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tv   Closing Bell  CNBC  December 26, 2018 3:00pm-5:00pm EST

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one by one. >> "mamba number 5" and i was fog say "who let the dogs out," seems appropriate, to do "power lunch." >> four famous one-hit wonders. >> and this is why bill does the play-by-play and me the color commentary thanks for watching "power lunch," everyone >> and a show called "closing bell" is next. >> we have companies that are doing the best in the world. record kinds of numbers so it's an opportunity to buy. >> president trump says stocks are gift at these levels i'm sara eisen at the new york stock exchange welcome to the "closing bell." come up, we'll discuss today's big real and where investors should still be looking for bargains one area they may want to watch is healthcare as big-cap names suffered double-digit declines pharma industry ved r pharma industry veteran breaks it all down. >> hi, i'm wilfred frost, the
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biggest shopping day in europe, called boxing day and how about here we'll break down the numbers and with the nasdaq firmly entrenched in bear market territory, we'll look at the biggest forecast names that look to benefit the most. "closing bell" starts right now. ♪ come and get your love ♪ come and get your love >> we should have boxing day. >> we should i said that this morning on "squawk box," should be a national holiday. >> did you know lou vega was german i thought he had a second song, but just the one. >> i chose "the macarena." we'll get to all the stories we mentioned in a moment. rally day for a change on wall street we're near session highs right now. the dow is recouping 95% of monday's brutal losses, worst christmas eve performance for stocks s&p and nasdaq getting all those losses back, it looks like.
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>> we're on pace for our best i don't think we say best boxing day but best after christmas trading day rally since 1973, if that's a thing, but a positive thing nonetheless. the doug, as can you see, up 3% and the nasdaq pushing 4%. we've got full team coverage for you. as always, bob pisani is here from the floor of the new york stock exchange looking at a rally after what was a tough december lesley picker and steve liesman with president trump's latest comments bob, we'll start with you. >> reporter: let's take a look at the s&p 500, started up but as we have so many times dropped in the middle of the day and prior to 10:30, kevin hassett, the head of the council of economic advisers basically said calm down on powell. he's 100% safe and the market stopped dropping it took about an hour for it to start moving up. i think we saw some selling exhaustion as a result of this can you see we're just off the highs for the day. we noted at the close yesterday and the open today, really i call them stupidly oversold
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reading. very rarely will you see 89% of the s&p below their 200-day moving average 38% in 52-week lows. usually we're at 15, 16, 17, 13.6 and the dividend yield is higher that's a good piece of news at 3% it's a 3% day right across the day but some of the more beaten up sectors like banks and energy up 3%. tech is up 3% and healthcare is up near 3% if you take a look at some of the subsectors, it's individual stocks and beating up sectors like energy, the high beta names in some of these groups. bank of america, key corp, regent financial, all on the upside, 3%, 4% there eats banks, and if you take a look at the energy stocks, same situation but even bigger moves up niece are higher names marathon, hess, noble energy, conoco phillips, up 6%, 7% the question is there enough
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selling exhaustion and modest enough of buying interest to move us forward in the question is whether we get any kind of santa claus real we've got five days, six days left in the that we'll see if we can get into positive territory for that famous santa claus rally back to you. >> bob, you mention the the headline about hassett saying the fed chairman is 100% safe. we heard that from the treasury secretary over the weekend more of that on monday what is it just a excuse, do you think, to buy in oversold conditions >> reporter: yes i who note it wasn't so much that we saw a sudden surge in buying interests it's just the selling pressure just sort of dropped we didn't see anybody push the market down further. there's been some short selling in the last couple of weeks. i think some people are definitely making money on the short side, and some of that short selling pressure may have opinion exhausted at this point. i would say the volume is a little higher than normal for a day after christmas, a little higher, but not dramatically, and we've seen -- the numbers on
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monday were really very strong for half a day that was very clear selling pressure there. >> all right bob, thank you as we watch the dow move higher here in the final hour of trade, up bomb 3% crude oil doing even better having its best day since november 2016. leslie picker has more on what's moving oil today leslie >> that's right. big, big moves in crude today, helping to recruit at least a portion of the losses that they have had over the last few months wti surging 8.5% to settle at 4613 that's its best day in two years. brent similar moves today to the upside, gaining about 8% to 5449 also its best day in two years now, this is largely a by-product of today's risk-on environment that bob was just talking about, the same optimism that's moving the equity markets higher trickling into the energy markets. you can see it based on those numbers on the screen. now, today's gains do come after
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wti slid to an 18-month low on christmas eve. it is still in bear market territory today despite the surge, and the s&p energy sector is looking like it could also snap a seven-day losing streaks but that group's performance this month is still the worst in more than a decade guys >> leslie, thank you very much for that now, uncertainty in washington is another factor behind the recent market volatility as president trump continues his criticism of the fed cnbc's steve liesman joins us with more. hi, steve. >> yeah, good afternoon, wilf. the president's top economic adviser says the president does not intend to fire fed chair jerome powell, and this comes a day after the president affirmed support for his treasury secretary. >> do you still have confidence in secretary mnuchin >> yes, i do. >> what about the fed chair?
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>> well, we'll see they are raising interest rates too fast, that's my opinion, but i certainly have confidence. are. >> reporter: the president softened in his criticism of the fed just a bit saying the fed is raising rates too fast but they will get pretty soon and then kevin hassett came out and had this exchange with hans nichols who asked is the fed chairman's job safe yes, 100% yes, and somewhere after that the market rallied more than 600 points can the market cross off from its worries listed that there will be a full-blown crisis between the fed and the president. other situations where the administration officials have shade a person's firing was not imminent and would be contradicted by the president's actual actions that said in the other situations it was clear that the president had the authority to move that person maybe not so clear, wilf, with the chairman. >> and, steve, in general, will we say that he's also softening his rhetoric, the president himself, in terms of how have anti he is towards the fed's
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action or not. >> reporter: he said in my opinion, they will get soon, that's a difference, but we both know that that can change on a dime. >> right. >> there's both i think a real criticism of the federal reserve here, and there's a political criticism where the president is trying to deflect any blame that might come do him on to the federal reserve, and where the truth is in all of that, well, we'll spend a lot of time and money figuring that out. >> can i say one thing, i know jay powell gets all the attention and he does the news conferences, and he's out there, steve, but, you know, he represents an entire fed board with a number of voting members and a number of -- 17 of them put their dots out for a forecast of interest rate mike and he has to represent a consensus and reflect what the rest of the fed members are saying, and so he has that constituency i mean, this is not just all on jay powell if the president and others have criticism for the fed, surely it goes to all the members, no? >> well, it actually is a little bit worse than that, sar a. you make a great point because
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here's the thing the president is fed up essentially with his own fed it's worth pointing out in a he's appointed four of the five members of the federal reserve board board of governors now they vote and become part of the federal market committee of which there are 12 bank presidents and the hole committee and then some of them are voters out of that, but four of those members were appointed or nominated by the president, approved by the senate they all voted for the december rate hike and ostensibly all of their dots or most of their dots are going to show some hikes in 2019, so his exasperation with the fed goes beyond powell you're right it's the considered opinion of the fed that, a, the balance sheet should be reduced, and, b, there should be further rate hikes in 2019. >> the thanks, steve let's get to the "closing bell" exchange what does this mean for markets? oliver, i'll start with you.
