Jim, josh brown, stephanie link, John Najarian and onset is kate moore, chief equity strategist at blackrock. You know what, kate, im going to do you first. We were going to start off talking about the momentum names which really have had a comeback of late. But as we approach 20,000 on the dow what are your thoughts on where we are in the market . I think were in a good place in the market. Not just because imen equity strategist but equities are the place to be in 2017 and that were getting greater recognition that the improvements and business sentiment, improvements in Consumer Confidence are well founded. I thought the jobs report today and average Hourly Earnings were pushing us in that right direction. I feel pretty good about both Economic Growth and the Market Movement in 2017. You guys pretty much share those sentiments or as we start to get towards 20,000 do you think about lightening up rather than buying more. Im encouraged that youre seeing a rotation and a broadening out in the market. Its not just the cyclicals leading or the defensives leading. Now you have health care participating, growth, technology participating, you have some consumer discretionary. Its mixed this week. But media and auto has picked up the slack for some of the discretionary and retailer names. I like the fact that we are seeing a broadening in the marketplace. Nd i think that sets us up very well headed into earnings. I, too, agree with kate that the nonfarm payroll numbers today, the wage number was the key and that number, i think, Going Forward actually starts to increase and that gives you confidence Going Forward, too. Financials after leading us to where we even are have started to underperform relative to some other sectors. And these fang stocks, high growth names that were so much in favor and out of favor, had a comeback this week alone. Facebook is up 7 this week. Amazon 5 1 2 . Netflix, 8 . Google 4 . Scott . The financial stocks probably topped around december 9th, december 10th. Theyre not underper forring. Theyre doing something better. Theyre consolidating. This is exactly what you want to see after a massive move. Xwha you dont want to see is Empire State Building like chart where they just get so incredibly stretched so quickly that theres no opportunity at all. Consolidation is perfect for what you would want if youre construct i. Let me tell you something. After being in this range for the last month, look at Goldman Sachs. Now breaking out of that consolidation technically. And then you just look elsewhere. So financials are important, 15 of the s p. Look at the stocks not doing well that have turned around. Sbi is up 7 . Equal weight biotech, these stocks couldnt get arrested last year. Probably a ramp into what people consider the super bowl of biotech. Fine, look at starbucks, nike, these are stocks that were not working, that are now working along with Companies Like deere that just continues to rip higher. Disney ripping higher. This is what you want to see if its broad based, different groups and they take a rest. The next group comes up. Substantially a better situation than when you just have four stocks leading the market and everyone talking a them everybody. I thought we had a good debate yesterday on the program with lee kecooperman who was he and positive on the markets but not wildly bullish by any stretch or have given where he thinks we are in terms of valuations. Jeremy siegel, famed war on the professor, a little more bullish than Lee Cooperman. Jim, where are you today. Im in the wait and see category. Look, if you look at the valuations, theyre not cheap, theyre not expensive. This isnt bubble territory but were one week away from the earning stream to come in. Next friday you get bank of america and a few other financials reporting. Thats going to start the deluge of earnings. Im at the point where i need to have it proven to me in what the dpek tives say xars looking forward into 2017 that the growth will be there. I suspect strongly that the growth and earnings is going to be there but i need to see it. I need to have it proven to me right now. I like it. A lot of the material names that pete and i have been talking about, the steel names just on fire here, judge. Freeport, fcx, we talked about it for unusual call activity zooming higher. I think 7 on the week. I think he talked about weatherford at the beginning of this week and its up 20 since last friday. I mean, these are names that are just under heavy accumulation. Thats not just because the 5 stock but the turnover in that stock Weatherford Plc is in incredible. Youre looking at that and bank america number one volume leader in the s p again. Ahead of the earnings that you spoke of, josh. I think these will be good earnings. Kate, you guys are neutral on the u. S. Market at blackrock. Were constructive on equi equities in general. We looked for rotation. Talking about rotation within the u. S. Equity market, rotation globally as well. Some areas of the world that have been underowned we recently raised europe to more neutral weight and we haven overweight call in jpmorgan. More tactical in currency inspired. But never the less, we want to own kind of the broad equity market. The thing that i loved that stephanie and josh just pointed out is that were getting closer to a more normal market. Were actually having these fits and starts of Different Industries leading. Paying attention to fundamentals. Not just the fed. Thats the point youre making. Not even talking about the fed anymore. Its great. Its a pleasure. We will. For four minutes. We will. Policy will continue to be important but i think were finally entering a stage where all of this fear that investors had overhanging their decisions is starting to fade. We just need the growth and earnings. The dow is in a 198 point range over the last 18 days which is extraordinary. And now youve got this situation where were spitting distance from 20,000. Its not a relevant thing in terms of