Transcripts For CNBC Closing Bell 20171130

A next the next gear. Yeah, if you went out for lunch, like came back and checked the market, you went, what the heck happened yes. Ooersheres a look at our se heat map energy dealing well, had of course the opec extension, industrials, financials, goldman the best performer in the dow. Those are all the big winners. Ug the ten year yield is creeping up a little bit today. Real estate also in the red. Coming up, well go to washington for an exclusive interview with senator Chuck Grassley about tax reform. Chairman of the Senate Judiciary committee. The dows rise, 24,000, has been rapid compared to other big milestones a few of the signature trader hats for each milestone on set with us here courtesy of our friend, the trader peter tuchman, one of the most famous traders on the floor, looks like albert aeinstein if we can zoom out for a second, so we crossed 20,000 january, we crossed 21,000 on march 1st. That day was sort of reminisce soent of today crossed 22,000 in august crossed 23,000 on october 18th if we close here, cross above 24,000, close there on november 30th real quickly, by the way, never in the history of this stock market have we had more than 2,000 point thresholds crossed in one calendar year we may have five if we close there today. Yeah. And where do we go next . Peters hedging his bets right now. He just its getting expensive to make so many hats in one year so hes this is good for a little while i think hopefully. We will see. Anyway, it took just 309 days for the dow to rise those 4,000 points from the 20,000 level, which it did hit on january 25th, to 24,000 today. The previous 4,000 points from 16,000 to 20,000 took almost four times as long going all the way back to 2013 this will with on ton the midtem better write this down the dow hit 23,000 for the first time just last month in october and it took only 43 days to hit 24,000 so whats behind this quick move to 24k bob pisani joins us down on the floor to break it down for us. Bob . Its not tech, its a will diversified group. Its all about highpriced stocks remember the dow is price weighted you get a stock like United Health care, 227 stock. Look, its up 5 today thats almost 40 points in the Dow Jones Industrial average come over here, boeing, highest priced stock in the dow, its up 5 another 40 points. 80 points just in two stocks moving the dow thats just today. We craossed intraday the Dow Jones Industrial average 23,000. That was september 17th. That was the intraday close for that we had a nice move up. Since then 1,000 points as you can see. The dows, remember, highestpriced stock look at the five highest priced stocks in the dow. Boeing, Goldman Sachs, 3, manm, United Health care, home depot goldman is in there as well, made the biggest contribution for the dow in that 1,000 points since september 17th you can take a look here, its all the highpriced stob ed stos 3m moved 147 points, United Health grew, home depot, walmart, then you got boeing in there as well. Apple has moved. The only thing thats not in the group, highest price, is Goldman Sachs which really hasnt done too much these six are over 60 of the dow move the good news, its well diversified. See health care and industrials, retail, technology, thats why the market keeps going up here diversif diversified. Whats the detractors . Weve had stocks that have negatively impacted the dow. These tend to be the lower priced stocks. General electric below 20, thats a cheap stock overall see its at had a terrible quarter. Its ochbnly impacted the dow 3 points merck, 55 on the downside, Procter Gamble, only 24. I think you get the point. Finally i want to take a point about tax cuts lot of people debate tax cuts influence the market take a look at the dow there s p 500 moved 15 points when senator mccain announced he was supporting, and theres the circle right there, he was supporting the tax reform bill that was at 10,055 people who say theres no impact, theyre not reading the markets right. Definitely some kind of premium. I guess, guys, the question now is, how much of a premium really is left for tax reform back to you. Bob, thank you, bob pisani. Earl eaier today on the halftim report, it was asked how much of this rally should be attributed to moves in washington heres what he had to say. I must admit, you know, i really thought trump was, you know, going to really change the landscape and he certainly has gone far to do that. Im not that involved with washington, as you know, but i am i have to say surprised the euphoria even though earnings are going to be very good, even and what have you, i just think this thing has got into a euphoric state. Sounds like a warning joining our Closing Bell Exchange to discuss all this, hank smith from haverford trust, jonathan here on post 9 with us from her rmeridian equity partns Rick Santelli checking in from the cme in chicago jonathan, we talked a lot about the euphoria in bitcoin and so forth, and even today the move is moderated a bit as we head into the close is it euphoria you see playing out in the stocks here i think it is we continually have this same conversation some of it sals weve become very immune to these milestones we keep hitting in this market and sometimes we expect this continue to happen i think if that expectation tie that with euphoria, there could be a little bit of warning signs that are coming ahead. We like to see the market moves up and down. Right, its health fy for the market to do it. There are headlines that could have acted as a catalyst to the downside, north korea, government shutdowns we havent seen that selfpressure yet. We keep having this conversation but at higher and higher levels. Correct the numbers keep changing. Hank, so if we believe tax reform is a big part of this, whats the next catalyst i mean, you know, the markets been waiting all year for this tax bill, it looks like its going to pass but now what well, bill, first of all, lets put this market into perspective, it is paying attention to what is important Economic Growth is accelerating in the United States and around the globe, corporate profits are accelerating Interest Rates remain low. And inflation is benign. This is what is important to the market its ignoring what really isnt important, the geopolitical events whether its north korea, russia, a terrorist attacks, storms and natural disasters its ignoring all of that. And the market, on a forward multiple, isnt that much more expensive today than it was a year ago so its earnings thats driving this market. We are not in euphoria yet. The other thing, too, john than, you have to look across the other averages and dont see as much reminds us how much we do look at the dow which is up more than 1 today. The russell is barely positive the s p is up middling 16 points the nasdaq is up half a percent. Right, thats something we have to keep in sp er perspective, a broader average whats happening in many different sectors and overall economy. Yes, we do focus on the dow. I think investors need to continually focus on the russell and s p. And rick, i guess its simplistic to say theyre buying stocks and selling bonds or selling bonds to buy those stocks but the tenyear yield is up to 242 today. And the dollar index just continues lower again. What do you make of everything here yeah, i think the dollar index is the odd man out and i would continue to have a little worry in that regard. But of course, many believe that multinationals would be more benefited in this area im not so sure that its worth the softness in the dollar as for Interest Rates, you know, yes, we seem to have tried to get close to unchanged on the year, 244. 50, didnt quite make it, since the high yield in march of 263, weve only closed above where we said last year just about middle of october, one time, 246. I think Interest Rates are going to pay more attention to the rally there the stock market and the economy. I do think theyre going to climb a little bit here as we finish out 2017. You know, i just dont agree with carl icahn. Sure, theres a little exuberance in the marketplace, i like kellys point if you dont just look at the dow, you get a little different flavor of whats going on. I think its the deconstruction of the nanny state its the antiestablishment threat, whether its brexit or trump. I think carls right, maybe not a lot has gotten done yet. I think that in the end, the Global Economy is going to be much better off for all these issues i think it continues hank, where would you go right now for investors . I mean, if you want to get tactical about it, what is your best advice here well, look, i would stay in a balanced approach in terms of having some money in the defensive sectors, like staples and health care, but also in the more cyclical sectors. Such as industrials, financials, basic material i wouldnt really skew in one direction or another were very, very underweighted in utilities and reits and dont think the value is there so, look, i think at this point you stay diversified dont get too concentrated in any one sector the nice thing about this advance this year is its been relatively broad based yes, technology has led the charge, but 7 out of the 11 sectors are posting doubledigit gains. Its very broad based. What about you, john, where do you see opportunity, very quickly . I think financials. Clearly continue talk about Interest Rates, how thats going to affect our economy. Weve seen that upward momentum there. Thats an area to continue to look at. All right, gentlemen, well no doubt have this conversation again. I wonder where the levels will be then. Well see. John, hank, rick, thank you all for joining us see you later. So, if youre just joining us, yeah, look at that, it was even higher than that earlier. The dow up 387 points at the peak today yes, were above 24,000 for the first time ever. As tax reform hopes boost this market to new highs, were going to talk to veteran republican senator Chuck Grassley about the timeline for this bill and what changes could still happen and up next, Energy Stocks surging today as opec wraps up its meeting in vienna. Well head there for the latest on what it means for oil and Energy Prices Going Forward. And we want to hear from you, reach out to the show, tell us what you think on twitter, facebook, or over email youre watching cnbc, first in business worldwide what if we could keep more amof what we earn . D. Trillions of dollars going back to taxpayers. Who could possibly be against that . Well, the National Debt is 20 trillion. As we keep adding to it, guess who pays the bill . Him. And her. And her. Congress, we should grow the economy. Not the debt. Joshs jousting hath latgrown a little. At laughs aggressive. Dude that freaketh me out, man. Id paid for the turkey legs, like, thrice in the past fortnight. I was vexed but chainmail hath no pockets, you know that. Youre right. I should hath spoken sooner. No, i behaved like an illbred, beefwitted clackdish. Huzzah huzzah hey, you want to grab some turkey . Oh, i never tire of turkey. The bank of america mobile banking app. The fast, secure and simple way to send money. Santas here ringing his bells. Its going to be a festive afternoon at the New York Stock Exchange with the Tree Lighting later to come. Meantime, christmas themes on wall street, too. Real estate, at least, is in the red. That gives us a bit of a mixed picture today leading the way in terms of the centers of the s p which you see there is energy up 1. 