Harwood, Meg Tirrell, Morgan Brennan, Josh Lipton>

Automotive Industry; Trade; Elderly; Financial Services>

ANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Sue Herera.

Funded in part by HSS.


SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR: New Year, new gains. The rally of 2016 sprints into 2017 with triple digit gains. Tonight, how to protect your profits and still leave room for more.

TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Switching gears. Ford cancels plan to build a plan in Mexico as president-elect threatens General Motors (NYSE:GM) with a big border tax.

HERERA: Fine-tuning your 401(k). With pensions disappearing, there are things you can do to shore up your retirement savings.

Those stories and more tonight on NIGHTLY BUSINESS REPORT for Tuesday, January 3rd.

MATHISEN: Good evening, everyone and happy New Year.

The stock market got off on a good foot for 2017. Equities rose this first major trading day of the New Year. Early in the day, the Dow came within about 100 points of that yet to be touched 20,000 level, flirting with it as did it for the last couple weeks. But as oil prices slipped, so did stock prices.

The blue chip index added 119, it closed at 19,881. NASDAQ was up 45. And the S&P 500 advanced 19, rising on the first trading day of the New Year for the first time since 2013. With the sharp and steep rise in the stock market over the past couple of months, many investors are wrestling with one big question: will this be the year of the bull`s big finale?

Mike Santoli takes a look.


MIKE SANTOLI, NIGHTLY BUSINESS REPORT CORRESPONDENT: Stocks are showing new life as 2017 gets underway. The major U.S. index has hit record highs starting in July after moving sideways for more than a year. And confidence has surged among investors and consumers after the election of a president promising business-friendly policies. While these upbeat trends seem to have some momentum, investors should probably view any further gains for stocks as a spirited latter phase of this bull market, not the start of a multiyear boom.

While some talk about it like the Reagan era in the 1980s when tax cuts and a new bull market helped revive American capitalism, the Trump administration will begin against a far different back drop. The S&P 500 is up some 230 percent since March 2009. The index has had a positive return in even of the past eight calendar years, one shy of the nine-year streak in the 1990s.

Unemployment is already near historic lows, and while growth expectations are perking up, stocks now appear fully valued compared to corporate profits, even if earnings continue to rebound as expected.

All this suggests to some market observers that any significant upside might have to come from a classic euphoria phase of this bull market, when the public embraces stocks with enthusiasm and drives indexes up toward an extreme. The upturning surveys and a rush of investor cash from bonds into stocks late last year are hints that such a trend might be underway.

Of course, there`s no signs to pinpoint where we are in the market`s life cycle. The economy might simply continue grinding slowly ahead and carry stock prices with them, or perhaps inflation fears a strong U.S. dollar and possible trade tensions could unnerve world markets and derail that confidence trade. However things turn out, it`s probably best not to expect several more years of smooth gains for stocks which after all have been doing quite well even as the public debate has focused on the economy`s weak spots.

For NIGHTLY BUSINESS REPORT, I`m Mike Santoli at the New York Stock Exchange.


HERERA: So, with the rally continuing into the New Year, how do you protect the gains that you`ve seen in your portfolio?

Peter Mallouk is president and chief investment officer of the wealth management firm Creative Planning and he joins us now to talk about that.

Welcome back, Peter. Nice to see you again.

PETER MALLOUK, CREATIVE PLANNING PRESIDENT & CIO: It`s great to be with you again.

HERERA: What is the best strategy? It`s a New Year, but not necessarily a new market.

MALLOUK: Right. I like -- I like to look at the markets and look at your personal portfolio from an opportunistic rebalancing perspectives, which basically means instead of trying to guess when the U.S. is going to stop running the strong and when international is going to turn, when the portfolio gets out of whack, you rebalance right then. You don`t wait for the end of the year. You don`t wait for end of the quarter. You take advantage of it right away.

If you look at last year, not meant you were doing in it February. You were buying energy. You were buying small cap stocks. You`re buying international stocks.

The U.S. has been doing better. Those were very weak. And if you did that, you were greatly rewarded and you will be rewarded over time. And if you`re doing that right now, you`re starting to look at maybe taking some of your U.S. profits and looking overseas a little bit.

