Transcripts For CNBC Closing Bell 20240713

Much as yesterday, of course, when it posted one of it best days since january joining us for the hour is mark tepper, founder and ceo of Strategic Wealth partners. And mark, you know, a rally like this going into year end has got to make your clients feel good but do you tell them not to expect the same thing next year . Thats absolutely the conversation were having with clients right now. I mean, it has been an awesome year markets are up about 30 all on the back of no Earnings Growth whatsoever. So its all been multiple expansion. Its all been an increase in Investor Sentiment so were telling clients right now, manage your expectations for 2020 dont expect a repeat of 2019. I think, unfortunately, a lot of Retail Investors tend to have a shortterm memory when it comes to market performance. So, its not easy. You do have to work at it. Expect good gains in 2020, but nothing like this. Lets focus in on the big stories were watching today Frank Holland is tracking the nasdaqs run to new records and the stocks most heavily weighted in that index. Mark santoli is kicking off its market dashboard with a look at a tech surge lets kick it off with frank at the Nasdaq Market site, though hey, frank hey, morgan the biggest name in tech makes sense. Microsoft, apple, and alphabet are a combined 25 weight of the nasdaq composite today back on august 27th, 2018, when it stood at 8000, the top three were apple, amazon, and microsoft at 23 of the index. Since then, apple has gained 33 , microsoft improved 46 . Alphabet class a shares getting just under excuse me, class c under 11 , class a under 10 . Amazon fell, lost about a quarter of its value since 2000 and lost three quarter of its weight, while facebook and comcast increased slightly and adobe replaced nvidia in the top ten of the weighted stocks thank you, frank. Lets send it over to mike with his first dashboard of the day mike looking at the best decade, david, in the form of the nasdaq 100 and how investors have been willing to pay up for these very large Growth Stocks that are contained in the 100 this isnt the composite its the 100 its where essentially all the earnings of the Nasdaq Companies come from and the vast majority of the market cap. What you see cumulatively, valuations have expanded, investors have become more comfortable with the supposed reliability of these Growth Stocks you see here, pushing 24 times forward earnings, based on the next 12 months worth of earnings and the premium over the s p 500 for the nasdaq has also inched higher what i find interesting, though, is that you had some pretty good years here when the market was not actually expanding valuation. Earnings requester going to catch up obviously, this is something that shows you later in a bull market, you do have valuations that start to get stretched a bit. But for a historical perspective, if you go back 20 years ago to the very height of the nasdaq tech bubble, this measure would have been around 70 times earnings. So, obviously, it just didnt even compare the new nasdaq is where a lot of the biggest, most Profitable Companies are as opposed to being more of a speculative, highgrowth instrument that is exactly what i was going to ask you going back that ten more years where we had, and again, its worth saying again, so ill let you do it, but we had a lot of companies that werent making any money in the late 90s into the early oughts before we had put a bottom in on the nasdaq. Exactly back then certainly, microsoft, vastly profitable it was the biggest stock for the most of that run back then, but cisco, also very profitable, but a towering valuation, a lot of those earnings went away in that tech recession so this is a different animal, especially given the fact that the biggest stocks in the overall market are also nasdaq stocks right now, there really wasnt quite the case back then 20 years ago so you can compare this to other bull markets i dont think it quite yet bares comparison to that particular phase. All right mike santoli, thank you. A rising trend among private companies, meantime, is allowing employees and early investors to catch in before going public kate rooney is back at headquarters with more on this startup employees can always wait a decade for their company to ipo they need to buy a house or pay tuition, so theyre turning to secondary markets. Through a broker or preipo platforms like sharespost, they can find Venture Capital buyers who want a stake in their startup analysts say this market is maturing as vc money eliminates the need to go public. Secondary markets climb to 50 billion through the end of this year, to 35 billion in 2018 there are some downsized, though these markets are pretty opaque, so you dont actually know how many shares are out there, making it harder to get a fair value. Common shares held by employees are often not worth the same as preferred shares that investors have its usually a 10 to 20 discount and of course, transfer restrictions companies have the right to completely refuse these sales, guys kate, thank you kate rooney. Well, the nasdaq hitting an alltime high today after breaking 9,000 yesterday joining us for more on what we can expect from the tech sector in 2020 are michael packtor, managing director of the equity researches, and mark setovic with rosenblatt securities mike, ill start with you. Its been a heck of a year for technology stocks, the f. A. A. N. G. Names we focus so much on it most of them are among the largest market Cap Companies in the country, in the world. What do you thinks going to happen next year i mean, for f. A. A. N. G. , you know, facebook remains probably cheap and deservedly so. Theyre never going to escape regulatory scrutiny. Amazon has been the promise of, you know, exploding earnings and they did it for a couple of years and they backed off and decided to go back into investment i actually think they turn it around next year and start delivering earnings. Netflix, im hugely bearish on, and thats a huge theme next year competition for both subscribers and content, i think its going to destroy them. And i think content more than subscribers. I think theyll continue to grow, but i think youre going to see, you know turn netflix on and nothings going to be on. Alphabet is kind of a mess they spend a lot of money on things that dont make any sense. Theyre opaque we dont actually know how they make money they dont tell you what youtube revenues are, for example pch so that probably moves side waist of the f. A. A. N. G. S, i really like facebook, but they have structural problems with regulators amazons the best in class, netflix is the worst in class, and google kind of in between. I want to dig more into netflix in just a moment, but mark, first, your thoughts on where you think the greatest outperformance could be, the stocks that are poised to have the most potential upside going into 2020 right now. Sure thing, morgan. Snacht, number one, for us is a great stock to own into 2020 theyve really had a complete e reorg of their sales team and a great reorg of how they branded the product, bringing in jeremy gore minute from amazon, who has really brought them in better favor with agencies and advertisers. Were hearing and seeing a lot of new advertisers coming to the platform i would say generally speaking, agencies and advertisers alike are looking for a fourth sort of horseman to balance off their dependencies on amazon, facebook, and google and i think snapchat has a really core demo in that sort of gen z, early dmenl, that theyre making very easy for advertisers to monetize today. So snapchat would be number one. In terms of number two would be facebook i do agree with mike there will be continued regulatory scrutiny here but unless theres a breakup in the picture here for facebook, its the best as platform out there in terms of returns. Its got the best reach. And i think if you think about utility to users, the utility to users is of high value i think its going to be hard for the ftc to advise on a break up of this company those are the top two for us next year. I want to go back to netflix for a minute i get youre hugely bearish and were seeing some of these competition concerns starting to manifest in the stock, in the numbers. Youve been bearish for quite a while. Underperform ratings since 2011. Do you feel like youve missed out on any of the run weve seen up until now im a broken millennium clock, so ill be right once every thousand years but ill be right on this one. Sure, ive been completely wrong about what investors are going to value and netflix has grown a lot faster than i thought. I continue to think their 200country strategy is just asinine. You know, amazon is in Something Like 16 or 20 countries, and netflix is in, you know, gabon what the heck are they doing in gabon . So i think theyre never going to be profitable internationally. But i think the big issue. And i called this with my downgrade in 2012, i said, disney is going to get fed up letting zplo intin inting disnet my thought bob iger read my research and apparently not. I was early by seven years im going to be right. Te content is going to vaerp and i think netflix will get cut in half for the seven years early. Better late than never, maybe. Mark, let me go to you on facebook and just push back a bit. Its going to be an Election Year theres no doubt that facebook will be under the microscope again. Its not hard to manage, its going to figure prominently in the election itself. You could imagine a scenario in which the pressure we saw on the company this year in terms of Public Opinion or many so from regulators and politicians, will only grow next year. But you dont see that sort of knocking them off their stride i dont. I think weve got some leaked information from the ftc, this is from the chairman himself, an ft. Com interview, where its really hard for us to sort of, you know, look at breaking this company up, since weve already approved mergers here. They approved the merger of instagram and whatsapp and hes argued its tougher to argue unwinding that, without facebook and i think thats a hard case to prove in terms of, you know, other regulatory scrutiny, you have the doj thats working along the ftc, the house judiciary committee. Youve got district attorneys in new york, as well as, i believe, its eight or nine other states. Obviously, theres a lot of weight on the stock from a regulatory standpoint, but again, i would point to, if the breakup isnt in the picture here, i really dont see the stock really being impacted. And it can even make a case from a breakup standpoint that there is Downside Protection here if you give instagram a higher multiple torre point, david, i would just make to your point is, i think facebook is generally playing ball right now with the Trump Administration i think there is some value that theyre seeing in terms of libra, much longer term, in terms of stability in the u. S. Dollar i think thats something thats not really talked about today. Not only that, but as a sort of offset to chinas intentions of building its own Digital Currencies so i think theres some things within the existing administration that, you know, may come out in their favor. Mark tepper, i want to get your thoughts, especially since some of your holdings include alphabet, facebook, amazon, disney all the big ones, right yeah. So we own microsoft, we own apple, but those are two where were actually taking profits right now. Weve seen quite a run this year apple in particular, the forward multiple has gone from 11 at the beginning of the year all the way up to like 21. 