4 industrials right behind it. Interestingly enough, you know, financials kind of just theyre in there, but theyre not theyre only up half a percent right now. Santas up there waving with the rockettes. How are you, santa good to see you. Ho, ho, ho. The nasdaq rallying today after having its worst day since august yesterday lets get to Bertha Coombs with a look at stocks driving this big rebound, bertha. One of the big winners in this rotation this week have been the small caps. Russell 2000 on pace to be the second best index. Best performer this month behind the Dow Jones Industrial average. But even as weve seen people sort of sell out of tech because of the enthusiasm over the tax bill, large cap tech still driving nasdaq gains with amazons record run this month, providing the biggest impact within that, chips have seen the biggest fall already down about 5 for the week and were watching to see that could result in the first down month in the last five, but chips, bear in mind, are up 41 this year. So its not surprising investors are literally cashing out their chips. But not all of the momentum weve seen this month has been about tax reform take a look at qualcomm. Bucking the trend. Down 21 for the year coming into november. After hostile bid for broadcom it is the best performer in the nasdaq 100 this one. Retailers among the others s seeing a reversal of fortune, costco up strong on same store sales numbers. Ross stores also at an alltime high now up for the year having been negative. Dollar tree rounding out that Retail Retail getting a bit of love here as people sort of thinking animal spirits might be loose. Of course, were in the holidays yeah, 8. 4 u. S. Comps for costco 8. 4 right something else. Thank you, bertha. See you later meanwhile, Energy Stocks have been trading higher today as well. Opec leaders wrap up that needing in vie vienna. Our Steve Sedgwick is live there vienna with the very latest. Good evening, steve. Reporter good evening, to you, bill, good evening, kelly yeah, im pretty sure around about this time yesterday we were talking about whether they would go to the end of 2018 with a review some way through the year thats pretty what weve got they tweaked the language a little bit, gone for a full new 12month bill rather than waiting for the next three months of 2018 then extending 9 months after that as well. Theyve given a review at the halfyear stage which downsides with a june 21st opec meeting. They seem really happy i spoke to qatar, saudi, iran, iraq, russia, nigeria, you name it, theyre all really lets. Lot of smiles around here. Why wouldnt they be happy they think theyre getting the job done lets listen in to what the saudi minister said to me earlier today about where they are in getting the job done. Whats important to focus on as we go into 2018 is that we still have about 50 of our work to be done, so were not complace complacent i am going into 2018 knowing were only half done and we probably need all of 2018 to finish the job that we started. So in terms of where they go next, well, look, we know the russians were after a review the russians got their review. In fact, i had a very long conversation, literally, about 45 minutes ago with the Russian Oil Minister were going to get all that sound out on cnbc later on and first thing tomorrow basically he was saying, look, i think all things being equal, thats hurricanes aside or shale growth aside, i think theres going to be a balancing in the market in the Third Quarter and of course if they think that, that june meeting could be absolutely key as well theyre going for 1. 8 Million Barrels a day they took off for the whole of 2017 that was pretty siuccessful for them, theyre going to try to do the same and replicate that into 2018 i put it to mr. Novak, about shale . Look at the figures from the eia. 9. 48 Million Barrels being produced in the United States as well he said, look, there are negatives but the positives for the russian economy, for all the other economies and the consumers more generally, policy of opec and nonopec, way outweighing the negatives coming i pushed them on this point, shale, of course, selling aggressively into markets such as china, they think they can compete very aggressively on those markets. Theres been a tweak within opec for a little of or more greekky oil watchers nigeria and libya, growing very, very strong volumes throughout 2017, theyre going to accept a cap in 2018 at current level, combined 2. 8 Million Barrels a day. The other key point, this is really fascinating, we talked about the relationship between saudi and russia, the relationship on political levels, geopolitical levels and of course here in vienienna as well the body language and the conversation between saudi arabia and mr. Novak of russia was as strong as ive ever seen it really, seriously, in fact, they were saying, look, there is no light between us, despite what you pundits may have been saying, in fact, we are completely aligned and on the same page. I thought that was very interesting because i think a lot of market watchers have have been waiting and looking for cracks in that key relationship because, of course, in some parts of the middle east, theyre on different sides of some of the conflicts there as well what is also interesting, when i spoke to zangane who is the iranian oil minister, he was saying, look, im completely aligned with whats going on from saudi as well when you hear language from a Senior Iranian talking about being aligned with saudi arabia, i thought was a very interesting as well. In fact, he also made some very interesting comments about potential further sanctions from the u. S. And said, look, we welcome companies from the world, its such a great shame the u. S. Companies cant gt invol get involved in the billions of dollars of investment when other companies from other countries can. So many different dynamics as well the long and short of it, bill and kelly, we got the deal we expected despite the fact many were looking for cracks in there. Im talking about cracks, but the spread between brent on notice last time i looked was 6,357. Thats a big 6 bucks plus dimpb difference between the two and shows you the dynamic going on in the moment. Yetthe Global Benchmark on brent has been held up by deals like we saw today. Back to you both in the studio. Very good, steve, thank you thorough as always Steve Sedgwick joining us from vienna appreciate it. 40 minutes to go, little less right now dow up 281, about 100 points off the high if you can believe that today. Still more moderate gains across the other averages. Look at the russell could go negative. Barely. Its been sort of fighting to get into positive terror potroi. Nasdaq up 37 s p up 17. Still ahead, stocks taking off today after senator john mccain said hes onboard for the tax bill ahead, well speak exclusively with republican senator Chuck Grassley about what that final bill could look like and what the potential holdups are. Do you realize he and orrin hatch i think are the only two senators who were around when they could vote for the reagan tax cuts in 1986, now here they are again. Plus the dow and s p wrapping up their eighth straight month of gains in a big way, but have Retail Investors been cashing in on this market rally yet . Were taking the retail pulse in our closing Bell Investment club, coming up. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. The markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. Welcome back with the dow transports up 185 points, pretty nice session for them also hitting intraday alltime highs like we saw on the close yesterday. People like it watch it for dow theory. Yes, they do. Today that theory is working out quite nicely. Here we are in the last trading day of the month. A big one for the markets to say the least. What better time than now to check in on main Street Investors . Joining julie werner, susan noise. Thank you for joining us is im here. Julie everybody hear us now we onboard julie, ill begin with you, especially after this incredible runup weve seen in the markets this year, what strategies are you undertaking as we head into december well, as an individual inv t investor who invests for the long term, i cant compete with the big boys, im more interested in the stocks that i own. As long as theyre good solid quality companies, i coopkind oe them go. Every once of in a while a few get undervalued. I took money off the table and recent ly a little bit more basically im letting my portfolio go. Okay. Susan, youre not selling anything yet, right . I havent im waiting for this to see some sign that this up market is actually on its way back down before i sell anything so possibly ge are you waiting for, what, well, yes. We could spend the whole time on ge are you waiting for a 10 pullback, 20 , i mean, what is that sign youre waiting to see that will tell you its time to sell oh, youre asking, you know, i dont know what that is. When i see it, ill know. Youll know when you see it okay. Yeah. Im an intuitive investor, i think. Okay. Julie, what are some of the stocks youve been buying rae reech recently we talked about names like tiffany you held for a long time does anything look attractive to you at prices at these levels . Actually the last time i actually put a little bit of money to work was last january when i bought a little bit more of my abbott around 39. Today, thats a little extended. And my newest stock that i added maybe about nine months ago was fox factory holdings, which is a neat little Small Company but here, again, you know, since i bought it, it has really gone up quite a bit. So other than just adding to some of the stocks i own, you