Transcripts For CNBC Closing Bell 20170928

Would show that companies dont always use the asset when theyre repatriated to invest in manufacturing, jobs, things you gees are talking about they Share Buybacks and financial engineering. How do you guarantee that wont happen this time so, look, we heard that numerous times if thats our worstcase scenario that companies repatriate their money and use it for share pbuybacks and dividends, what happens . They buy back shares, issue dividends, pay the repatriation tax, we get another 20 tax on Capital Gains or dividends and the people who get that money back do what they reinvest it back in the economy in new investment and new capital. Were putting very enticing rules into the system that will entice people to invest capital for the next five years. Were giving people a fiveyear writeoff that they can instantly expense. So, look, if that happens, thats fine, we know that money will get invested right back into the economy and drive jobs, drive economic growth, drive wages and drive prosperity right over here. Gary, you asked a question twice, you didnt answer id like you to answer this. I get your message on the middle class, you made that very clear. The tax plan as it stands now appears it will benefit the president and his family why not just be candid about that look, i fold ytold you it wil benefit the middle class i think thats what American American taxpayers care about what they take home. They care about they have to spend. Thats what they care about. Thats what i care about i care about what i pay in taxes. I bet you you care about the president s message, hes saying he wont benefit. It appears as though the way this is put together, he actually will. Gets to the idea of wealthy americans around this country which people do care about. Let me take you through the components youre all obsessed on senators going to yell at me, im taking too long here you all talk about the death tax and that being a great benefit the two biggest drivers for repeal of the death tax are the nfib and the farm bureau thats Small Businesses and farms. Those are the two organizations that spend the most time lobbying around the repeal of the death tax. Death tax has the biggest effect on them. Small businesses and farms wealthy americans do a lot of estate planning. They can use trust, they can use all types of things that are legal within the tax code to make sure they dont pay death tax. On the amt, im not going to get into deep, deep, deep, deep calculations, but in a broadbrushed level, when you do the amt, once you get rid of the deductions of state and local taxes, thats the bilge ebigges addback in amt. Amt becomes if re s irrelevant all the things youre starting to pull at, youre not looking at the plan in its entirety. They dont make sense gary zblo youre qwelcome. Gary . Yes, you. In a followup question, in your penultimate appearance to this group, said i cited to you the worry of groups such as jim martin and the 60plus steen yours association that you were going to drag out repeal of the death tax, that it wouldnt be immediate land you said at the time that is immediate is that final . Is it going to be an immediate repeal and go off the books as soon as the new tax reform package is passed . In our outline, its immediate. The same with the alternative its immediate. Everythings immediate the only thing that phases out is the fiveyear expensive, a fooiye fiveyear expensing. Thalast one, guys. Speaking of all businesses, lets start negotiating. Yesterday senator schumer said democrats may be willing to work some kind of Small Business tax relief into whatever comes out of all this. Where do you start negotiating on that . What offer do you want to make, perhaps, to the democrats . Our offers our opening offer and final offer are on the table. We were happy to start at 25, and were happy that o go lower happy to start at 20 on corporate and go lower theres our opening offer. If he wants to counter something lower, were very negotiable thank you. Gary gary, one more . One more thank you, gary all right the chairman of the National Economic council, answering a number of questions involvin the tax reform package that was unveiled yesterday. A very complicated issue that wants to get boiled down politically into whether it was going to help the wealthy or help the middle class more. I mean, theres a framework there, but now were starting to put a few pieces together and figure out any tax package look this can have moving parts and pieces. Its not if theres something here eamons question about the repatriation of the money, and what corporations will do with that you cant force a company to do something with that money, but i thought Gary Cohn Wasser aerody, what theyd do with the money and how it would impact some ways like a budget document, its a bit of a wish list until they can get the numbers to work or get democrats onboard. Lets bring in ylan mui, shall we, to reaction of what we just heard. Reporter i think this is a sthast taste of the opposition building through the tax framework, particularly among democrats on capitol hill again, most of cohns remarks were spent defending this plan against the criticism that it primarily helps the wealthy. You heard him talk about why theyre getting rid of the state and local tax, saying only 75 of families do not itemize their deductions he said that they were going to protect the mortgage interest deduction, isnt say they were going to leave it totally untouched. Perhaps room for change there. Thought it was interesting he mentioned they do have some sort of draft language around how theyre going to write the rules to ensure the passthrough rate for businesses is not used as essentially a loophole for wealthy americans, you know, that has been something that has stymied lawmakers for years, so if they have some language around how theyre going to solve this problem, i think wed all like to see it all right ylan, thank you. Well be checking back with you as the afternoon progresses im sure so is it the wealthy or the worker who win with this republican tax reform plan lets talk about it from both sides. Jimmy, cnbc contributor from the American Enterprise institute is with us. And maddie from the national tax union. Now, jimmy, youre not convinced that this helps the middle class as much as gary cohn is saying here why . Listen, i think this plan, i think its almost charitable to call it a plan, its not its more than, you know, talking points, its more than just, you know, some guidelines. Its an advancement. Theres so much we absolutely dont know listen, it would have been very easy to create a plan that un helped middle class, working class voters, could have a done a sort of meanstested payroll tax cut. Right now its not clear how much, on a static basis, that this helps one, what the