But, of course, the contrarians say thats great news for stocks, actually, because when everyone is bullish is when its time to worry. Well take a closer look at what 2014 might hold up. Its an interesting survey. Also, a tragic story that is gripping the nations attention right now. A carjacking at an upscale new jersey mall turns deadly last night. It was the mall where we did our black friday show, the day after thanksgiving. Thats right. We were there just a couple weeks ago. I mean, a horrible story, taking the life of a 30yearold man. As it unfolds, just nine days before christmas, could this be another reason for shoppers to pause in what has been a tepid Holiday Season anyway. Well have a live report on that tragic story coming up. Lets take a look at markets at this hour. The final trading hour of the day. The dow is adding 145 points. Closed to highs of the session. Its up about 1 . 100 points, bill, isnt what it used to be. The nasdaq and s p 500. Lets look across those indexes as well. The nasdaq bouncing above the 4,000 mark. Up 0. 8 of 1 . Having the best day in three weeks. The s p 500 adding, not bad, 13 points here. 1788. Although, i was going to say on the nasdaq, twitter is down 4 today after noted investor dan niles told you guys on squawk on the street this morning hes short that stock. Closing bell exchange, abigail doolittle, peter kudla, tom carston, john smith and our own rick santelli. Welcome, everybody, here. Thomas, i mean, you think the possibility of a tapering is in this market. Does that mean that we dont see a selloff if they start using the t word on wednesday . I think we could see a selloff, but weve really adjusted our thinking this year in 2013 where you used to ray much more severe pullback on news that might be announced, such as the taper. We now see that the market doesnt really pull back as much. So, i think that if they do announce the taper, it could shave some points off. I still think with low Interest Rates into 2014, stocks are the place that investors want to be. David kudla, heres jason writing in the wall street journal today, Profit Margins are more likely to narrow than widen in 2014. In other words, if stocks keep rising, theyll have to do so on stretched valuations and not stronger earnings. Do you agree . Well, i think that we will see Profit Margins compress. Companies have cut their costs so much and Profit Margins are now at a record. But with revenue growth, that can increase profits on the upside, which we expect. And with an ultralow Interest Rate environment, even with rates creeping up here, we think we can have multiple expansion so stocks have further to go in 2014. Abigail, you think we are headed for a correction, maybe 5 , 10 , no matter what the fed does, right . Yeah, i do. I think when we look at todays move up in the equity markets, its probably a brief relief pop before near term drop of 5 , 10 . I think this happens before the fed tapers or not. If they taper, the source is clear. Liquidity addicted investors will go into withdrawal. If they dont taper, were looking at two other factors. First, diminished returns of qe, which ben bernanke has talked about, and second, the ongoing uncertainty of this taper threat. Markets, investors, hate uncertainty. And that sort of feed for volatility could really prove to be a negative factor for the markets. Plus, the markets are up 30 to 50 this past year. If youve been brave enough to trade that fed froth, i think it really points to taking profits here. Yeah, john smith, just to go back to this point, i mean, david basically acknowledged that perhaps for the market to go higher next year, it does have to be all on that multiple expansion. Do you agree or do you see other forces coming in, or are we going to be able to increase earnings from what have been historically high levels here . Well, i think when were looking at earnings, were looking at straight equities. I think we have to sort of rechange what our focus is going into 2014. This year was all about the rally of price, right . Anything you wanted correlation and risky assets. Going into next year, i think what you want as your themes are Asset Classes that have a little more of their total return come from income. In addition to that, you want noncorrelated, emerging market, highyield debt, real estate and even, god forbid, commodities, might tend to do better. With a potential rise in Interest Rates from a tapering happening, you also want to be looking now more than ever at your fixed Income Portfolio to make sure youre protected from a rising Interest Rate environment. And, in fact, rick santelli, youve been getting that rising rate on the long end of the curve from fiveyear note on. The taper talk has gotten a little loud neither last couple of days here. What do you think theyre going to talk about wednesday . I think the talk has gotten louder. The talk has definitely gotten louder. If you look at threemonth chart, thats the last time we closed up this close to 2. 