know, havent really been doing very much buying, and not very much selling, just kind of letting my profits run and susan, on your your list that you call you have them and never let them go stocks, facebook, apple, amazon, microsoft, snnetflix, google, lily, disney no matter what, youre going to hang on to those is that the idea is. Yeah, id have to see something really crash before i let those go i believe there the companies. I the one thing that i am putting more money into selectively is impact investing, in particular, so i bought into a great fund with morgan stanley, and i am looking for stocks that real whose values really align with mine. Susan, i also see here, tell me im wrong in reading this, youre thinking about bitcoin . Yes the last time i was on, i told you i was thinking about tesla and you were surprised and i didnt buy it. And what a mistake that was. So im watching bitcoin right now. Okay. Go ahead dont let me stop you on bitcoin. Yeah, and some people are saying it will go up to 100,000, some are saying it could crash, you know. I dont know enough, and im enough of a Retail Investor to need need to understand it better before i put a lot of hundr money behind it. Best thing youve said ill probably put a little behind it before the end of the year because what a mistake if i dont, right i cant maimagine, julie, wih your history of teaching investing and being involved with the investing clubs you would give somebody the advice of investing in bitcoin, would you . No, because i dont know how you value it the biggest mistake usually individual investors make is they may buy the best Quality Company but if they overpay for it, its usually not a good investment over the short term so, no, i have no way of valuing bitcoin, so, therefore, i will let some other people risk their money doing that good to see you both, thank you, susan, im worried about you. Dont go near bitcoin. Ill just say that okay okay. Ill take that advice. Thank you. Okay. Be careful tauhank you, julie. Yep julie werner, susan noyes. Time for a cnbc news update. Lets get over to sue herera. Ooers whats happening at this hour, everyone, fema director asking for additional funds as they grapple with a series of natural disasters. Brock long making the request to a house committee. Not only to harvey, irma, malma le maria, the california wildfires, were working 31 disasters across this country in 21 jurisdictions. My staff is tapped out they work around the clock and bust their rear ends every day to help those who are in need. An historic bridge in tennessee is no longer standing. Crewss demolished the hoskins jargon bridge earlier this morning built in the 1940s, the size of its overpass caused problems for emergency vehicles. And a new postage stamp will raise money for Alzheimers Research the Postal Service revealing the stamp hat Johns Hopkins Medical Center in baltimore. It features the profile of an older woman with a hand on her shoulder thats the news update this hour guys, ill see you about an hour from now bill, back to you. Kelly . Sue, thank you very much. See you then. Weve got about 29 minutes left if the trading session on what has been a powerful rally die for the blue chips dow up about 300 points right now. Joining me right now is the chart master, carter worth and youre looking at, i mean, this has been a Growth Market here right . Sure. I mean, what i thought would be interesting to look at is do you chase the cyclicals, right, because they have come to life, or do you take advantage of maybe some of the weakness in the growth names and really stick with them or if you were underweight, get bigger . What are we looking at here 1234. I have two charts etfs that capture the themes pure growth etf out by guggenheim versus the pure value. What we know is essentially blue is growth, green is value. And the orange is the sby, itself. Okay. Two of the parts that compose the whole. What we know is basically growth has doubled the performance of value year to date what 350epeople are getting interested in, oosk of course, is this recent hook. Value is catching up. Value over the past three, four sessions, whereas growth is unchanged. The question is, for all Portfolio Managers o errs indivs do you say this is a time where this will catch up or actually, frankly, still not going to be able to keep up ultimately with growth thats my view i think growth is the better bet. We can look at a chart of the pure value etf, itself, i think question have that here, what we know is that this is this is a fairly welldefined uptrend. When you get big moves off of trend, you know, typically, you know, you get also checkbacks, right . So that at some point, i think well get that point, rather than chasing this,you want to wait for some giveback or said differently, take advantage of the weakness in some of the growth names to put money to work. Look at that. Chart master and telestrator master as well thank you. Thanks, carter, see you later. Kelly . More on that very theme next hour. Little less than half an hour to go the russell is trying to stay positive its up just half a point. Up next, as stocks surge on tax reform homes, well speak exclusively with republican senator Chuck Grassley about the latest on the bill and whether flu chges tantohe Corporate Tax rate are in the works when we come right back. Us. Its what this country is made of. But right now, our bond is fraying. How do we get back to us . The y fills the gaps. And bridges our divides. Donate to your local y today. Because where theres a y, theres an us. We are the driven. The dedicated. The overachievers. We know our best investment is in ourselves. We dont take no for an answer. We fight for what we want. Even for the things that were once a given. Going to college. Buying a home. And not being in debt for it for the rest of our lives. But were only as strong as our community. Who inspires and pushes us to go further than we could ever go alone. Sofi. Get there sooner. Welcome back so, new developments in tax reform are fataking the dow pas 24,000 today it was late this morning when senator john mccain signaled he will vote for the Senate Tax Bill and thats when we saw that spike that took the dow up with a gain of 387 points at its peak were off that right now, but it has been a strong day in large part, i guess, because of the euphoria over the tax bill senator john mccain said he will support it, and in a cnbc exclusive, we are now joined by republican senator Chuck Grassley from iowa he is also a member of the Senate Finance committee senator, thank you for your time. Thank you, senator. Thank you, kelly. I mean, its interesting that this rally is being attributed to senator mccains support for this bill. Do you think at this point you guys do have the votes to pass it not only the good news today, but i have had a good feeling the last two weeks on this because there has been five or six people that had questions about various aspects of the bill, but i always felt that every one of them wanted to get to yes on the bill they had little something, big or little here that needed to be fixed and there, and theres been trying to accommodate not only members that were holding out, but even some of us members that have supported the bill for a long period of time. Theres some things we want changed and theyre trying to accommodate all that and that gets us to 52, i believe. Well lets talk about a few of those senators that had problems senator corker was one, he was worried about the deficit. Now youre talking about these triggers that are troubling some of the senators out there that if the economy doesnt grow fast enough, maybe you have to trigger some spending g ining c the deficit doesnt balloon. If the economy grows too fast or grows faster than you think, then maybe you could see some tax cuts extending beyond that i mean, are you in favor of some of these sort of after the burner triggers here not really, but let me explain. If they are going to be in the final bill, i have to look at it this way no one of the 52 senators can have everything their own way. And i was back in the senate in 1986, the last time we did this 31 years ago, and in the last 30 years, we have made the tax code so complex, none of us have the liberty once in a generation of getting everything we want we have to simplify the tax code we have to get middle income tax cuts we have to make our corporations globally competitive senator, another concern that were hearing, and we can show you one example from a viewer today, he said why is the senate denying to individuals the same benefits of tax selling that institutions will get . This is a reference as you probably are aware of forcing people when they sell their stocks to do it on the first in first out method, means they have a higher Capital Gains that they would have to pay is this something that is important to you that you make people do this or can you come to some agreement where they wont be forced to do that change . Oh, we will be able to come to an agreement, but dont forget, one of the benefits of the business tax cut and the incentives for investment and the predictability of investment is to encourage longterm investment oh, for sure. And, i mean, i think thats why people are saying, look, we want to be incentivized by the way, to your point about the fairness of the whole bill, the perception in surveys time and again out there is this is going to help Corporate America and not going to help the middle class immediately, certainly in this area and in california, theres a lot of concern about the spending hit people could take because their taxes are going up on the state and local deduction as im sure youre aware. So what about the idea of bringing that Corporate Tax rate up to 22 or 23 in order to make all these other concern were talking about go away . Well, im going to give you an answer pleading my colleagues, that theres all sorts of good ideas out there and thats an idea that ought to be considered, but if were going to start breaking up into small groups the 52 of us that are going to take to get this tax change, the first one in 31 years passed, we better not get that specific about finding something wrong with the bill. We have to Work Together as a group, or its not going to get done let me bring up another one, aarp in fact, Susan Collins has expressed this concern as well about cuts to medicare that could happen if the pay go provisions were to kick in because of the ballooning of the deficit here it gets complicated but you know what im talking about senator mcconnell has told Susan Collins that they wont allow that to happen, but in order for that not to happen, you dmeneed senators to vote to make sure you dont have the pay go provisions kick in if the deficit does balloon so what can you say about the possibility of medicare cuts as a result of this tax bill . Well, youre talking about something that would probably happen after 2025, and all i can tell you is that the leasest the economy has to grow to make sure that doesnt happen is 4 1 of 1 increase in the gdp and if you go back to the 50 years before0f 1 increase in the gdp and if you go back to the 50 years before obama, the economy grow at 3 to 3. 