final parameters of the Child Tax Credit are, they tried pressing gary cohn on that, we dont know what that is thats going to be key now, you could argue on a dynamic basis with all the growth, it would help the middle class that way it could be very clear even on this basis that it would, and it isnt. Well, maddie, you guys are saying the core tax reform principles outlined can deliver relief for middle class families highlighting the simpler filing process there. So what are your thoughts . I dont share jimmy p. s pessimism. Im hardened by the fact we saw a framework release yesterday. Now this work goes to the committees this goes to the experts in congress who will negotiate these details out. But we do see a framework that i think its hard to argue, it doesnt benefit middle income earners and earners down the income scale youre collapsing tax brackets so much so youre expanding the people who have a 0 Tax Liability. Thats significant, not to mention the expansion of the standard deduction, expansion of the Child Tax Credit these are all efforts that are obviously aimed at people who have a Tax Liability they cant afford you heard gary cohn mention the fact getting rid of some of the other deductions and junk in the tax code is whats going to help make that math work but, you know, the deductions that are taken with these state and local, for instance, these are all deductions taken by high income earniners, without them, the impact is going to go straight to middle income earners. Look, listen, this whole plan is very similar to the house better way plan. If you look at the distributional tables on that plan, this does not look like a windfall on a static basis for middle class workers listen, they better hope they keep the Corporate Tax rate 20 and better be a i believe to pay for for it the way this is going to help middle class workers is ultimately by the growth if they dont get that, its not going to help them very much as all. Jimmy, you almost make it sound like thats a minor, if they get its not a minor thing. Thats the whole point. Its not minor. If this moves in the right direction to both, on, you know, day one, but also in terms of down the road, isnt that the whole point . Right its the whole point, as long as this thing ends up not losing 2 trillion or 3 trillion. Listen, look what happened in 2003 all right, so, so far what we know is its a money loser you know im getting a wrap here mattie, whats your final word there, what were you going to say . I could say we have an exercise in this before, 2001, 2003, 2003 paid for itself, and then some. Well see explosive growth on the top end of this tax reform plan, and not only are we going to see growth for income earners was where the explosive growth in the 2000 there was no explosive growth everything was fully phased in, 2003, we saw it was 100 billion more. The economy exploded, i remember that. Is right. When everything was its hard to talk about the 2000s without the aftertaste. Theres something in there, yeah thank you, both. We got to move along thank you, both, for joining us. Its only beginning. Everybodys got their calculators out trying to work the magic right now. By the way, welcome to closing bell. Welcome back, by the way. Thank you. That is kelly evans sitting next to me. Four eyes. Nice pretty cool to see that lets get to our Closing Bell Exchange the dow up 44 points today the s p for those at home keeping score thats in record territory. So is the russell. Thats katie from Goldman Sachs Asset Management sitting next to New York Stock Exchange trader, jonathan from Meridian Equity Partners both at post 9 with us. Rick santelli checks in from the cme. Jonathan, i come back, gone three days this week, i come back, yields are much higher but so are stock prices. So whats going on here . I mean, we continue to see this market inflate higher right . The headlines that are out there that support the moves headline could put significant pressure on this market as were trading at the highs, if we continue to consolidate at these levels here and dont get catalyst headlines, think tax reform would move the market all the headlines weve gotten over the last three to six months, nothing moved the market either way in a strong fashion if we consolidate up at these levels here, i think overall con st consens consensus, were going to move higher earnings season might help the market as weve seen historically, tomorrow, end of the month, end of the quarter. I dont think we need window dressing weve clearly seen the returns in the markets. Look at the russell, small caps, youre saying that might be one of the beneficiaries. Big debate about what individuals will benefit most, its clear from a corporate perspective, an effective tax rate in the low 30s versus larger Cap Companies in 25 we look at equity valuations, obviously very elevated for large cap, we got to look beyond that the small cap part of the market to us represents great value. Rick, what about the higher yields, are people simple sli bly selling bonds and buying stocks, whats going on here reporter listen, i think the high yields paired with the solid stock Market Performance for 2017 isnt a bad thing it hasnt helped the dollar index as much as many of us thought. Consider this, stock markets are up pretty strong on the year if you look at the yield curve, where everything settled, theres only two maturities that are higher in yield, lower in price than they were at the end of the year. Those are short maturitmaturitis two year an three year, the fives, tens, 30s are lower in yield. Were at 231 i guess what im getting at here, all things being equal, Interest Rates can continue to firm if you look at the two channels, i think one that was underrated was the fed policy, whether it was Balance Sheet or another rate increase, third for this year, that keeps some pressure on the curve and the other is Global Growth you know, there are many naysayers and maybe thats kept it down a lit, but all things considered, i wouldnt at all be surprised to continue to see the march of rates higher, a dollar, marching a bit higher in a slower fashion, and the equity markets seem quite comfortable here the one fly in the ointment, of course, can be if things go wrong with some of the legislation, but i have yet to see a great correlation with pro or con stories on any legislation that seem to have Lasting Impact in the marketplace. Although tax policy does seem to have raised the kinetic normal energy of all markets. Curiosity today, katie, the fact the dollars weaker we usually see the stronger dollar, better small caps. The russell right now we should mention is at intraday alltime highs. Yeah. What do you make of the fact the dollars weakened here a little bit obviously we have to digest a lot more of the macro news thats come out today and look at it relative to