw investors move into treasuries today. also move into gold. 2019 was a great year, relatively speaking for gold does that continue >> if you look where interest rates are versus inflation, that's generally a bullish situation for gold if you look at the gold miner's

index, they had a pretty good rally in the fourth quarter. i don't know what the upside is there really i don't see a big reflation happening. we might see a little bit with stimulus around the world, but i don't see a big reflation, nor do i see big deflation those are generally your themes that drive gold. so i'm okay with gold, just not terribly excited about it. >> liz, what about the dollar? where do you see that going in the year ahead >> the dollar for 2020 we see having a softening bias. and that doesn't have a ton of scientific explanation, but it's more about sentiment, where the dollar stayed strong in 2019 where there was really no other option and now because some of that fear has come off the table, we expect europe to have a little bit of a revival some of the other currencies are going to do well by comparison, which would put a lid on the dollar >> thanks for joining us up next, former defense secretary william cohen and council on foreign relations president richard haass will weigh in on the rising tensions between the u.s. and in.ra they'll join us when "closing bell" returns in 90 pekds.

. welcome back a u.s. air strike in iraq overnight killed iranian military official qasem soleimani. joining us now, william cohen and richard haass, president of the council on foreign relations. a very good afternoon to you both thank you for joining us let's start on that main topic, aimed at stopping a war, not

starting one what is the risk in your view, richard, that that would have the opposite effect? >> my own view is iran will feel compelled to retaliate in one way or another, at one time or another, in one place or another, indeed, in several. so i don't think this stops a war. it may have stopped the specific attack, but it adds further fuel to the fire, which by the way was started when the united states got out of the 2015 nuclear accord, when we committed economic warfare against iran they have been pushing back militarily now we're exchange military action so this was -- it's important not to see this as somehow an isolated incident, but there's been a dynamic here that's been in place for some time and i think it's highly unlikely to end here. >> secretary cohen, how do you see it you know, cowen, for example, this morning, wrote that this marks a shift from a proxy war, a proxy situation to a much more direct conflict.

is that the way to think about it >> i think so. i think this is a real inflection point i would disagree with the president to say that we've taken action to stop a war we may stop a given individual, but we're not going to stop iran and so i think as richard has said, they are very likely to strike out in various forms and fashions in the foreseeable future and then the question will be, how do we manage that escalation of conflict? and i don't think that president trump is in the business of managing escalation. i think this was a significant one. first thing i think that has to be done is he and his team have to go to capitol hill and explain exactly what caused -- whether there was, in fact, an imminent threat, the scale of that threat, and why this became imperative that soleimani be taken out. we've looked at him for a long time, he's been a threat for a long time, but you have to say, why now? and if the president's

intelligence is correct, i think he'll enjoy support for a tactical success but i think we have to then ask ourselves, what is the long-term strategy what is plan "b" what happens when they respond and how do we manage that, et cetera so i think it's tactically successful, for the most strategically, i have yet to hear a strategic plan laid out in terms of what we're trying to achieve with iran. >> secretary cohen, if things do escalate from here, who would the key players that might side with iran, that could make things increasingly difficult for the u.s., whether in the region or further afield, like russia and china >> reporter: well, russia and china certainly will be opposed to us having taken this action or escalating it even further. but you have for military and paramilitary groups in iraq, certainly in iran. you have them in lebanon with less bla

so there are any number of supporters of the iranians throughout the entire crescent in the gulf. now, uae will be happy with this saudi will be happy with this. the israelis may be happy with this, in terms of taking out soleimani. but the risk has gone up substantially, i think, in the region and i think we have to protect our people in syria in particular we have a very light footprint in syria and i think those forces there have to be beefed up substantially. sending part of the 82nd airborne into kuwait for a rapid reaction force, that will be helpful. and i think we have to be concerned about all of our folks in the region and also, i worry about our embassies and other facilities in africa as we've seen terrorist action take there in the past >> richard, we've heard from a number of countries today on the heels of this air strike one that i don't believe we have heard from, though, yet, is