09 in a ten. One of the cornerstones is to put investors in riskier Asset Classes. They have been successful in that. Look at barclays Investment Grade chart of the spread. Its hovering close to sixyear lows. Thats reality. Look at perception. The etf, not nearly on best levels, even for this year. And i think that really says a lot about whats going on in the taper. Its like wizard of oz. It might be a line, but the courage isnt going to be there. I think a small taper is whats priced into the bond market. The bigger taper isnt going to be good for stocks. I think thats why the Federal Reserve has been literally dragging their feet. You know, its fascinating to look, bill, at the size of the equity market. The rebound weve seen this year has put the valuations, again, to go back to justins piece, but put valuations near historic highs relative to disposable income. I guess this 2014 could be the year, perhaps, we start to see some of that distributed, maybe Profit Margins come down because, you know, heaven forbid, employees are starting to make more. Thomas, that world would be favorable, would it not . I think so. Its also an issue of managing expectations as we move into 2014. I agree with a lot of points that abigail and john made, which are that i think its still favorable environment for equities as we move forward. I think investors do need to remain cautious because it is very likely that we see a pullback. But as weve seen throughout this year f we get a 5 or 10 pullback, it will create a buying opportunity for client to get into equities. I think a lot of clients who need that income will shift more from the bond portfolio into alternative investments where were seeing much more attractive yields. Abigail, i want to ask you about sentiment. Well highlight a survey coming up of investors. 40 of whom feel were going to see a market lower next year. Now, i dont know what the other 60 , were saying we have a breakdown of that. But you hardly have a situation where you have too much bullishness right now. Theres still a lot of skepticism about this rally, even though we have the great gains you cited. Thats a great point. Im certainly a fan of contrarian analysis. Even so, when we think about the 30 run the s p 500 has had over the last year on this qe3, the extension of the twist, again i think were at that point of diminished returns. I think if the Federal Reserve and other Central Banks have created so much instability within the currency markets, thats likely to shift at some point into the equity markets. We have this unnatural and unsustainable back drop that everybodys taking for granted. Even though that survey points to that 40 60 split, i still think this is a complacent market. I think investors feel the fed has their back and nothing will take down the fed. At some point well see a shift where investors look at 1. 6 gdp growth and slowing bottom line growth. Its just not as constructive an environment as the 170 return of the s p 500 over the last nearly five years would suggest, in my view. At the same time, david kud lashgs on this point, if we have a situation where employment growth has been picking up, same for gdp growth but inflation remains so tame disinflation remains a concern among a lot of policy makers, that remains a pretty Good Environment for stock investors, does it not . I think it does. We have benign inflation environment. We could be at no inflation for years. Theres no pressure on the fed to change their policy their easy policy they have now. We will begin tapering at some point. Thats priced into the market. Whether it happens this week or happens in the First Quarter. But i think con temporary to abigails outlook, gdp growth next year, 9 earnings growth, revenue increasing, top line growth increasing, we now have housing, last leg of the economy recovering, auto sales are booming, precrisis levels in autos. And, you know, we just continue to see and the sentiment of the average investors out there, the poll that said there are so many that are concerned about a downturn in the market next year. Not only contrarian indicator but also important because we need those people that arent bulls yet. We need to climb that wall of worry. As long as everyones not a bull, we need that market top. I wanted to challenge abigail on that as well. Thank you for joining us. Even you, cowardly lion. Heading toward the close. 50 minutes left here. The dow off the highs but still a pretty strong rally today. Its actually, frankly, got some traders on the floor skramping their head. Thats true. By the way, we only have ten trading days left in the year, if you can believe it. Is the santa claus rally coming . History says yes. Up next well tell you about the nice gain santa typically brings to investors during that last stretch. And dont hurt the me messenger. A big snowstorm over the weekend kept shoppers home and more is on the way tonight and into tomorrow. Drive safe. Now heres a double whammy for retailers. 40 of americans who planned to spend less money this Holiday Season. We have the man behind that study coming up next. An important one. What a year its been for the nasdaq. Yes, its outperformed the dow, the s p 500, but will it lead the way in 2014 . Well hear from both sides coming up on the closing bell. Keep it right here. Youre watching cnbc, first in business worldwide. 