longterm history. I would say for us one thing were always encouraging investors to do is diversify from an equity market perspective, its relevant to the dollar, were asking people to look outside the u. S. For opportunities both in developed as well as emerging markets so one of our, interestingly one of our best calls this year was to be overweight japan for many of our clients. And this is actually an environment where youve had a strong yen, obviously, because you had a weaker dollar, and actually the equity market has still done quite well. Is that because the bank of japan buys everything thats not nailed down . I think that certainly helps but actually theres a lot of really interesting secular growth stars there one comment i would make, join look at really big secular themes in the market like electr electronification, automation of vehicles, those stocks are available in the u. S. , some are expensive. Some of those companies arent making money if you look in japan, you can buy those companying at a discount to whats an offer in the u. S. They might not be the h headline companies but theyre making inside parts Great Companies that attract thank you, both rick, thank you as always. See you all later. Thanks for your thoughts on todays market action. Full steam ahead streaming Video Company roku rocketing higher on its first day of trading well tell you what that pop means for other Tech Companies looking to go public. Plus, no, this blackberry did not come from a museum they asked me if i would be embarrassed to hold up my blackber blackberry of course i would not be. No, proud. This came out of my pocket. Apparently im not the only one excited about blackberry shares seeing a big bump on the ba oanarngsurise well hear what Ceo John Chen had to say about the future of the company when we come back. Shares of blackberry soaring today up by 13 after a strong Earnings Report where the Company Reported Record Software services for the quarter john chen told cnbc this northern hes happy with the companys direction but there are potential headwinds in their future we have a consulting surfaces from cyber security, and that, you know, is starting to get into a very sizable range now. So we have to deliver that we have to have enough people and Trained Personnel around the world to deliver that. Were very big in cars in auto. We won a number of autonomous driving platform but those are going to g revenue is going to come later when the car is being shipped. So, you know, theres a theres still road bumps going along the way, but not so much that it will get ourselves off the track. And heres a thought here for you, john, how about getting back into the phone business i was going to say, i didnt hear him talking about the phone. Yeah, i know. Googles doing that now, theyre getting back, right . Maybe they could have called blackberry but they didnt. No, they didnt, for what whatever reason. Anyway. Streaming hardware maker roku, hardware play for you, jumping more than 50 of its first day of trading bob pisani is hear with a breakdown of the ipo they talked about streaming and over the top deals plus other companies behind them could go public . Folks, take a look at roku, this is a big day, they priced at the high end of the range, 14. Pushback on ipo recently, theyve been up big all day, 21 and change thats off of the highs from right after the open volume is huge, more than twice the normal volume. Normally 100 is a good day. Those looking for a play on cord cutting, this is it for roku 15. 1 million act ifd uive user akouchbaccoun accounts its still unprofitable. They have competitors, amazon, apple, even google highprofile names likely to go soon, actually been a pretty good last couple weeks rovio pricing at the top end of the range, somebody tweeted angry birds are happy, thats true going to trade in helsinki, by the way, and down at the nasdaq on october 3rd well also see switch, a Big Data Center operator, competitor to amazon, see how they do cargurus coming, too, new and used car dealer. Finally, reuters is reporting lyft is close to hiring an ipo advisory firm, competitor, uber, of course, nowhere near an ipo ipo business has been getting a little better. Ive been complaining all year about it 105 so far this year, up 41 from last year thats the same number of all last year. Renaissance capital ipo etf, look at that, basket of last 60 ipos, up 27 this year everyone pushed back on the prices saying we dont want to pay high prices. Pushing the initial offering prices down. Good start today but remains to be seen what happens after thissin i this, right . Thats the problem for some companies, they start fast out of the gate on ipo day then they fade. The company is unprofitable, itself. 15yearold company, it still hasnt turned a profit i know, theres a little bit of a warning sign and have the huge competitors against them. Its big, well known, a lot of people want to buy it at a very high im quite surprised it moved up on this kind of price. If you take the fact that apple should have owned this space and they have given they lost so much market share, that you got to hand it to roku, they at least are getting that right. Im a big apple user, i have apple tv i have to say. So do we. I dont use it that much, im surprised how little i use it. My father is a human rohuge rok user he said i dont want to go any about cable, apple tv, my roku. Keep it simple. It is simple. Thank you, bob, see you at the close. Twitter has a big presence in the oval office now its heading to capitol hill the latest on twitters visit to washington as lawmakers explore the role that social media played in last years president ial election. Plus, estee lauder executive chair William Lauder sheer at the New York Stock Exchange. Were going to hear what his company is doing to fightbreas nc a wt caerndhahe thinks about the current retail landscape, when we come back. Of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Lets get a check on todays market movers, drug maker abbvie is the best performer in the s 500 today, after amgen agreed to delay the launch of abbvies blockbuster arthritis drug, humira, until 2023 the bestselling Prescription Drug with annual sales , and asa result, abbvie up 15 today. Spice maker, mccormick, also rising thanks to growth from recent acquisitions and the stock today also up just over 5 one of the best for formers in the s p 500 the index positive by about a point. Estee lauder will ring the closing bell today at the New York Stock Exchange in honor of the companys 25th anniversary of its Breast Cancer campaign. Joining us, sort of become an annual event, William Lauder, executive chairman of estee lauder who will be ringing the bell today, fellow blackberry user, by the way. Right. Proud of it 25 years since your mother started the campaign isnt that amazing