5 and the worst decade was 2. 6 between the 70s and the 80s and only grew 1. 4 for eight years under obama. It seems to me its a no brainer that that cannot possibly happen in a country based on the free market system. Do you think thats the kind of explanation that will bring Susan Collins onboard . I think she legitimately has concerns just because like iowa, where i come from, we have a High Percentage of our people are elderly. She has the same thing in maine. And that does concern me, but i have not lost faith in the free market system we have and the entrepreneurship of American People that this economy is going to grow more than 4 10 of 1 senator, so just to go back to this point, the white house has made their intentions at least in the past very clear, they want a 20 Corporate Tax rate is it okay if that rate is 22 or 23 as far as youre concerned yes, it is, because right now, englands going to 17 , irelands at 12 , and the rest of the industrial world has an average of 22 if we were at that average, wed be a heck of a lot better off than we where now at 35 , but were going to be more competitive at 20 and it isnt just a case of corporation taxes. Its the increased jobs and the increased income that comes to the workers as a result of reducing the Corporate Tax rate because 25 of the Corporate Taxes, minimum of 25 of Corporate Taxes, comes out of wages and so were able to increase the wages of the of the american worker. Senator, if you can stay right there, we want you to hear this, some analysis of the senate bill is just coming out right now. Our ylan mui has that for us i want to get senator grassley respon response. Reporter the joint committee on taxation is out with their anap dynamic estimate theyre estimating the senate plan would raise over a decade 407 billion in additional revenue, and that translates into about. 8 additional growth over the course of ten years now, this does appear to be lower than what Senate Republicans were hoping for. They were hoping the plan would essentially pay for itself, but the jct score seems to indicate that it will fall short. Back over to you guys. All right, ylan, thank you. And, you know, this has been a hallmark, senator, of the argument for the bill, is that growth will pay for the deficit and offset that, but can that happen if the joint committee on taxation is correct, and the growth estimates they have for the next ten years yeah, well, listen, in washington, d. C. , generally, but particularly in the Congressional Budget Office and only recently there the committee on joint tax, theres been a bureaucratic opposition to considering anything in a dynamic scoring area so i think youre going to see them to be very, very conservative because of that longterm opposition to doing dynamic scoring, and i think it just proves to me that were going to do a lot better because of their bureaucratic resist answer to dynamic scoring. All right senator, always good to see you. Thank you for your time, sir. Thank you so much. Chuck grassley of iowa joining us today about 14 minutes to go and, aga again, if you look at the dow up 295, mccains support is being cited as one reason but we know theres been differentiation across these averages today and the impact is playing out very differently. Hca one of the best performers in part because jp morgan up strong, too, with the possibility of cvs merger. Thats right. That, too. Theres that coming as well. Coming up, were going to lkbo h mta autowuch longer this rally can last cant wait to hear that. Let out your inner child at the lexus december to remember sales event. Lease the 2017 is turbo for 299 a month for 36 months. Experience amazing at your lexus dealer. Of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. S p having its best day since march. Its the best day of the year for the dow or it was. When we come back, well talk about whats behind this rally and how maybe you should play the markets into the end of this thar as we close out the mon of november. Kelly and i will be back in just a moment [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Talk to one today and see why were bullish on the future. Yes or no . Gin. Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Listens to this, art cashin stopped by and said the markets on close orders, ready, bias to the buy side of 3 billion he double checked it he said he couldnt believe it, himself. If its true, would push us higher 50 to 70 points the market upjumpupjumped 40 po. I think its kicking in yes well see if any more kicks in even the russell is suddenly up. 25 . It was struggling to stay positive a minute ago. Seven minutes to go before the close. Can the momentum continue into year end joining us, weve got chuck grom from Gordon Haskett and ian, i know youve been kind of cautious on this market, what do you make of this here . Well, i mean, it completely makes sense whats going on. You have absolutely no supply in the marketplace, because everybodys expecting this big tax reform and you have a bunch of yield chasing and theres no alternative so people are pouring into stocks because they cant get yield anywhere else. It makes sen what s sense maswg one day were talking about tech flonothing trks technology its had a good year does that impress you . What does that tell you about the nature of the incredible rally weve seen this year from my specter in retail, i think weve seen some really strong numbers out of the consumer as you guys all know, Consumer Spending is twothirds of gdp and the strength is really broad based. Weve seen it at walmart, weve seen it at costco, wayfair pbh last night saying good things about the department store. From what i look at, the consumer seems extremely healththy right now and its in a very important time of year coming off black friday weekend and the head of the Holiday Season here. You think retail is going to be that strong, the sales overall for the holiday are going to be that strong . Is that what the stocks are trying to tell us here they had an incredible wethis week. Black friday was tremendous youre going to see a lull over the next couple weeks but wow have Consumer Confidence at close to 17year highs, unemployment at close to tenyear lows. The consumer seems really optimistic right now theres no reason to think with these tax cuts coming, likely the most impact, the low to middle income customer, you know, consumers seem strong here we think tiin will be healthy it the end of the year. Ian, for me, for anybody whos skeptical about the market, it feels like if you just say costco put up an 8. 4 u. S. Comp, what more do you almost need to know . Doesnt tell you theres some fundamental strength in the economy . I dont know, yes, theres fundamental strength the question is, whats it worth . As far as the u. S. Consumer, you know, look at consumer debt, alltime highs so, yeah, im not really sure how strong the consumer is, and all this tax reform, you had Chuck Grassley on here talking about Just Trust Us on dynamic scoring. These guys should be ashamed of themselves all right, gentlemen, thank you. Got to run to get ready for the close. Chuck, ian, thank you both for joining us on a azcry day for the markets. Well have the closing countdown coming up in just a moment stay tuned letsfist word that comes to mind when you think of lowcost futures trading. Was it happy . What about a dedicated service team with futures licensed specialists . And what about being able to react to the 24hour futures market with integrated trading across web and mobile . Still happy . Good. Then its time for power etrade. The platform, price and service that gives you the edge you need. Etrade. The original place to invest online. About 90 seconds left as we close out the month in a big way. Bob pisani is joining me here. We have chart of the dow for this month, and the biggest gain here, youre going to see it right at the end there. There it is. Thats today and this week really i want to put up if we can the s p on an intraday basis people who argue tax cuts dont really matter ought to look at the charts a little more carefully. At 10 55, john mccain was announcing he was supporting the tax cut, the tax bill we saw the s p move 15 points on that this is the russell i just want to make the point, it lagged forever and its finally playing catchup. Theres the s p today. It was up moving sideways going into 10 50 we have a chart with a circle around it. It mattered. Okay there is a premium in the market for tax cuts, the question is, how big is that premium, and is there any more of it left . Thats part of the big debate. After that, do you sell on the news suppose you get the tax cuts through, do you sell on the news or not thats what people are debating. The bulls are saying, wait a minute, Global Economic expansion is really what matters, historic earnings are what matters that could continue. And the market may continue its rally. Others are saying, forget it if we dont get big, big moves up economically, and we dont get a friendly fed, the markets going to be in trouble all right well, what do you know, a day like today, we got santa claus ringing the closing bell as they get ready to light the New York Stock Exchange Christmas Tree youll see that live next hour on a day when we set alltime records for the major averages with a big rally stay tuned for the second hour now the closing bell with kelly evans and company. See you later, kell. Thank you, bill. Welcome to the closing bell, everybody, im kelly evans a very festive day at the New York Stock Exchange. All the more so given the gains we see on wall street. Dow up 320 points on the close, best day since march 1st we were up 378 87 at the highs s afternoon. Huge rally today the s p adding 21 points to 2,647. The dows closing level, by the way, over 24,000 for the first time its the fifth time this year the dow has crossed 1,000 threshold and weve never seen that before. We crossed two in the year, weve never crossed