5. Its essentially doubled fiveyear average forward multiple is 14 thats really at the high end of its valuation range. Next year will be an execution year theyre going to have to execute. Our favorite tech name right now, salesforce. Crm. Software play, all recurring revenue, making unbelievable acquisitions theyre going to help to really build out their customer 360 effort thats what we like heading into 2020 all right well, mark and michael, our thanks to both of you. Well see you next year. Maybe ill come back and we can see how they did, facebook and netflix. Up next, its been a rough year for softbank, from weworks woes to ubers underwater debut. And now the company is losing a key voice on its board well give you the details right after the break. And later, tesla hitting a new alltime high today as production kicks into gear well take a look at the sck d e tential speed bumps in 2020 welcome back to closing bell. From the wework debacle to ubers public company, its been a rough year for softbank. Now a key voice is leaving the companys board of directors josh lipton has the details for us in san francisco. Josh thats right, morgan. A big change here on softbanks board. Tadashi yanai, founder of uniglo is resigning hes been described as having the stature to stand up to masa san when necessary about half of softbanks board are softbank execs, like Marcelo Claure and rajiv misra you have the head of the saudi investment fund, the biggest contributor to the vision fund also on that board guys, back to you. Okay. Josh, thank you. Well, in march, just before the uber ipo and of course before the summer when wework started to sink and did not manage to get to the public markets, i did sat down with softbanks ceo and asked him about the team overall and management in fact, josh mentioned two of the his key people, Marcelo Claure and rajiv misra for some time, theres been talk that at the top, things dont always go as smoothly as they might. Heres what masa had to say. No, no, they are good guys. They are good friends and good partners of course, once in a while, theres a difference in opinion. But me and them, between them or other management, but, you know, always good to have a little bit of healthy competition or tension, because that way we work harder. You know, for any organization, any family members but they are both very good partners and, you know, happy so youre happy with the team you have in place right now . Of course, of course. Claure, of course, jetted into, tried to help rework wework and misra helping run the vision fund, of course. But the organization really is about one guy. Its very interesting. And we know who that is. And thats kind of it. So well see 2020, it should be a very interesting and challenging, perhaps, year for softbank its funny, because we talk so much about i guess not funny, but curious we talk so much about esg and whether were sort of hitting this Tipping Point for esg investing. The governance piece of the puzzle doesnt always get talked about as much. When you look at a company like softbank, whether that starts to become a bigger piece of the scrutiny its a great point and i think it would not pass a lot of potential tests when it comes to governance, at least thats certainly what you hear theres a lot of debate about softbank and a lot of it goes back to just the overall value, their ability to potentially launch vision fund 2 will they really be able to do that after the performance so far of vision fund one well see. But dont forget, they own that enormous stake in alibaba, the greatest investment perhaps ever made all right, one to watch, again, as we go into 2020. After the break, Global Markets gained 17 trillion in market value in 2019. But will the worldwide rally continue in 2020 were going to discuss that, next and later, nike leading the dow today after one firm initiated the stock at overweight, saying its hitting its stride weldil ve into that name ahead in todays market zone. Closing bell will be right back we have some news on disney. Julia boorstin has those details. Well, the mandalorian will be returning in 2020 this tweeted out by show runner, jon favreau. He says the next season of the mandalorian will be released in 2020 the final season is streaming today and this has been a key part of the big push for disney plus, which announced that it had tens of millions of signups in its very first days disney shares ended the day pretty much fast how can you not keep baby yoda going Julia Boorstin, thank you global so stock markets have gained 17 trillion in 2019. Seema mody has a look of what 2020 has in store. All thats happening on trade, huawei, and u. S. europe relations. 2020 could be the year that International Markets outperform the u. S. Heres a look pat what to expect global stocks rebound, europe goes hes, and china launches a Digital Currency here are three predictions for Global Markets in 2020 first, investors pivot to emerging markets u. S. Stocks outperformed most International Markets in 2019, but strategists are betting that a pickup in Global Growth will push more investors into a handful of emerging markets that have been unveiled stimulus measures second, u. S. europe tensions will rise over huawei. Despite warning from the u. S. That huawei uses back doors to spy on customers, European Countries will continue to lean on the company for the build out of 5g broadband, ignoring washingtons call to ban the Chinese Telecom player could create strained relations between the u. S. And the eu. Third, china goes digital. They have hinted that theyre launching a digital version of its currency while the country is already on its way to becoming a cashless society, a Digital Currency could dramatically change the way consumers purchase goods, putting more pressure on u. S. Regulators to greenlight Facebooks Libra or explore other currency options that could rival china. And earlier this month, ceo of facebook, mark zuckerberg, warning that beijings digital efforts could leave america behind, this comes as he really tries to push libra and get that green light from regulators in d. C. Guys okay. Seema, thank you seema mody mark, emerging markets and developing markets always an important allocation outside of the u. S. What do you think as we head into next year so we definitely have an allocation to both emerging markets and developed international. But were not overweight, were right on target. We still think from a risk reward standpoint, the absolute best place to get exposure and hopefully get some positive returns next year is still large cap u. S. Stocks. Why why i mean, for one, you already have exposure through those large cap stocks to both the emerging markets and international, when over 40 of revenues are coming from overseas, right . Furthermore, our base case is that the dollar is going to weaken in 2020, which should be even better for all of those multinationals. So with u. S. Stocks, you are seeing modest revenue growth, modest Earnings Growth, and i think thats the bes plat place right now. If you see china launch its own cryptocoin, what does it do to the dollar . I dont think it will have any impact on the dollar whatsoever you havent seen bitcoin having any impact on the dollar its hard to believe that will be any different than bitcoin. And bitcoin tends to be the crypto leader right now. Coming up, weve got your last chance trade and mark is looking towards the Health Care Industry well give you his call, straight ahead and later, stocks are at record highs, unemployment is at record lows. But David Rosenberg says recession risks remain evaluated and theres too much complacency in the market. Hell tell us why, next. And as we head to break, heres a check on bonds. U. S. Treasury yields moving lower to end the week. The benchmark tenyear currently yielding around 1. 87 . Closing bell will be right back if you see wires down, treat them all as if they are hot and energized. Stay away from any downed wire, call 911 and call pg e right after so we can both respond out and keep the public safe. Weve got just a half hour left to go, not only to the trading day, but to the week it is a mixed picture for stocks right now with the dow and the s p hanging on to gains, but the nasdaq slightly lower after hitting record intraday highs earlier in the session here are the three things that are driving the action overall today. Stocks continue that steady climb higher we are on record close watch for the dow and the s p, with those gains. But the nasdaq is in danger of snapping an 11day win streak. And Holiday Spending continues to help stocks amazon rallying again today after posting its best day since january. All right lets get to a cnbc news update right now. For that, we go to Julia Boorstin julia . Heres whats happening at this hour. China successfully launched its most powerful heavy lift rocket, carrying a communications satellite. State tv says it hopes the launch will help with the countrys ambitious plans for missions to the moon and mars. Russia is formally challenging a fouryear ban of its athletes from major sporting events, including the olympics its Antidoping Agency sent a letter to the world Antidoping Agency, stating it disagrees with the decision to ban russian athletes japan announced it will delay cleanup of the Fukushima Nuclear plant. Thousands of spent fuel units remain in cooling pools within the plant. The Nuclear Reactor was wrecked by a tsunami in 2011 and Los Angeles Clippers superstar Kawhi Leonard is the aps 2019 male athlete of the year leonard was the nba finals mvp for the second time, leading toronto to its first championship hep received more than twice as many points in the balloting than any of the other 18 vote getters, beating out Baltimore Ravens qb, lamar jackson. Thats a cnbc news update at this hour. Back to you. Julia boorstin, thank you lets send it over to mike santoli for the second installment of the market d. A. S. H. Boar dashboard. Talking now about cycling near the edge, the outer edge of where equity valuations have got to this cycle. Check out the s p 500 over two years. I want to put some longer term context than just talking about the yeartodate yes, its been an amazingly strong year. This is where were building from thats your 30 run right there. If you take it from other points for example, the high in september of 2018. This is up about 11 right here. Thats about a 9 annual pace. And from january of 2018, youre up about 13 thats only about a 6. 