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what do you make of the bounceback today start of something more meaningful that we've found a bottom >> i doubt it, but no one knows. at the end of the day when the market has done over the course of december is reprice insecurity they brought multiples down from 16.5 down to below 14 which is crisis levels multiples and we're nowhere near a crisis, and it doesn't make sense, and it reflects the uncertainty in washington you know are we ultimately going to go higher absolutely i'm convinced we can see a great rally in 2019 and perhaps up as much as 25% for the s&p, but we still have a lot of insecurity out thereto that goes not just about the fed interest rates and tweets from president trump but also about the balance sheet de-leveraging, what's happening internationally, and let's not forget about the trade war and the impact that will have on our economy. we've got to shake through, that and fourth-quarter earnings will start in a couple of weeks will be a pretty good indicator that have. >> kenny, i pointed out this morning, president obama march 3rd, 2009, if have you a long-term view, stocks look like
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a pretty good view based on profits. is president trump -- i mean, the bottom was less than a week later. president trump going to call a bottom like that is that what this is going to turn out snob. >> to your point, i think we did hit a bottom i think there was exhaustion and capitulation the last couple of days it. got to the point where it was ridiculous, real ridiculous to see the new york city continue to crash on what, on the fact that they raised rates a quarter of one basis point and we're still at 2.25% so we're not anywhere near what normal is so i think it was a huge overreaction really driven by ought mattmatio automation and algorithms and people had a chance to sit back and say what the heck is going on and they came and saw massive buys, santa claus, instead of bringing a real, brought stocks on sale to everybody and today is a perfect example that people are looking at what's happened to prize of stocks and multiples and they ever going like blanchees. >> rick, focus on what the dollars have done, a big move in the middle of the trading
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session today. >> yeah, no, we're over 97 again in the dollar index and rather remarkable down close 20-month fresh hisz in my opinion, a good chunk of the world not being in today probably made the markets a bit thin, and especially the relationship between the dollar index and what's going on in treasury rates they were so in tune when what was going on with equities when equities were on their lows, for example, we had a dollar index that looked like it was giving up all its gains that it came up with. we were down to 2.74 in a ten-year that's now 2.80, a basis point and away from the mid-point of the year which is where my money would be where it choe closes 2018 out. that gives us a glimpse that everything is relate even though market signals are rather murk toe try to keep up with. in the end, a lot of talk today about machines, hand i don't
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think machines are responsible for where the market is, but i think they are very responsible for how it gets there, and i think momentum and machines are going to stay in tune with each other. if we build momentum here, don't be surprised at more upside in the next several sessions, especially in the new year. >> the same way we just saw it to the downside. the machines followed. look what's happened over the last week and a half they destroyed this market for real know reason. >> oliver, quickly, final view what's the top sort of pick for next year? do you like amazon >> i like amazon some of the utilities after monday that sold off 4%, 5, 6%, getting a yield above 6%. >> do you think the market is going to rally 25% you want to be in utilities? >> that's a beta play you want to be in when you account for dividend that's a huge number no one has had a clear vision of what's going to happen what we're saying is based on expected earnings, fine there's a significant slowdown in the
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economy and corporate earnings, at a 15 multiple you end up back above 2,800, that's a 28% rally. >> we'll have to see what happens. guys, thanks very much still ahead here on "closing bell" f.stocks have hit a bottom where do you buy we've got someone who says three big losethers year could be big winners. we'll talk to each of those individual stocks. >> and retail is one of the big winners in today's rally we'll look at the final lihoday breakdown. a look also at how the shippers performed this season as well. your brain changes as you get older. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown
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stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. welcome back to the "closing bell." dow just crossed 700 points higher, currently up 689, very close to the session highs individual winners for you there, nike, visa, microsoft a nice cross-section of outperformers. >> by the way, that kind of gain, that means that it has recouped all of monday's losses. that would put the dow, s&p and nasdaq with a push basically. >> but still down 12% for the
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month of december. >> absolutely. shares of fedex and ups higher today as the final tally for the on-time holiday deliveries rolls n.frank holland with the numbers. >> reporter: fedex investigate best day since march and ups on track for the best day since june, and today we're looking at the latest numbers on shipping and shopping for the holiday season retail sales excluding auto sales run more than 5% from november 1st is to christmas eve we'll break it down a little bit. brick and mortar stores saw growth more than 3%. the best performers were specialty apparel shores, your gap and banana republic. they saw gains of nearly 8%. department stores, however, saw declines of more than a percent. mastercard says that was largely due to closures. we're also getting a report card for on-time e-commerce deliveries for the post-ups and
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fedex. the week before christmas is like the super bowl for them the post office, the best online performance and anything above 95% is basically considered excellent. a record 2.5 billion e-commerce deliveries were made this season that included 32 days between thanksgiving and christmas, the longest period possible, and during the first four weeks of the season, including thanksgiving, black friday and cyber monday ups got the highest marks. strong numbers domestically after ups and fedex both reported that they saw declines internationally last quarter and, again, fedex on track for its best day since march and ups on track for its best day since july and ups outperforming the dow transport secretaryor. >> sounds like they really up their games to get the deliveries on time frank holland, thank you. we're about 40 minutes away from the bell. the dow continues to soar. s&p 500 and nasdaq roaring back and so is the russell 2000 index and check out naz dwaksdaq, a 4.
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come up, despite today's real the number of megacap stocks still down 20% from the recent highs. top strategists here to break down the names to buy on the dip. >> after after the break, mike santoli joins to us take a look at how oversold the market was before today's real and what it all means for next year. shield℠ annuities from brighthouse financial
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welcome back to "closing bell" on a comeback wednesday for you. there's the dow picture right now, up 687 points, more than 3%, wiping out the mavis declines that we saw monday on christmas eve which was a somewhat tumultuous trading session. very ugly close and the worst performance for stocks on a christmas eve ever. >> it was, and it took us into oversold territory, but how oversold mike santoli joins us now were a look at the damage that was done on monday, and today's bounce. >> yeah, monday and the days leading up to monday in fact, how do you get a 3% bounce in the major averages on essentially no news? well, the setup has to be that the market was extremely extended to the downside this is a chart from an
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investment group showing on a rolling basis how much more decliners you've had than advancers over a span of time over a ten-day period. this is your net number of downstocks over up stocks. over 2,400 you'll see in the past four years you've had a handful of times where it's been near that level so you can look at them. that's october 2008. obviously the front edge of a nasty bear market and in 2010, you've come close in 2011, '15 and '16. the takeaway is when the market has been extremely depressed and gone down accelerated to the downside it's in the vicinity of when the market attempts to have some kind of a rebound. now, it was not at the absolute low in 2010 or '11 you've had these retest and, of course in, 2008, six months later you were down from here. >> so i guess this point is that we would do at least a short-term rebound but it doesn't necessarily tell us about whether this is a change
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in direction of momentum for the next couple of months or years. >> not necessarily in the context of a general uptrend it's been a good time to buy because you did have something like an average 20% gain in the year out, but, yes, you have the false starts and have the times when in fact the market was not hitting a new low, and, of course, keep in mind, what do we always hear, the biggest rallies happen in the bear market? >> by the way, the chart is sending us to a new high up 745 on the dow. >> i wish i could claim any credit >> a hole different feeling heading into the close. >> the viewers like us enjoyed it. >> they saw how oversold conditions were. >> it hasn't worked at all in the last month or couple of weeks when i've been saying how oversold the market is. >> briefly hit 745 points higher, 740 odd. 742 points exactly on the dow with just 35 minutes left to trade. there it is. 3.4% for the dow and s&p. >> all of the indices really lifting here
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>> up next, stocks seeing big gains, and according to one analyst healthcare could be a leading sector for 2019. >> and coming up a look at the sector heat map. everybody is up today. a top technician breaks down the key levels to watch and the surprising correlation that he's seeing in the markets, straight ahead.