yeah. Who would have imagined 25 years it would take on the life that it has but it has really been a catalyst for gathering people in a conversation and awareness and discussion for Breast Cancer. Right. Thats really accomplished a lot. Our Breast Cancer campaign, weve raised over 70 million in the last 25 years and were helping to fund over 225 researchers who are searching to find a cure. And what weve accomplished in our 25 years, the whole Breast Cancer medical world, 25 years ago, if someone was diagnosed with stage 1 Breast Cancer, they had a 72 of survival. Today thats over 92 . Thats fantastic. Whats amaze to me is the way we talk about any type of Cancer Therapies and treatments and you can talk about this being a diagnosis that is not necessarily such a lifeending one. Where do we go from here with the funds youre raising and whats needed to for Breast Cancer our goal is to go out of business, find a cure for Breast Cancer and go away we wont stop until we accomplish that. Therapies are far more effective and gentle, to longer is a death sentence, its no longer even more than a bump in the road for people who are diagnosed with Breast Cancer. Soat thera many of the therapi thing the Breast Cancer world does is theyre sharing when we fund, they have to oblige themselves to share their findings with their peers who are doing the work we think collaboration is goingf momentum theyre branching out beyond Breast Cancer because cancers behave similarly theyre starting to spend time saying, okay, what other treatment attend what other cancers can help this, vice ver sau versa . The sophistication of the scientists is unbelievable, what toews been able to accomplish in such a really short period of time we as humans have eliminated a number of diseases from the earth. This is a disease we should aim to eliminate also. Slight, with immunotherapy, genetics, theyre using today, a Bright Future we can only hope there. While youre here, shift gears for a moment, i want to ask you a few business questions what is going on with the Retail Industry as it pertains especially to the Big Box Stores, department stores. Where is that going, do you think . Its got to have an impact on your business. North america, its had an impact traffic has gone down. We dont operate in the Big Box Stores we operate in the macys, bloomi bloomingdales. The numbers seem to be a little bit better one of the things weve done is reshifted our focus over the last few years to the specialty multi world, ulta cosmetics, sephora, for example, direct to the consumer through our own online businesses, for example those businesses are growing nicely in a healthy way. Thats here in north america outside of north america, we see a resurgence of the Chinese Consumer which is both inside china as well as the traveling Chinese Consumer southeast all of asia in general seem to be doing okay. Or better than okay. Korea, i didnt realize what a hotspot that was for beauty products. Very hotspot, korea has been a very hotspot and competitive place for a long time. The korean cosmetics industry is actually very substantial, very good, and has a credibility beyond its borders which is great. Quick question, talking about repatriation as part of the tax plan, you guys have a huge overseas business. In general as were getting details about what the plan may look like, what are your thoughts about it and what impact it may have on the company. You know, on the surface of the few lines that weve actually been shared, it would seem it would be helpful repatriation certainly would be he helpful. Lowering the Corporate Tax rate makes us more competitive. So theres a well get more competitive would you hire more people, would you buy more companies would you invest more to expand . What would you do with those extra funds . Yes yes to a up ll of the above. Buy more Companies Hire more people investing. Its all of that releasing the untrapped money. You realize that money is sitting there just earning the nominal rates. It would be helpful. I want to be careful there, we have to be careful of the law of unintended consequences and the last time in the repatriation piece, didnt quite work the way it was intended so there have to spend some time engineering it properly to get the intended results. And that would be i would be concerned because if you do another repatriation, where all it does is go to Share Buyback, New York Stock Exchange says thank you very much, im not certain it does what you talked about. Were really late here, i have to stay gary cohn was asked that very question a at the white house a short time ago, what companies would do with the repatriated money. This argument was if you increase dividends or Share Buybacks, that helps the shareholders who are the middle class people that own shares in those companies. Its my understanding, you guys would know better, that Something Like 75 to 85 plus of all shareholdings is held by institutional managers for the benefit of. Doesnt that represent pensioners and 401 k s it certainly does, but its all about individual confidence and i have disposable income to spend on myself. So the real question is, how do they message it in such a way where somebody says, ive got a few hundred dollars more a month that i can spend and so the real key is how do they structure it so they really can show theres money there for me to spend . At estee lauder. Certainly, estee lauder, only in our brands. Should be engineered just for us. Theyre getting sweaty palms. They need you to go to the upstairs to ring the closing bell good to see you again. Thank you very much. Id say i hope to see you next year. Lets hope we dont have to see each other it will be for other circumstances at that point. Certainly hope so. William lauder from estee lauder, ringing the closing bell. Thanks for having me. Lets go the cnbc news update with sue herera. Thank you very much. Heres whats happening at this hour, everyone, President Trump lauding congressman Steve Scalises return to congress, hailing his bravery, telling reporters hes excited to see him back at work. Hes a special man. Brave. Just a great guy a great friend of mine were so excited what happened to him, just horrible we are so happy. Kelly and bill were talking about fight against Breast Cancer the star of veep and Seinfeld Julia louisdreyfus has been diagnosed with health care she tweeted shes lucky to have fantastic Health Insurance through her union but not all women are lucky. 