7 to 7. 5 annual pace. This is not how healthy the market is and has behaved, but its more to say it hasnt been up, up, and away and in some rarefied orbit for a while it really has broken out of a range. How do we get here take a look at apple biggest stock in the market right now. It has gone from being a depressed valuation stock to a premium valuation stock. So here we go. This is one year ago it was trading below 11 times earnings, or just about 11 times earnings at the low in january earnings estimates have stayed exactly the same since january 31st of this year to now but now were up around 22 its doubled the valuation the dividend yield, gone from above 2 , down towards 1 . Clearly, people are just deciding that apples earnings stream is worth much more of a premium. Correct or not, thats been the dynamic. Finally, i want to take a look at this etf that tracks cyclical stocks over defensive stocks this is long cyclical stocks and short part of the portfolio in defensive. So this is just the outperformance of cyclicals. It is going out at a new high. It shows you the market last year was handicapping a slowdown in growth at the end of the year right now the market is pacing at a pretty good revival of growth pch how mu growth how much is left for the actual stock market great charts to put these record runs into context the four major averages trading higher by 22 or more this year, but despite the rally, our next guest says risks of recessions next year remain evaluated joining us now with his 2020 outlook is David Rosenberg, president of rosenberg research. David, great to have you on. I mean, weve been hearing this narrative in recent weeks and weve heard that this is really whats powering the markets higher right now, that were seeing the slowdown in Global Economic growth bottom, stabilize, poised for renewed strength in 2020 why do you think theres still evaluated risks of recession well, actually, when youre taking a look at official risk models, they are at the same level today that they were 12 months ago when the stock market is 30 lower than it is today. And its interesting nobody talks about the fact that weve got the conference boards leading economic index a few weeks ago for november the consensus that it was supposed to go up, it was flat and its actually been flat or down six of the past seven months so what i tend to find is that a lot of economists and strategists will look at the price action in the stock market or risk assets and then theyll fit the narrative to the price action, instead of actually instead of talking about whats really going on out there. Heres the reality the reality is as of october the 8th, the 12month return in the wilshire 5000 index was 1. 2 and on october the 8th, the 12month total return was plus 30 sop this has nothing to do with anything except what happened in the first couple of weeks of october, which two things happened, which caused this major inflection point, which is, phase i talk out of donald trump and that created a lot of positive sentiment and momentum and thats when the fed issued its memorandum saying that they were going to start to hoover up the Treasury Bill market, not saying its actually qe 4 when it actually is qe 4. But that liquidity injection thats ongoing has caused the money supply numbers to go gangbusters at a time when business credits actually contracting, which is interesting, because that excess liquidity hasnt found its home in the real economy, its found its way into risk assets by the way, not just the equity market, but look at what credit markets have done, what Commodity Markets have done. In the past three months, weve had this real sudden liquidity infused runup in risk assets writ large nothing at all to do with the fundamentals, despite what the gurus are telling you. A year ago, you were saying something somewhat similar, david. In fact, you tweeted at the time, you took a shot at my friend and colleague, jim cramer you also said that we were bubble vision, which is fine but you said, hey, he doesnt see pa recession what exactly are his economic credentials. We didnt have one, jim was right. Did you get anything wrong well, heres how ill respond to that. Firstly, when jim cramer was talking about his particular asset class, he was talking about equities hes not talking about gdp gdp has a lot of Government Spending in there, youre quite right. Government spending didnt go into contraction and the consumer hung on but heres what ill say is that the other 30 of the economy which are exports and commercial construction and housing and capital spending, by the way, all are in a recession right now. The exconsumer economy, has actually contracted two quarters in a row and ill say firsthand that the consumer has hung on much better than i thought it was going to, but would that be the story Going Forward . Its just a timing issue and im noticing that the Small Business sector out of the adp numbers have been laying off staff over the past six months and thats the canary presidein the coal mr the labor market but let me go back to jim cramer and your particular comment, which is this. Profits are in recession if youre buying the stock market, youre not buying gdp. Youre buying a corporate earnings streak. And profits have gone down negative year on year four quarters in a row. So actually, in jim cramers world, we are in a recession, called a profits recession, and this entire year came down to four full points of multiple expansion. And thats what gave you the returns you had in the stock market this year thats basically the story, a liquidity induced price earnings multiple expansion and the context of a huge earnings recession. Quickly, mark, do you agree with the prognosis i agree to what happened in 2019 all multiple expansion, no Earnings Growth. But i do believe next year should be a decent year. Were expecting no recession in 2020 when you look back through industry, if youre not expecting a recession for at least 13 to 24 months, the average rate of return in the s p 500 is 14 over the course of that time frame i still think youll see a good year in 2020 david, weve got to leave it there for now, but thank you congrats on the new firm David Rosenberg. Thanks a lot. Zblup next, weve got your last chance trade plus, apple flying high that stock hitting fresh records and one analyst says it will be the topperforming f. A. A. N. G. Name in 2020 well discuss when closing bell comes back dont get mad. Get e trade, dawg. All right. We have 18 minutes to go before we wrap up trading for the week and then only have two more trading days left in the year. Heres a check on the closing bell big board on the top, a look at the three major averages, as you can see, as we head into the close. In the middle, todays biggest style leaders which are nike, mcdonalds, and Procter Gamble and on the bottom, the laggards. Dow, home depot, and apple all right, well, its 17 minutes left to go, mark, what is your lastchance trade . My lastchance trade is exact sciences so the Health Care Sector this year has been punished, all the way up until about the beginning of the Fourth Quarter. It was one of the worstperforming sectors in the s p 500. As Elizabeth Warren started slipping in the polls, it is now the bestperforming sector of the quarter. A way to play catchup to that catchup trade is through exact sciences and exact sciences is a company that right now in our opinion is trading as if the bear case is a reality. Its about 25 off its summertime high. What is the bear case the bear case is that competition comes in and crushes them but competition wont be even viable for about five more years. Theres still a fiveyear runway with their fdaapproved product, which is what it does, it provides a lessinvasive way to test for Colorectal Cancer the problem with testing for that is its something most people dont want to do. They put it off, right so what theyve done is theyve developed this patientfriendly way, less invasive way to test for it were expecting Phenomenal Growth over the course of the next five years, and its trading at a valuation discount to its peers of about 20 . But growing at twice the pace. Okay. Exact sciences your last chance trade up next, were going to take you inside the market zone. I get so excited me too what is it, you ask its uninterrupted coverage of the final minutes ofrang tdi thats when closing bell returns. At leaf blowers. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. All right. Weve got 12 or so minutes left in the trading day we are now in the closing bell market zone. Strap yourself in. Commercialfree acticoverage of the action going into the close. Today, weve got mark tepper from Strategic Wealth partners here, as well. Lets get things off with apple. The stock did hit another alltime high, but it is actually down now today, ever so slightly josh liptons got more on what a move its been this year, in fact, josh so, dave, apple will be the topperforming f. A. A. N. G. Stock in 2020, thats according to a new note from gene munster among the reasons, continued growth in apple watch, five new Iphone Models coming in 2020 and an investor anticipation of 5g i caught up with munster and asked him about risk to his call and he cited two big ones. One, that services and wearables dont grow as strongly as expected and two, what happens if carriers are too slow rolling out 5g networks . What would that mean for investor expectations, she asks, when it comes to traction and success for that expected 5g iphone coming in september guys, back to you. Josh, thank you mike santoli, i feel like weve been hitting the apple drone all day. The stocks up 83 this year and therefore the story has had to flip, right it used to be, well, its cheap. Its underowned was a line for a very long time i think its harder to make those cases right now. I do think the market has effectively said, though, its a less hitdriven business than it used to be and that may be why it traded at such a those multiple points, we talked about them for some time and suddenly there they were in terms of the recurring revenue stream from services which continue to grow as the overall percentage of revenues and grows faster than the rest of the company. And doubt about it, overall Market Impact of stock buybacks is very debatable in my opinion, but for a stock like apple, its hard to discount mark, you must apple must come up owl a time in confess n conversations with clients and that multiple has doubled from january 1 until now i dont know how this could be your number one choice for Stock Performance in 2020, after what its done this year. I personally believe theres an absolute ton of execution risk next year. Not just, you know, some wild card issues that might arise all right well, tesla also hitting a new high today, announcing it will officially begin deliveries of its first chinesemade model 3s starting in monday teslas shanghai factory began producing the cars in october and 15 are scheduled to be delivered next week. The ultimate goal is to produce 250,000 vehicles a year from that location. Mark tepper, ill go to you. The fact that we have seen a rally in tesla, how much of this is a turning point in terms of the stock and perhaps starting to reach some of these grander, bigger, loftier production goals versus maybe a short squeeze theyve obviously done some things right recently. Theyve had a good quarter, but for us to get interested in the stock, we need to see more than one god quarter. We like to invest in companies that have a Sustainable Management team, a Sustainable Growth story that we understand and believe in, that are priced at a reasonable valuation at 430 bucks and Everything Else thats going on with this company, its just not something we can invest in right now in the hospital saying it wont be in the future, but right now, its not for us. David, you have been keeping an eye on comcast, our Parent Company today as well. Yeah, you know, some reports, Julia Boorstin confirming as well that there are talks, at least, between comcast and a Video Streaming Service called zoomo. Its an adsupported service no comment from cam caomcast this comes as comcast gearing up for the launch of peacock adsupported streaming services. January 16th, well have an investor day and learn a lot about it, the same way we did about hbo max, which will launch next year from at any ti t, and same we did in the spring for disney for the fall launch of disney plus. Here, weve already got some data points. Mike kavanaugh, the ceo a few weeks ago, said 2 billion if spend the first two years should break even by year five. But its important, no doubt, but not as ambitious an effort, of course, as disney plus, or perhaps not seen as quite as central as that was to disneys future or some of the other streaming. Hbo maxs, the warner future to at ts, as well. Not surprising that there might be these talks disney, of course, as we pointed out earlier, morgan, today, when we were talking about the story. That was more for the technology side, of course, as opposed to getting subscribers for the new platform it is interesting, though, mike santoli, quickly, to see roku down another 4 today its been a huge mover this year its been seen as sort of the big winner at least for now in terms of streaming what do deals like this do to that its still a winner, but the value of kind of being the neutral third party as a synthesizer of some of these services, it gets diluted if every content provider is trying to be the delivery mechanism as well as you suggest, wide, wide swings in the valuation of the stock based on the latest temperature of the competitive picture. Mark, your thoughts on the streaming wars theres all of this talk about streaming, but what do you need if you have streaming, you need the internet, and the one thing comcast does, the 800pound gorilla is they provide highspeed internet at an affordable price. I think its great that theyre acting as an aggregator and willing to compete with roku and i think its great that they are dipping their toes into streaming services, as well. Shares of retailers michaels, surging today after that Company Announced it will replace its ceo mark cosby with walmart executive ashley buchanan. Buchanan, who was previously the chief advertising merchandiser of walmarts ecommerce business will take over as head of michaels on january 6th cosby will remain on michaels board, but was officially ceo less than three months look at that move in michaels now, mind you, the stock is still under 8 bucks a share, but mike, i mean, 31 move on this ceo change yeah, you know, this has been a space thats under a tremendous amount of pressure, not just chain retail, but this whole crafts thing. I think ac moore, a competitor, went chapter 11. Its just the idea that theres a spark in here, somebody with broader management expertise in a walmart is probably enough to at least get people leaning less in a negative direction on the stock. Retail names you like right now . Names i like in retail, i would be staying away from this name i think this is a dying retail name, but tj max i love their crafting but you can buy all that same stuff on amazon. I like t. J. Maxx i think offprice is still the way to go. The consumers nowadays are strong, but theyre price conscience so t. J. Maxx is the way wed be plag playing it i always like to remind people of the market value of t. J. Maxx. I dont know why its a surprise that its a 73, 74 billion market clearly its the only store i go to, the t. J. Maxx right here every so often, you can find some good bargains but i got nothing to say about the stock. Other than that, market cap. Lets talk about consumer edge initiating coverage of nike with an overweight rating seema mody has more on that for us seema . News to me as well, david consumers acknowledging they are late to the party with nike stock already up 36 this year, trading at 23 times forward earnings, but they say nike is ahead of the curve and well positioned to benefit from the consolidation and brick and mortar retailer, and that nikes ability to continue expanding its market share in china will continue into 2020 analysts, though, are more cautious on under armour, citing competition and a recent probe by the s. E. C its worth noting, under armour down about 15 over the past six months a tale of two retailers. Dave, back to you. Okay. Thank you. Any thoughts on nike mark i love the company, but the stock is just too expensive at 31 times forward earnings right now. You know, theyre executing well when it comes to their directtoconsumer model theyre executing on their triple double strategy i get that iconic brands deserve premium valuations, but just like aluminlululemon, as much a love what theyre doing, its just out of our reach from a price perspective zplp it its been such an interesting year from the perspective of departures john donahoe will be taking over as ceo certainly interesting, having less service now, being replaced by the gentlemen who ran s. A. P a lot of moving parts there. But speaking of parts, lets talk about the market internals, mike yeah. You know, basically kind of mixed. As you can see, the market is taking a day off yesterday seemed like when everybody threw their handy cash into the market. You see slightly negative on the breadth front in the New York Stock Exchange 13 to 16 to the downside really not telling much of a story, except to say theres a little bit of fatigue, perhaps after this rally also, i do want to look at some of the stocks that made alltime highs today. Nike is one of them. These selection of stocks is the kind of acclaimed consensus sort of anointed stocks right here. The longtime growers, mostly consumer exposed they had very high valuations. Market still wants to own them and i also want to take a look at the volatility index, the vix, because it is not falling to new lows. In fact, perked up above 13 right now. Hedge funds are very exposed to the market right now and theyre also, i think, doing a little bit of protection of some of that house money with some hedging. Thats why a little bit of upside pressure on the vix that you wouldnt really expect on a sleepy day like today. Thats a key one to look at milwauk mark tepper. As we go into the close, weve got two and a half minutes and were fact the dow only up 21 points the s p just turned negative what do you make of that i think youll probably see a minor pullback in january in the 3 to 5 range. I think thats to be expected. The market is overbought right now. Investor sentiment is really high i think a pullback is in the cards. Its healthy, but that uptrend is still in tact youve got over 81 soft s p 500 trading above the 50day moving average. Thats a strong uptrend. I would be using these pullbacks as buying opportunities. Less than 2 minutes left to go here before the closing bell. Lets send it over to Frank Holland at the nasdaq. Looks like the nasdaq is going to narrowly miss its 12th record close today and well, right now, its been changing a lot. Facebook is leading all the f. A. A. N. G. Stocks and some of them moved lower as we approached the closing bell. The entire index being dragged down lower by alphabet and also and apple shares, still both within about a percent of their alltime highs american airlines, as we enter bear market territory today, down about 23 from highs in august, possibly on concerns about higher oil prices. The biggest gain on the nasdaq 100 today was actually Liberty Global thats the largest Cable Provider outside of the u. S. Both classes of its shares, up about 1. 