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welcome back to the "closing bell." we're up 748 points on the dow session highs at 3.5 misfor the s&p and nasdaq up 3% to 4% not a single bit of red, and we've got nike, visa and, what's next, microsoft, home depot, they are raul up over 5%, a very encouraging market movement today. time now for a cbs news update with contessa brewer hey, contessa. >> hi there, wilfred here's what's happening right now. president trump and the first lady made a surprise visit to iraq late christmas night to the visit with u.s. troops the president thanked them for their service, their success and their sacrifice and wished them a merry christmas. it is his first visit to a combat zone since becoming president. u.s. forces continue to patrol in northern syria after
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president trump eats pl's plan o withdraw from the country. extra troops were sent to the-year in response to a turkishbacked rebel threat to attack the region. los angeles laker lebron james who injured his groin in his team's win against golden state to us is day-to-day after results of his mri exam game back clean james 2013ed he dodged a bullet and will be back in no time. >> mariah carey's 24-year-old christmas classic "all i want for christmas is you" set a new one-day streaming record on spotify christmas eve. it was played 10.8 million times. carey called the feat an amazing christmas gift when she posted about it on instagram. incredibly brave or incredibly foolish for someone like me to even bother singing the chorus of mariah carey? >> it is definitely brave, but i think to be applauded, but that -- >> you surprised us. >> tuneful, contessa.
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>> did better than probably both of us. >> the other thing i would say as well, i'm sure all she wants for christmas is the royalties she must make amazing annual annuity to keep getting. >> the most common song played when you go into the stores on christmas or before. >> it's a new classic, a modern classic. >> but it's been going 24 years. >> bye. >> extra special holiday special of a news update i don't think that's repeatable. 29 minutes to go here before the close. let's look at some of the biggest movers of the day. bob pisani is here on the floor. jackie deangelis at the nasdaq bob, let's start with you and whether we can glean anything by who is leading the charge up today. >> we certainly can. it's a big meltup, but there's a very clear bias towards cyclical stocks take a look at the dow movers. boeing, chevron, home depot, goldman sachs finally bouncing a little bit even goldman is bouncing today about 3% and more defensive
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names. well, they are up but on a relative outperformance basis it's not even close so if you look at coke and verizon, procter & gamble and people ask me why are we rallying 700 points and you might ask why did we drop 600 points the stock on monday is discounting zero earnings growth, zero, for 2019 and the strong possibility of a recession? does that seem a little extra team sure did to me maybe a lot of other people had the same idea and decided to reverse that a little bit. >> thanks very much for that let's get an update of what's happening at the nasdaq with jackie deangelis. >> well, we're actually seeing the same kind of reversal here you can see a 4.5% gain on the nasdaq composite of losses we saw on monday. this is the best move we've seen since august of 2015 that's pretty significant. some of the stocks as you can imagine that are seeing the most
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boosts today, the faang stocks, no surprise at all take a look at facebook and amazon they are seeing gains of more than 6% and 7% each and rest of the faang stocks as well the company said that it saw a breaking holiday season and there's potential to maybe beat their own outlook, amazon a little disappointing for investors and facebook saw a drop before 25% year-to-day, and you're seeing buyers come back into this one. maybe it's a beaten down stock, but pretty much everything across the board is seeing strength today, guys >> a big jump for facebook, up 7% jackie, thank you. healthcare has been the best performing sector so far this year the only s&p sector that's in the green for 2018, just barely. with drug prices poised to rise in january and more regulation can be expected in 2019.
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is he can arthalthcare the secrr have let's ask our guests good to see boath of you. fred, what does 2019 have in store for healthcare particularly in price for pricing and regulation >> 2018 was a very good year for healthcare, overall a lot of innovation and a lot of good things happening there were a lot of fears around may of this year when people were talking about price controls, all kinds of harsh actions against the industry, and then, of course, the mid terms were another source of angst i'm as it turned out, things are pretty stable, and the industry is moving along beautifully. in fact, in 2018 we've seen certain things happen that are going to make 2019 very good this has been the best year ever for innovation flow in the hole industry, especially in the quality of new molecular
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entities approved by the fda, and this year it's amazing and the new modalities being used to bring new things out is amaze, so 2019 looks like a very robust situation. it is a defensive secretary tor begin with, so there are financial factors at work but the fundamentals are good. demand is growing year after year every year 10 million boomers come into the area where they need a lot of medicines and then, of course, tremendous innovation flow next year. >> david, what about the threat of political action getting in the way of those positives that fred just outlined >> well, with the democrats coming into power in the house, i mean, there's definitely the possibility of headline risk, you know, from efforts to control drug prices, whether it's part "d" or part "b." what woe do is look at companies that can grow the top line in earnings through innovation, through new product launches and
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volume growth, and i want to point out that i cover more than just the pharma sector i cover medical devices and some healthcare service stocks and in the devices sector you see companies that can grow earnings and revenue and expand margins even in the face of declining year-over-year prices. >> it's interesting, david, that you're picking some of the winners. i mean, if you look in this group, some of these stocks have been beaten down so hard i just happened to be looking at allergen, 30% off its highs. we have brent sunday aers who comes on the show, had a pretty good year and raised their outlook. yes, there were hiccups when it comes to breast implants in europe that's only a third of their total revenue. why is a stock like that down so much is it indicative of the market or why would you not step in
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without -- i think it's been a mixed picture. you've got possible competition in the esthink theics area you've got competition for bow torks and definitely in the yooiflt care space there's competition for restasis and there's a couple of areas where the market is assessing. if you go back to 2016 when they completed a deal to divest their generics business and brought in $35 billion in cash and you look at what they acquired to boost their -- their pipeline, and it's been a mixed picture on what they have acquired. i think the market views that as like they are wondering, are they really going to find something that can grow revenue going forward and provide some diversification if you've got the headwinds. restasis competition. >> fred, do you expect there to
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be more m & a and consolidation within the healthcare space next year, and which subsectors in particular >> oh, absolutely. i'm a little surprised there was not more m & a this year with the tax reform coming along. one expected maybe more m & a and fewer buybacks, but, in fact, there were a lot of bye backes but not much m & a, the usual m & a with the smaller companies being bought by the larger company, and also among largers companies there might be some horizontal consolidation. there is a little overcapacity in the sector. just look at the number of cancer projects in the system. oncology projects in the system, over 100, and it's just not sustain football have so much overcapacity there will be consolidation next year. >> do have you any names for us, david, as far as what you're watching on that front and which
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stocks could be a buy on that idea >> sure. the two names that are being down that we really like are united health group and -- and medtronic. united health is a very large insurance company, health insurance. they also have operations in optimum rx, optum. you've got the pbm that's growing market share you've got a data and analytical miss that's just doing great you've got a consulting business you've got a care delivery business in there, so optum has been a huge growth driver for united, and within united, you know, they -- they are -- united healthcare, the insurance part, they are doing very well in medicare, medicaid as for medtronic, fred talked
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about demographics of the aging population medtronic treats people with aging-related vp conditions. they do very, very well over hes and whether it's pain management and med tron six also acquiring a robotics company for their spinal implants. that's a real big leap forward in technology, and that's really where the innovation in that space is headed. >> we'll have to leave it there. we have 20 minutes left and big rallies, crossing 800 points on the dow. 864 now. >> really pocketing higher into the close like this. i mean, we're going to be asking all of our guests, is this just an oversold big bounce, and you see these bigger bounces in bear markets, or is this a bottom and
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the start of some new buying coming in? it's the day after christmas. >> and we also have the make the point which rick also alluded to because we always make the big down days, the algos are driving the funds more than normal and kicked off above a certain level and they all had to start buying and that took up 872 points on the dow, photographs wouldn't have been as big if not for that sdwrt nasdaq up almost 5% with big business mariah carey, contessa brewer, i'm not sure the latest on when this rally might end and how it's impacting your stock >> and one firm's top pick for next year. we'll discuss that with our analysts coming up