MATHISEN: So, buy stuff that is not participated quite as much as other sectors. You know, Peter, I hear an awful lot of commentators these days sort of saying, hey, the market could continue to run here another 10 percent, another 15, whatever, because we`re going to have the prospect of lower taxes, less regulation, maybe more infrastructure spending. When everybody starts to say and think the same thing, that`s when I start to worry.

What are the possibilities that`s something might get in the way of this sort of clear sailing path?

MALLOUK: Well, I think if you look at the market`s valuation from where interest rates are, from where unemployment is, interest rates still near all time lows, unemployment near all time lows, the market is fairly valued. And if you look at all the things you talked about, pulling back on regulations, lowering corporate taxes, repatriation of assets, those drop to the bottom lines for these companies. So, that`s -- it`s not really hypothetical that these companies are going to make more money in this kind of environment.

The question becomes, will we see more growth? And with the low unemployment, even regardless of all the things Trump is talking about, when you have unemployment drop below 5, you start to see wage inflation which starts to drive, you know, more growth.

HERERA: Now, you say -- you gave us a couple of ETF that you think might allow people who want to rebalance their portfolio some diversity.

MALLOUK: Yes, I likes VEA, which has developed markets international, and IEMG, which is emerging markets. In Creative Planning, we believe in being globally diversified all the time. But when you look at the discrepancy that`s happened between international stocks and U.S. stocks, that sort of discrepancy has never been sustained. We never know when it`s going to change, when one is going to start and the others today, indicative of how the year is going to go, nobody knows that.

But this sustained gap of performance is not sustainable. If you`ve got patience and you`re looking for value, well, there is plenty overseas. To the extent you think the U.S. is fully valued, fairly valued, and I do, at Creative Planning we do, you can look at it globally and see a lot of value on the table.

HERERA: Excellent. Peter, thank you for those suggestions. We appreciate it.

MALLOUK: Thanks for having me.

HERERA: Peter Mallouk with Creative Planning.

MATHISEN: The president-elect today targeted another American icon, General Motors (NYSE:GM). He did this just hours before finding out Ford canceled plans to build a small car plant in Mexico. As a candidate, Donald Trump vowed to stomp Ford from building that very plant. Now, just weeks from becoming president, Mr. Trump is pushing even harder to change automakers look at building their vehicles south of the border.

Phil LeBeau has the details.


PHIL LEBEAU, NIGHTLY BUSINESS REPORT CORRESPONDENT: After months of repeatedly saying Ford would not change plans to move small car production to a new plant in Mexico, Ford CEO Mark Fields switched gears, calling President-elect Donald Trump to say Ford is not expanding south of the border, but rather in the U.S.

MARK FIELDS, FORD MOTOR CEO: While we inform President-elect Trump and also Vice President-elect Pence this morning that we were going to be investing $700 million here in our plan in Flat Rock, Michigan, adding 700 jobs on top of the 28,000 jobs that we`ve created over the past five years.

LEBEAU: Ford says it`s not adding a Mexico plant because demand for small cars is showing down. Perhaps. But this is clearly a victory for Donald Trump. While running for president, he hammered automakers for building vehicles in Mexico and importing them tax-free to be sold in the U.S., a message he is still pounding, this time with GM, tweeting, "General Motors (NYSE:GM) is sending Mexican-made model of Chevy Cruze to U.S. car dealers tax free across border. Make in USA or pay big border tax."

GM responded saying, "All Chevrolet Cruze sedans sold in the U.S. are built in GM`s assembly plant in Lordstown, Ohio. GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S."

Approximately 4,500 of those hatchbacks sold last year in the States. So, not a huge part of the more than 400,000 vehicles GM imported to the U.S. from Mexico last year.

But in Lordstown, Ohio, where the auto maker is laying off 2,000 workers because of slowing demands for the Cruze, Trump`s message plays well. In fact, Spitzer Chevrolet in Lordstown refuses to sell Cruze models built in Mexico.

BARRY GONIS, SPITZER CHEVROLET: What we said, well, we`re not keeping them on the lot. And we`re sending them out of the area. We want to support our plant and the guys and girls that are up there, third shift. It`s kind of sad what`s happening, so we like to keep them here.

LEBEAU: The big question remains, whether Mexico`s soaring auto production which will top 4 million this year, will eventually lead to a tax being slapped on those models sold in the U.S.

If that happens, how much will those increased costs hurt demand? And the bottom line of auto makers who are increasingly taking a second look at their operations south of the border.