5 going into the closing bell. Over to bob pisani at the New York Stock Exchange. And were fading a little bit going into the close maybe thats understandable. Remember, this is technically the last day of tech selling you can do so if you want to sell something before the end of the year and make sure it closes, settles, you have to do it today. So there may be a little bit of whats going on here theres the dow industrials here, briefly in the negative territory. Some stocks dipped a little bit on the weak side. Theres gulf coast, running out of steam some of the other banks gradually ran out of steam tough year for Energy Stocks we saw oil moving up, but saw that fading and most of the other stocks fading. Still an up day for the Dow Jones Industrial average, up 20 points and still up for the week sort of a Perfect Little santa claus rally. S p closing essentially flat im Morgan Brennan in for sara eisen the dow, the s p, the nasdaq, you can see them all there of course, nasdaq down, s p, dow, slightly higher and theres the russell as well in negatory. A narrow trading range, light volume it looks like we did get a fresh record close for the dow and possibly for the s p as well joining us to talk about the market day, mark tepper, ceo of Strategic Wealth partners still with us along with bill baruch, president at Blue Line Futures but first, mike santoli, are we reaching overbought territory . Oh, yeah. Any kind of technical snapshot will tell you the market has become a little bit stretched. Whatever relative strength indexes. Thats an observation. I think sentiment has gotten a little bit calm, complacent, and people expecting good things all of that being said, thats context. Not really out of whack for a market thats been clicking successively to new highs. Its just really a question of whether it has set us up for a good pullback going into january or just a pause, because that also does happen you saw some similar readings at the beginning of 2017. And that didnt really cause a big pullback and you got more extreme at the beginning of 2018, that definitely caused more of a shake up hey, mark, you know, you advised High Net Worth individuals, families. Two trading days left in the year is there anything they should be thinking about before this year ends bob mentioned tax loss selling, which basically had to take place today. Yeah, thats behind us now, right . So really what were telling people to do is just make sure you enter 2020 with a clean slate. Dont carry over any of the, you know, extreme positive sentiment with you into 2020 in 2019, we had the fed on our side they switched from hiking rates to cutting rates the fed will be on the sidelines now in 2020, so its really all going to boil down to the election and what happens with regards to trade and Earnings Growth bill baruch, how are you thinking about this move into 2020 we just talked about tax loss selling now essentially behind us but you say rebalancing is the elephant in the room right now it really is. I mean, you got mention funds that those are the elephants. Theyre going to have to rebalance. Youve got stocks up, at the same time, quarter four is where a lot of them look to rebalance. And quarter four, stocks well outpaced bonds, which are flat youll see rebalancing here over the next month or two. Ultimately, an orderly move lower would be very attractive to set up for the rest of the year thats what you could hope to see. Right now, youve got a lot of tailwind from the u. S. And china trade, but when those kind of pivot out, you could see that tax law or sorry, the pension rebalancing, be something that put a little bit of pressure on the market how is seasonality factors into all of this, mike weve seen a santa claus rally gone right according to script for the most part even to the point where december, the market was in a pretty good spot going into december and people thought that maybe they had used up the Fourth Quarter rally clearly not the case january, on balance, has over the long span of history been a strong month, but its unclear whether were entering at a point where its really prime for immediate upside so, you know, seasonality has fit the script now, the santa claus rally period which carries two days into the new year, if this even still applies, because this kind of stuff was cataloged many years back, what it really is a little bit of a check on the market condition that says if you dont have the market go up over that span, its a little bit of an Early Warning sign for the First Quarter of the following year so thats what it really is. Not so much that it always goes up, but if it doesnt go up, them you have to be on alert by the way, one other quick thing is, if the market in the very beginning of the next year breaks below the december low, its been a pretty good sign that things are on rougher footing. And hes got a million of them, doesnt he its incredible. But they dont change from year to year so i can just pull them up come on, crazy lets talk a bit about commodities. Oil dipping after hitting a threemonth high today it was boosted by strong Consumer Spending data the Energy Sector is on pace to be the biggest laggard for the year most likely will be, given theres only two days left of trading. But Energy Stocks such as conocophillips and chevron have been boosted by the rally this week and its been funny, morgan, any number of people who joined us in the morning, which is typically when im doing this have started to talk about energy as their sort of surprise sector for outperformance next year i dont know if its just because it did not do as well this year. But obviously, oil prices have moved up as late and into the 60 range, kmz bewhich has been helpful. Its an extension of the value trade. Even though theyre not cheap based on what theyre earning right now, you could make the argument that clearly a little more cyclical in value but over the course of this year, people have started to rethink exactly the longterm view of the Energy Intensity of the Global Economy has been going down as well the stealth rally not so stealthy anymore is it sustainable . You know, ultimately, ive been a dog on energy in general and im thinking the same thing. Im starting to come around, but is it because im hearing everybody talk about it . Because its easy because its underperformed this year im taking that with a grain of salt i dont think crude oil can sustain these levels very long without another tailwind, ultimately but i think there are some good names in the Energy Sector noble energy being one theyre a very Interesting Company here with some ties to leviathan natural gas pipeline off the coast of israel. They have another pipeline out there, too natural gas. And that could be green lighted the next couple of days. And youre talking about israel, egypt, natural gas, thats an interesting component. But the chart also really looks good and youre seeing this thing come around. Its advanced recently its hit the youve seen the 50day moving average almost cross out above the 200 and fail in may and in september. But its setting up to do it again. If it can do that, you get the golden cross, theres some trend line assistance. You get above there, get the golden cross, 25 1 2, and you dance through there. You can see this thing with some good news. Gain, 30 to 40 , up to 35 next year i would keep a close eye on noble energy all right mark, is there anything you like right now . And i ask that especially when you look at u. S. Energy patch, because were continuing to see the rig counts come down and the debt levels go up for many of these names and the consolidation continue is the only one we own right now is Kinder Morgan and its basically for the 5 yield i think if youre looking for anything other than yield, you should probably look at a different sector, because since mid2014, the Energy Sector has been a place where you set your money to just straight up die, right . Its down 76 over that time frame, s p im sorry, its down 30 over that time frame. S p is up 76 over same time frame. I think if youre going to be in trn energy, youre doing it for the yield play lets get a check on how stocks fared in this shortened trading week really almost a perfect santa claus rally. Were still up for the week and still up for the major movers. Caterpillar, new high today. Up fractionally, maybe 0. 4 for the week we had banks also doing well, jpmorgan hit a new high, goldman hit a new high, although goldman down today, as you can see but jpmorgan still up fractionally for the week. Nike, another new high, as you heard from mike there earlier. That had a nice rally, though off the highs at the close and fintech with visa up fractionally but this is the new high stock of the year. This is hitting new highs more days than any other stock on the New York Stock Exchange. Certainly at the Dow Jones Industrial average guys, back to you. All right bob, thank you mike, your houghts winners and losers heading into 2020 theres definitely been a momentum effect, to say the least, going into the end of the year, meaning the stocks that everybody already loved and the highquality companies that everybody loved have carried the index to this point. And you also started to see them trying to scoop up some of the ones that havent participated amazon is the best example of that that i know of, up a little bit modestly adding to yesterdays gains. All right our thanks to mark tepper, thank you so much, mark, and to bill baruch as well up next, teslas big china push the automaker is set to start deliveries of its chinamade models next week what this could mean for the stock going into 2020. Closing bell is back after 90 seconds. Welcome back to closing bell. Tesla is set to deliver 15 chinamade model 3 cars on monday these are the First Vehicles to come out of teslas shanghai factory since the Company Started production there in october. Joining us now to talk about what this means for teslas bottom line, alexander staclosa. I hope i said that right you did okay, good. Alexander, thanks for joining us thank you so, uh how significant of a milestone is this, that tesla is now rolling these cars off the production line there . Its quite big. They are finally purk outside of the u. S. Market so until now, theyve only been building cars in california and this allows them to get cars to consumers in china at a slightly lower cost and mum quicker than they have been up until this point one of the conversations we had on our air earlier today, especially in light of everything thats going on with the u. S. china trade dynamics right now is Technology Transfer and what it has meant for American Companies to come in and manufacturing in china what does it mean for tesla in terms of all of that technology and ip thats been so important for them tesla has carved out a really interesting little niche over there. So their factory is, they retain complete ownership of it they have been not been required to enter into a joint venture with a local manufacturer. So for them, my understanding of this would be that there is no transfer there, so they get to hang on to their glekt chul property, as well as theyve just gotten this factory up incredibly fast. They started in january with construction and cars are already rolling off the line today. I was going to ask you about that alexander you said incredibly fast is there anything you can compare it to in terms of how quickly it went up and should there be a concern about quality given how fast it moves . I dont know about theyve ironed out over months and months and months any production issues they have with the tesla model 3 in california, which is the first volume model and theyre starting with the model 3 in shanghai, and eventually, they will add the model y crossover. Theyre starting relatively tamely, as well. Tha theyve only set a target of a few thousand cars monthly, until demand ramps up, as well as the rest of the factory. So the factory is still being built out. And thats what that 1. 