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your stock welcome back session highs significantly. we're pushing close to 1,000 points on thedown. the dow is up 930 points over 4%. it's the biggest point gain for the dow since 2008 if we finish at this level. big moves. now the financial sector within that is on pace for its own best
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day since march this year. many names seeing their best days leslie picker with the details. >> reporter: a broad-based rally for stocks today if we drill down further, one of the closely watched etfs that tracks bank stocks on pace for its best day in two years. regional banks seeing a big move to the upside. that group's best day as well in two years. among the individual names leading the sector higher today, regional players like key corp and big bank names like morgan stanley and bank of america, you can see those moves up almost 6% for morgan stanley and more than 6% for the other two but even with the notable gains today, the financial sector remains more than 23% off of its 52-week highs. in late january the bear market plunge has been largely due to worries about slowing economic growth, but at least for today those concerns not weighing on investor sentiment in this
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sector guys, back over to you. >> yeah, wow a lot of buying today. >> just hit 980 on the dow, sara. >> the volatility can work both ways. >> right. >> big time. >> today it's going up, and it looks like the historically largest point moves north dow ever let's take a look at two other big movers today, intel, higher on news that's expanding in israel, israel's parliament approving a $185 million grant for intel in return for a $5 billion expansion and its production in the country. intel is one of the biggest employers and exporters in israel, and that stock is currently higher 5%. >> i chant believe yours is only up 5%. mine is up 10%. >> i could have picked amazon, that's up 8.5% they had a news peg so we sometimes go with that, too. wanted to share that. >> i understand. >> mine has had a news peg and it was our mystery chart down 48% year to date and up 10% today so down more than 40% on the year
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needham's picked it as the top stock for 2019 a strong position in a growing market its sail and demographic reach is up 10.5% off the back of this had a very tough year largely because the valuation got to the 24 million subscribers, roku and it had a 10% share 18 to 25-year-olds its valuation has come back, and its long-term prospects remain good up 10%. >> two bouncers were the reason i guess. >> exactly. >> we've got 13 minutes to go here boy, are we charging higher for stocks take a look at the major averages as we speak up 943 points. 946 points there on the dow. everyone is higher same with the s&p 500, all sectors are higher right now you're seeing some reason outsized movement in consumer discretionary and energy sector up more than 5%. technology these are some of the most beaten down in the selloff over the last few weeks part of the energy story is oil
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having its best day since novel 2016 coming up next, one market watcher is here to tell us whether this is a good sign for the broader market or not. not bnttouy io this big move up "closing bell" will be back after a break. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today.
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welcome back to "closing bell." ten minutes until the bell, and the dow is up 934 points. >> go on 1,000. >> we haven't seen moves like these since what did you say, october 2008 >> right. >> that was the last bear market that was the last time, so -- >> we got to 980 do you think we can do 1,000 i bet you a drink we can take the bet >> downside going into the bell so maybe we'll see it regers. >> you're not engaging on the bet. >> okay. i'll take the bet. all 30 dow stocks, by the way, are higher, led by nike up 6.5%. remember, it got sold during the selloff even though it came off with the very strong earnings report. >> oil has been a big factor today as well supporting the markets and crude oil up some 9.5%, having its best day since november 2016. our next guest says this could spell good news for the stock
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market tom mckellenan joins us. thanks for joining us. got a couple of charts to show us falk about the relationship between oil and the markets, in particular on their way down we were wondering whether they were strongly linked around what's your take that's been the rather underreported story that the decline in oil is the decline in the stock market you put the two of them on a chart today and you can see they are just dancing like fred an dinger together so now we've got oil rebounding 9% so stocks have permission to start going up, and the other thing that you have to understand is that when you have a very sharp decline like we've just seen, the rebounds are equally sharp the slope downward is matched by the slope upward and you've just got to be ready for that. >> based on historical patterns, tom, the move we're seeing up, yes, it's historically sharp after we've had historically sharp down moves up 499 points on the dow
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a 4% gain for the nasdaq what does it look like you to, just a short-term comeback from oversold conditions or just the formation of a bottom. >> it's deeply oversold conditions and what's supposed to be an uptrend and so it's one of the most oversold conditions we've seen in a long time. i've prepared a chart of the summation index created by my parents in 1969. the most oversold it's been, and unless you're going to believe that the sky is real falling and the central banks are all going to melt down and we're all going to die and then you've got to look at this in the same context as the 2011 bottom or the 2015 bottom as a great oversold opportunity and what is not yet done in an uptrend and we saw just on monday we saw an index down to 2 and we saw the vix at a hugely oversold level, very high up above 35 haven't seen the vix up that high in a long time so it's a
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great opportunity in my view. >> so talk us through this point on the volatility. we've got this second chart of yours. what's the key things to look at on this? >> well, if you're talking about the vix chart, what we're seeing is the spot vix index is very much different than the vix futures, and so when the vix index goes high, that's what that saying is that the s&p 500 options traders are pricing in a bunch of risk into the options that they are trading. the futures traders who trade the futures are trading on whalt vix will be at some future point so comparing the spot index to the march contract we're seeing a huge difference. that tells you that the futures contract traders are not buying into this idea that the proper value of the vix is way up here at 35, 36. they are saying, no, we'll see a reverse back to the mean, and when you get to there, you'll get the big huge upmoves today is a big down payment on that fun to belong on a day like today. waiting for a day like today to
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come around waiting for the oversold condition to matter and it's fun to be long and that big spread says there should be more to come. >> tom, thanks very much for joining us we appreciate it tom mcclellan, sara. >> you was wondering what the chirping and kwleyelling was one floor. are you going to buy everyone a drink? >> i'll buy you a drink. >> up 1,012 points the biggest move on the dow was 936.4, that was october 2008, but it was an 11% move back then >> exactly you've got to the put it in context. the dow at 22,000, 23,000 here, very different to see a 1,000-point movement still, gets your attention. >> it does. >> giant percentage-wise, up 6.67. >> like we should celebrate it big move up. >> if you're bullish we're joined by chad morgan lander from washington crossing
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advisers who you buy into this strength, chapped? >> well, i would be slowly adding to positions that we think are over the long run, meaning three to five years out, going to be okay regardless of the deceleration of the global economy or not >> so has anything fundamentally changed, or was it just way oversold conditions? >> yeah, sara and wilfred, i think that's been way oversold conditions, that this is a time of tremendous volatility you have a couple of things that are happening within the global economy. there is a deceleration, and it is synchronized. that doesn't necessarily mean that we're in a point of recessionary risks here in the united states, but nonetheless, it looks as if the global economy is decelerating, global frayed is decelerating at the same time, you have quantitative tightening here in the united states as well as the ecb has stopped their asset purchase program
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those two things have created a head wind alongside the political risk that you've been reporting so well about. >> i mean, you don't sound very enthusiastic got a dow up 1,000 points, 1,037 points, the first time ever said that, ever. >> as you know, sara, throughout the year we've been very cautious and balanced within our message to investors we continue to believe the long range measure of exindustries is between 5% and 6% and the short range yield curve more competitive with the federal reserve continuing to raise rates. if they decided perhaps to seces and not raise rates going or revert to quantitative tightening then we'd be more optimist im. right now we're recommending invest ox look at healthcare companies and look at consumer staple companies and some consumer discretionary companies
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but don't get overgiddy about the situation. you just want to be somewhat more balanced right now with all of these headwinds. >> i know you've liked consumer staples for a long time. chad, thanks for weighing in still cautious as we've seen one of our best days in years for the stock market with the dow remaining higher by more than 1,000 points wilfred? >> very quick comment from gordon over at post five you were bearish on christmas eve at the close what's changed >> just a big-time reverse a. the shorts got caught here and whatever -- whatever liquidation was in play obviously got satisfied, and there's just nothing on the upside to get in the way of this thing. we'll have to say what the rest of the week looks like. >> thanks very much. we have the dow intraday, the biggest points gain ever, 1,036 as we approach the close the record was 936 back in october 2008 that 11% today we're talking 4.8% let's look at the other indices. we've got more than 5% on the nasdaq, close toss 5% for all