MATHISEN: One stock that fell after the Ford`s announcement was Kansas City Southern (NYSE:SO) (NYSE:KSU). The automaker`s Mexican plant was supposed to have been built along Kansas City Southern`s railway lines. The railroad received nearly half its revenue from its Mexican operations during the first nine months of 2016.

HERERA: The president-elect tapped a new trade ambassador. Robert Lighthizer is a former Reagan administration official. Trump says that he has repeatedly fought to prevent bad deals from hurting Americans. Lighthizer is a critic of China`s trade practices and says he is fully committed to leveling the playing field for American workers.

MATHISEN: The president-elect tweeted his pledge saying the Affordable Care Act, saying, quote, "It just doesn`t work." This as the House and Senate convened today for the start of the 115th Congress which saw Paul Ryan easily reelected as House speaker.

John Harwood is outside Trump Tower in New York City with more on the congressional agenda.

John, Congress has an aggressive to do list, beginning with the repeal of Obamacare. I assume that remains the top priority. Did they put in a bill to do it today?

JOHN HARWOOD, NIGHTLY BUSINESS REPORT CORRESPONDENT: Yes, they started the process in motion. They passed language for the process that is an expedited process. That means they can reveal big parts of Obamacare with only a majority vote. It does not make it vulnerable to a filibuster by Democrats. That process is going to take a few weeks. It will go through end of January.

But Republicans are on track for what they`re calling a repeal-and-delay strategy to have a phase-in period for some replacement. The question is whether they come up with one or just keep putting it off.


On the environmental side of things, can we expect to see the reversal of the environmental regulations? And on what kind of a timetable?

HARWOOD: No question about it. There are a couple regulatory bills, rollbacks that they`re passing. Donald Trump vowed to have a policy that repeals two regulations for every new one that is passed. And regulations like the president`s clean power plan, which is now subject to legal challenge, holding up its implementation. That is something that Republicans in the executive branch are going to take a different attitude on, of course, once Donald Trump becomes president.

MATHISEN: All right. John, thank you very much. We have to leave it there.

John Harwood in a rainy New York City tonight.

HERERA: Indeed.

Still ahead, preparing for retirement. If that`s one of your New Year`s resolutions, there are some things you may want to do to maximize your 401(k).


MATHISEN: Finland is launching a two-year experiment. The country is providing 2,000 unemployed citizens with a monthly income of roughly US$580. Those receiving the money will continue to do so even after they find work. The government hopes the experiment will cut government red tape, reduce poverty and lower unemployment in that country, which stands now at more than 8 percent.

HERERA: Tesla misses its delivery goal for 2016. That`s where we begin tonight`s "Market Focus". The automaker delivered just over 76,000 vehicles last year, missing its target of 80,000. The company noted that more than 2,500 cars in the fourth quarter were not counted as delivered because the vehicles did not make it to the customer in time. Tesla shares initially fell in afterhours trading following the news but ended the regular session up 1.5 percent to $216.99.

Xerox (NYSE:XRX) has officially split into two publicly traded companies. Over the week, the printer and copier maker spun off its business services division called Conduent. That company debuted on the New York Stock Exchange today, opening at $14.90. Separately, J.P. Morgan and Credit Suisse upgraded Xerox`s stock. So, shares of Xerox (NYSE:XRX) soared almost 20 percent to $6.89, while Conduent shares fell nearly 8 percent to $13.72.

Chip maker Intel (NASDAQ:INTC) said that it will buy a 15 percent stake in the German digital mapping company called Here. Intel (NASDAQ:INTC) said it also entered into an agreement with Here where the two companies will research and develop technology for autonomous driving. Shares of Intel (NASDAQ:INTC) rose almost 1 percent to $36.60.

MATHISEN: The molecular diagnostic test maker Interpace Diagnostic said it has signed an agreement with Blue Cross Blue Shield. Under the deal, Interpace will work with one of the insurer`s programs to help it developed the best ways to secure ongoing coverage for its products and tests in the pipeline. Shares of Interpace skyrocketed 70 percent to $7.50.

Shares of the pharmaceutical company Depomed surged today following a report that said the coil will sell itself and it is accepting final bids tomorrow. According to "The New York Post", the private equity firm KKR (NYSE:KKR) is among the potential suitors. Depomed surged nearly 13 percent today to $20.34.

