investors, corporate america starts reporting its earnings and the bar is pretty high. at the world economic forum, there are questions about china, russia and america's position on the world stage. and it all culminates with an historic power shift on friday. the 45th president of the united states will be sworn in at a time when many investors and americans are trying to figure out what policies the new administration will usher in. we begin with the critical week for earnings. >> the first wave of fourth quarter earnings including morgan stanley's has been above expectations. that's good news. it is worth noting that 2016 was not a banner year for earnings. it was up a measly 0.9%. now much of the pain come from this catastrophic 77% decline in energy earnings and the market is ants participating, this will reverse in 2016. earnings are expected to rise.

but most analysts have not changed their 2017 estimates to reflect trump gentle. some say 20% growth could be possible. that's why the markets are like a tightly coiled screen. a lot of pressure to perform big in 2017. energy in particular is expected to rise a whopping 366% this year. in fact, analysts have factored in a 100% increase just for exxonmobil. is any of this remotely possible? some believe it really is. rich bernstein, for example, the ceo, richard bernstein advisers is in the camp that earnings will expand for several different reasons. first, trump may not get everything he wants but he is not going to come away empty handed. there will be a reduction and there will be some kind reduction many regulation. second we'll get some kind of stimulus program. it is unusual to get a stimulus program when the economy is improving but it is going to

help earnings. certainly for industrials and materials. third, the global economy is improving and we are no longer in a global deflationary environment. now, with this kind of date, a bernstein said it is rational to believe that stocks will rally and bonds will not. for "nightly business report," at the new york stock exchange. >> it is a big week for the margaret but stocks have been idle for weeks despite the spike that bob was talking about. is this lull in volatility a sign that maybe the market is too quiet important investors are confused? michael jones, chairman and chief investment officer joins us now. mr. jones, welcome. good to have you with us. i heard a statistic earlier today that it has been very rare that we've had such a prolonged period where there has been such few daily 1% moves up or down with the major indexes. what does this suggest to you is going on?

>> i think what we're seeing is a transition in the markets between the euphoria that characterized the markets right after trump's election to reality slowly setting in. i think what investors are recognizing is that there are prospects for the earnings gains that he was talking about earlier. but that they require legislation and legislation is more complicated than just sending out a few tweets and it is looking like unlike fdr or ronald reagan or even obama, there is more division between the president-elect and his congress on some of the major legislative initiatives that are necessary for some of the reforms bob mentioned. >> you were aggressive in the market earlier on. and congratulations because obviously, we've had a big run up. what are you doing right now as the market starts to slow down a little bit? and starts to really pay closer attention, not to the rhetoric but perhaps what might actually be accomplished? >> well, the huge run-up in

equity markets and interest rates and the dollar that we saw right after the trump election. pretty much through the end of 2016, look, we agree with everything that gets people excited about what could come from the trump administration. but we also think it will be a much longer and more complicated process than maybe people were initially hoping. that means we may have to wait a little longer for the earnings gains that bob was mentioning. that suggested to us that we take money off the table as we came into 2017. not because we're getting bearish but we were pretty over. we had a fairly aggressive portfolio posture. we want to pull back toward a neutral stance so if the market did consolidate, if it did get back those gains, we have some dry powder to get to work. >> what do you like internationally? >> internationally, we think the best position country is probably japan. last year they made is major

mistakes in moving to interest rates. they surprised the markets with it. they fundamental out their banks and trading company couldn't use the negative interest rate in their computer system. that caused a big rally in the yen. it slowed their economy. they got policy back on track as we moved into september. and we need to recognize that now that monetary policy is a little more on a stable footing, you have government that is committed to reform and one of the few governments throughout with a huge majority and a reform commitment. we think all that is real positive for japanese equities. >> thank you very much. river front investment group. >> the president of china defended international trade and globalization in his first ever speech at the world economic forum. president ping said economic integration has improved the lives of his people. it come at a time when they are questioning global zprad

promoting more protectionist ideas. >> there is no point in blaming economic globalization for the world's problems, and that is simply not the case. and it will not help solve the problems. from an historical perspective, from growing product sxift the natural outcome of scientific and technological advances. it is not something created by any individuals or any countries. >> president xi is the first to daniel. and he added when it come to a trade war, there are no winners. beijing uses the beautiful snowy back drop of switzerland to position itself as the global leader, many of the most richest and influential people are using to it discuss the massive changes underway across the

globe. the report tonight from davos, switzerland. >> i'm at the world economic forum in switzerland where the top issues are globalization, china, after president xi's historic visit. of course the rise of populism and donald trump. top ceos like at&t and bank of america are here along with activists matt damon all weighing in on the issues. >> we've all consistently said, you fix this regulatory environment and you get tax reform. that's the catalyst for higher growth. so president trump comes in. what is he talking about? tax reform. >> you have china quoting great american president. then we had lunch with him and