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the indices. if we look at the sector, some massive moves higher, consumer discretionary, tech services, some of the more high beaten names, 6% or more. bob pisani is joining me here. oil prices, we'll just show you that as well, because that's an extraordinary big move and why we're seeing energy up oil prize up over 10%, bob. >> so we obviously had the biggest point gain ever, but that's not what is important back on the phone with my former producer this is the biggest percentage theme in the dow since march of 2009, so it's a big move that we're seeing on the upside, and people are going to ask, why did we real 1,000 points, and the question should be why did we drop 650 points on monday? i've said repeatedly the market has discounted zero earnings growth for 2019, and there's a possibility of a recession which nobody thinks is going to happen, so this is what we call really extreme readings here, and it's about time we had some bit of a bounce. we're not market cheerleaders here, but it was very obvious
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that the numbers were on levels that were slow far off the charts, some kind of bounce was warranted. i don't think we're going to have a recession in 2019 and i don't think we'll have zero earnings growth. sill down double digit percentage points, keep that in context, but nonetheless we're up 4.9%, 1,073 points on the dow at the close this boxing day that does it for the first hour of "closing bell." sara, back to you. purchase. >> wow a dramatic rally to finish off the day. welcome to "closing bell." i'm sara eisen wilfred flost will rejoin me in a moment along with mike santoli. cnbc's senior markets commentator. check out how we finished the day on wall street best day for the dow, s&p and nasdaq since march 2009. first time ever the dow has finished higher by more than 1,000 points 1,085 points that's good for a gain of almost
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5% for the dow s&p 500 also climbing 5% all sectors there higher check out the nasdaq, up almost 6% this was a ferocious rally today, up 5.8% and the russell 2000 index of small caps up almost 5%, burks again, coming back from a very oversold market, according to everyone we've talked to. the it's been a rough year for auto stocks in particular with ford and gm posting steam declines, but tesla outdeperforming both and turning higher on the year what other stocks to buy that discussion among others coming up, but first today's market action. bob pisani here on of the floor. new york stock exchange and jackie d'angelis with the nasdaq and the moves there. what got this all started? >> yeah, remember, march 2009, 5% that's the last time we saw those kinds of gains in the dow and the s&p. take a look. there you see the s&p intraday i think the important event happened around 10:20 in the morning when kevin has et cetera, the head of the council of economic advisers again reiterated essentially to the
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market stop worrying about pout. he's 100% safe at the very least that stopped the market decline in its tracks, took about an hour for the market to moisture and essentially except for a their step in the middle of the day, straight up here the important thing about here, let just take a look at why we had the rally. people keep asking why did we move up the huge amount? i've had a very simple position. the market has been discounting 0%, that should say zero percent earnings growth in 2019 and a notable economic slowdown, possibly a recession that seemed a very extreme reading for 2019, and as you can see today some people at least thought it was in fact going on. when i say extreme readings, i mean almost 90% of the s&p bloat 200-day moving average and 38% at 52-week lows in the mark. the pe ratio 13.6. that's the lost since june of 2013 those are numbers that indicate
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real economic slowdown and negative earnings growth just note the big movers here, a very clear if a sis on -- emphasis on those names. thank you very much. >> let's head uptown to jackie d'angelis at the nasdaq to recap what happened there. >> hey, whiffle, as you mentioned, we saw a 6% gain on the nasdaq composite today, and it was pretty much broad-based across all sectors as a matter of fact, on the nasdaq 100 there was one stock that was negative. we'll get to the that in a second let's talk about where the pockets of strength were we talked about the faang stocks just about half an hour ago and retail was one of the bright spots. walmart, target, macy's, amazon, they all were higher across the board. this was after a very strong holiday shopping season. as a matter of fact, amazon saying that it was its best holiday season ever, so a lot of
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positivity coming out of retail, but it wasn't just there it was also in the semis as well take a look at the chip stocks, so stocks like intel, amd, become and intel, as a matter of fact, a little bit of news there, receiving $185 million grant from the israeli government this is after a $5 bill crop expansion of its chip facility in israel, so seeing strength in these names by the point impact on the nasdaq today. you could see that it was real was those tech stocks, amazon and microsoft and apple. we'll throw it in there as well and finally to the one stock in the red on the nasdaq 100, it was netease but only by 1% a very strong rally and performance. looked like we had a little coal before christmas, but things have turned around. >> absolutely. that would be the story of the day. joining to us talk about what happened and what you should do next is barbara dur an
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mike, we'll throw a lot of bs at you. is this a legit bounce or a bottom >> you have to believe boast those things could be true, the kind of activity you see in a bear market. i would say it's been about a week late in terms of just how oversold the market was going into this hole period. by the way, we're only about 2.5%, 3% below where we were when jay powell had his press conference did he still foul everything up? was it still a disaster? >> i think we should hike again now. >> going into the powell presser, the market was down sharply. >> that's the point. >> we were right at the bring of a bear market. we closed 19.5% off the highs. >> 19.8%, therefore, it was a logical place, but we've had a lot of logical places where this market should have bounced today we caught the build. you didn't have the forced panicky selling. it real seemed like an aggressive unwind coming into
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last friday. i would have thought it was all done and monday you had a weird panicky day, half serbs and what i would say from here on though is the market is down enough that the strongest first rally is going to be just enough to keep the bayers on their toes, but they don't tell you where it's headed. >> we should also say this is the biggest points gain for the dow. the last one we took out was 936 october 2008 that wasn't a great warning sign of a good things to come for the next couple of months. barbara, what is your take were we due this are we deploying more cash going forward? >> it's still a little premature. this is very encouraging because the bottom is being put in place here because i'm in the camp that we're not heading to recession and the market is discounting recession and worst case and has been oversold for a while and when you've had this much damage psychologically it will take some time but when you look at monday with the extreme panic, the put-to-call ratio was at a high. i think we're bottoming in here
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somewhere. i think you could start deploying capital this week, not aggressively, because this is not going to be a straight shot up i think -- yeah. >> that's been the hole debate in all of this. >> it has. >> is there a disconnect between what the market is telling us and what the economic data is telling us, and if you think we're not going into recession, then it sure looks oversold. >> yes. >> that's what all the bulls like barbara would say. >> it looks like there's value there if you're not going into, it at least an earnings recession next year, right, because you really have discounted a lot of stocks when something like 80% of all stocks are down more than 20%, when the average stock is down 33%, you've repriced for a much dimmer scenario going on a year, and the question is will you be liberated from the fears that's tipping into something ugly within the next three to six months >> mike, we lamont the impact of algos. >> some people do. >> and should we celebrate that or point that that's a large factor in this move. >> what you should point to is that the market does have a lot
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of one-way days, and by the way, the last few days of the year, air pockets in both direction. it's not the most liquid market. an ill liquid market means it can gap in either direction. yeah, without a doubt. this is the market that we, have right? the machines have been no more active in the last two to three months than they were in the year and a half before that when in 2017 they smothered volatility to nothing and in january when they shot the market up 8% in three weeks. >> right we didn't ask where were the machines when it didn't move 1 it is. >> look, you can still make the case that we got an overshoot to the downside in the last few days or weeks because there was an accelerated kind of mechanized selling going on, but, again, you're right, it goes to the upside as well. >> huge day. dr. j is here on the floor making a cameo. >> that's right. >> we know it's a big day, dr. j, with the dow surging more than 1,000 points. what were you doing today? >> well, other than putting seat
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belts on the toilet again, what was i doing, sara, i was, believe it or not, kind of listening to scott minerd of guggenheim i think the communication has been horrible to the public about things like meetings over the weekend with those bankers and things like that that just spooks people, and i think today after we saw that little bit of a bounce that turned into this gigantic bounce, i think they caught an all of lot of people that will were newly short in the market and just caught them scrambling trying to get, you know, coverage after they shorted into the hole here hand obviously that was a pretty bad decision. >> john, stick with us we've got that scott minerd from guggenheim partners.