HERERA: Early champions of the 401(k) are having some regrets, reportedly about, the investment resolution that they started. According to the "Wall Street Journal", many of the backers say the 401(k) has fallen short of expectations and was never meant to replace pensions.

But it has. So how do you make the most of and it improve your retirement savings?

Tim Maurer, director of personal finance at BAM Alliance joins us now to talk about that.

Happy New Year. Good to see you.


HERERA: Tim, what do you make first of ball the article and whether or not those claims, do they resonate with you? And then how can we really help ourselves improve our 401(k) performance?

MAURER: Well, in many ways, they do resonate with me because anyone who is in the financial space as I am, spending all my time working with clients, many times, their retirement objectives, I do see how the 401(k) has been underutilized. I absolutely see how companies in many cases have abdicated the role that they were playing and retirement for their employees` lives through pension plans, by eliminating pension plans and just pointing people in the direction of a 401(k).

And I absolutely see the institutional challenges with big companies filling plans with bad investment that have high expenses. But at the same time, this is option that we have on the table today. And if you utilize a 401(k) correctly, if you know how to hack it a little bit from the institutional problems that it has, you absolutely can make the most of it for yourself and your family.

MATHISEN: When you say hack it, what are you talking about there? Making the right investment choices within the panoply of choices that you have or what?

MAURER: Well, that certainly is part of it, Tyler. One of the reasons the choices are a problem is because most 401(k) plans are run by these big financial firms that fill them up with their own high expense investments. But you can often find index type funds inside of your plan. Well, that`s where I`m referring to with the hacking. You may have to look between the lines in order to find the best options. It should be easier and hopefully it will be going into the future, but you can still absolutely make the most of it.

HERERA: You say there are three things that individuals should be doing to maximize their 401(k) contributions. Tell us about that.

MAURER: Well, the first one is contribute. No matter how many times we want to complain about the options that are available, no matter how many times we want to be concerned with market volatility and the challenges that we all have and investing throughout our lifetimes, the number one predictor of financial success in retirement is the degree to which you apply yourself and your funds that you save. So, let`s not see this news about 401(k)s. It can be a little dreary and use it as reason to abdicate our role in saving for the future.

Number two, we have to do our best to allocate the funds inside. And that`s where we get to Tyler`s point about hacking what might be a mediocre plan. Hopefully, we`re going to see improvement there, especially with the new Department of Labor ruling requiring financial advisers to be fiduciaries this coming April.

But, lastly, you also want to maximize whatever fixed income opportunities that you have. For most of us, that`s still going to be Social Security as the primary. And as we continue on age in the future, I am encouraging retirees to stave off taking their Social Security benefits until as late as possible, because then you will see your Social Security income go up and you will reduce the reliance on your 401(k) and retirement.

HERERA: And on that note, we have to leave it there, Tim. Thank you, Tim Maurer with BAM Alliance.

MAURER: Thank you.

MATHISEN: Coming up, why some in Silicon Valley are giving new meaning to the term "pet rock."


HERERA: The Fed releases the minutes of its last meeting when it voted to raise interest rates. There will be two competing meetings on Obamacare on Capitol Hill, one with President Obama, and the other with Vice President- elect Pence. And the world`s largest automakers release their sales numbers for December, potentially setting a record for the year. That`s what to watch for on Wednesday.

MATHISEN: The space industry could enter a new phase this year after a number of stumbles. SpaceX plans to resume rocket launches shortly and there`s a lot of money on the line, as private companies shoot for the stars.

Morgan Brennan has more.


MORGAN BRENNAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: Space Exploration Technologies says its rockets are ready for blast off. The privately held company is targeting a return to flight this Sunday. For months after a Falcon 9 rocket erupted on the Cape Canaveral launch pad, destroying a commercial satellite and halting an aggressive launch schedule.

After an intensive investigation, SpaceX determined that explosion was triggered by the failure of the helium vessel used to help pressurize a liquid oxygen fuel tank. The anomaly initially stumped founder and CEO Elon Musk who called it a, quote, "toughest puzzle we`ve ever had to solve" in a CNBC phone interview back in November.

