Points overnight in asia, the nikkei hitting 26year highs during the trading session. Market ended up by over a half percentage point to 23,849 in europe this morning green arrows there the dax up is up by 0. 2 in france, the cac is up the ftse up over 0. 1 . Yesterday the yield on the treasury closing at 2. 48 . This morning the tenyear is yielding all the way up, almost 2. 496 stocks to watch today. Samsung is forecasting a 64 rise in Fourth Quarter profits on continued demand for memory chips but that guidance is below analyst estimates. The strong yuan and yearend bonuses hit results. Samsung will report detailed earnings at the end of the month. Shares of altice are higher after the Company Announced plans to spin off u. S. Operations the Telecom Provider will pay a 1. 5 billion Cash Dividend prior to separation and launch a 2 billion buyback of u. S. Shares after the spinoff. British American Tobacco says the new u. S. Tax rules will boost earnings by 6 in 2018 the changes will also result in a noncash tax credit stemming from the reevaluation of deferred tax balances from its acquisition of reynolds. Last nights College Football championship game was an alls. E. C. Battle President Trump took the field for the national ann shem before tanthem before the kickoff. Georgia came out with a strong start, taking a 130 lead at half time. In the second half, nick saban benched the starting quarterback in consideration for the backup quarterback, tua tagovailoa. He threw for 166 yards, three touchdowns and sealed alabamas fifth National Title in nine years under nick saban the last one he threw was to a freshman as well it was a freshman throwing to a freshman i feel a little bit that shows you what the program has ahead of it. Alabama wins a lot. I feel like the guy at the end im just reading what happened but i guess he missed the field goal yes to win the game so he would have been, you know, he got bailed out in overtime. I guess georgia should have scored a touchdown i got up this morning, i said if i were to bet, i will bet i go to my phone and it says alabama won. Even though im a georgia fan. But then the way it happened, damn overtime damn that you missed watching it thats what i mean. I saw the my thrill with georgia oklahoma was an unbelievable game. But the National Championship what this means for nick saban is tremendous. This ties him with bear bryant six total six total the guy at georgia who seems like hes really inspiring these guys, hes from alabama, too its like tiger cubs. Exactly okay before attending the football game, President Trump made a speech in tennessee highlighting the benefits of the new tax reform law Kayla Tausche joins us i know you were rooting for georgia, too that was a great game. I went to bed when it was 1720, sad news to wake up to this morning but, you know, alabama played a good game. They pulled it out georgia has a freshman quarterback, too they have a good future ahead of it lets talk about politics a bit. Trump before that game addressed the American FarmBureau Convention in nashville, tennessee. The first president ial address to that group in a quarter century. He heralded tax bill for allowing farmers to deduct Farm Equipment but left the audience reading between the lines on one key issue, trade and the renegotiation of nafta think of it, when mexico is making all of that money, when canada is making all of that money, its not the easiest negotiation. Well make it fair for you people again members of congress have been lobbying the white house to preserve the deal. Several traveled with the president yesterday. A gop working group on trade in the senate is set to meet this week ahead of nafta talks resuming january 3rd in nashville, trump signed an executive order to increase Broadband Internet in rural areas. Senior gop aides told me they doubted the deal would get formalized until the gop retreat at the greenbriar hotel. Theres discussions between Robert Mueller and the president s legal team that began in december over a potential interview with trump himself. Those talks are in the early stages but could result in a sitdown between the two in weeks. Well see what format that would take and what guarantees muellers team would be willing to give the president which his legal team is requesting becky . Kayla tausche, thank you very much lets get you caught up on the markets. Here with us for that is ed keon from qmu and paul hickey from spoke Investment Group keon, this is like i always say, this is not a standalone sort of a movie on amazon this is ongoing. Episodic last time you were on, you didnt know you werent convinced we would get 30 last year you thought europe and international might be a better place to go. I think of you originally as a domestic guy but with your new job, youre all over the place you have to look internationally, right looking at last week, you were not that overly bullish about 2018 you still sort of meh about 2018 the way i would put it. Theres three scenarios. So the most likely scenario is you get kind of a decent year. Thats what people always say. Im getting there ill get there high Single Digits. So hired tired of hearing that. I think theres a 30 , 40 chance that we get a year analogous to last year but another good well into double digit year. I think the key to that is what happens with productivity growth which has been trending up the last reading was 3 . I dont think we can sustain 3 . If you can get productivity growth of 2. 