russia how does russia figure into this and what does it mean for that country? >> well, i think for countries like russia and china, this is a great strategic benefit. once again, the united states is pulled into the middle east or in this case pulled itself into the middle east. it's a great strategic distraction. we'll have fewer resources, less attention, less military force to devote to europe. we'll have less attention and resources to devote to asia. north korea will probably be happy with this. this is a strategic distraction, at a time, it's the last thing that we need so i think for russia, this is simply another -- it's been another good day for mr. putin >> richard, during the president's address an hour or so ago, he said, we're not seeking regime change in iran. he followed that sentence, though, with the word, "however." to what extent could this, whether intention or not, lead to regime change how many people in iran, how many iranian citizens will be celebrating this action?

>> my own analysis is this will not lead to regime change. the iranian regime is quite resilient, quite resourceful it's willing to use force to protect itself regime change, at the end of the day, is not a strategy, it's a wish it's a hope, it's not something to predicate u.s. foreign policy on and by the way, i do think u.s. policy has been regime change. what we did was put into place all sorts of economic pressure, and we never provided iran with a diplomatic off-ramp. we never said, we'll reduce the sanctions if you do this limited step on the nuclear side or this limited step on missiles that would have been serious diplomacy. so i actually think u.s. policy was and continues to be regime change and i don't think it can succeed. >> secretary cohen, do you think this has an impact on the u.s. defense budget, especially as we turn to the fiscal 2021 proposal that's expected out next month and how do you think it adds to,

if at all, priorities and what the u.s. would be willing to field in terms of weapons systems? >> i think the congress will give the president whar the president and the administration need in the way of supplying additional resources to the defense budget i gagree with richard, however, it's going to shift our focus away from europe and our friends in europe. and by the way, this is one of the things that former secretary of defense jim mattis was saying, you need to nurture your allies and the first thing the president is now doing is calling upon our allies to help us in the region so we've got to keep our focus on our allies in nato, in the eu, as well as those in the jeen region from uae and saudi arabia and others i don't think it libit will be a question of a deficit of resources. the question will be, what are we going to defend what are we going to anticipate now that we'll have to respond to so i think we lose focus as a result of this

we get tied down in the middle east and this is one thing i think we have brought upon ourselves, as richard said we brought it upon ourselves by having an on again/off again policy where the president says, i want to get out of afghanistan, i want to get out of syria wi, i want to get out f iraq and you send those signals and fail to respond to when they're attacking you, when the iranians attacked saudi arabia's oil fields, we did nothing so then the question becomes, maybe iran is tempted to do a little bit more, which they did or were planning to do so i think we have caused some of this ourself with having an inconsistent or nonexistent policy in the region by sending a signal we're out and then in sort of, and that only added to the confusion. >> to follow up on that exactly, mr. secretary, to what extent was this stronger than any one expected action by the u.s. a result of lack of action, whether it was relating to turkey's actions in syria or as

you said, iran attacking the saudi oil refinery >> i was disappointed that the president didn't react with military reaction when the iranian launched those attacks on saudi oil fields. it may be for the criticism he was getting, in addition to having tweets going back and forth between khomeini and him, that he felt that he was being toyed with or ridiculed and that may have contributed to it but what was the intelligence? how imminent was the threat posed to our people in the region and did it require immediate reaction i think that is the first thing they'll have to satisfy the congress on. and i'm sure that the chairman of the joint chiefs and the joint chiefs themselves will support what the president has done, and not for political reasons as some have suggested about wagging dog. i don't believe that and if that were true, i would say that every member of the

joint chiefs should step aside so i don't think there's any merit to that. but i think they've got to explain to the capital, to the leaders on capital -- at for very least the leadership, here's why we did. i know it was a step up, but we had no choice under the circumstances. >> yeah. well, thank you both for joining us great to have your insights. william cohen and richard haass, as the story continues to develop. thank you. it's been a year since apple ceo tim cook cut the company's revenue guidance, but the stock is up, get this, 109% since that warning. up next, we will break down the charts to see if the sck stotill has more room to run, when "closing bell" comes back. because it's tailored to you! take the personal assessment and get matched with a proven weight loss plan. find out which customized plan can make losing weight easier for you! myww. join for free + lose 10 lbs. on us.