29 billion loan that they secured today from china and chinese banks will help facilitate, is competition going to become a bigger theme, and i guess, a bigger part of the bear case for tesla in 2020 i ask that, because youve got volkswagen saying its going to hit its electronic vehicle target sooner than expected. And ge rumored to be planning an electric comer globally, evs are taking off not quite yet with consumers, but definitely Regulatory Environment that is facilitating their rollout. So china had subsidies for a long time in for electric vehicles there and obviously weve had them in the u. S. Teslas tax credit is phasing out entirely next year but as thats happened, more and more manufacturers have jumped into the fray. Volkswagen, like you said, is planning about a million cars by 2025 that just got ramped up to 1. 5 million recently, because theyre very bullish on consumer demand increasing in the next five years so the competition is going to heat up, heat up hugely in china, but even here in the u. S. , where tesla has a fairly Comfortable Lead as a provider of luxury and performance evs, thats going to be the cornerstone of their brand globally and may help them rise above the fray, but the competition is going to grow all right alexander, thanks for joining us on this topic on a day where tesla is again reaching another record high. Coming up, mike is taking a look at Market Sentiment right now with stocks at record highs. Plus, the playbook for social media stocks. Theres a deep divide between facebook, twitter, and snap this atil wh wl next year bring . Well have that when closing bell continues. Or training for something youve never done before. Thats room for possibility. My name is john and im a 30 day i work long hours and i have no time to go to the gym. This app solves my problems. Its super easy, all the exercises include demonstration videos. I love the 30 day fitness app. Welcome back to closing bell. Lets send it over to mike santoli for his third dashboard of the day mike yeah, morgan, its getting around that time to ask if the boat is a little bit offkeel in this market, because everybody is on one side of it, the bullish side a lot of sentiment indicators are leaning in that direction. Take a look at this one. The ndr, net Davis Research crowd sentiment trading Sentiment Survey this is a tactical indicator, its a composite, a lot of different measures of behaviors as well as mood. And obviously, youre right up here, just under 90 bullish thats pretty much as high as it gets as you can see now, its not always predictive of a market pulling back its not always a pure reliable contrarian indicator but often, the weight of the evidence is going to lean on the side of maybe the market cant really going straight up from here i pointed out the other day that you did see it in 2018, 2017, a few times and it didnt medium sink the market, but keep in mind, its getting a little overheated what we havent seen is very heavy retail inflows and some of the other indicators that the broader public is really embracing equity market risk in a big way. Is it so incredible, though, how intense these lines are. Its almost schizophrenic with the high highs and the low lows and the back and forth its very true, morgan. This is designed in a sense to catch these swings but look at how, this is how you had the good buying opportunities this year is where youve got people very bearish and over time, according to the firm here, when its above 65 or so, the annualized returns of the market on average are negative, but thats not for a full year. Thats just for the period in which it remains evaluated like that it could be for three weeks, its a negative annualized return on average as opposed to really saying the next big move is down. Havent there been any number of reports, as well, mike, that have indicated that Retail Investors have not been fully allocated to stocks . Thats the part thats not really cooperating with this idea that the market is overloved right now. Youve seen some beginning stirrings of net inflows in terms of retail etfs and mutual funds, but its not been something that has really gathered a lot of steam. Hard to imagine it wont after the year we had in the Broader Market but well see. Mark, thank you. Straight ahead, social scrutiny companies such as facebook and twitter are coming under fire, certainly have this year but what could lie ahead for those stocks as well as the companies, of course, when privacy laws continue to elvvoe . Well have that story when closing bell comes right back. Welcome back to closing bell. Just getting a check on where we finished the week here take a look at the big board on the top. The major avenue snapping its 11day win streak. Consumer staples, utilities, and health care. And on the bottom, todays worstperforming sectors, energy, materials, and Communication Services all right time now for a cnbc news update. For that, we go to Bill Griffeth bill thank you, david. Heres whats happening at this hour new york city bill de blasio met with the leaders of the lubeovich headquarters in new york city. He says hate has no place in new york city the nypd will be relentless the city of new york will be relentless anyone who commits a hate crime, anyone who commits a hate crime, we will find them and we will prosecute them no exceptions. And well make sure people are safe meanwhile, actress lily tomlin has become the latest celebrity to be arrested in washington while protesting Climate Change she was led away by police after joining her friend jane fonda on the steps of the capital as you know, the protests have become a weekly event organized by fonda under the title fire drill fridays. Finally, the character popularly referred to as baby yoda from the new disney plus series the mandalorian has become a sensation while the baby yoda toy has become available for preorder, it wont ship until may and season two of the mandalorian wont be out until july. Youll have to cool your jets a little bit, faber. How did you know . I know, i know. Its true you know have a good weekend you, too, bill. 2019 turned out to be a volatile year for social media companies, with the industry getting plenty of attention from lawmakers on capitol hill. Julia boorstin joins us with a look at what could be in store for social companies in 2020 julia . Morgan, facebook shares hitting a new 52week high Facebook Stock up nearly 59 this year shrugging off range of challenges heres whats ahead for facebook and other social stocks in 2020. In 2020, social media giants will navigate regulatory scrutiny, while looking to hold on to consumers who have more social options and ways to opt out. First, social platforms will limit ad targeting to comply with laws and to get ahead of more regulation. With californias new privacy law and concerns about foreign interference ahead of the election, the social giants will take dramatic steps to show regulators theyre protecting consumers and that will start to impact facebooks bottom line. Second, facebook will push to grow its position in ecommerce, games, dating, and other new businesses facebook would be blocked from using its 52 billion in cash for major acquisitions, but it will do smaller hires as it looks to diversify away from ads in the news feed third, tiktok and snap will continue to grow and distance themselves from facebook and new social startups will take off as influencers push to connect with fans in ways they control and monetize, in addition to tiktok and snap, niche apps like Ashton Kutchers backed community could gain traction. Facebook, twitter, youtube, all of these companies will pull out the stops this year to prevent foreign interference in the president ial election. With so much scrutiny from capitol hill, we can say that these Companies Understand how high the stakes are. David . Yeah, julia, stay with us for more, lets bring in rohud ill start with facebook i think you like a couple of analysts we had on earlier in the show like facebook going into next year despite what so many believe will be an even more tumultuous year for the platform itself in terms of at least criticism and focus. Hey, thank you for having me. And i agree. Facebook, although is one of the top picks, i feel that is debated on what gets the stock again. I think as far as the regulatory head wind is concerned, as long as we dont get any clarity, we dont get the stock higher its trading around 20 times earnings its almost trading an ebaylike 10, 12, 13 times ebitda, but it should trade 15, 18 times ebitda what gets it higher is as long as we get more clarity around no more negative news from ftc, which i believe we would probably get over the next 12 to 18 months, it wont happen overnight. And second, are we at the end of an investment tunnel already, facebook has said that theyre approaching the end of the investment tunnel, but you just talked about privacy and all the things these Companies Need to do to make sure elections are safe and theyre correcting all the ads i think thats a big investment that these Companies Need to make and facebook has been on top of that. So margin relief and regulatory relief i think either of those two, we get the stock higher julia, its pretty incredible facebook has just bucked the Regulatory Risk narrative. Its up 59 for 2019 right now but there are regulations that are going to come into play in 2020 and one is this privacy law in 2020. What does that mean for some of these social companies, facebook and the others i think for facebook and the bigger players, it would mean effectively nothing. Facebook has said that it doesnt need to make any changes to comply with this New California law thats going into effect next year, because theyve already made a lot of changes, especially to comply with european privacy law, gdpr. So they say that they give consumers disclosures, enable them to opt out from targeting, and that may impact it, they did say in their Earnings Releases over the past couple of quarters that they do anticipate the fact that consumers will opt out, should impact their bottom line, but thats already really priced into this stock. The fact that maybe perhaps some advertisers are