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>> when we've had that kind of a pullback in stock the federal reserve reacts they at least pause. about half the time they go on and do a rate cut. every one of those situations, whether it was the stock market crash of '87, it was the asian crisis, these were all opportunities to step up and buy, and so i would be looking, you know, to selectively pick up some what i think some cheap assets that are out there because i -- i think inevitably the fed is going to have to react to this. >> so, jon, as you mentioned, that's one of the cat lifts, but size of the move has us all talking it from your experience when we see the 5% or so moves, are they sustainable or one-offs? what's your hunch for this one >> well, i think a lot of us thought we were pretty close to an oversold condition and sure enough we get a bounce, riflewi, but mr. minerd is exactly right
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that it takes something pretty big to get the fed to change course and do a 180. obviously i think the fed chair wish eds he had the words back as soon as he said them, those words being ault pilot you don't want that out there because you don't want it sounding like it's pre-determined however, i think scott minerd is exactly right, that what we're going to see is a fed that's reactive, not just to data but to sentiment when it gets this negative or if it gets too effusive right now we've got of course a 1,000 point rally off an extremely oversold condition can we hold it that's your question to me i can say we can, and the question is seeing people pick stocks that aren't overlevered and stocks that are carrying great balance sheets and obviously solid financials that's the base you would like to see you don't want to scramble them back into the highest pe stocks in the market because those are the ones that if people do need to tap again, those are the ones
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that are going to be tapped into to get cash. >> barbara, you liability mark you say we're not going into recession. can the market rally here with the fed sort of lingering out there and the market and the fed maybe being on different pages >> it's hard to see a real rally from here had. i think that the market has toss backfill for a while the institutional investors coming back, looking at asset allocation, do we get more defensive or continue in growth names which have gotten beaten down and then look for earnings which start in january i think the fed will not -- cutting is a road too far for me you'd have to seal real detearation i think in other economic indicators, but fed may hold off on any rate increases because they are supposedly raising rates to fight inflation and that's not exactly running out of controls. >> do that point though, mike, we did also see the dollar move higher today, intraday. >> sharply. >> and when we started to get a positivity in stocks, so it's not like the market overall was saying the fed is going to
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change course. it's more like we think there won't be a bigger fight between trump and powell. >> that's right, at least not judging by the dollar action obviously, look, the fed funds future market has essentially priced out hikes for most of next year, so they are calling the bluff on powell at this point, so, i mean, my view has been for a while that the fed policy-makers feel like having two potential hikes on paper next year gives them all the flexibility they need. the market doesn't want to hear it the market wants clarity and wants them to wave the white flag, but i think the market has a long way to go to make its peace that they are more likely to turn towards dovishness to hawkishness. >> the market is almost expecting it. >> do you think it's a coincidence that the president said yesterday to buy stocks >> i mean, look -- he was -- the fact that he was in a pox to having to essentially speak up for corporate america and say maybe stocks are a buy right here shows you how bad things,
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so i think it's all about -- it's another indicator of how oversold and one-sided this market has been. i also perhaps don't think it's a coincidence he's been quiet on twitter. if kevin hassett said powell's job safe so maybe it was a lot of raucous but not very much going on in the last couple of days of the selloff. >> coming into the earnings season, you think we're well set up for that for an actual lasting bottom >> i think it could, because i think earnings will come in -- expectations have been reset valuation now to 13.6 is way down, and earnings, nobody expected earnings to say up at 22% to 23% and we're looking at 5, 6%. company managements will come in and have the same comments about trade impact which are some are being impacted and being pass aid long in prices and others will say i'm not seeing it so i'm not sure if we'll see anychange this quarter >> what about if there's had a
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much lower bar, right, than previous earnings cycles how much bad news is priced in because of tariffs and the strong dollar and all the other issues. >> you've priced n something pretty nasty are the process of reducing the year-ahead earnings estimate is usually not that pretty, so, you know, i think you can have it both ways where stocks are set up to me, earnings season feels miles away. >> wright. >> it's only a few weeks, but way this market has been acting, who knows what the setup is going to be when we're on the doorstep of jpmorgan reporting numbers. >> i guess it is because when jpmorgan reports numbers, if their loan growth is decent they are forecasting four more quarters of earnings growth. you would think hat least that secretary zor set up for the banks. >> ultimately that's coming before the next fed meeting and before the 990-day trade deadline so it's the next bigning. >> it's more about how eventful the market has been. in the real world, you're
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absolutely right and that's what long-term investors should be focusing on, earnings season. >> in terms of the market wrap-up, to bring,up, we've seen a lot higher values christmas week do you think that continues into the rest of the year >> i thy we'll see more volumes and the fact that we had the vix trade through 36 last week, wilfred, is another bullish sign in terms of seeing some capitulatory action in the mark. you didn't see that at 24 or 25 vix but certainly as we preshd towards 40, and we got preciously close, that's perhaps a better sign other than today's market action that carried us up 1,000 points. >> thanks for stopping by. barbara duran, thanks for joining us. still ahead, tech leading the rally though it's still one of the worst performing sectors over the last three months we will discuss whether today's turnaround is real. >> but first a top asset manager says investors should buy this
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the market rallying hard
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today with the dow finishing higher by more than 1,000 points for the first time ever, best time for the major averages since 2009 despite today's real, the dow and s&p still on pace for their worst month since february 2009. it goes in both directions here, and it's been mostly lower for the month of december. >> certainly has joining us to discuss which losing stocks he thinks deserves a second chance is john levine, ceo of levine capital strategies john, let's kick off with a pick that i'm very interested in which is citigroup >> well, they have had a tough my firm and colleague jack murphy, look at things that are great, down and out and good and recently had the idea of calling them dogs. sti corp fits that definition. when the stock was 69, i think last august or so, they announced a massive buyback and
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i think the earnings forecast, which is, you know, in the mid-5s going to the mid-6s and mid-7s and going mid-8s, everybody thought that the stock selling with a book valve 72 which doesn't mean much would go up significantly here it is down hovering around had a very low price, and with a massive buyback. our colleague tells us that they are going to buy back 13% their stock, so that if earnings are just flat, it's a tremendous buffer, and they have the excess capital to -- to do it moreover, they have quite a number of businesses such as the consumer card business to command a multiple and a lot of technology on a worldwide basis that's valuable. they have been selling some of their regional banks that are valuable it just seems that it's been carried to a level too low and i for one have been wrong about interest rates i thought interest rates would be higher and sti corp is particularly well positioned to benefit from higher interest rates and the earnings should be ahead anyway and that's the thesies.