more than two. We just crossed five on the close here as i mentioned, 24,263 for the dow. 2,647 for the s p. The nasdaq up to 6,873 on the bell the russell 2000 the laggard up two points today still managing to close higher up at 1,544. A lot of records set here on the final day of the trading month in november. And the month in general its another busy hour for earnings weve got results coming our way from ulta beauty, vm wear, 5 below, ambarella markets closing above 24,000, Thomas Farley will join me later on this hour with his take on the stock moves this year. What a year it has been. Joining me now, cnbc senior markets commentator michael s santo santoli, stephanie link from tiaa investments and paul hickey from bespoke leading the dow, utx, United Technologies laggard, ge, still couldnt manage to close positive in the s p, elle brands a big winner there and Juniper Networks lagging l brands up about 6 and juniper down about 6 . The rally went into overdrive when senator john mccain announced his support for the Senate Tax Reform plan this morning. Mccain saying, i believe this legislation, though far from perfect, would enhance american competitiveness, boost the economy, and provide long overdue tax relief for middle class families. Michael l, what do you think of it all look, its definitely impressive we were able to tack on at the alltime highs i think the dow is what catches the eye and it maybe is going to overstay just exactly how furious the rally was today. It was more balanced, almost all the up days have been balanced in other words, by balanced i mean plenty of stocks are down today. Russell 2000 barely above flat to me it wasnt about precisely pricing in the end effects of a tax cut but the fact this tax cut is going to probably move ahead and helping the mood its just a glut of good news the market has been ingesting for a while now. Stephanie, what do you think. A lot of it was tax, for sure, you also got through opec without major surprises and a couple companies in the Consumer World with really good earnings, costco, l brands the earnings parade continues to be very strong so if you do get tax and see an additional 10 a share, Something Like that, for the next year added on, sure, were starting to price it in. Its obviously a positive and a nice tailwind. I would note, again, the shift youre seeing a major shift rotation Even Technology did not have a great bounce today that was not impressive as well. It was really financials, industrials, energy, utilities, telecom, that kind of thing. Is that a temporary thing mike, you were making the comparison to march 1st. Weve seen these kind of herkyjerky moves like that before. The biggest oneday gain for the dow since march. March 1st was kind of the culmination of the First Quarter trump trade rally. People got very excited that one day and it wasnt as if it was the end of the good times. Two months after that, the market traded down to sideways and the leading sectors turned over and became the laggards so i do think as steph says were seeing this rotation the past couple of days. This type of large into small, growth into value, rotation, happened in june happened in september. Seems to be happening again now as people reshuffle. And paul , what do you make o it as you look at the fact we hit above 24,000 in the trading session, closed above 24,000 today, i dont think i dont know if its the fastest weve ever done. 35 trading days is the fastest weve ever gone from 1,000 mark to the next. Given that we close at 23k on october 18th, this was pretty close. What do you make of it yeah, its a rally that would make bitcoin proud six thousandpoint threshold crosses since the election five this year throughout this rally this year, what weve constantly heard, what happens if tax reform doesnt go through i think to what stephanie was saying before is key, the markets starting to price it in throughout all this year, the market hasnt been rallying on tax on hopes of tax reform, and thats ef devident by the ft the high tax stocks havent outperformed on tuesday they had their best day of the year as a group, and i think that helps to explain also why, you know, part of the rally in retail. Theyre among the highest tax paying companies, so any tax reform is going to hit their bottom line the most so i think its a combination of things, but i think right now is a number we can finally start saying the market is pricing in tax reform, so Going Forward if we do see any bumps in the road, that could spell trouble for the market unlike in the past when we said what if tax reform doesnt happen and shrugged it off. Or stumbled and the carl icahn was on the Halftime Report earlier toe. Heres what he sad had to abouti market. I thought trump was really going to change the landscape and he certainly has gone forward to do that im not that involved with washington, as you know, but i am, i have t euphoria even though earnings are going to be very good, and what have you, i just think this thing ha. This is the guy who bought the futures. So he says. So he says. Maybe he did i do think hes also been a little bit cautious for a while. He was really worried in late 2015 we were having a high yield bond meltdown. So i do think hes kind of a value guy. His orientation is when theres blood in the streets, toii want be the one there. Exactly. To be with the so i dont think necessarily its surprising that he feels like were getting a little bit carried away this market doesnt owe anybody anything at this point but bull markets usually give you more than you deserve. Is i actually thought he would have been more yeuphoric, himself, hes a value guy. Thats the one thing you can say about this market, said it all year long, youve seen rotation every single day practically and its been growth to value, value to growth, small caps, large caps, international, domestic so thats whats kind of keeps us afloat here, if you will, because youre seeing this rotation and new leadership leading. I think thats okay until its not. Paul, real quickly, i know you guys try to gauge whether were entering euphoria territory. Do you agree with carl icahn no. The market it taking on doubters, no smart onhortage of. Today stocks in the s p 500 hit a 52week high, the strongest reading since the first half the participation of new highs has been sort of lagging for the last fur months so this was a step in the right direction. When you look at prior years where youve seen this type of trading pattern heading in the first 11 months of the year, year typically ends off on a strong note with little, you know, small to minor declines if you have any all right all 11 s p 500 sectors were higher today tech was not at the bottom of the pack, its not leading, either as we were just saying, it was industrials, energy, financials. I think goldman the best performer in the dow today what rotation would you guys shay is happsa is happening here then money is flowing into the neglected parts of the market, the ones that have not been as exten extended its up 500 points in two days i can tell you there are strong numbers which there have been, people are enthusiastic, maybe newly so about airlines. Its the kind of stock that hasnt been quite as stretched in the last couple of months moneys finding its way into cyclical parts of the market. Its the laggards, the laggards across the board because the transports rails havent done anything in a couple months, right theyve really taken off how about fedex and u. P. S. Those things are on fire yet they also, too, lagged i get energy, why thats starting to see a little bit of a do you think thats opec related . I think a little bit is opec. I think if youre looking for the reversion into the laggards, certainly they hit the bill for sure of course, financials, you get a couple of different although theyre not tax cut winners, energy. Energy. Not really across the board. Not really. I dont think they need much. Right. They really dont well see what happens with the oil price. But clearly theyre acting better and thats encouraging. You want to see the whole market participate at certain times and when the value trade is working, you do want energy to be working. You dont want it to go against you. Well see if it continues. Lets talk retail for a second because weve had some big moves there for the last couple of days names that were higher today, costco, the big standout, it was up 4 . Alltime highs we mentioned 8 comps, 8. 4 in the u. S. For november. That number, to me, is pretty extraordinary. Yeah. And its not the only part of retail thats all of a sudden found a head of steam about it so is this part of what you guys were just describing i think so. I mean, i think its actually good news being good news. Look, all the ingredients are there for a kind of a Consumer Spending push, where theres enough to go around for a lot of the good players but also costco in particular being able to kind of nail this number is impressive. This stock got hammered on amazon. Yes. It was kind of like the teflon stock, could go against amazon, all of a sudden it didnt. Down 6 . It fell, like, 20 from its high and so its now it got derated. Now its rerating back. People are saying, guess what, its a good concept, people are going there, they have membership fees. Its not a broken story. Amazons copied it membership fees. Thats right. Very low margins. Paul, what would you say about retail and other sector winners here you know, i think its more the sector was so washed out, its a rotation plan i mean, the consumer is feeling good so thats a positive there. I think these rotations tend to last a few days. Tair it n theyre not oneday events like yesterday we saw tends to last a few days down the road, two, three months from now, it will be back to the same old winners we were looking at in june, everyone was worried about the tech stocks. That was quickly forgotten about. Seems like ancient history at this point. Speak of retail, we have san Earnings Report. Courtney reagan has numbers for us. Take a look at shares of ulta beauty, shares sharply lower after the bell u ulta did beat on earnings by 3 cent comp sales up 10. 3 . That sounds really strong but remember, weve seen numbers that were even stronge eer for m time for ulta. Earnings guidance for the Fourth Quarter, thats pretty light and thats whats driving the stock lower here i should also note ecommerce added 370 points 370 basis points to that comp total. So thats a breakout that we like to look at in retail. How much ecommerce is contributing versus the stores and you can see here shares down almost 6 for ulta beauty. We also have results from 5 below, beating earnings by 5 cents. Revenues also beating those comps. Almost twice as strong as expected coming in up 8. 