163 carat flawless white diamond, largest ever to come to auction, was previewed by Chris Christys in hong kong today, expected to bring in more than 30 million. It was found in an angola mine in 2016. It goes on the Auction Block in geneva on november 14th. That is a big diamond. All right. You are up to date, guys back downtown to you that would look good on a ring, wouldnt it . Thank you, sue ill see you tonight on nightly business report. Ill see you then. Looking forward to it. Me, too welcome back, bill. Thank you. Coming up, americanairlines facing headwinds on the back of increased competition from budget carriers. Well head to the companys Investor Conference in texas, seeing what Ceo Doug Parker is doing to reinsure investors. Plus kb home is reporting its results after the bell the stock on a tear, up 40 this year ahead, why one analyst says millennials could keep the Home Builders rising. Stay with us i count on my dell Small Business advisor for tech advice. With one phone call, i get products that suit my needs and i get back to business. Parts a and b and want more coverage, guess what . You could apply for a Medicare Supplement Insurance Plan whenever you want. No enrollment window. No waiting to apply. That means now may be a great time to shop for an aarp Medicare Supplement Insurance Plan, insured by unitedhealthcare insurance company. Medicare doesnt cover everything. And like all standardized Medicare Supplement Insurance Plans, these help cover some of what medicare doesnt pay. So dont wait. Call now to request your free decision guide. It could help you find the aarp Medicare Supplement plan that works for you. These types of plans have no networks, so you get to choose any doctor who accepts medicare patients. Rates are competitive, and theyre the only plans of their kind endorsed by aarp. Remember these plans let you apply all year round. So call today. Because nows the perfect time to learn more. Go long. Executives from twitter meeting with the house and Senate Intelligence committees today to discuss the companys role in last years election Kayla Tausche has the latest kayla . Reporter hey, kelly, members of Twitters Public Policy Team met with staffers at both the house and Senate Intelligence committees to field questions about the extent to which its platform was used by russian propagandists and what twitter is doing about it Going Forward. Lawmakers say accounts traced to russia built bots, bought ads and pushed out fake news to influence the election, and they say facebook after much rhe reticenrhet reticence acknowledged its platform was used that way last month, happened in a closeddoor meeting in september Ranking Member of the Senate Intelligence Committee Says facebook has yet to turn over the document it requested and said congress is going to be taking up this issue for all social Media Companies because selfpolicing has not worked i would like to see these social Media Companies, one, cooperate on this legislation, which will be bipartisan, and id like to see them spend more time, energy and resources kind of ferreting out some of these fake accounts and particularly when we see actual agents of foreign governments whose sole purpose is to sew chaos in our political system. Twitter has publicly so far been silent about this issue, in particular, and its unclear how much its Public Policy team divulged to the staffers of those committees much of this could, kelly, get discussed out in the open. The Senate Intelligence committee has invited executives from google, facebook and twitter to testify in public on november 1st well see what they say and whether theyll accept that invitati invitation kayla, what looks like a related move here, they have now put out a long statement from Twitters Public Policy Team saying its an update on russian interference, basically they said they looked at the 450 accounts that facebook shared in their review, 22 had correspo corresponding accounts on twitter, they said they were already had been, were immediately suspended. In addition. 179 further twitter accounts were found related or linked and took action on those as well and said none of the original Facebook Accounts or ones they saw on twitter were registered as twitter advertisers reporter yeah, but one of the issues, kelly, some these lawmakers on both sides of the aisle have been trying to distinguish is the fact that on facebook, where, you know, much of the coverage of this issue has centered, at least on facebook, they say, you have to use your real name or a facsimile of a real name, whereas theyre really harking on twitters anonymity and believe its much more than those several hundred accounts twitter has isolated and think it could be in the thousands or greater than that. So well see exactly where the dust settles there indeed. All right, kayla, thank you. Kayla tausche on capitol hill. Were heading to the close with 19 minutes left in the trading session. Most of the major averages are positive right now the s p is close to an alltime high and the russell is still in alltime high territory. Americanairlines could be ready to take off on an investment binge up next the ceo talks about ttg airlines profits to work when we come right back think again. This is the new new york. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov if you could book a flight, then add a hotel, or car, or activity in one place and save, where would you go . Expedia whoo woman class, lets turn to page 136, recessive traits skip generations. molly i reprogrammed the robots to do the inspection. Its running much faster now. See . Its amazing, molly. Thank you. thank you. Whuuuuuat . Rtgage offer from the bank today. You never just get one offer. Go to lendingtree. 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Americanairlines has been holding its media and Investor Conference today phil lebeau spoke with the companys ceo exclusively a little while ago, he joins us now with more of that conversation phil reporter bill, this was a very bullish doug parker we talked with not only when we talked with him, also when he gave his guidance, essentially guidance, over the next three years for analysts as well as representatives from the media here in dallas whats american looking at over the next three years he says theres no reason they shouldnt hit at least 5 billion in annual pretax profit, part of that is being driven by the fact that they see an immense opportunities when it comes to driving greater revenue, and this chart says it all, look at the Revenue Growth that american has seen over the last couple of years as its introduce add new premium cabin product with new seats, live flat seating, all of that has been helping the Company Drive greater revenue and greater profits. The nice thing about profits is it allows us to invest again. Weve been doing that faster than anyone. Were bringing in a new airplane every four days to replace an older aircraft, we invested 20 billion or so since the merger just in improving the product. That makes a difference and matters to premium travelers. Reporter but does it matter to investors take a look at shares of americanairlines basically, around 48 a share. Doug parker was emphatic