market mechanics. Its highly relevant for that to appear on the front page of every local newspaper or every local news website. Mainstream. Even those who have said, look, dow 20,000 is meaningless. People care. Its a sign post. As i said yesterday for where we are and how weve gotten to where we are from the election. Alltime high in the s p 500 right now, right . Yes. And the nasdaq has been making new highs. Maybe add in positive commentary from the companies when they report earnings. A couple weeks ago Goldman Sachs had a Financial Services conference and the banks were there. A lot of Financial Services companies were there. And all of them were very of the mystic. They the photone was sont different. The crowd was so different. Im wary its getting to be consensus to long financials however i think all theyll need is confidence about whats happening in the marketplace and the economy and that could get us higher Going Forward. I dont want to get past, kate, the fact that you are not as bullish on the u. S. As you are elsewhere. Im wondering if you can expand on exactly why that is. Aside from the fact that you may see better value elsewhere. What is it about the u. S. Market that makes you a little bit weary . Were positive on the macro. Positive on the fundmentals. The two things making us more neutral are the valuations and the sentiment. If we look at our positioning data, flows, u. S. Is the most wellowned market globably. We see optimism around the u. S. Dollar. I think that is a place that everyone has as a giant anchor if their portfolios. Also the valuations, while not too expensive, are at the upper end of the range. Especially relative to other regions which are also its valuation in positioning. Do you see the prospects of earnings being better, getting multiple expansion . Thats the bull case is built on that alone. Absolutely. I feel really good about Business Confidence numbers and if we get great guidance from companies as they report Fourth Quarter and full year 2016 numbers, that will make me i think even more confidence that the earnings revisions that weve seen recently will continue. Maybe the valuations wont look so stretched if we can get that e higher. Are you willing to go against the grain on currencies . Everybody is saying that the dollar is going to continue to strengthen. As if ignoring that it strengthened so much over the last two years. Are you willing to go against the grain and to say part of the reason to be outside the u. S. And investing is that the dollar might revert . No, our view is the dollar will appreciate but much more moderate pace than the record is expecting. Calling for gradual dollar appreciation. Theres going to be push and pull on the currency. Its not just a oneway bet at this point. I think if we had a huge appreciation in the dollar in 2017 it would make me nervous. Its bad for large caps. Also bad for small and midcaps. I think it would be a real challenge for foreign investment. The euro is down so much. Why are you just neutral on europe, especially since the valuations are so attractive, margins are depressed. What would get you more bullish on europe . It was a big deal to raise europe to a neutral recently. From an underweight where we had been for most of 2016. I have to say its been wait for operational leverage to actually make sense and translate into something productive in europe and i think theres a lot of sentiment scare and overhang from politics in 2017. Unlike in the u. S. Where businesses are feeling better, i think european corporates have incentive to hold back until the elections. You mentioned politic, thats going to play in i think thats why the u. S. Out performs, quite frankly. Because those regulations are not being rolled back in europe. Right. Nor can just one im not sure about that. The frontrunner in the french elections assuming they dont go hard right, is probably a reaganesque figure for france, take that with a grain of florida sale. But, for example, the french stock market. Like 1. 5 gdp growth forever. Really disappointing bank situation, et cetera. But its 14 multiple. Thats a discounted in. Huge, huge yield. My point though is the regulations. On difficult dividends. Youre not going to see a roll back in regulations over there like youre going to see here. You dont need it on these valuations. You dont need it. Youre being paid for the fact that you dont see that. That gives you the boost here. Jon, the s p 500 is a 125multiple on trailing 12, 18 forward. Assuming we can do, i dont know, 125, 130 in earnings, thats about 400 we were talking yesterday thats fine. Youre getting paid that discount for owning europe right now because everyone recognizes not as good as the u. S. Lets bring it back to where we were sort of, you know, a few minutes ago with this conversation about whether fang was back. Technology has been doing well over the last couple of days. And, you know, the stocks as i said, the facebooks of the world are up 7 . Are these stocks that you want to be in . Absolutely. Ia. Yeah. We pounded the table, judge, at 114 again on facebook. Not a favor for a while. Now its back to 123, almost 124. Ten bucks. Probably see 130 before the end of january. I think were pretty good on that track right now. I took profits in amazon today though. I took profits in amazon. Took a shot and bought a puts spread because the recovery has been so strong in that name. After the election, they pushed it aside and slammed it down. Now it has made basically flat since the election. Down 7 . It was down over 80. Over the last three months. I actually bought more amazon today. So i probably bought what you were selling. I think the growth story is so fifteen nominal. Then you look at what macys and what some of these other companies, jcpenney and kohls, those were disasters. They sure were. And it is clear as day that amazon continues to take market share. And guess what, yes, theyre spending a lot and thats the concern and thats the wall