ELON MUSK, SPACEX FOUNDER AND CEO: I think we`ve gotten to the bottom of the problem. Really surprising problem that`s never been encountered before in the history of rocketry, and it basically involves a combination of liquid helium, advanced carbon fiber composites, and solid oxygen -- oxygen so cold that it actually enters solid phase.

MORGAN: SpaceX says it`s taking, quote, "corrective actions" to address, quote, "all credible causes of the explosion", including long term, some design changes. But to launch, the upstart must first get the green flight from regulators -- a process likely to happen if tests this week go according to plan. Experts say it`s crucial that the company is successful.

DAN DUMBACHER, PURDUE UNIVERSITY: What SpaceX is doing with this launch is another step in exercising commercial entities, to take over the role that has been done by the government in the past so that we can do it more efficiently and then focus our government resources on the next stage of exploration.

MORGAN: Like deep space.

The upcoming launch would put ten Iridium satellites into orbit, the first of seven such trips to replace an aging constellation. That will be in part used to help track aircraft. Shares of Iridium soared on the news.

SpaceX has a $10 billion backlog of launch contracts, and September`s explosion already caused the company at least one order. It also has deals with the Pentagon and NASA, including to shuttle cargo and starting next year, astronauts to the International Space Station. And beyond that, the company`s own plans to go to Mars.

But it all come down to this week and whether SpaceX can finally get back into space.



HERERA: So, what is about it billionaires and space? From Elon Musk to Amazon`s Jeff Bezos, Virgin`s Richard Branson, and Microsoft`s co-founder Paul Allen all have entered the race for civilian space travel. But there`s another space race playing out in Silicon Valley.

Josh Lipton has our story from San Francisco.


JOSH LIPTON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Steve Jurvetson knows he might never get to travel to Mars. But that doesn`t mean the respected venture capitalist can`t bring a piece of Mars home. He`s converted his office in Menlo Park, California, into a private museum. It`s filled with treasures, including the second largest Mars rock in private hands.

Jurvetson won`t say how much he paid for the rock, only that it costs more than his first home. To find such space rocks, Jurvetson turns to professional meteorite hunters like Michael Farmer. Since the late 1990s, he has traveled to some 80 countries, searching for these rocks, which he then sells to private collectors, including tech heavyweights like Jurvetson.

MICHAEL FARMER, METEORITE HUNTER: The Silicon Valley guys have been pretty good the last couple of years. They buy a bit different than the Chinese. The Chinese want large iron, large things to put in office lobbies and things like that. Whereas the tech guys, they want rare things. Very, very special things.

LIPTON: Farmer, along with his friend and business partner Greg Hupe, recently returned from Bolivia where they brought several meteorites from Quechua people, a local indigenous community. The rocks were some 4 billion years old. And within 24 hours, they flipped them for $60,000.

This work is not for the faint of heart. In 2011, Farmer was kidnapped, beaten and nearly killed by Kenyan thieves. In that same year, he was charged with illegal mining in Oman and imprisoned for two months. Greg Hupe also counts tech entrepreneurs as his clients, seen here with Naveen Jain, who is the founder of startup Moon Express (NYSE:EXPR), a commercial space company.

Hupe sold Jain two slices of lunar meteorite, each weighing roughly one pound and about the size of a large dinner plate. Each slice of this rock costs hundreds of thousands of dollars. The market for meteorites extends well beyond just tech powerbrokers. Last April, Christie`s held an auction for these rocks and sales totaled some $700,000.

Collectors don`t necessarily think of these space rocks as sound investments. Instead, Jurvetson says he buys meteorites because of the unique, rare story that each ancient rock reveals.

For NIGHTLY BUSINESS REPORT, I`m Josh Lipton, San Francisco.


HERERA: You just never know, do you?

MATHISEN: You never know.

HERERA: That does it for NIGHTLY BUSINESS REPORT for tonight. I`m Sue Herera. Thanks for joining us.

MATHISEN: I`m Tyler Mathisen. Thanks from me as well. Have a great evening. We`ll see you back here tomorrow.


Nightly Business Report transcripts and video are available on-line post broadcast at The program is transcribed by CQRC Transcriptions, LLC. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Nightly Business Report, or CNBC, Inc. Information presented on Nightly Business Report is not and should not be considered as investment advice. (c) 2017 CNBC, Inc.

(Copy: Content and programming copyright 2017 CNBC, Inc. Copyright 2017 CQ- Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.)