today saying, look, theres no reason we should not be at 70 a share. You do the math if youre an investor and you realize that we will have sustained profitability, in fact, he essentially said theres no reason that american should ever lose money again given where the business is right now. Having said that, bill, this is a stock that like a lot of the Airline Stocks has been under pressure somewhat in the last 12 months, in part because investors want to see can the airlines maintain this level of profitability if, in fact, we ever go we know we will go into a recession at some point, when that happens, can the airline maintain profitability i mean, i dont know about you, bill, but so when i see that the and doug, you know, hes fantastic, when he says i dont think were ever going to lose money again. Wow. I mean, phil, you just wonder, he was funny about it, actually, he said the old world was darkness, now its light he knows hes been cheeky. Thats quite a statement to make is it going to be the kind of statement well look back on and think how could someone ever think that reporter look, theres always going to be certain factors that are going to pop up that no ceo can foresee, and thats always a possibility here if you look at this airline and united and delta as well, in terms of how they are structured both with labor contracts as well as with route networks, theyre far different now than they were before the recession and before all of these airlines went through bankruptcies where they retruckturstructured busin. Its a good point, kelly, not often we have a ceo say theres no reason we should ever lose money again. I like it, in some way theyre right, but these reasons come about all the time. Anyway all right and we have phil lebeau on record now as forecasting a recession. But hes got no timeframe. Well see what happens here. Thank you very much, phil. See you later. Reporter you bet 12 or so minutes to go dow is up 33 points. Right now, the s p is up a point and a half tra transports at an alltime high. Talking about the airlines there, as a group, theyre at an alltime high. Transports. Doing quite well. Plus kb home has made headlines recently, not happily so not for its home building. That could change after the bell when the earnings are released and when the analysts call begins, will company ceo Jeffrey Mezger be asked about his headline grabbing feud with comedian and neighbor Kathy Griffin . You knew we were going to bring that up. Plus we have a bear and a bull weighing in on the stock coming up us. Its what this country is made of. But right now, our bond is fraying. How do we get back to us . The y fills the gaps. And bridges our divides. Donate to your local y today. Because where theres a y, theres an us. slow jazz music fly me to the moon and let me play bell ring we have a very mr. Carbon cashin had to yell it across the floor, buy side of 350 million. The s p, boy, its flirting, its right at the alltime highs. Russell is still there, other major averages are not right now. The Home Builders have been one group higher today doing pretty well this year. All of this minutes before an Earnings Report from kb home, with hurricanes having destroyed many houses, tax reform possibly changing the landscape for home buyers, should you be investing in these Home Builders joining us right now, jack, home builder analyst at Susquehanna Financial Group with us and ken, home builder analyst at Key Bank Capital markets youre our bull. Youre kind of neutral on these guys, right . Well, were neutral on kb, the reports tonight. Were positive on lanar, horton, and toll brothers. What i keep hearing is the Home Builders in thing a r thiee dont have enough workers, enough land. Is there a bottleneck . Labor was an issue a year, year and a half ago. The builders have been growing the last several years and some qu somewhat of a moderator on growth and Land Investment as long as demand you see pricing power. Thats what we continue to see now. The same time, a lot of builders are moving to a land light model where theyre filling their bucket with land, but its more on the options side. Theyre not going to get much capital. Thats driving better returns. Thats interesting. Ken, im just looking at the estimates this afternoon, theyre looking the street, 46 cents on the earnings about 1. 1 billion on the revenue. That revenue is up 22. 5 from a year ago i mean, thats a pretty hefty number, isnt it it is kbh had good order growth. I think Going Forward in general, we do like the Building Product companies because they benefit from price depreciation, where the builders as you just spoke about face cost inflation, so land labor. Pricing is not beneficial for them as it is for the Building Product companies. What would be an example, ken, real quickly, of some of the Product Companies you think are better positioned in this market well, we do like owens, top build, tied to insulation, which had three announced price increases this year, not all of them being realized. Its a case where you have tightening supply in the factories resulting in upward price as demand continues to rise i think the hurricanes obviously on the margin helped them. Those type of benefits for the Product Companies are net negatives for the building for the Home Builders on their cost side. Is the Jeffrey Mezger controversy over now is he still a distraction to some degree do you think you know, the board handled it, the board addressed it i think when you think about somebody buying a home, are they buying the brand or are they buying the location . The school district. The price. The value proposition. I dont want to diminish what was said, but i think we know why theyre theyre saying this is a great looking house, a great the point is, if you have people all of a sudden tweeting, hey, look what this guy did, dont buy a house from kb, have they introduced that into the psyche of potential home buyers . Its possible im not sure thats going to be a meaningful impact to the business longer term. Ken, do you anticipate any effect what happens if for some reason his tenure there is called in question again i think jack described it well ill let his comments stand there. Oftentimes, you know, changes in management can be seen as beneficial to companies and that the processes sometimes get reviewed all right you arent minimizing the role of the ceo, by the way, by saying that. I dont mean to thats all right. Be interesting to see how the Conference Call goes when they get under way. Jack, ken, thank you, both, for joining us here. Were coming back with the closing cotdn unowfor this thursday in just a moment. Stay tuned pa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. And her new mobile wedding business. Tte at first, getting paid was tough. Until she got quickbooks. Now she sends invoices, sees when theyve been viewed andtadahpaid twice as fast for free. Visit quickbooksdotcom. For tech advice. Dell Small Business advisor with one phone call, i get products that suit my needs and i get back to business. slow jazz music fly me to the moon and let me play bell ring all right. 