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Snore winter storm of course, we had one over the weekend which dumped as much as 18 inches in parts of the northeast. Now more snow is coming tonight, late tonight, into tomorrow. Thats going to put another crimp on some retailers, i would think. Youre going to do the show from home tomorrow, right . I dont think so, but ill be here. Well, the Holiday Shopper overcome these obstacles and make up for short time . Joining us with details on American Consumer is greg mcbride. Whats surprising here for all the improvement in household balances, confidence generally, expectations for spending this year are still sharply down. What do you make of it . Yeah, youre right, kelly. I think a lot of this ties to the fact that although consumers have seen imprurmeovements of t household balance sheet, theyre not seeing a change in the paycheck. That really crimps their ability to ramp up spending. Not only on a consistent basis but even for, you know, discretionary purchases or those onetime holiday expenses. So, whats the optimism about then if theyre feeling better about themselves, i guess theyre feeling better were not in a financial crisis like we were in 2008, but if they feel better about their job, if they feel better about the value of their home, why wouldnt they be spending more . Well, a lot of this, bill, just boils down to the fact that, you know, theyre seeing their net worth improve because of the stock market, because of the improvement in housing. Theyre not seeing an increase in the paycheck. So they dont have the capability or the willingness to go out and spend money they dont have. People are feeling more secure in their jobs. Weve seen an uptick in big purchase items, automobiles and homes, but ramping up spending, they dont have the income to do that. You point out the biggest weakness is among households making less than 50,000. What can you tell us about that segment of the population relative to the higher earners. Thats the thing, it was more pronounced for households with income under 50,000 but it wasnt confined to households under 50,000. The percentage of people that said they were going to spend less this year than last year outnumbered those than those that said they were going to spend more in every age group and income group. It was most pronounced at income levels under 50 thoi. Also a disparity that increased with age. Reflection of the fact that Senior Citizens living on fixed income continue to be heavily squeezed, longterm unemployed also feeling the brunt of that. When did you take this survey . The reason i ask i mean, we had the Government Shutdown, had you all kinds you know, the debt ceiling saga in washington, the fear that, you know, obamacare was going to collapse at some point. Was it around that time . I mean, were hen were these peo feeling that secure . Its part of a poll we do every month. This was done this month right after the jobs report came out. We saw a lot of effects of the Government Shutdown that dented confidence in the past few months, kind of in the Rearview Mirror at this point. Weve seen a complete rebound in terms of how people feel about job security, Comfort Level with debt, but when we asked a couple months ago, whats the biggest Factor Holding you back from ramping up your spending . Most prominent answer was, stagnant income. Thats reflected when we see this Holiday Spending intention. Final question, greg, kind of to this point, but in years to come will it rely on americans taking home bigger paychecks to fix the situation, or do you get the sense theres perhaps something more lasting here, a damaged psyche from years of the boom and bust . Well, i dont think its necessarily, umyou know, the bigger paycheck in terms of a raise at the job you have. In some respects its having a paycheck where there isnt one now. People that are unemployed that then get a job or somebody whos working part time and that transitions into a fulltime job. I think aggregate Household Level f you start to see greater income coming into the household, that will translate to additional spending. And i guess one positive we can look at is at least theyre not taking on more debt. I mean f they dont have the income increase, theyre not going to spend that much more this year, meaning they wont add to the debt levels. We know theyre not taking money out of their homes. Theyre starting to increase using credit card balances. But we have seen a slowdown in rate of increase in installment credit in this economy, and this speaks to that right there. Good to see you. Thanks. Appreciate it very much. Enjoy florida, while youre down there. Much more on the Holiday Shopping season coming up, including mall Security Fears following Fatal Shooting in an upscale new jersey mall last night will keep shoppers away . Stay with us right here on the closing bell. Meantime, with about 40 minutes left in the trading session here, we are hanging onto gains for the most part. The dows up 146 points. The nasdaq, the one stellar again, up 29 almost 30 points now, right above 4,000 level once again. Theres now a waiting list for tesla. Model s in china. If the company can tap that market . A chance to drive away with this stock after 20 decline from the highs. We have a stock brawl coming up next. Google acquiring eighth Robotics Company this year alone. The one they just bought makes robots for the pentagon. Is google quietly becoming a military contractor and is that a good or bad thing for investors . Well take aim at google army of robots. Thats the one that can beat you at 29 miles an hour. I love him. 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