5 the street was just looking for those to be up 4. 4 . You can see shares of 5 below are higher by more than 34 after hours. Kelly, back over to you. Courtney, what did you say the comp was for five below . Five below comp 8. 5 . Wow. Analysts were looking for that to increase 4. 4 . Remember when we were talking about fidget spinners, five below . I dont think we heard a lot about the fidget spinners lately, courtney. Question have not five below is one of the retailers that the continues to expand and add stores. Theyre still not to that mature phase where theyre looking at maybe an oversized fleet theyre adding stores, too remember the comp number doesnt take that into account that stores have been open at least a year. True. Thats a really, really strong number. Also good place for Stocking Stuffers if you think about it with all the smaller items of course, christmas is an important time of year for everyone, five below especially so yeah, great point courtney, thank you. Ulta down 6 so sort of interesting because estee lauder had such a good number, right so it goes back to that theme of you want to own product, right you want to own the manufacturers. You dont want to own the distributors this one was kind of interesting to me, the setup, because the stock is down 13 year to date. Is that all feels like more. It bounced. It bounced. Right. Its bounced, but its down 13 . The multiple went from 34 times to 21 times forward. So you had a derating there. I just thought the jetup wsetup better clearly theyre having issues e and speaks to margins. The quarter, poor quality, tax, buybacks, really a disappointment. Courtney mentioned the Fourth Quarter guidance was light upper end of the guide below the street consensus at this point if you look at the commentary going into the number, theyre lapping very strong numbers in past years including getting people to sign up for rewards program and reportedly the rihannasephora is doing very well. Paul, got a comment on the rihanna line ulta, the big theme earlier this year is it was amazon proof. A lot may be amazon proof, even a small chunk, if it isnt amazon proof for a high growth stock like that, if you just ding a little small part of its growth rate, thats going to really cause Something Like whats happened to ulta to happen. Yeah. Yeah still down a little more than 6 well keep an eye on it. Lets get to chip maker ambarellas earnings aditi roy has that story the makers share are spiking more than 4 at the moment did well on eps, beat by 8 cents. Eps coming in at 75 cents versus analyst expectations of 67 cents. With revenue, it came in line with expectation there at 89. 1 million versus what the street was looking for, 89 million so pretty much in line with expectations and on the q4 revenue guide, basically in line as well, 68 million to 72 million versus analyst expe expectations of 70 million. The company has had challenges lately with some of their biggest clients like gopro and dji going with competitors for their chips, but, again, shares now up almost 4. 5 now as they post a good beat on eps. They are betting big on new Computer Vision chips and well hear more about that on the call kelly, back to you steph apparently the Computer Vision chips certainly are having momentum, clearly stock trades at 5. 5 time to sales, which is not cheap. Up 35 year to date, but its peak was at eight times sales. Scarcity value, Machine Learning products if they can convince the vc produ its not quite a faang yet, though, mike a long way to go. Its not going to displace amazon in faang. Less than 2 billion market value. We think of it as a bellwether name. Right. Its still one of the scrapfy guys trying to fight for it. Paul, last word no interest there no interest in ambarella. Well give you the last word on tech, then, because its been sort of an odd one out in this incredential r incredible rally there this close today. Yes i think that divergence we saw yesterday, historically, those things tend to maybe, you know, last a few days but, again, i think over time, three months from now, well be, you know, looking back and, you know, wondering what happened on that day. And well be from higher levels. We wont remember that day at all. Paul, thank you. Stephanie, thank you. Thank you. Appreciate it. Paul, stephanie link joining us, to talk earnings and these markets. Quite a day. The dow soaring more than 22 now this year. But value stocks as we were mentioning have been significantly underperforming growth until lately. Were going to talk about whether value can fuel the next leg of this rally. Plus transports soaring higher and helping lead todays huge rally well discuss why this group is suddenly taking off to some new highs. And we always want to hear from you, contact the show and share your thoughts with us via twitter, febk, oacoover email youre watching cnbc, first in business worldwide is this a phone . Or a little internet machine . [ phone rings ] it makes you wonder. Shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. Choose by the gig or unlimited. And ask how to get a 200 prepaid card when you buy any new samsung device with Xfinity Mobile. A new kind of network designed to save you money. Click, call or visit today. Welcome back the dow just closed above 24,000 for the first time and it cleared it by a margin the dow was up 331 points today. Its the fifth thousandpoint milestone of the year. Excuse me. Thanks in large part to growth names. The growth etf is up 25 so far this year. But value stocks are showing signs of strength in recent days the value etf, the ishares starting to edge out in growth in the last three months will value take the markets to the next milestone lets ask bill smid from smid Capital Management and barry james from james advantage funds. Welcome to you both. Bill, what do you think . You betting the house on value here i certainly wouldnt bet i wouldnt bet on milestones i dont think thats a good way to look at it. Were eight, nine years into a bull market, and at the end of november, now, each year, what youve got is people have had momentum and big gains on stocks so they have virtually no interest in selling those until after the first of the year. And then amazon made a series of industries uninvestable by throwing scares in them for their lump of coal right. There are bargains galore in uninvestable areas in our view, there are two outcomes here, it would be like 20002002 where tech goes out of favor and money flows into the rest of the market because the economy is improving and that would be the real positive case, or we have a blowoff top to suck the individual investors in the next three to six months and then cream everybody and value should drastically outperform because if you own lower p e stock, you get hurt a lot less on the downside when they unwind the momentum okay. Barry, what about you, i mean, is it true that if this rally goes on for a while longer, that growth will inevitably lead the way . Is yes. That is true you know, i love the song home on the range and unfortunatel i got the discouraging word and cloudy skies we sent out a special study called topping market. Because the fed change and excess optimism and other things of that nature and this long growth pattern, we do believe value is going to outperform, the market will probably have a correction but lest the other gentleman said, the 20002002 period, Small Cap Value stocks went up when the overall market fell 37 . With y you can make money in smaller cap stocks under those types of circumstances. Were seeing the first vestiges of that since really the end of 2015 its all been growth all the time, and were just starting to see an edging of bargain stocks starting to outperform thats right. Well, barry, bill, you can weigh in on this, too, one difference between that period that was around 2000 is that back then, there was an abundance of demonstrably very cheap stocks it was essentially the entire market overvaluation was restricted to sort of half the market the other i dont think thats the case right now. The median p e of stocks is higher where it was then and where does that leave you, barry . Barry, what are your picks as you answer that . As far as i look at that, in terms of value wativaluations, schillers, thats as extended levels and price to sales, median price to sales on the s p 500 is at a record level today thats another indication that things are overvalued in that sense. We also have what we call a mania in ecommerce, the faang stocks are up 500 in 5 years. Thats not a normal advance in stocks and so if that crumbles as weve seen with the nikkei and the tech and biotech and other areas, when those bubbles burst, they tend to get hammered and it ripples through typically the other stocks that are their neighbors. The ones that arent their neighbors are these value bargain stocks good earnings but good valuations some examples macys, barry . Thats a name, you like macy thats exactly an example macys is hated by everybody sometimes its the best thing to buy. It has a yield higher than its price to earnings ratio yet its not eating up all of itserin earnings to pay that dividend. Okay. Its the fifth largest retailer in terms of ecommerce so it has that that part is growing theres some positives there and, again, the price has been so beaten down, its really cheap. Much less than its enterprise value. Much less than the value even of its real estate. Were showing id like to pigpiggyback you like target rp, right, b . 12k3w4r a month ago, targets price to sales was the same at the end of march of 09 when we thought we were going into a fiveyear depression mike, i dont agree with you on your assessment. You had john malone, most successful media investor of pretty much alltime on with david faber last friday in an extensive sbrinterview. If you listen to him carefully, he said unscripted television is a fire sale right now, so we like tegna, largest owner of tv affiliate stations, unscripted television dramatically less expense in unscripted than in scripted. Amgen trades at 14 times earnings anybody that can walk and talk and chew gum in the large cap space trades at 20 to 25 you guys talk about costco cost costco dropped down to 25 times earnings, yes, theyre doing well, but its hard to make a lot of money at 15 return on equity paying 28 times earnings like youre paying today. All right. And then, so target, tegna, amgen, buy things youd buy fivi years ago. Theres lot of them, actually, if you look at our portfolio, 7 or 8 out of our 28 stocks that look like that. Great stuff people can go look that up bill, thanks for joining us, barry, too with some ideas for this market. Up next, dom chu has some ideas of his own hes been digging to find out where investors are pouring their money today and show you where the most exuberance is in a moment. Later New York Stock Exchange president tom farley daanhs in on the market move toy d much more. Youre watching cnbc, first in business worldwide not rebalancing your portfolio. Focused on what you love, not how your money will last through retirement. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. Welcome back we have an earnings alert on vmwear now deirdre bosa, howd they do . Hey, kelly, the Third Quarter report coming in better than the street was expecting we got a big beat on the bottom line eps at 1. 34 versus 1. 27 expected a small revenue beat, 1. 98 billion versus 1. 96 billion that was forecast. Its biggest Services Business need up 1. 19 billion in the quarter in line with what the street was looking for last year it moved away from trying to build its own public cloud and competing with the big guys to actually partnering with them, instead, the big one was aws and reinvented this week, announced plans to expand its partnership with amazon that has served the company well, made it easier for i. T. Departments to use its products. Its up 50 year to date and a strong showing in the after hours, its now up thank you, deirdre. Feels like theres a lot of consolidation starting to happening. A tremendous amount of jockeying, partnerships, people trying to fill out their offering for now, they like vmware. Its got a big install base in all those relationships. Its up 3 right now on that report time now for a cnbc news update, lets get over to sue here herera. Hello, kelly, hi, everybody heres whats happening at this hour john conyers Attorney Says the congressman will not be pressured into resigning amid Sexual Harassment allegations. Or fold re arnold reid saying despite nancy pelosi calling for his resignation, conyers alone will decide when its time to step down. First of all, its not up to Nancy Pelosi Nancy pelosi did not elect the congressman. And she sure as hell wont be the one to tell the congressman to leave that decision will be completely up to the congressman. Americanairlines says only a few hundred of its late december flights remain without pilots. It said the pilots were picking up the extra flights and the airline has more oncall pilots in december than during other months so, so far, no flights have been canceled San Francisco is planning on bringing surge pricing to every parking meter in the city in 2018 each of the citys 32,500 meters would be subject to hourly rates that vary depending on demand. For example, a neighborhood with a lot of restaurants might see higher rates during the evening hours than during the day. Thats the news update kelly, back downtown to you. Im avoiding San Francisco. There you go. Except during off hours because im there so much. Anyway, thank you, sue. You got it. Sue herera. Lets take a quick look at how we finished on wall street, dow up 331 points, by far the outperformer strong day at the close for other averages nasdaq up 49 russell managed a twopoint gain a bunch of record closes there in general, the dow up 387 at one point today. Lets get to some the other big stories today in our rapid recap. We do have dow 24k, dow surpassing 24,000 for the first time ever. Went above 23k for the first time on october 18th john mccain becoming a yes. He was a crucial swing vote here for republicans and he put out a statement that said he doesnt think this is perfect legislation but he does believe it brings muchneeded relief to american families. The white house not denying this report that appeared in the New York Times earlier today that theres a plan here at the white house to replace Rex Tillerson as secretary of state with mike pompeo who is currently running the cia. This is the decoration of corporation, what they decided sp wh is what we thought it would be, going from january now to december 2018. Theyre ripping up the last three months of this deal, replacing it with a brand new 12month deal. With the tax break and with the way you have the emerging markets being so strong, i have to admit that there might be a very strong underpining to this market so in other words i think its just run away, you know, it might have a big correction but i cant say its the same. And mike, that story, the New York Times story about Rex Tillerson potentially leaving the white house is one of these that it hit it has huge ramifications even in h terms of if pompeo takes over, senator cotton would take over for him, who would take over for the senator . It did not seem to grab wall streets attention today. It doesnt really penetrate the daytoday on wall street. Does seem as if investors are kind of, look, day kind of put this in the pile of things we kind of get, you know, its not the most stable administration theres a lot of personalities in and out its been the case from day one. Its not necessarily something that bears on what the market is trying to price in today. I think thats a great point. Where is all the money flowing the these days todays massive rally . Dom chu, are hewhere hes findie etf exuberance the heat, the trading, all the volumes, the sector etfs, spdr ones. We took a look right after the closing bell things were still settling out these numbers are interesting. They now changed dramatically in just the last 15 minutes as trades have settled out. The three, etfs among the big spdr etfs that had the most activity relative to where they normally trade are these, the financial, tech and industrial etfs we looked at their 90day trading volumes and then looked at what their trading volumes were today in relation to that to get an idea how much surge there was in trading volumes turni ins out for the spdr financials it was more than double and now its more than more than double 120 , 130 average daily volume over the last 90 days. The tech side of things, a huge surge, 135 . We have 71 here. It went up dramatically in the last few minutes industrials, 128 more than average 90day trading volumes the one cause for maybe a little bit of caution that some traders are looking at right now is the s p financials spdr. The xlf. Thats the ticker that trades here the reason why, we saw a lot of trading volumes but did see the momentum weighing throughout the session. Were not to the lows so to speak. Financials lost a lot of momentum if theres a place people are looking at for a little bit of a cautionary tale, might just be in the intraday trading are inin for the financial spdr thats one of the hot spots in the market, todays trade, guys. Dom, its not that we had the big rally, its also as mike was pointing out, its the last day of november. Does that mean these flows are indicative of where people might be going or leaving a wez head into the rest of the year . Month end could be part of the whole story. Theres a rotation at play, weve been talking about it for maybe a few days now this idea that some of the hot tech names have seen a selloff over the last couple days. Perhaps even in financials have seen that pickup when we talk about the idea that markets are poised for the seasonally strong time of year, you wonder whether or not the action that weve seen on the downside over the last couple of days and then the upside today has really at least changed the dynamic for that santa claus rally, whats going to happen Going Forward. But, again, this is a seasonally strong time of year, but after a run after around 16 , 17 , 18 from major averages, you wonder whether or not the sector etfs tell a bit of a sign for what should be happening. We sal see. Dom, thank you. An Earnings Report on zoumiez. Earnings per share coming in line and revenues beating estimates of 246 million. Analysts were looking for 242 million. So for the quarter, comp sales were up 7. 9 zumiez is one of the retailers that still gives us monthly updates. Theyre telling us also in the month of november their Comp Store Sales were up 7. 8 also when you look at the guidance, pretty strong for the coming quarter shares, though, are lower by about 8 the best we can do to explain this right now is if you look at the price action on the shares, up into this report, they were up 4. 5 today. Up 71 in the last 3 months. Kelly . Wow okay shocked that theyre up that much yes, thats great context. Zumiez down about 8 after hours. Courtney, thank you. Transports one of the big leaders in todays rally up next well break down whats driving those gains after underperforming the Broader Market this year. Coming up nyse president tom farley will join us on this recordsetting day to discuss market moves and well lhtig the Christmas Tree outside here at the New York Stock Exchange. Zar one of our investors was in his late 50s right in the heart of the financial crisis, and saw his portfolio drop by double digits. It really scared him out of the markets. His advisor ran the numbers and showed that he wouldnt be able to retire until he was 68. The client realized, i need to get back into the markets i need to get back on track with my plan. The Financial Advisor was able to work with this client. Hes now on track to retire when hes 65. Having someone coach you through it is really the value of a Financial Advisor. We are the driven. The dedicated. The overachievers. We know our best investment is in ourselves. We dont take no for an answer. We fight for what we want. Even for the things that were once a given. Going to college. Buying a home. And not being in debt for it for the rest of our lives. But were only as strong as our community. Who inspires and pushes us to go further than we could ever go alone. Sofi. Get there sooner. Welcome back it wasnt just the dow industrials. The dow transports pushed to another record high today after huge gains yesterday phil lebeau is here with whats driving this lately. Phil kelly, today it was the airlines but really across the board, all of the transports had a big day today. As you take a look at what was really driving this subsector, if you will, for the dow components, and the dow overall, airlines were higher well talk more about that in a bit. The shippers have been on a roll for some time. Were expecting a strong Holiday Season that helped there. Then you also have fuel costs that remain relatively speaking in check take a look at the airline index. And this is strictly looking at the airlines today had a nice move higher today now basically at a multimonth high not for the oneyear high, but theyre getting back to where they were earlier this year. Americanairlines, one of the largest gains today. Part of this is because the headlines yesterday were, boy, you have all these pilots who may not be scheduled for flights, were going to have mass cancelations at christmas take a deep breath thats not going to be happening. Think people saw really the true story going on here, that stock was up more than 2. 