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welcome back let's send it over to mike santoli for his third dashboard of the day mike >> morgan, what's a hilltop orch orchard? it's a place where apples go to the sky. an incredible accelerated extent, recently august, september, barely even happened in terms of a pullback for people which did happen in the broad market this leefs it in a trivial extended position. it was down about 1% today,

taking a rest at that $100 market here's a chart showing the distance of the stock price from its 200-day average. so when this is high, it means it's really accelerated well above its longer-term one-year trend, from jonathan krinsky at bay crest partners it's about 33% above that 200-day average. that seems like an extreme, although it has been more extreme in 2012 when it previously made this crazy sprint to at the time $1,000, i believe, was the price, because it had been prior to to the seven for one split. so it has gotten more overheated, but not all that much more. on the other hand, street sentiment, analyst consensus on the stock is still not particularly bullish on an overall basis. you saw a couple of price increases from b of a and rbc capital. that's where the target is right now relative to the stock price. it seems like the street is not

yet endorsing this new valuation level for the stock. it's not really a huge majority recommending it. is that enough of a wall of worry to keep fueling the uptrend in apple that's the most important stock. >> and to what extent was that buybacks market cap, not quite to the same extent. >> it's always impossible to identify, but i think buybacks a very powerful part of the apple story, as opposed to the overall market, because we know they can perpetually fund them, they've been aggressive about it warren buffet, as every share apple buys back, it means buffett owns a bigger percentage of this company, because he hasn't really sold any so that means there's this perception of scarcity even if it's not genuine scarcity, a perception of scarcity i mean for portfolios, not as a bellwether of the economy or of the overall market >> mike, thank you, as always. coming up next here on "closing bell," we will discuss the last details about former

nissan chairman carlos ghosn's flight from japan when we're joined by former toyota usa chairman jim press who knows ghosn personally >> and later, find out why a personal shift at the google has led to a exodus. park city, of or the famed peaks of whistler, you've faced the hassle of lugging your gear through the airport. with ship skis, you're just a few clicks away from having your skis, snowboard and luggage shipped from your doorstep to your destination. with unrivaled pricing, real time tracking ship skis delivers, hassle free. ship ahead and go catch those first tracks on fresh snow. ship skis. your skis. delivered.

welcome back time for a cnbc news update with sue herrera. >> hello, wilf hello, everyone. here's what's happening at this hour, on capitol hill, senate

majority leader chuck schumer took to the senate floor, saying the president sidestepped congress in ordering the air strike, which killed iran's top general, qasem soleimani >> the operation against soleimani in iraq was conducted, however, without specific authorization and any advanced notification or consultation with congress. i'm a member of the gang of eight, which is typically briefed in advance of operations of this level of significance. we were not >> actress jane fonda holding her 13th climate change protest in washington. she was joined by fellow actor, sam waterston, who was then arrested by police during the protest. according to the protest website, next week will be the last rally in washington before fonda heads back to los angeles. >> and rapper dababy appearing in court after being arrested on one count of the battery he'll stay in jail until further

notice with no bond. you are up to date that's the news update this hour morgan, i'll send it back downtown to you. >> i feel like every friday, we see a story about jane fonda, the latest, and it's another co-star in her "grace & frankie" show keeping track ere. >> it has an ongoing passion of hers for some time, but she's ending that, because she has to go back to los angeles apparently there's a project there that she's going to be working on so we will see what happens next >> i wonder if it's the next season of that show. sue herrera, have a great weekend. carlos ghosn, the former head of nissan is attempting to clear his name in lebanon after fleeing japan earlier this week, ghosn faces a number of charges, which he denies, including hiding income and enriching himself through payments to dealerships in the middle east we spoke several times to carlos' wife, carol ghosn, where she raised concerns about doing business in japan and the way in which the country turned on her