he is very much concerned that he'll be, the ability for trade to then world grow. the imbalance in the economy and stuff. that's the fear out there. i think we have to let it play out for a while. >> every 90 seconds a child tunneled age of 5 is dying because they lack clean water and sanitation. it is also the outcomes you can expect. if you're scavenging for water, you're not in school which is a huge problem for girls. if they don't to have scavenge for water and they're in school, they can have a different outcome. >> it is and just getting started. >> the world economic forum in years past has promoted ideas of free trade. the united kingdom outlines it. more from london where the british pound is rallying. >> the u.k. will be leaving the

european union but not you're. that was a message made loud and clear by teresa may this her most important speech since taking office in the wake of the shocked brexit vote. in a 12-point ambitious plan, the prime minister set out for goals for exiting the european union stating that yes, britain will have to leave the single market which does allow free trade across the european union. however, she sounded confident that britain will remain a formidable trading partner on the global stage. >> a global britain must be free to strike trade agreements with countries outside the european union, too. because important though our twrad the e.u. is and will remain, it is clear that the u.k. needs to increase significantly its trade with the fastest growing export markets in the world. >> in addition to leading the single market, she made it clear a final brexit deal will be

taken for a vote in both houses of parliament. that announcement i know what the greater certain if i the prime minister pledged to give both voters and investors going forward helped improve the pound. it has risen sharply ever since she took the stage for the big speech. the big question remains, what the trade deals will welcome like once britain is outside the crucial single market and what will the trade deals be like outside of europe? the prime minister made a big push with global trade partners, mentioning specifically u.s. president-elect donald trump. with just days to go before the inauguration, she made it very clear she was confident the u.s. would now put britain at the front of the line rather than the back of the queue. >> president trump said the dollar was too strong in part

because china holds its currency down. they said they have a hard time competing. >> the fall in the dollar may have contributed to the down day for stocks i know what the steep decline in the financial sector. the dow fell 58 to 19,826. nasdaq dropped 35 and the s&p 500 was off 6. >> on wall street there are growing concerns about donald trump's policies. the president-elect called one policy idea circulating through congress as too complicated to enact. it is the border adjustment. at a. a cornerstone of house republicans tax plans. as we reported last week, this would generate a lot of revenue which could be used to pay for other reforms. just days before the presidential inauguration, a number of company highlighted their u.s. hiring plans. walmart said it will create 10,000 new retail jobs this

year. it will come from the opening of 59 new expanded or relocated stores which were previously announced. general motors will announce $1 billion in the u.s. factories add go or retaining a combination of 1,500 jobs. and baer and monsanto plan for the u.s. the world's eight richest people, all of them men, have a net worth of $426 billion. that's equivalent to the wealth held 20 bottom half of the world's population. the wealthiest men are bill gates of microsoft, mr. or telling, a the billionaire investor, warren buffett, carlos flynn, followed by jeff bezos, larry ellison, and michael bloomberg. coming up, the oldest boomers have to start taking

money out of their 401(k)s, whether they want to or not. the economic ripples that might cause. the nation's third largest railroad csx reported earnings. will the rest the sector deliver when they report earnings? morgan takes look. >> rail results just got rolling. in total, four rail roads will release number this week including the union pacific, canadian pacific and kansas city southern. the stocks have ridden the stock rally. the effect for norfolk southern has gained double digits since

the election thanks to improved production and prospects for infrastructure spending and deregulation. the outlier, kansas city southern, which has fallen 9% on trump's tough trade rhetoric with mexico. analysts say they'll be watching on pricing and volume which for the first time in nearly two years, are growing. >> they expect a pricing increase over the next six to 12 months. but more importantly, it marks the first time since the fourth quarter of 2014 that we've seen a consequential increase. also, they said that 77% of them were more favorable about the economy. now that's up from just 22% in the third quarter survey. so clearly we're seeing more than just green shoots out there. i think people are feeling better about things. >> after years of decline, coal could be a bright spot. since the price of natural gas

has made it more cost competiti competitive. but stock valuations have already barreled toward the high end and some say investors are not fully weighing the risks. >> the reason strength in the dollar is just very, very bad for exports. it is very bad for onshoring, domestic manufacturing, domestic assembly. i don't care how many you tweet against. it is a real head wind. >> at least some investors agree. stocks stumble ahead of the quarterly results. customers helped with health group. the nation's largest health insurer said the management business caused the company to post higher profit and revenue. united health group reaffirmed

its guidance for 2017. still, shares fell a fraction to $160.66. morgan stanley saw its profit double and sales rise last quarter as higher trading activity them bank top estimates. the company said it benefited from strong performance in its wealth management operations. morgan stanley said it is optimistic. still, shares were hit hard. logan's family was off. last year, reynolds rejected british american's nirnl takeover bid. the shares rose 3%. while british american shares fell to 113.10. tiffany said its flagship store in new york city which sits next to the president-elect's office suffered a 14% drop in sales during holiday season because of disruptions related to post election traffic.