5 . And then finally, the rails, b boy, they were rolling today whether its kansas city southern, union pacific, norfolk southern, they were all higher on a relatively strong day really a very strong day for the transports and thats what was moving the transports today. Kelly . Is and mike, whats your two cents on it . Look, when the market is playing offense, when they want theexposure, the transports run pretty much whats happening also the rails, one example, high tax rate, they would be big beneficiaries mostly domestic. I think kind of lologistics, fo chain, shippers, theyre running flat out and people think its part of the stronger Holiday Season. Economy good stuff phil lebeau joining us in from chicago. Bitcoin also traded lower today after crossing into 11,000 mark yesterday one fed governor has a warning about the cryptocurrency in todays takeaway. On ston, tfa mey aop technician says theres one name you want to buy. Thats at 5 00 well, its earnings season once again. Yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. Welcome back it is time now for our takeaway today, we begin with Procter Gamble trying to stop the bleeding at gillette by launching a lineup of razors with new blades that wont be more expensive than current products and introducing lower end razor options. Nelson peltz railed on p g i imagine he wont be happy with this the ceo told the journal, quote, we decided to innovate not just on the Super Premium share, they lost to cheaper startups like dollar shave club. Seems like a concession to the realities of the market right now. I also wonder whether there isnt that much incremental innovation you can persuade customers about at the higher end. That trick worked for a long time. I thought the same thing. I read the article. Im thinking after peltz making the point. There was one in the 90s, the mock 3 once p g bought them in 2005, its kind of been crickets maybe its not selfevident if they had come out with something innovative. In which case youre making the case that its pure marketing. Which i think maybe nelson peltz would agree with, essentially you persuade people, its a little bitter and worth paying for. Men are really loyal to whatever iteration of the razor that they got comfortable with they dont upgrade all the time. Youre still using one from three or four generations ago. Next, warnings for bitcoin first, fed governor correls warned today its growing popularity could pose, quote, serious Financial Stability issues then the irs saying if youve cashed out or paid for anything with your bitcoin this year, you have Capital Gains to report on form 1099 and taxes to pay on that the irs has actually gone to coinbase for user info in the past, michael, so it feels critical bitcoin holders actually know this. For sure. Its always been sort of risk factor in number one in terms of using bitcoin as an investment which is the government can decide to hem in on this unregulated area the irs issue is particularly interesting to me because, you know, this, of course, is going to create a disincentive to try and hide gains here somehow. Well, the other thing, too, its not clear, people go and buy something in bitcoin, i think theyre going to get a form 1099. Coindobase, we need the ledgers. Right we want to know who these people were potentially huge issue if you bought bitcoin, it has a huge capital appreciation, suddenly you owe tax on that, call your accountant, everybody. Finally as were about to light the tree outside of the New York Stock Exchange, a warning when you go get your own trees. Apparently theres a shortage of Christmas Trees. They take ten years to grow six feet tall. Ten years ago was the great recessi recession. Apparently fewer trees were planted. Now were harvesting these results. Of all the unan tes pate eti consequences of the financial crisis this is not one i would have foreseen. Nor i. Buy shorter trees because theyre cheaper or much taller trees because they started growing in 2006. All i discovered is i should buy it at home depot instead of whole foods. You save so much you can probably get one twice as tall. And not the Street Corner outside my building in manhat n manhattan. Probably not. Thats where i get it, anyway. You dont care, if its up 10 , you dont even know i carry it into the house. Its the most wonderful time of the year. Coming up, we will head outside the New York Stock Exchange with nyse president tom farley to talk about this rally, about bitcoin and to light the Christmas Tree you can barely see there. lbeig bk. Wel rhtac up next, kelly is heading outside the New York Stock Exchange to join nyse group approximated tom farley for the annual christmas Tree Lighting here at the exchange and to get rerdayke on todays co d on wall street well be right back with that. Keyboard clacking ] [ mouse clicks, keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. When it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. Fidelity. Not rebalancing your portfolio. Focused on what you love, not how your money will last through retirement. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. Hard to believe, christmas is just 25 days away now im outside the New York Stock Exchange with nyse Group President tom farley, getting ready to light this big old Christmas Tree at broad and wall street youre in the wrong color for today, buddy the tie works, but lets talk it through. Huge day in the markets as we stand out here getting ready to do this. What do you make of whats been going on for the stock market . Right color for the 94th Tree Lighting but not for the stock market were seeing more positive economic results outside the u. S. Than in the u. S theres a lot of optimism. Weve seen a lot of ceos here at the Stock Exchange expressing optimism certainly 24,000, i dont think anybody expected it a year ago, here we are. Carl icahn said today he thought it was some euphoria in the stock market i know you dont want that hanging over your head, a big bubble do we think were anywhere near that territory im not a stock market prognosticator im an Exchange Operator were here whether the markets are going up or going down so i truly dont have a feel but you do pick the brains of the great and good of industry and by and large, people feel like were in a good spot economically so the real bubble is in bitcoin . I mean, i wouldnt all these children who are behind me here, i wouldnt advise them to che cheer if you hold bitcoin [ cheering ] will you start trading bitcoin like your colleagues in chicago are doing . We were in early with an investment in a Company Called coin base. Were looking for appropriate commercial uses of it. Theres still a lot of work to be done with blockchain and bitcoin to bring in institutional customers and industrialize it as a product with utility were keeping a close eye on it. Is it a business you think is worth getting into you have Different Companies now, Cantor Fitzgerald hosting trading on it. Its proprietary platforms this is where the excitement is. This is the topic everybody wants to talk about. Its a little bit of a scary one, though. How do you guys balance the risks versus the opportunity its worth spending time on for sure five years from now, do we look back and say, wow, its revolutionized everything . Its unclear but were absolutely spending time on it if theres one issue to look out for with bitcoin and crypto currencies its how do you manage the risk. We will not dive into every product or busy. How do we manage the risk . Its volatile, its gone up real fast, it could go down real fast do you mean when people say, great, they might be launching Bitcoin Futures but i dont want my company to be sucked into a situation where theres margin calls, even though we dont want anything to do with it thats great example of appropriate risk management. Lets go back to the market and talk a little bit about the business this year one second. Its coming, i promise were getting a light the tree chant back here. How is the business of the New York Stock Exchange doing . The business is great i said to my colleagues, in many respects this is the best year ever from a listings pessimist s pre the ipos are coming here, all the tech ipos. We raised twice as much money, had twice as many ipos as last year its going very well are you going to get saudi aramco well compete for any exciting idea. But i try not to blow it by talking about those ipos publicly the fact that the blue aprons of the world hasnt done so great, thats the not keeping people away . The ipo market is great this is awesome. The crowds behind me are chanting light the tree. Its cold out here lets get right to it. Are we ready to go . [ cheering ] im going to ask the man of the hour to come over and light the tree, give the officer a round of applause. [ applause ] now, officer nash is going to light the tree but only when this group, every single one of you, including those sitting way up on the federal hall steps, counts down from ten all right . Here we go ten, nine, eight, seven, six, five, four, three, two, one. [ cheers and applause good stuff, isnt it . Thanks for being here, man good stuff, i love the light the tree chant. Im talking about bitcoin wearing a red velvet suit. Thank you. Thank you. Its so fun. Happy holidays. The tree wasnt the only thing lit today. The dow surging more than 300 points, cross that go key 24,000 level. The s p and russell also closing at record highs. And it all began with hopes of tax reform as the senate seems to be on the fast track to passing its tax cut bill within the next 24 hours. In fact lets go right to washington, d. C. On capitol hill our ylan mui is standing by live with the very latest details ylan reporter scott, the tax bill is gaining momentum in the senate it got a big boost when senator john mccain said that he will back the tax reform bill he put out a statement saying that even though this legislation is not perfect, he does believe it will provide relief to american families. However, in just about the past two hours or