husband. >> look at my husband, a businessman who saved nissan from bankruptcy, who spent 20 years dedicated to this country and made it flourish and help the economy of japan and they arrest him by surprise they don't even question him and then he spends this much time in a detention center and we still don't know the end results. we don't know if he's going to get a fair trial >> i think we're seeing the dark side of japan ink, where we see this inward closing clfr that is biased to foreigners >> let's bring in jim kress, former president of toyota north america as well as our own phil lebeau welcome to you both. jim, i'll start with you you've worked with and know mr. ghosn personally your reaction to what we have seen unfolding >> well, he's a high-powered ceo. he did recover nissan, he built the alliance he charges globally. he's on his way every day

accomplishing things and the fact of the matter is that this is an example where the cultural differences tweechb the east and the west have really impacted the relations p relationship i think that his rise to fame is a bit of a loss of faith for the japanese and of course if they found some issues that they were concerned about, they're going to use them to try to bring him down now, i don't know anything about the charges or what may have happened hopefully the facts will come out. but he's been waiting too far a fair trial he's been there over a year. and if you take a look at the commented that have been made recently, the trial may not occur until some time in 2021. so i think he was looking at his options and he chose to leave so he could tell his story, clear his name, and maybe get his life back in order. >> phil, to the question of his legacy, when he was in charge at

nissan renault, how successful was he how significant of a leader was he >> he was significant and very successful now, look, some people will look at his success and they'll say, a lot of things that they did in order to gain market share over the years as the renault/nissan alliance grew and one that had greater sales worldwide, a lot of people will say, look, there were heavy discounts that were applied to their vehicles in north america. that's how they picked up market share here in the united states or in canada foryou lo or if you look at other regions, they probably could have been a little bit more successful and profitable if they were a little bit more prudent in terms of how they managed their portfolio make no mistake, nissan was on the verge of going away completely when he stepped in, not only saved frit bankruptcy, but then the alliance flourished from there you can hear the arguments from both on both sides, but there's no doubt years from now, they'll look back and say, overall, was hi tenure successful up until

his arrest and a lot of these things came out? yeah, very much so >> and jim, in your experience, having worked for toyota or a different japanese automaker, was there some level of envy from the japanese, senior japanese officials at nissan that this turnaround has been overseen by an outsider? >> wilfred, that's a great question you've got to remember, in asia, face versus facts. and you've got to respect the people that you're dealing with. and i think perhaps when mr. ghosn gave up the ceo position at nissan, he was a little isolated from what was really going on and the dynamic was that nissan became the high test profit piece of the alliance but was reshared as a part of the total. and there's some resistance there. there is a problem not just for foreigners, but in japan, the

nail that sticks up gets pounded down nobody takes credit for everything he got a lot of publicity and credit for it. so i think that's part of this cultural difference. and what we're seeing is that gap he's fallen in the middle of and that hopefully, through this, there will be a lot of understanding and better communication and coordination between asian and eastern businesses >> jim, should foreign business leaders be a little bit more nervous today than a decade ago for taking a senior executive role based in japan? might they be treated less fairly because they're not japanese >> you know, i don't think so. i think they've got to be more sensitive to the differences and understand that they're in a host country and not to do business the way they are used to doing business. >> and i feel there could be the perception, and maybe there's so the truth to the fact that the

treatment was different, but he was part of the process of uncovering this problem and maybe got some favorability from it but in general, the environment in japan is not bad for formers. it's not bad for executives. in fact, they need more understanding as well, of how the other countries work and how foreigners would operate but i think that this is a reason for us to have more exchange and not be afraid to go there. >> all right gentlemen, thank you for joining us today jim and phil up next, we'll discuss which industries in the u.s. are at the most risk from potential retaliation by iran. "closing bell" will be right back