5. We talked many times on the show, you can get 3 gdp growth . The key to getting 3 gdp growth is productivity growth up at a sustained basis. Maybe technology can do that. Nobody knows what causes that what about Capital Spending . That will help. If the new tax law incensed productivity, were in good shape. Population growth we need more babies. People hunker down in the cold, might be a while takes a while for the labor force. All right so you wouldnt be you said double digit would be surprised if it was Mike Campbell this we could get 20 . Talking to cramer yesterday, i said every day you see this. 577 points last week theres reversion to the mean coming there has to be, or else well be up like 800 or so. But then the earnings come out, and it almost, by the bootstraps, some of these companies do so well that it pulls the averages up when they shouldnt be going up. Well get probably 15 Earnings Growth when you put in strong cyclical Global Recovery as well as the tax bill. Ahead of expectations valuations are high eventually well pay a price for that if you get 15 Earnings Growth, you maintain that level of valuation and maybe tick it up a bit. Its not impossible. Its like a ball hog. Doesnt pass gets dribbled around, shoot. What do you think . I think just because calendar changes, the strategy shouldnt change going back to the strategist targets, Single Digits, a single digit year for the market is about half as likely as a 10 or plus year. To take a reined in attitude, its a safe bet. We have new highs expanding five days into this year weve seen record highs 20 of the s p hit record highs last friday. That would be the best rating of all of last year vix has not closed above ten as long as these trends remain in place, you cant fight it just to verify, youre saying about half as likely well see 10 or less based on what . Historical returns. Actually, a 5 to 10 gain in the market is uncommon, even though its what the average and what people tend to look for every year its not the common return you see. In these bull markets, as ed was talking about valuations, they tend to get excessive. Thats what happens in bull markets. Bullmarkets die of when valuations are very stretched. I dont think were extremely stretched now. As you point out, analysts are ratcheting up forecasts for u. S. Corporate profits, the fastest pace in ten years. Which means valuations will stay steady thats a better sign so weve seen a big uptick in analyst revisions, which you could consider a negative. Its more mechanical now, because the tax reforms come through. The overall view is the market is going strong. Today i was reading this article, this Family Office in asia, this bank, theyre staying away from crypto and debt but focusing on private equities and real estate. So sentiment is important watching for years and years, you do see the wall of worry, you see the more skeptical people are, the further the bull has to go. Last week the piece in the journal was that a lot of people missed out they didnt get in for whatever reason they werent part of last years rally. Today its investors drop shields against stock downturn so theyre getting rid of what they had shorted, puts or hedges so thats the opposite of the is this starting to be embraced . I spent most of my day yesterday trying to plot out how we would react to our portfolios if the market did turn down. As an investor you have to prepare for the worst, have a great plan as far as the fundamentals of the market now, valuations well pay a price for that some day, but i dont think its in 2018 is joe right, this is a turn in sentiment where this has been an unloved market run, you could be looking at everybody kind of jumping in you cant say its the most hated bull market ever now youve seen people embracing it Short Interest levels are not at record lows. Margin debt is at record highs 25 of all margin debt readings have been at record highs. Year over year increase in margin debt, 6 . In 2000 and 2007 the increase was over 60 doesnt tell you theres that much extreme optimism going on i think the key is productivity if we can get high productivity growth that will keep inflation down, let the fed normalize policy, it will allow higher wages without crimping corporate profits. If you get 2. 