Later on in the show, you wont want to miss it. First, the dow had a major milestone that even the president had something to say about. We did in fact break 25,000, very substantially break it, very easily. So i guess our new number is 30,000 but what it means is every time you see that number go up on wall street, it means jobs, it means success, it means 401 k s that are flourishing it also means americans are getting richer from the stock market the s p 500 opening the year with three Straight Record closes this is the first time thats happened since 1964. 54 years ago, for those keeping score. The dow and nasdaq on their own recordwreaki recordbreaking rallies. Could 2018 be better than 2017 how long can this euphoria on wall street last i remember 1964 like it was yesterday. It was yesterday for you. Ha ha ha. Ha ha ha. Dow 25,000 is a big deal. Why . People that typically wont be talking about the stock market are now talking about the stock market people that havent looked at their 401 k s are saying, whats going on on here, maybe theyre tuning in for the first time to answer your question, what works, things that worked at the end of last year i think will continue to work they come in the form of the financials, the banks, which on a price to book i still think are cheap. These industrial names, like a boeing, like a roper, for example, have done well. I think they continue to do well defense stocks, which were on their rear end when president obama got elected the first time, have now quadrupled. Youll say theyre expensive, but you look at a Lockheed Martin and theres tremendous potential to the upside there. Someone watching will say, valuations are high, historically speaking, why should i buy up here at record highs . The argument for buying up here is weve seen Global Growth continue to accelerate the dow in the u. S. Is fine. While valuations may appear to be i dont even know if i would call them stretched. Lets call them at the high end of the range here on some of these things, you still have to say, okay, but am i going to have Economic Growth not only will i have Economic Growth, but look at the bond market what are your alternatives, what would you pay for stocks given this yield environment and yields are still relatively low. And even if they creep up a little bit, you still have some room here in the stock market. So ive got low yields, ive got a high growth or a growing economy globally i mean, to me it sounds actually pretty good for stocks the other piece of the puzzle is the earnings part of it if the earnings havent come up yet. They havent. Then thats going to expand if you think about companies, i dont think companies will do their best to cheer lead, if anything theyll try to tamp down expectations. Theyre not sure what theyll see in terms of the demand profile. If you look at auto sales as any indication, i know this was yesterdays story, but weve had 24 hours to think about yesterdays auto story the auto companies, which a year ago at this time we were talking peak autos, well never get above 18 million sars again, if anything the numbers show gm has started the year up 8 so the global trade, yeah, the nikkei got through alltime highs, got through the january 1992 high, now has been taken out in japan and seriously, the reason i bring that up is if you think about emerging markets and you think about japan, they have not made new highs japan is now making new highs. But if you think about the catchup trade and how long the tail is on these things, i would believe theres a lot more to go for some of those markets that have lagged in the u. S were seeing eye to eye tonight. Weird we talked about this on the desk today you look at the upside surprise, the surprise index when it comes to Economic Data in the u. S. Since the fourth quarter, the past several months, weve surprised to the upside, versus from a relative perspective, e. M. And europe. The catchup will be e. M. Really catching up. The other side of that trade is that e. M. Does well when money is expanding away from the u. S. And out, right . So we know we still have a fed thats going to start contracting the money supply why wouldnt i want to be here where the money is staying you wont have it like an out. I 100 agree with you right now growth is going to outperform value on a relative basis, considering the catchup weve seen from the fourth quarter. What does that mean for somebody at home, growth versus value . Do you want to stay in the facebooks of the world, the googles, the big names that have had growth if you want to put money to work now, would you say put them in facebook . I would much prefer to be in a facebook, a google look at where energy is i think at the top end here, weve got buyers on the desk of energy that are reluctant to put more money to work if anything, all were seeing is short coverings. Theyre the momentum trade over the past month. The dow performed today, materials were up 2. 2 and handily beat every other sector. Whats happening in the resource sector were actually at a place where companies that for three or four years spent a lot of time downsizing, trying to restore their balance sheets, getting to a place where theyre controlling inventories. Now we have underlying commodities that are higher. You have companies that are leaner and meaner than theyve ever been. Those are names that have lagged, and as i like to say about commodities, you dont buy them when theyre cheap, you buy them when theyre running and theres momentum and growth behind them. Tim has said that for a while. Going back to google or alphabet, whatever theyre calling themselves now, the stock is really not expensive. It trades 24 times forward earnings theyll probably grow at 31, 32 , made an alltime high today along with other names, by the way. If youre looking for value, as crazy as it may sound, i think alphabet provides value. Thats an interesting