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take your business beyond. welcome back to "closing bell. cybersecurity strikes higher after the strike in iraq a note from evercorps isi today detailing more than 25 politically motivated cyber actions since 2010, saying, quote, it is likely that the near-term increased tension between iran and the u.s. could

result in reactionary cyber attacks. joining us for more is kate sizini i know you've been writing about this as well what are we talking about in terms of cyber capabilities for iran >> so iran is actually one of the most capable countries as far as cybersecurity goes. and they have a history here in 2012 and 2013, they conducted some very successful attacks against banks in the united states so the financial services sector is really watching this. and those attacks were retaliatory in response to sanctions against iran and so, if you think about the gravity of the issue that we're dealing with here, it's certainly much more important than simply sanctions. so a lot of observers are concerned about this >> and kate, their capability, they built it up, how recently, over how long a time is this something that is sort of unique and proprietary, if

it's that right word, to iran, or are they sort of guns for high in this space around the world? >> a little bit of both. but iran has an advantage of having a lot of people, within the country, who are very good at engineering and some of the different kind of tasks that underlie being very good hackers. and they also, cybersecurity is kind of funny in the sense that when you're a smaller country, you actually have a little bit of an advantage in that you can be a little bit more agile, try different things we see that north korea. iran has a bit of an advantage there. they also have done a great deal of intelligence gathering through cyber means against the united states. >> kate, thanks for joining us much appreciated for more on iran's cybersecurity threat, do check out kate's full article on cnbc.com. coming up next, inside life at google. the tech company's shifting culture dominating headlines over the last week we'll sit down with google's rm hof international

relations and get his take on why he left the company. that's ahead ( ♪ ) hey there! i'm lonnie from lonnie's lumber. if you need lumber wood, lonnie's is better than good. we got oak, cherry, walnut, and more. and we also have the best selection of plywood (clattering) in the state... hey! (high-pitched laughter) man: dang woodchucks! (wood clattering) stop chuckin' that wood! with geico, the savings keep on going. just like this sequel. 15 minutes could save you 15% or more on car insurance.

doprevagen is the number oneild mempharmacist-recommendeding? memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. welcome back google facing more criticism from former executives for its culture, its relationship with countries like china and its treatment of employees the company's former head oaf international relations, ross largeness writing in a new post that the tech giant has strayed from its motto of "don't be evil." he claims that google pushed him out after two years of lobbying the company for human rights program.

he's now pushing for regulating big tech companies like google as a democratic candidate for the u.s. senate in maine he joins us now. very good afternoon to you thanks for joining us. >> thanks for having me. it's a pleasure to be here >> so let's start on the big picture here, of your criticis before we get into specific examples you felt the company in your time there changed from being moral-based and values-based to being purely profit-based. >> yeah, that's exactly right. i was one of the executives in 2010 who was charged with dealing with the china crisis and i helped execute our decision to stop censoring search results with the chinese government that was a moment in my career that was extremely proud of google and of the work i was doing. and it was alarming to me to see the company's culture and its

approach towards human rights issues change during the time i was there. >> there were some specific examples you mention as well, during the article some fairly worrying ones that would suggest that some exhibit executives exhibit racist or sexist traits. is that fair >> there were a number of issues asaw, including a diversity exercise, in which employees were asked to separate into their identities i was in a group labeled homos, for example. we were then asked to list and then shout out into the room stereotypes about our identities i found the whole exercise extremely disturbing, as you can imagine. and when i went to speak with other members of the policy team about their experiences, women of color told he that they had

put in groups called grown people or another colleague had been roeaming around the room trying to find a group that would accept her when i brought this example, this horrible experience to senior hr people at the company, i was accidentally cc'd on an email that said that they should do some digging on me instead, because i continually raised concerns about diversity and inclusion. that was certainly one of the moments when i realized that the company that i had known and had been working for and loved had changed. >> but -- and yet, ross, you were there, for, i believe i'm right in saying 11 years so if things were changing so aggressively in front of you, why did you last so long why didn't you just walk away after four or five years >> well, the incident i just described and my push for a