5 productivity growth that would do a lot of good things for the economy, wages and the market in terms of how youre getting your portfolio ready for the worstcase scenario, what does that entail creatal e aing options for mf either pulling back quickly on certain positions or constructing portions of the portfolio that are more defensive in nature. So the key is to have the tools available, so that when things do turn down, we have some big portfolios to manage, that we change them more quickly not that we will get it perfectly right, but you have to have the portfolio tools in place as part of the portfolio to get defensive quickly if you need to. Paul, do you watch this show . Yes so you know how ive been treating people that say the high Single Digits he comes in, yeah. Oh, yeah did you do that because you knew youre not just spoon feeding me what i want to hear you want to please me, okay only half as likely that its only 10 or below than above. Thats an out of youre sell side, arent you no. Okay. Thats why you actually have to make money. You cant just try to keep your job by not saying anything that might not come out theres a big difference so its just looking at history, and history says that, you know, things can go on for longer preaching to the choir, theres ran old saying after a real estate boom, please, god, let there be another real estate boom because i missed the last one. Those three years in the mid 90s 35, 35, 35, thats a stock market that you want to be part of it doubles whats 35 give you . It doubled in 2 1 2 years. You look at valuations now, theres a threeyear stretch in the 90s, that was an extreme, valuations of the s p were this high in 1996 all right people now think 27,000 just sounds like absolutely stratospheric. What if its i dont want to say the word last time somebody said 30,000, 40,000, glassman they got laughed at. I think well have another good year. Dont try to join up with him now, keon. Im spending a lot of time preparing for the worst, hoping for the best might go up, could go down. You have to be prepared all right paul and ed, thank you but you more when we come back, the korean thaw. Reports this morning of progress in the talks between the north and the south ahead of next months olympic games. A live report from seoul after this whos the new guy . They call him the whisperer. The whisperer . Why do they call him the whisperer . He talks to planes. He talks to planes. Watch this. Hey watson, whats avionics telling you . Maintenance records and performance data suggest replacing capacitor c4. Not bad. Whats with the coffee maker . Sorry. We are not on speaking terms. Whats with the coffee maker . Take a deeeep breath in. And. Exhale. Aflac and a gentle wavelike motion. Liberate your spine. Aflac and reach, toes blossoming. Not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. So he had your back . Yup in just one day, we process, approve and pay. One day pay. Only from aflac welcome back dow jones is reporting that a highly classified u. S. Government satellite appears to be totally lost. That satellite, which was code named zuma was launched on sunday by spacex the report says that lawmakers have been briefed about the destruction of the secretive pay load which is believed to have been burned up in the atmosphere but dow jones does note that the absence of official word on the incident means that there could be other explanations. Satellite maker Northrop Grumman declined to grumman because the mission was classified said they cant say anything ever about classified missions spacex says reviews of the data indicate falcon 9 performed nominally. That does sound bizarre, nominally. Not good were following a developing story opt crn the korean peninsa north and south korea sit down for talks. Sherry cha chery kang has more. Reporter southen offici ekon officials and reporters are getting updates. The talks themselves are rare and the latest word is a Rare Development between the two koreas they have decided to reopen their military Communication Channels that have been cut off after 23 months. So a speedy turnaround on the mood in the Korean Peninsula in 2018 were only nine days into the year also north koreas sports diplomacy fully in the works today saying that it will be sending a team of athletes, a cheer squad, as well as highranking officials to the 2018 pyeongchang olympics, thats starting in a month from now. Of course here is a sound that shows the warm and fuzzy mood at the border talks this morning. Here is north koreas top point person translator we came to this meeting today with a serious and sincere attitude and with the thought of giving our breather remember who have high hopes for this dialogue invaluable results as the first present of the year reporter the real question is who is getting the big present here is it north korea that will eventually be asking for the price of the north korean participation at the games next month and how will the Trump Administration react to all of this this thaw in the korean tensions guys chery, thank you. All right. Coming up, geopolitical tensions aside, we will talk about the economics behind the olympic games, which are i can tell you, theyre very good and how the host country is getting ready for the influx of fans as we head to break, heres yesterdays s p 500 winners and losers most etfs only track a benchmark. Flexshares etfs are built around the Way Investors think. 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This morning its green arrows across the board, with the dow futures indicated up 36 points s p futures indicated up by 1. Nasdaq up by 10. Stocks to watch this morning starting with Urban Outfitters samestore sales fell by 1 during the holidays. The retailer said tight controls will leave it with clean inventories heading into the spring season. The stock is off 2. 25 seagate is forecasting Second Quarter