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>> what about the leadership and the management because as you said sort of last august a big strategic review people got pretty excited about it the execution since then hasn't been as good as some would have liked, and did you think it's in the right hands to move its valuation higher >> i really think that they had done an excellent job in a management standpoint. they made hard decisions, sold some businesses and have a very, very large buyback the big risk in sti corp came out of the previous crash where they had all this capital that requires so much capital from a regulatory standpoint. that's mostly been sold, so the management has done an excellent job of the most important thing which is liquefying the bank, and they have made changes when mr. corbett wasn't satisfied with particular people so i think it's hard to fault
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management at sti cociti corp. >> are you still a fan gm? outperformed a little by the late by but it's still down 20% for the year. >> yeah. so i guess the problem in the securities business is statistics, you know gm made a deal with alibaba for automation which was then a further investment by honda, i believe, that showed about $8 for autonomous cars, and i think their cars are going to be even better, so i think that's another $8 the ride-sharing, there's an analyst on the street that thinks they will make $7 billion. they have onstar in the car that is a very valuable, has about $650 million of revenues they own 9% of lyft. you start to add up these numbers and you get a very big
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percentage of a stock price which is earning $6, and it's consistent with what i'm thinking in general. there are a lot of companies we follow where i think the earnings may be lower, interest rates may be high, but the stock can appreciate significantly i mean, there are several estimates $60, $80 and $100 for the stock but that's well noefnl i'm not saying anything that investment professionals don't know about gm. mary berra closed the ward down, trying to re-employ the people, the president came out concerned about that china produces a significant part of the earnings there is the opportunity in china if you're bullish. a real risk in china if you're bearish. they share the ownership with shanghai auto but they claim they get a lot of technology and give a lot of technology, and you can "x" out china. you can "x" out the cycle, and you still come up with a stock where the pieces seem to be worth more than it's selling for and that's what make stocks --
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because the auto cycle can real be a problem and so can auto credit my view is that most credit on most cars is available because most cars in my view are obsolete i think we're going to convert to electronic -- electric vehicles over the next 5, so, is a years. >> john, clearly energy prices have been hit hard other than today, big rebound today what's your top pick in that sector >> everybody knows that i'm obsessed with hess, and somebody said, well, it's just an oil stock, and i -- i tdisagreed wih this person and i said, no, we sharp-shooted. we sharp-shooted with a particularly big discovery in guyana where they have 30% and exxon with 20%, a chinese group with a small percentage and the company has an override. this fine was talked about a year ago as a small find today it's $5 billion. our professionals think it could
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be somewhat larger elliott, which owns 21 million shares worth $600 million, $700 million on 7% of the company i think has even higher numbers, and if you value this, it's like the gm thing it's half or 100% of the value of hess, and the historic part of hess is also half or 100% so you're not paying something for hess it was just a change last saturday in the election in giania the stock was down 12% the weird part is the part that seems to have emerged as a challenger was the coalition that actually signed the contract there is no doubt that this is a subject of negotiation and it's an uncertainty, but this is a major oil find in a company that is not undervalued went up very sharply and it's come down very sharply and we think it's attractive separate from oil pricing. >> we've got a few of your these
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ease out john, thank you and good to check in with you. >> great to be with you. >> just in terms of this rally and how to find beaten down stocks and whether to know whether that's safe to go in after a move like this, what would you tell people? >> you don't necessarily know it's safe, honestly, but what you can say is when stock prices go down a lot, risk comes out of them it doesn't go into them. yes, it's still a downtrend and this market got us back only a couple of days of losses, back to where you were with the fedd raising rates and setting this last little bit going. you it makes sense you who stop and have a little bit of a
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buying and the selling dries up here end and the institutions are done we'll wait and see. >> richmond fed manufacturing, did you see this, his biggest shipment drop i think on record, it went to negative territory. yes, regional manufacturing, but really starting to show had a major turn in the data unclear whether the markets saw that as sort of vindicated in its view that the fed should maybe pause or calm down here because the date sax starting to turn or not. something worth watching. >> one of the smaller regions but they -- i was born in cincinnati i'm a true southern belle. >> got another song going? >> oh, no, reprimanded after the last one no. singing, it's been ordered here's the news this hour. president trump and the first lady are making a surprise visit
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to iraq. they did that late on christmas night to advice wit u.s. troops. the president thanked them for their service and their success and their sacrifice and wished the troops a merry christmas they spent about three hours on the ground four people were killed when a car slammed into the back of a tanker truck on the garden state parkway in new jersey earlier this morning the four who were traveling in the car were all pronounced dead at the scene the 2019 nfl draft lost its top quarterback prospect as he announced he's returning to school for his final year. scientists learning more about a violent sleep disorder in which people kick and yell while sleeping when people enter r.e.m. salim the brain sends a signal to prevent mussles from moving but those signals get disrupted with this particular disorder doctors found patients with the disrecord more likely to be on
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anti-depressants or have ptsd. >> video loaded, that's not violent sleepers, very peaceful sleepers. >> yes. >> contessa, thank you. s&p is approaching a very key technical level. the 200-week moving average. what's the in addition what does it mean for the markets? mike santoli has made his way to the telestrator. >> 200-week moving average. >> very long-term trend line, show think about it. that's about four years roughly speaking in fact, this morning s&p 500 was around the 2040 mark suffice it to say you did approach it, and it hasn't done that very often during this bull market the first time we got here in 2008 when the last bull market was giving way to a true bear market was right here and you bounced a couple of times so that's a small point obviously we gave way after, that and it was the financial
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cries, but this other time is interesting, too in 2011, you kind of played with this trend line a little bit by the way, the trend is much flatter. still you have a rising 200-day average. so they are saying here's at least part of an execution on a technical basis to stop the selling and try a reversal right here i think it's worth watching and keeping in mind. now, we've pointed to so many of these things over the past few weeks, so many of these kind of indicators that said, a-ha, this is finally a bullish catalyst. the market has plowed right through them so i'm not saying this is going to be, it that this was the bottom because we bounced off this level, but it's worst keeping in mind that the overall longer-term trend was in jeopardy. >> and on christmas eve -- today we're talk about it as being some sort of sipgs:p.