human formal rights program really occurred during the last two years. so i would say that the changes in the company's culture and its desertion of the don't be evil motto and principles are fairly recent and happened mostly in the last couple of years i stayed on, as long as i could, because i believe in trying to stand up and do the right thing. i was fairly senior at the company. i felt like it was my responsibility to stand up and speak out, for as long as i could. and it was only when the company very transparently pushed me out or tried to push me out as a quote reorganization -- >> they say that their -- >> the company, ross, say they offered you a job on the same pay, on the same seniority leve level. >> yes, this is what happened. as part of a reorganization, they took away my job and my

portfolio as head of international relations. when i complained and spoke up that this was retaliation for my advocacy for human rights and for my advocacy for women and for the lbgtqcommunity, they then offered me another job, which was a sideline job, which had very little portfolio. it was a way of buying my silence. i could have done what many people might have done, which is put my head down, said thank you very much, shown up to work, and twiddled my thumb at my desk >> we lost that shot there with ross, absolutely no intention of losing the shot there. ross lajeunesse joining us we did reach out to google for a response the company said, quote, we've got an unwavering commitment to supporting human rights organizations and efforts. the commitment is unrelated and unaffected by the reorganization

of our policy team, which was widely reported and impacted many members of the team as part of the reorganization, ross was offered a new position at the same level and compensation, which he declined to accept. our apologies also to ross that we lost the signal there towards the end of his final comment >> all right, still ahead, a major manufacturing divergence mike heads back to the telestrator with a look at this key economic indicator and what it can mean for the broader market my dad joined the navy and 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.

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welcome back let's send it over to mike santoli for his final dashboard of the day and of the week >> of the week, that's right the last one, although there are two charts here showing some diverging signals on manufacturing. the ism manufacturing index downside surprise this morning it came in weaker. it has been persistently weak, as a matter of fact. this compares to the s&p 500's year on year change compared to the ism. it's been linked over the years. this is the ism going down this is the s&p bottoming late last summer and fall and now surging. to what do we attribute this divergen divergence look at the ism compared to an

alternate measure of manufacturing strength the ihs market manufacturing index. it's a compeltter rating it hasn't been around for quite as long, but it bounced when the stock market did late last year, and the ism is an outlier now. but maybe it's less of a divergence with the market if in fact the ihs market index is giving you a more accurate read. also, there regional fed indexes are more in line with this than ism. still, we have to wait and see if this means something. >> we certainly do good context there, thank you. >> up next, the key things every investor needs to wah wtcase head into a new trading week, when "closing bell" comes back

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looking ahead to next week, the first full trading week of 2020, the electronics show kicks off, and the energy conference gets under way tesla will reveal their model 3s to the public. wednesday, we'll get a reporting from lenar and bed bath and beyond friday, the december jobs report will come out. 8:30 a.m. eastern time

plenty on the docket, and mike, you know, we come into a pretty close to those all time highs after a decent pullback for geopolitical concerns. >> the final stretch of december, we were saying the market keeps ratcheting higher there hasn't been a lot of pullback you're seeing people saying it's overbought it makes sense there might be an opportunity in january to have a shakeout, to add a little bit back to the wall of worry which had been knocked down pretty low. we cleared away these supposed uncertainties with trade and all the rest we're figuring out if this is going to be more of a profit taking phase or if the resilience showed you we have fresh money wanting to buy the market >> we have to get through the weekend and see what happens on the geopolitical front giving some of the retic we have seen out of iran. >> no doubt about it, and arguably, if it's a quiet weekend, maybe that's an excuse

to kind of wade back in. although the jobs number on friday is also going to be somewhat significant, because we do want to see the u.s. economic performance start to firm up in a very tangible way since the market is essentially priced something in like that >> s&p closed down two tenth of one percent for the week >> "fast money" begins now >> oh, yes, it does. thanks live from the nasdaq market site overlooking new york city's sometim times square this is "fast money. your traders are steve basso, carter worth, and christina hooper, and tonight on fast, we follow the latest developments out of the middle east president trump saying he is not looking for a regime change in iran but he is nonetheless deploying thousands more troops to the region after a u.s. airstrike took out the country's most fearsome military leader iran, meantime