2 1 2 minutes left as we head toward the close with the dow up 32 im going to highlight the russell today because thats gotten a lot of peoples attention. I know the traders follow it a lot more than the after rverage investor does. Its noteworthy its in record territory when some of the other averages are not this is the small cap index. This is one thats not affected as much by the vagaries of the dollar, for example. This is where a lot of the job creation is in the economy and right now, the russell is still goingto close in record territory. The s p looks like it may as well, although, yes, now it is back in record territory the dow and the nasdaq are not you know what else is in record territo territory, the transports as a group and, you know, one of the great theories out there is the socalled doubt youre going to have the dow industrials and the transports setting records at about the same time they confirm each other and thats positive generally for the whole stock market so the transports are moving higher, even as the dow, itself, has been setting records also yields are going up the ten year, although thats come back. I sort of thiss emove while i ws gone were we today at 231. When i left we were comfortably in the low 220s. We had the big move up yesterday in the markets oil is just coming off a fivemonth high. We had a pretty good move down today. Up more than 1 , bob pisani. I was in Northern California the last few days. Theres where gasolines very expensive. But i even saw it when i got back here. The east its moved up in the last few days here. Yeah, thats why the refiners are hitting new highs, of course they need that oil thats one of the reasons the oil has been going up, holly, other ones like valero, at 52week highs as well. 2,509, bill, new high on the s p 500. There. We have the russell use mentioned and transports hitting new highs. Well see how kb homes does, right . Lanar, a new high just did a segment, very interesting. The hurricane effects seem to be somewhat minimal a lot of them are going to make up for next year i think the car numbers are going to be very good as well, see people buying a lot of new cars i was encouraged by the fact that southwest came out with some comments but the damage here in terms of earnings from the hurricanes seems to be somewhat modest with the possible exception of a few of the airlines the economic damage, im talking about, of course. Thanks, bob William Lauder ringing the closing well as we mentioned at the New York Stock Exchange. Stay tuned for kb earnings and much more on the second hour of the closing bell with kelly evans. See you tomorrow, kell thank you, bill welcome to the closing bell, everybody, im kelly evans we have a bevy of records on wall street today. Looks like at least the transports, small cap rustlsell going out at record high levels and s p with a small. 10 gain as i mentioned, also a record high for the russell up to 1,488 with a quarter percentage move higher today record high for the transforts which had a 40point jump. Just have been moving this market higher as well. Meanwhile for the dow, no the quite there but did gain 39 points today 2,23 22,33379 the nasdaq, 6,453. Coming up, congressional conflicts of interest. The details of a new report who says its not just congressmen and congresswomen who may have interestingly timed stock trades also the aides who are working on capitol hill. And we will get you those details coming up. Joining me on the panel today, cnbc senior markets commentator michael santoli, next to him stephanie link, managing director, equity Portfolio Manager at tiia investorsmeinvest e investo investors. Paul hicky joins us. Earnings were looking for, kb home at this hour. How about the transports in particular with withis move of late transports hitting a new high, essentially going down, the bears checklists of things they want to see, not giving an of them. Have the small caps working and transports working sort of a riskseeking profile to the markets very modest moves on an indexwide basis, holding near the record highs it shows you even with a lot of reshuffling through september, theres been a general acceptance of Holding Stocks at these levels so i think its net positive, going to start hearing people say its running hot, sentiment is starting to get little bubbly but thats historically this year has meant the market flattens out. Stephanie, this comes as were looking at the details on the tax plan, trying to learn more about it and understand, you know, just what basis it does have for moving forward and for something maybe on health, looks like the Alexander Murray might be on some sort of cusp of an agreement about the bhaum ca obamacare exchanges. How would you overlay this movement out of washington with whats happening in the record with the record high levels . I think investors are more excited about the potential for tax. Expectations are much lower. If tax doesnt come out the way, bestcase scenario, what we thought about yesterday, how the stocks reacted, sounds like the narrative is going to continue to be positive at least for the next coupled weeks months and that should keep a bid under the trump trade and the reflation trade and value stocks and iwm the interesting point id like to make is, even though value has worked, so has growth. Now, growth has had some, you know, ups and downs in volati volatili volatilities, particularly technology, particularly faang and the semis. Banner faang names have not necessarily been leading the charge this time. Right, its interesting they actually, yesterday and today, they were quite strong in addition to value so to me, that suggests that were broadening out a little bit. Until we get earnings. When we get earnings it will all be about the underlying fundamentals. Micron up again today Applied Materials one of the best performers in the nasdaq. By the way, on the dow mcdonalds was leading, with the Siracha Burger is a big hit and the initiative are paying off. I dont know which aspect to you is most telling about the market. The Siracha Burger, ill take it as far as the market is concerned, its hard to tell people to fight such a strong tape here. Mike was talking about sentiment getting a little bubbly here i think investors are far from complacence. Weve seen Short Interest steadily increasing and Investor Sentiment polls are still showing, you know, a skittishness toward the market, just the individual investor poll today, only a third of investors are bull iish. I think as far as the sentiment is concerned, going, looking forward