looking to expand their reach beyond the more traditional Online Advertising duopoly of faceboo and alphabet where do the opportunities lie and what are names that can stand to benefit the most . I think in terms of the company that have unique duplicated cohorts of users, snapchat and pinterest come to mind snapchat has almost 90 million daily active accusers. And thats more than pinterest and almost two or three times pinterest, twitter in the u. S. , im just talking about u. S. Users. And they have a cohort of users that are maturing, that people who grew with snapchat and will stick with snapchat and they may be firsttime voters in 2020 that creates a tailwind for snapchat heading into 2020, which hay probably didnt see in the prior election cycle that to me feels like a good for advertisers to tap into firsttime voters who probably arent on other big platforms or at least arent as engaged on facebook and instagram and thats a way for them to tap into that cohort of voters similar to pinterest, you have signals from american moms who are you think firsttime mothers. And i think pinterest still is just cranking up the levels in terms of products. Theyre still very early, but i think thats where they can do in terms of intent and signals mike, im coming back to multiples for a second, because i was struck by the apple multiple expansion that you detailed for us earlier in the program. Facebook hasnt really been rerated up and that is why people, investors are still attracted to it given the growth rate and the fact that its multiple has stayed subornly low based on that, compared to that growth rate all the metrics that an analyst would use to boil down into a fair value for facebook, they havent changed very much, even as thetory line and to noise around the company has gotten less friendly, but whats interesting is how alphabet has gained a premium to facebook and arguably, if there is a huge crackdown on, you know, this concentrated power in media and dilgd media, alphabet would not seem to escape that, and yet the market is fine paying up for that business. People think its going to be more financially disciplined, but whatever it is, it is fascinating that facebook has been restrained in this way in terms of its valuation and you get everybody coming in with their sum of the parts and whether, in fact, that actually seeds the current stock price although it seems somewhat unlikely that we would get to that, certainly not next year. Something well continue to talk about in 2020 thanks for joining us. You think i think so. Julia boorstin, its been such a pleasure to have you. Up next, new fundraising numbers out from listener lrns campaign, and the data might surprise you plus, driving inequality our next guest has a theory on why the rich working harder is actually a bad thing for middle class rks. Woer were going to discuss when closing bell comes back. What i love most about being a scientist at 3m is that im part of a community of problem solvers. We make ideas grow. From an everyday solution. To one that can take on a bigger challenge. We are solving problems that improve lives. I love home workouts and the ability to work out at my own pace. The 30day fitness app is perfect for that. I love the fact that you can do it anywhere because you dont need equipment. My clothes even fit better. Because you dont need equipment. Itreat them all as if, they are hot and energized. Stay away from any downed wire, call 911 and call pg e right after so we can both respond out and keep the public safe. President ial hopeful Elizabeth Warrens campaign telling supporters that so far, its raised just over 17 million in the Fourth Quarter. That is a significant drop from her fundraising haul in the third quarter. Joining us now to discuss is cnbc. Coms brian schwartz. So shes had a drop, brian can she make it up shes going to have to make a really tough choice on this. Thanks for having me on the show, by the way this is somebody, Elizabeth Warren, who has focused her entire attention on going for those small dollar grassroots donors and isolating, taking part in any sort of big money fundraisers now, in the last few days of this quarter, its unlikely shell be able to get back to how well she did in q3, where she raised 24. 6 million this has been a 30 drop so far. But going into 2020, you know, shes going to have to really make some decisions here is she going to stick with just focusing on picking up 1, 2 donations, or go back to what she did in the senate, where she focused a lot of her time on big money, finance, Big Business Events that could help her campaign we know she wont go to any wine caves she did do that in the senate some winerytype things. Who has benefited if any of the other candidates from her lack of fundraising recently . Thats a really good question i think Bernie Sanders is somebody who has kind of maintained this wave of getting some of these progressive grassroots donors from Elizabeth Warren shes been trying to peel some of those back from him, but hes been doing pretty well you know, skrojoe biden is some to keep an eye on as his Fourth Quarter wraps up hes done better from last quarter. Hes raised 15 million last quarter. He says hes done better than that in q4 mayor pete buttigieg, he has these connections to wall street we have to keep an eye on them as we finish up this quarter Going Forward. Senator warren has been pretty outspoken against bringing on megadonors to her campaign if you can see the numbers fall off, do you think that changes im not sure yet, but i think hell have to sit back and make a choice its going to be very difficult for her to keep up this momentum with smalldollar donors because Bernie Sanders has that lane he did that in 2016 and made that niche for himself its also been a question mark how hes going to pick up on her momentum and they are friends, dont get me wrong, but at the same time, how is she going to pick up some of those donors, consistently . And thats really not clear. And thats why i think she has this dip in fundraising in the First Quarter so far, which has four days left to go all right brian, thank you very much for joining us and for our viewers that want to learn more, go to cnbc. Com for the article senator warren has also been critical about the pay gap between the ultrawealthy and lowincome earners lets bring in someone who has a unique take on income inequality, danielle markovitz is a professor at Yale Law School and author of the meritocracy trap how americas foundational myth feeds inequality, dismantles with the middle class, and devours the elite. Danielle, thanks for joining us today. Youve got to break this down for me this is so fundamental to the american dream, the fact that you can roll up your sleeves, get to work, work hard, and rise through the ranks. Whats wrong with that so thats much, much harder to do now than it used to be and one of the reasons is that the middle has been stripped out of the labor market. Look, weve all heard statistics that a ceo used to make 20 times what a production worker makes, now its 300 times a doctor used to make four times what a nurse makes, now its eight times. A partner at a law firm used to make five times what a legal secretary makes. Now its 40 times. A Bank President used to make about what 50 times what a bank teller makes now its a thousand times. And whats happened is that the good middle class midskill jobs that used to dominate work have been destroyed and replaced with a lot of gloomy jobs at the bottom and a few super elite glossy jobs at the top and if we want to fix inequality, what we really have to do is fix that. We have to fix work. But danielle, just to push back on that a little bit, when you talk about Something Like bank tellers or administrative assistants in offices, i mean, you can make the argument that automation also has eroded those jobs and opportunities, as well. Sure, automation is part of story, but automation didnt have to go the way in which it has gone in this country so that if you look at an economy like the german economy, which is an incredibly high tech, incredibly highly automated economy, its also one in which robots and computers have been deployed to miss with plax workers, so that midskill labor continues to do very well there. Whereas in our economy, weve invented particular kinds of fln technologies that make super skilled workers incredibly productive and make it possible for them to do without the middle class workers that used to dominate the labor market yes, automation is part of the problem, but we could fix that by having different kinds of automation from the kinds that we now have. So i would assume when you say, we need to fix work, thats one of the solutions what else, do you think, at least needs to be done to actually realize that ambition a very big part of what we need to do and thanks for asking that question is we need to focus on fixing education, also. You know, the gap between what is spent on a typical middle class kid in school and what is spent on super rich kids is just staggeringly big the Median High School kid in america in Public School gets about 15,000 a year spent on her education. But the forbes 20 highest ranked private schools spent about 75,000 per pupil, per year. So one thing weve got to do sf weve got to massively increase investment in middle class education. And weve got to open up elite schools and colleges to many, many more students, particularly for more modest economic backgrounds. I wonder how much of that you think will be a cultural and societal shift and one thats not just focused on, i guess, increased investment in the middle class, but also this belief that Everybody Needs to go to a Fouryear College and rack up all of this student debt in the process well, one thing i want to be clear about is that actually the data that we have suggests that for almost all students who go to college, it remains a very good investment. I know that a lot of people are talking about a college debt bubble, but the truth is that for most People College still a good investment. And if we had better subsidies for public education, which has been dropping, and if we admitted more middle class and working class kids to private universities, which were not doing nearly enough of, college would be a much, much better investment still for many more people so properly financed and properly structured Higher Education is part of the solution, not part of the problem. You mentioned germanys economy, and its always been notable that they have sort of vocational schools and apprentice programs for highly skilled industrial workers, something that we dont seem to