the luxury jeweller said overall sales were down. shares were off 2% to $79.90. the hedge fund elliott management and blue scape working together. the two companies which combined have a spike called nrg shares. nrg shares up 5% to 15.34. and david einhorn is betting against caterpillar and other cyclicals under a trump presidency. despite the plan to increase infrastructure spending, the hedge fund manager said cater piller's division is only a small part of business. another equipment maker, deere fell more than 1% on that news.

united continental reported a drop in profits. the airline did see a rise in sales. that topped expectations. but shares initially fell. down a fraction at 73.74. some of the nation's oldest baby boom letters start mandatory withdrawals from their retirement accounts. it could create economic ripples for decades to come. welcome. nice to have you here. >> thank you. >> it seem to me there's impact on two fronts. the management business and the baby boomer who may not realize it is a mandatory with gra sull a taxable event. >> a lot of babyboomers think of them as 401(k)s or i.r.a.s.

they are tax deferred plans. so the million dollars you think you have might be quite a bit smaller. >> so how much do people who mit age of 70 1/2 for an ira, how much do they have on withdraw every year and will you be told that you have to do it? >> well, your financial adviser should be telling you. the formula is based on irs calculations. they base it on life expectations. at this point anyone who reaches 70 1/2 has to withdraw about 3.65% of their assets in the 401(k)s. that increases the older you get. for those lucky enough to live to 90, it is closer to 9%. >> do you think most babyboomers are aware of this? if they don't take withdrawal, you point out, it is a 50% taxable withdrawal? >> i think a big penalty.

many are but i've gotten a surprising amount of e-mail from babyboomers. it will be a big bill. >> is the tax withheld there your withdrawal or do you have to withdraw that it be withheld? in other words, let's say i want a clear $50,000. do i tell them i want to take out $75,000 and they withhold or do you know? >> i don't know. but i think the way it works is you declare it in your income tax return and that will be calculated. >> what are tim reply indications for the industry? for the financial services industry? because people will be taking their money out of the 401(k). i assume they're going to encourage them to reinvest them. >> they will. you have to remember the boomers were in many ways a 401(k) generation. the first one that started using the tax deferred funds and they saved a lot of money.

they earned a lot. and over the years that has helped the asset management companies. in any given year right now brgs 10% of 401(k) assets will shift around. >> very quickly, why do they have this rule? >> they have rule because at some point, the tax man wants his money. >> the money. >> wants the money. the money was never men to be tax-free. it was meant to afford people an opportunity to save money and avoid the tax bill right away. >> all right. everybody should check their 401(k) and make sure you know how much you'll have. thank you. >> thank you. with the "wall street journal." and coming up, stain grinst doubles down on ads.

twitter is officially shutting down vine, the six-second video service will be replaced by a camera application instead. the new camera will let users create a short looping video and then share directly on twitter. facebook ceo was in court today, mark zuckerberg arrived at a dallas courthouse in a suit. not his usual, to defend his company against claims that it stole virtual reality company when it purchased oculus. facebook says the claim without merit. >> facebook's instagram is turning up the heat on snap chat going after the revenue sxiflt comes as snap chat, the popular app with teens and millennials

prepares to go public in what is expected to be one of the biggest public offering this is year. >> as snap chat prepares to go public, expect to it file for an ipo in march. a valuation of around $25 billion. the much larger rival facebook's instagram is launching ads in threes. a format that looks just like snap chat stories. announcing that instagram has 150 million daily users. after launching just five months ago. >> it puts tremendous pressure on snap to show number one, fast user growth. and number two, that's revenue growth. so they're direct competitors. slightly different cases. i think snap is more did video cent ric, more so than the instagram. >> and instagram which already tested the new ad format with

thrive advertisers, has an advantage being part of the behemoth partner facebook which has more than 4 million ads with advertisers. it makes it easier to buy and target ads. while the latest ad products sets the bar higher than ever for snap chat to show growth, demands for snapping shares is expect to be significant as investors and advertisers look for alternatives. they control so much of the ad market. facebook and google alphabet. >> they are looking for ways to allocate. and the second part, the audience is extremely younger than what you would find on a google or facebook. so that's appealing. >> and we w the digital ads part of the ad sales last year, they say there's plenty of room for a arrange digital platform to grow. for nightly business report.

>> and snap chat gets ready to sell shares to the public, there are reports the founders of the company are structuring the ipo in such a way that they will retain control over the company. >> and that will do it for "nightly business report." i'm sue herera. thank you for watching. >> and i'm tyler mathisen. we will see you back here tomorrow night.

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