question value within a growth sector like technology. I like ibm. So a dog. I dont know if its so much of a dog its a growth stock listen, it is within a growth sector i dont know if its a value track. Look at whats happening come on look at whats happening with ibm. Rbc came out the other day with an upgrade you have everybody he also wels going to follow along. They have a lot of growth areas in the space it has been a turnaround story if i look and say, what is the news Everybody Knows, Everybody Knows that facebook is doing well, google is doing well where is the surprise going to come ibm. The reason youre buying ibm here, i appreciate the contrarian in you, bk, two days ago when you said it, the stock has moved 4 since then, good for you. I ultimately think ibm has a lot to prove for a company that for a decade was financially engineering numbers. Buying back their shares. Doing what they could to keep this company chugging along when in fact they were finding no way to brgrow the software business, the security business, i do believe theyve put some flags in the ground to grow on. Cisco is the opposite. I think cisco is cheap and i think cisco is a real company with a real business right here and now infrastructure buildout and technologies all coming with this capex, this stock is cheap to its peers i think intel should be bought aggressively. Even with the security flaw that will be plugged up and fixed. We saw this in equifax, that was an even worse scenario, and remember what i said there, the solution will occur. Its not a detrimental scenario to their model why wouldnt you want to own the two hottest areas in tech, ai and blockchain . Thats what ibm is i get it. Ibm has legacy businesses. But thats the growth the upgrade from rbc, to be fair, cited legacy mainframes which will lead to software and Services Revenue they said the legacy was a good thing. I have not liked ibm for years. Collectively weve been right. The last quarter in ibm was shockingly decent. So you have to ask yourself, to bks point, do people want to sell ibm to january 18 when they report next, with the potential to build upon what was a pretty good quarter . Because if they do, instead of being 161 stock, where it currently is, youre probably back to that 182 level. I hear what tim is saying. Im with bk on this one. If you want to go for high quality here, its a new year, i know people want to try to reinvent themselves. You dont have to necessarily find a new idea. Find the ideas that make sense find the companies that have the growth you can make an argument that on a p. E. G. Ratio, its pretty attractive, this is a Company Trading roughly 40 times, its probably growing around that too. I think thats very interesting. And quickly, i think if you look at the Broader Market, you have to Pay Attention to the things that have underperformed that make sense here. And that to me includes telco and some of the utilities plays which have to be part of every portfolio. People want to sell these things down but i think they deserve to be held. What did you do today ibm was the play, to me it has the most upside. I hear tim on the at t and verizon. Those type of names. If you want to get some yield, probably not a bad place to be i bought some cannabis names on the weakness. Auto nation, if you want to play the Second Derivative like tim said, auto nation had a decent run, probably grows at 13 or so. A. N. , thats bks mike jackson, a leading indicator. Coming up, General Electric with a shocking start to the new year the stock is up 6 in the past three days is its Long National nightmare behind it . Plus 10 trillion, thats how much one wall street analyst says the crypto universe is worth. The man behind this bold call, mitch steves of rbc, will be here to explain. And later, the Trump Administration is putting the kibosh on pot and some high flying stocks are going up in smoke. But ti m daniel jacoseymour win that youre idling in your car, youre sending about half a gallon of gasoline up in the air. That amounts to about 10 pounds of Carbon Dioxide every week. malo hutson growth is good, but when it starts impacting our quality of air and quality of life, thats a problem. So forwardthinking cities like sacramento are investing in streets that are smarter and greener. The solution was right under our feet. Asphalt. Or to be more precise, intelligent asphalt. By embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic. Then that data runs across our network, and we use it to optimize the timing of lights, so that travel times are shorter. Who knew asphalt could help save the environment . Or a little internet machine . 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. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Welcome back to fast money. Do not adjust your tv. Ge shares are on fire this week. And that kicks off our top trades the industrial giant surging more than 6 in the first three trading sessions of the year thats tops in the dow and its on pace for its best Weekly Performance since november 16 the Stock Plunged 45 , ending the year as the worst performing dow stock. Is this the beginning of a ge return no. That was fast were 18 1 2 now, great maybe we hit a bounce from here. But wait a second, ge is trading 18 times forward earnings, they have literally zero eps growth why are you paying a premium valuation for that company when names like honeywelltrade at a little bit of a premium, but they grow. There are better places to be than ge. Ge owner. Ge owner, around 8 higher, and very comfortable owning it here, because i think what are some of the things that can happen in 2018 one includes a baker hughes either valuation accretion back to ge, that could be through a spinout, it could be the energy sector. They top ticked on this one, folks. To say that its worthless is to totally miss the boat. That is the issue with ge. This is still a Massive Company