have nearly as much of in this country that can lead to a very strong or decent lifestyle absolutely right. Workplace training has been gutted in the united states. In writing the meritocracy trap book, i talked to a guy who runs a Bowling Alley and he told me in the 60s, his pin boys used to quit on their 18th body and walk down to detroit, join one of the big three autoworkers, get lifetime employment and they would get trained at work. They would have only a high school education, but they would get Workplace Training and if they worked hard and would get skilled, they would end up as tool and dye makers makinging 80,000 or 100,000 a year and that was all based on Training Provided by their employers. That was true in Blue Collar Work and whitecollar work and weve got to have programs that incentivize employers to have Workplace Training. But that world doesnt exist anymore. Much of what youve been discussing in some ways doesnt exist. Were dealing with the current reality and hearing from a lot of politician s on the democrati side but trump ran on this idea as well, trying to empower the working people of this country again. Are you hearing anything out there that gives you hope that perhaps some of these solutions that you see are going to be met . Well, here are two very simple policies that would make a huge difference. The first is that right now, because of the wage cap on the Social Security wage tax, middle class labor is the high test tax factor production in our economy. If you eliminated the cap, started taxing top earners a little bit more on their Social Security wages and enacted broadbased wage subsidies for midskill ld workers, there would be a huge incentive for companies to hire middle class workers. The second thing to do is that colleges and universities and private schools, all of which are treated as charities for tax purposes, educate almost exclusively very rich kids and if they were forced as a condition of keeping their tax subsidies, their taxexempt status to admit many, many more middle class children, you would open up education once again to many more segments of the population that now find it a barrier to opportunity those two policies together, both are straightforward, both are achievable, would transform the labor market and bring social mobility back to the country. I can imagine you havent talked to the yale endowment about that, have you, professor . Im not always their favorite person i bet youre not. Well, we appreciate you taking some time. Thank you. Listen, thank you so much for having me on up next, mikes chart. Yes, mikes chart. Plus, a viral tweet about uber helicopter rides got us thinking about the profitability of this service. Well look at the Unit Economics of losing or making money on helicopters. Thats coming up thats why i take osteo biflex, to keep me moving the way i was made to. It nourishes and strengthens my joints for the long term. Osteo biflex now in triple strength plus magnesium. The debate over digital political ads extending into the world of audio today spotify says it will suspend political advertising in the u. S. In early 2020, telling cnbc in a statement, at this point in time, we do not yet have the necessary level of robustness in our processes, systems, and tools to responsibly validate and review this content. Twitter said earlier this year it would ban political ads entirely while facebook, of course, says, it wont really do much of anything citing free speech and facebooks position in part has been that, theyre in a sense, although required to run political ads if they have a policy of running most ads these other platforms are saying, no, with we think we can fully ban them its an interesting extra legal decision theyre making. And its interesting, because theyre cracking down on census misinformation, as well, even as the whole study stands pat on the political advertising front. All right well keep talking about it. The third rail of some sort still ahead, secret santa lives of the superrich bill gates sent an 81pound package this holiday season. What was inside . There was a lot. And thats cinupomg when closing bell returns im a mother. I have no time to go to the gym. The 30 day fitness app solved my problems i love the fact you can do it anywhere because you dont need equipment. It keeps me going, because the way its set up, i dont want to miss out on my workout days. I recommend it for everyone, whether its to lose weight, get fit or just stay healthy. Try the 30 day fitness app and start working out wherever you want. Welcome back lets send it over to mike santoli for the final dsh board of the day, mike. Morgan, calling in a lop sided ledger, dealing with supply and demand for treasury securities in light of what the fed is doing, reexpanding the Balance Sheet. This is on the same scale here first up shows the public treasury debt. So this is all government u. S. Debt held by the public the last decade you see this is marched up steadily up more than 10 trillion in aggregate over the period of time this is the beds Balance Sheet peaked around 4 trillion after the two qe rounds and dipped here and building at a rate the 100 billion per month as it provides liquidity since september. A lot of folks we were talk about this earlier a lot of folks attribute the rally in the credit markets and stock market to the expansion cht fed as Balance Sheet however thats a small drop of absorbing the net new supply of treasury securities. If youre trying to say these small differences in buying of government securities by the fed is somehow swinging around the stock market, why is not the massive increase in issuance of treasurys depressing the stock market its finding buyers i mentioned earlier gross issuance of treasuredy was 2. 6 trillion. After you consider some of it rolled off and refinanced. I guess the point is you can belief it has a psychological affect in the supporting risk appetites and providing liquidity. Its not clear to me it accounts it doesnt get out of the Banking System in a direct way to buy stocks. These numbers are incredible. Thats the other part. I keep think of byron wayne saying the debt service has only got up unup 90 billion even though the debt increased 6 or trillion to where we are we were at the return of the century. Its been higher 25, 30 years ago. Because Interest Rates are so low. Yes and of course we have a greater deficit gap poised for this year too with the new spending bill that pushed through as well. A trillion dollars again. Mike, thank you. Up next wall street buzz, the top things investors are talking about today when closing bell comes right back this is a historic moment. Demand has never been higher for what we do. Creating compelling, engaging, and informative content and experiences. With this merger, viacomcbs will be one of the largest and most influential content creators in the world. I know we can deliver on the full potential of this amazing new company. Everything your trip needs for everyone you love. Expedia. But at fidelity, value is more than just talk. We offer commissionfree online u. S. Stock and etf trades. And, when you open a new Fidelity Brokerage account, your cash is automatically invested at a great rate thats 21 times more than schwabs. Plus, fidelitys leading price improvement on trades saved investors hundreds of millions of dollars last year. Thats why fidelity continues to lead the industry in value while our competition continues to talk. Talk fidelity. Apple card. Is a new kind of credit card, created by apple, so its simple and transparent with a new level of privacy and security. It lives here and here. And it will save you 6 on products at apple; like iphone, apple watch, airpods pro and so much more. Apply in as little as a minute, right in the wallet app. It is time to get the buzz on wall street first up, the rising cost of concerts the wall street journal reporting over the past decade the average ticket price for north american concerts has surged a whopping 55 . Tickets now cost just under 95 op average and the average gross per show is around 950,000 up next, a bill gates christmas. The worlds third richest man participating in the Reddit Gift Exchange he was paired one a woman who had taken part in a 94 previous gift exchanges on reddit sending her an 81pound box. A set of his books, including a manuscript copy of the great gatsby. And it was also i think covered in Christmas Lights when you opened it up, too. Very thoughtful very thoughtful, bill. And a tweet about uber going viral after a woman if new york said the Helicopter Service was the cheapest option on the app when looking for a ride home from the jfk april airport a kate rooney with the story. David, a slightly more expensive than the subway. Uber telling me this was a temporary holiday promotion. But even at discounted prices, the margin on the chop he were discount might not be that bad by one commercial pilot estimates that cost 300 per hour when advertising the cost of owning or leasing a 6seat chopper. And uber flights take 8 minutes. Uber charges 100 per person in the six passenger chopper. Bringing in 60 oh breaking even at least stanford professor telling me they may be taking a line out of the playbook from the airlines and no stranger to loss leaders with ride hailing they offered discounts to grow on economies of scale but investors are focused on profitable now that uber process you can. Kate, thank you mike santoli, i cant help but wonder at a time where Companies Like uber under scrutiny in different markets around the independent contractor debate, what it would mean to actually be putting more effort, more resources towards for example pilots oh, yeah, i mean obviously if you employ fulltime pilots its a different equation but the news in that it was so expensive to get a car from jfk. Which shows you they are subdiezing both sides. Ill find out tomorrow morning what the car costs. The car. I thought you were going to say the helicopter. That does it are for us here at closing bell. Fast money begins right now. Yes, we are. Live from the Nasdaq Market site over look new yorks times square where there is about a billion people this is fast money. Im Brian Sullivan happy friday. Trade ertz are christian from hertz. Gina sanchez tony zang and dan nathan tonight on fast, the record rally comes to an end for the nasdaq ending the 11day win streak but will it end more than that well get answers about the market and the money ahead from worst to first. Energy could be the standout sector into the new year and our 2020 playbook offers a scary prediction later, theres been a lot of talks about netflix being the