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>> tour shots from mike. >> it was that kind of day. >> still to come, a top strategist tells us whether today's rally is the head fake or the start of a market comeback we'll be back in a couple of minutes. my experience with usaa
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i have great confidence in our companies. we have companies, the greatest in the world, and they are doing really well. they have record kinds of numbers. so i think it's a tremendous opportunity to buy really a great opportunity to buy. >> well, that did turn out to be right judging by today's one-day performance. we're coming off our best day for the dow, s&p and nasdaq since march 2009 close above 1,000 points for the dow, mike, for the first time ever, judging by one day, a tremendous opportunity to buy the question is did he call a bottom >> i mean, intended to he called a short-term bottom. a 5% move is not to be sneezed at but it shows you how much pressure we were under before. if this market is coming back down to the current state of corporate fundamentals then, sure, the market looks cheap you've kind of really had a lot of -- >> he didn't relent on the shutdown, going into five dates, still wants money for the border wall and didn't relent on china or trade talks which is a still
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lingering concern that could escalate going forward or the complaining about the fed. >> to be fair he often talks up the economy and makes generic points and he went on to mention pes if you played more of that and that's the first firm call he's made on the market, a up-day record. >> it shows how a fixation on how the market was behaving seemed to be some of his lark out at powell and maybe getting the treasury secretary to put out a statement about bank liquidity so it's been a back and forth trying to figure out exactly what message might take hold. >> one sector that was a big part of today's rally tech that finished higher by some 6% leslie picker looks at some of the name that drove those moves. >> tech stocks posting its best day in a decade. the move things in large part to a number of momentum focused
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names including adobe, papal, amd and those names have been beaten down as of late got all five faang names snapping lengthy losing streaks and apple posting its best day, google, parent, awful belt, its best day since august 2015 and amazon, its best day dating back to october of last year. apple though, the real standout, finishing the day up 7 boston bolstered by a report from consumer intelligence, research partners saying that they found the company's latest iphone release successfully poached a greater number of android users compared to previous years so the question now becomes can this momentum continue apple still sitting firmly in bear market territory along with facebook, netflix and am son-in-law guys >> leslie, thank you very much for that joining us now to discuss the
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top tech stock picks for 2019 tom landis and tom forte and a very good day to both of you tom, if i start with you, of the big names, the faang names and large market cap names, which is your top pick for next year? >> sure, so focusing on the as in faang, it would be amazon and apple. very encouraged by getting the users of android to switch over to apple i think the stock has been beaten down, and what people are missing is that the higher selling prices for their iphones protects them from lower unit sales, so amazon and apple focused on the as in faang. >> kevin, your own >> i suppose if we had to pick one. fang naims, probably have the greatest waiting among that grew, but i think generally speaking those are already big-cap names that have been
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anointed by everyone, so i think that this is a good time to look down the road from the up and comers. >> and with that in mind similarish to netflix, you like roku they are market cap is much smaller with lots of head room and what they have in common is they are both great cord-cutting plays, and never -- >> tom, would you go to the most beaten down names in the overall tech sector, because if so, you're looking at some of the chip stocks, nvidia, mike ron technologies, "western digital." those are both off 47% of eyes
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i think you can look at the beaten down names in tech and look for the rebound next year i do think we'll face some of the same challenges as far as concerns over u.s./china trade wars and rising interest rates, but what could make next year special is it could be the year that some of these unicorns go public, like an uber, like a pinterest, so i think 2019 is going to be pretty exciting for tech. >> kevin, if you think, that you know, maybe it's not that interesting, are there any of those that we have gotten used to considering the bellwethers that you think are just kind of receding from the scene right now? i don't want to necessarily lead you on this, but, i mean, it's facebook, is that one of these stocks that we'll be talking about for a while as kind of a former leader? >> you know, facebook is a younger company than some of the others on that list. i would say, you know, i kind of
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is there a hard time envisioning a year where apple's apple iphones stagnate and it goes up. and if one company that isn't doing as well perhaps it's google microsoft went through a phase where their newer product initiatives fell flat and their business was so strong that nobody noticed but that was just a harbinger of what was going to happen so maybe google is the creekiest of the group, but they are still so strong right now you can't real dish wouldn't short any of those names. >> okay. kevin landis and tom forte. >> thank you. >> up next, a top strategist tells us why he thinks today's rally is for real and which sectors he finds the most attractive when the "closing bell" returns. [leaf blower]
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two trading days and you know that they are. what we've done, today was an important day. we caught a lot of people who were short at the wrong spot we caught a lot of people who bailed out the market at the wrong spot we were approaching a major league trend line in the 2300 to 2015 zone. all of that at least in our opinion where the forward-look fundamentals look pretty good. decent growth here and abroad and with these valuation levels for us, stocks look pretty attractive >> so what was the 20% slide in stocks all about then? >> i'm sorry >> what was the big -- >> yeah, sara. you've been saying that the hole time that stocks were falling, that the economy was looking good and the fundamentals good and the outlook was continued growth. >> that's right. sara you and i have talked, for us, this thing you could categorize in two different things one is the market feared the federal mistake that they are still afraid of and the other thing is the market feared a
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global slowdown. let's face, it some of this data whether it's here or abroad is showing that there's going to be some slowing now, we don't think it's going to be much the fed is obviously trying to adjust for what reality is probably going to be a 19 and 20, but fours those are the two big things fear of the fed and fear of slowing global growth. that took the wind out of sails of the market. there's a lot of underlying things trade friction, other types of things like that shutdown, very partial shutdown. those kinds of things, but the two big issues are fed and global slowdown. >> scott, great stuff. thanks for joining us. scott wren from wells fargo. >> it's been a tough year for auto stocks. we'll discuss the names that could bocen 19 un i20
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well back. auto stocks rallied with the market with tesla jumping 10%. but following a rough few months for auto names fiat chrysler and ford both 10% lower than three months ago. >> let's bring in jamie albert ien from consumer research how much bad news in the auto stocks with a dismal auto stocks >> a lot of the auto stocks are pricing in era multiples most recessions you'll see stocks 25% to discounted to s&p 500. now closer to 50%. i think auto dealers there is a lot of value opportunity there >> not to cut you off but is it cyclical because we had john levin pounding the table for gm.
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and talking about big shifts with electric cars and the idea that we are not needing as many cars because we are doing ride sharing and shothose issues in multiples where we can't look back and say pricing in recession like prior cycles. >> i think some of it is cyclical for sure. the fall of car sales for example, right and sort of luxury manufacturing squeezing out mid-lines but a lot of it is secular. as we move to electric and autonomous it's not overnight. there is step functions into hybridize vehicles driving minute nancy costs hype rroic is where you want to focus and a secular tailwind cruz automation in dm is where you want to focus. >> let's talk about ferrari because it's the attract zbleefr you like it the most. >> i don't blame you high return on invested capital and transitioning from 9,000
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analyst units of production to call it 13,000 or 14,000 over the next cycle five to seven years. from a brand perspective one of the most protected he want customer-loyal brands in the history of luxury broadly. so again focused on quality there. but also key ebit margin expansion and near-medium term. >> you mentioned auto dealers. it's not a picture -- you just think overall volumes should hold up >> share shifting is going on remember the last recession a big consolidation of auto deters penske is a great example. pivoting into used retail. car max. premium traditionally to the s&p 500. and you know pensky is getting into stand alone used sales in more force and we see a pivot from consumers from new to late model used as the off lease supply comes to market.
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that's one to focus on. >> do you think if the trade issues get solved that's also a big stimulus for the stocks is is it just the growth outlook they trade on. >> i think it's priced in it's not solved i think there is upside to the degree we get incremental line of sight on a resolution but to me that's going to linger well into 2019, probably beyond. >> jamie albert ien. good to see you as always with 2019 picks in autoland up next we discuss whether the historic rally carries into tomorrow what signals to watch. coming up on "fast money," a technician says there are three tech stocks you want to buy right now. he will be there to namenames.
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we're back to "closing bell." stocks staged a historic rally on wall street today coming up of course the "fast money" team hosted by brian sullivan a long day brian but exciting day here on wall street. >> it's been an unbelievable
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day. as you noted many times wilfred and sara, the biggest point gain not the bigds percentage gain but it got stronger during the "halftime report." we spoke with guggenheim strategist there is a 50% of a federal reserve rate cut in 2019 >> that was. >> david rosen rk has been saying that. if you are bearish and you think the market tells that you there is a recession coming or a sharper slowdown than most economists forecast, mike, that's going to be where you go. >> if you are bearish or you think this is a rerun of the mid-90s. everyone said 94 to 95 six months into '95 after hiking through '94 o 4 the fetid cut and you get the soft landing not endorsing it but it's another talking point. >> but if you think going into recession stocks typically fall 30, 40%. >> we didn't price that in. >> people are saying.
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>> brian on "halftime report." did anyone predict a thousand point move on x li wex. >> futures were up 15 at 5 eastern time i don't need toll you they were trin thinly traded at that hour we started small and continued to gain as the day went on. >> the key question which i'm sure you'll answer is what happens tomorrow that's it for "closing bell." >> over to you brian "fast money" begins now. >> we will try that. a monster rally. "fast money" begins right now. heart in the times square. i am brian sullivan what a day the traders are near and far pete najarian in minneapolis chris harvey gene munster and brian kelly k.b.k. on set. our coverage offer the massive santa clause rally rolls on. the dow soaring 1,100 points 1100 points for the bigds


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