with massive investment, with Massive Technology and trademark and intellectual property. They dont serve a high valuation. But im very comfortable only this name at this valuation. People realize the perceptions are low as they can be 93 cents in free cash flow. This is a 17 stock at best, its dead money. I wouldnt be investing in this. There are so many other places to put your money in now ge isnt one of them they made terrible investments this is a stock where there are so many other places in the market to put your money lets go to the other side of this if you gave management, mr. Flannery, an opportunity to kitchen sink it, he will take it, he did take it theres no question that at 105 a share, which is where the street is in 2018 earnings, they didnt leave themselves a lot of room to miss thats as low as it goes i could be wrong when i look at the broader business, theyve streamlined, theyve decided were not going after all these farflung businesses we dont know what its really going to look like at the end of the day, do we . Thats the issue. Thats the overwhelming concern. Investors need to have clarity turning the ship is like turning the millennium falcon. Ill even go so far, i dont think you get hurt in ge, and i understand tims rationale, but you have to have the same type of faith to buy ge as you do tesla. You have to believe that at some point in the future what . Yes i thought you were going to say ibm. No, tesla the reason why you buy tesla is because you think five to ten years down the line its going to be not just a car company but its going to disrupt the electric grid. Theres a path to grow. Ge, you have to think the same thing, that theyre going to be able to do something they cant do today theres a path to growth. Theres something in their business outline ge doesnt have that yet you have to have the same type of faithbased investment as you have said so eloquently i have said it eloquently, thank you. Well, sometimes in terms of the way we get energy to our homes, elon musk has a vision i dont know what ges vision, using the parallel youre using. True, i guess so. Listen, ge is not going away you have to think that theyre going to figure it out if youre buying ge, you have to have the same type of faith that they are going to come up with a path to goethe thats a big leap millennial what is it . Millennial falcon they turn that thing around pretty quickly good movie. That was sean penn, sure do you have a point about ge or no . Button it up all right. Im going to have everybody yelling at me. Still ahead, it was a record Christmas Shopping season. Why are a number of Retail Stocks getting slammed today the chart master has the answer. If you own any of these names, you may not like it. Im melissa lee. Youre watching cnbc, first in business worldwide in the meantime, here is whats coming up on fast. No, im not i pass on grass. Puff the magic dragon so does attorney general Jeff Sessions who is contraction drao legal marijuana. Tim seymour says now is the time to get in the weeds. Hell give us the name plus how much do you think the whole crypto space is worth . 1 million. Nope. According to a top brokerage firm, its more like 10 trillion whoa. Yeah, whoa. And the man behind that call will be here to explain how he got to that number and the currency that will lead the way. When fa meyrernston tus. Welcome back to fast money. Wall streets love affair with all things crypto is picking up steam. Just how big is the Crypto Market so big that the cofounder of ripple, a leading cryptocurrency, is now richer than Mark Zuckerberg our bob pisani is at the nyse breaking down the latest in the crypto boom. Reporter hello, melissa. The Crypto Market is getting bigger but not because bitcoin is getting bigger. Bitcoin has been fairly quiet in the last few weeks, while the upstarts have made impressive gains in the past month, even in the past week. Look at this ripple and ethereum combined are almost 85 of the market capitalization of bitcoin. Thats a huge change from a while ago. And the total market cap of the top 100 cryptocurrencies now roughly 686 billion hoo boy, thats a big jump from even a few months ago. Its still small compared to the Broader Market for example, small cap russell 2000 stock market is a market cap of about 2. 5 trillion cryptocurrencies are one fourth of the size of the Small Cap Stock market and its way below the 25 trillion value for the s p 500, and roughly 38 trillion value of the u. S. Bond market, even way below the value of all the gold in the world, maybe a little more than 7 trillion the big issue is this. How big will federal and state regulators allow these cryptocurrencies to become before they step in with even more regulation . Back to you, melissa my guess is you start seeing two, three, four, 5 trillion valuations, thats going to be a trigger. Bob, thank you, bob pisani at the new york stock exchange. Wall street firm rbc is so bullish on the crypto craze, its calling it a 10 trillion opportunity. Yeah, you heard me right, 10 trillion lets bring in the man behind that bold call, mitch steves of rbc capital, he joins us from san francisco. Mitch, great to have you with us nice having me, thank you can you kind of explain how you came up with that number what percentage of that 10 trillion is cryptocurrencies and how much of it is sort of the related ecosystem around blockchain and crypto . So i think the fast majority is actually on the ecosystem what im trying to describe in that report is creating a decentralized world computer i think what people misunderstand babout the crypto space is its not just a store of value but it allows you to secure the internet. Essentially right now we trust Third Party Providers such as icloud or dropbox to hold our storage and photos and things like that. In the future well be able to do this for free by using a file coin or a different type of coin, whatever it