of worry on the stock and i like that you have something to worry about. I dont want everyone to be so euphor euphoric. You trimmed a little amazon. Took off all of my long amazon. You took all of them. All the long amazon when it was up 12 today and put spreads above the market. You bought more pop long going until. I dont think these should trade as a group. They dont. We just talk about them. Youre making my point for me. When you look attal if bet, yes, its a momentum stock in terms of how the stock moves. In terms of the valuation and fundamentals a value stock at this point. Heres a news flash. Fate book is entering the same category. Amazon, steph, im impressed that you own it. Im on a different side of the valuation. Same as netflix, great companies. Cooper man said he owned it. Another Value Investing he joe biden. Which one . Amazon. God bless him. You can go do the parts analysis and get to it. I get the valuation call. Theres a limit. I totally get your facebook because that stock is very attractive for the growth youre getting. Exactly. I lean towards that one as well. Why cant you just brush the concerns aside and say, yeah, okay you cant brush them aside. Valuations pay be crazy but its such a disruptives for im going to buy it. It cant be used in innovative industries. Dangerous thing to say. Im not calling you out on it. Thats what the investors who are buying are saying to themselves. Okay. The stock trades at Something Like 100 times this years earpings. If it was 80 times this years earnings, over priced an down 20 . Youre in the second inning of frame growth internationally. Youre only in the 50 probably in the sixth or seventh inning in prime growth in the u. S. That is huge. Prime members spend two to three times as much as regular members. That is whats driving the retail its worth dont you know thats not using amazon. Its worth pointing out this is a stock thats been public now for 20 years. Its up 38,000 . It has never traded at a reasonable price to book, price earnings. Sometimes valuation, traditional valuation metrics just dont apply. Thats not to sigh who care it is they ever make money. Its to say that there are things like Revenue Growth that are more important if youre trying to really understand a growth story like this. And you can own macy much, much cheaper. People could own eastman all of the way to zero . 12 times earnings a year before it went bankrupt. There are things that just cannot be captured unfortunately with traditional that doesnt mean throw it out. It just means lets be realistic. Not everything can be looked at through the same prism. Lets move on. Cyber security in the spotlight today as president elect trump meets with top intelligence officials about 15 minutes time. One noted short seller making a bullish case for a long position in the sector calling it the 2017 market darling. Citron Research Founder andrew left with us live today from palm springs. Andrew, nicely tanned. Presumably from a round of golf. Welcome back. Nice to see you. Happy new year. Why the long case in this particular name . Well, first of all, i just heard you speak for the past five minutes amazon, facebook. Everything that we know is reality, every ticker on the bottom of your screen right now is based on a notion of some form of Cyber Security. I think we saw yesterday with the Senate Hearings that this is something its not a trend and much like you just said two minutes ago, scott, youre talking about Disruptive Forces versus valuations. I think the notion of Cyber Security is beyond a disruptive force. So now why palo alto . So the stocks over the past two years, many of the Cyber Security stocks, were, first of all i. T. Security spending was down last year. And then this year they didnt benefit from the rotation of stocks out of technology and to, lets say, bank stocks. Youre getting pricing like this. But i look pal to at to as short seller. I cant be short everything especially as we see the market hitting new highs. If i was always short i would probably be living in my mothers basement or something. Why do you see the risk reward in this particular name more than some of its peers, whether its fire wire or check point or others . Mainly with checkpoint, one interesting thing about palo al alto. I cant bring it down in my time with you. Over 60 of the revenue is subscription revenue. Which should be valued at a higher ratio than install revenue. And not more importantly, with the knock against Palo Alto Networks in the past few years have been the amount of machine any they spend on sales and marketing and the amount of money they spent building this business as kept it compared to checkpoint which has been a lot more fiscally conservative. When you deal with this type of market and the size of market were going to see on Cyber Security by 2020 theyve been able to capture i think its 85 of the fortune o100 companies ad theres a Network Effect revolved around Cyber Security. The more customers you have this could become a winner take most type business. Also it gets prohibitive for other people to enter. For all those reasons i think theyre in a good situation. Theyre a u. S. Based company. We can sit here and argue about single pass architecture all day long. But i like corporate i. T. Spending. The companies have decided to go with them. I think its an unloved company. What will happen, sure, the stock did get ahead of itself two years ago but this year as people see Cyber Security theres no way this market goes higher. Theres no way these companies can spend more money without addressing the needs across the board for firewall and security spending. Andrew, i have a panel in front of me as you know we always do. Stephanie link has a question for you. Shes long the stock as well. Hi, andrew. I agree with you, especially the fact that its unloved. I guess the only question i have is product revenue. Guidance is for 11 , 12 . Some people think its going to come in 5 , 6 . You are having