to the Fourth Quarter, you know, overall, the Fourth Quarter should be strong, and i think to what stephanie was saying about washington is, the markets rallied in spite of washington all year, and i think theres been zero chance of tax reform priced into the market, up until the last couple of days, and so if we do start to see some tax reform, make headway and move in that direction toward something getting done, i think that could only be taken as a positive for the market, and make next years earnings forecast of about 145 a share seem, you know, doable and, you know, that would put us at 17 1 2 times next years earnings which isnt cheap, but its not too expensive, either. Mike, to his point, said their basket for the s p, for the tax beneficiaries and also for this kind of trump trade in general is now turning positive and outperforming again. Its perked up, right, so its had kind of a few months on the outs and now its perked up a little bit i think thats kind of a matter of people sort of squaring up their bets, not going to fore close on the possibility we get progress on that front i agree with paul the main thing, and steph, the main feature of potential Corporate Tax cut for next year is not everyones going to immediately raise their gdp growth forecast but the corporate profits can stay support if. 145 estimate on the books for 2018 now if the wages moving higher, high as profits have been, thats not a small thing. Its not a small thing. Surreally high. Right see, heres what i was going to say, normally from this pibt on, thats going to get downgraded thats going to go down as people revise down the estimates. C can also get support from tax down the road, if you come in at 140 or something, youre less than 18 times earnings, its tolerable. Whats interesting, kelly, on that point, i looked at the Financial Services sector today. The multiple expansion that weve seen in that group since november 8th, since the elections. Right. On average, financials multiples have expanded 20 to 25 . Wow. Clearly we have some expectation of something happening, right but, but, if earnings are going to, therefore, now go up 20 or 25 , suddenly right back to where you were, so actually financials arent as expensive or dont look like theyre that ahead of themselves if you believe all that. Here are financialrelated names, alltime highs earlier today, jf morgan, t. Rowe price, nasd nasdaq, Parent Company of the New York Stock Exchange, blackrock. If you look at ben fish area be, apple and companies have largest cash piles, relative to their market cap, hewlettpackard enterprise, agiliad, these are companies that would benefit the most that havent seen that much of an increase. Thats why i think youre seeing this kind of broader some zoks that are doing well and some sectors and broadening out a little bit because repatriation impacts a lot of different sectors but a lot of Company Specifics as well. Financials for sure will benefit. Biotech will who knows what theyre really going to do. You know, we dont really know if theyre buying back stock and throw out a special divvy, Something Like that, thats fine we want to see m a activity, capital investmentme. Its not like investors are saying show us the money, theyre signaling to companies, we want you to put this to work in the real economy. The mismatch is the companies with all the cash are not companies that need to do a ton of plowing it back into their own business. How much more can apple spend . Thats the point. But at the margins especially with some of the Smaller Companies that you mentioned, thats where you really get the leverage effect. And paul, we also had an ipo today that went off pretty well. Roku was up last check about 50 after pricing at 14 the interesting thing about that is media stocks have been lagging this year. Over the Top Companies providing this hardware, roku, some of the software, are on a tear. Ma what do you make of that roku soot w, another way to streaming. Netflix being the main play. Its another opportunity there, makes it an attractive target. Its good for the investment banks going to be reporting in two weeks from now and stephanie, you were talking about the financials analysts have been cutting forecasts on the Financial Sector just about as much as, or more than any other sector heading into earnings season so the bars getting set low there. And, you know, so that could set the stage for a positive, you know, a positive start to earnings season. We typically see analysts lower forecasts but theyve been doing it at a faster pace. Yeah. Sorry. I was going to they is the reason why theyve been cutting their numbers on the financials because the way Interest Rates have fallen . I mean, theyre so volatile lately, right . You blink and theyre down to almost 2 . You blink again, theyre back up 2. 4 on the ten year is that feeding into this . Whats going on there . Yeah, we were seeing very low Interest Rates then you blink and then were back to, you know, multiweek highs in the ten year so, and thats, you know, thats why theyre starting to rally. I think as far as its overall concern is, the analysts have been, you know, overall lowering forecasts but theres a decent negative tone heading into earnings season and the, you know, with the backdrop of a potentially positive legislative environment out of washington. Yeah, and i totally agree it is Interest Rate related, especially for the regional banks who are more dependent on net income interest and the flatter yield curve. I think the stocks, bigger ones, started to rally after the barclays conference where the companies actually guided their business to no worse than expected down 15 , down 20 , but no worse. Since then, september, the data points have actually been better so i think theres this hope that maybe things arent as bad. Lets get to kb home earnings which are now crossing the wire. Diana olick has those numbers. Reporter kelly, a nice beat, coming in at 51 Cents Per Share, earnings of 51 Cents Per Share thats beat. We were expecting 46 revenue of 1. 14 billion up 25 from a year ago so thats pretty nice. What im noticing here, though, is no mention of houston whatsoever in this press release. Now, 14 of annual closings for kb home are in houston and theres nothing in here about that so maybe its just not figuring into the numbers yet obviously, it may come in in the next quarter ceo jeff mezger is quoted in the release, says we continue to make considerable progress on threeyear returns, significantly increased our housing Gross Profit Margin on a year over year basis. No surprise, there is nothing in this report about his recent unsavory argument with comedian Kathy Griffin, his neighbor, so we didnt expect to see that, perhaps well hear something about it on the call one other thing i want to note is the home price, up 12 year over year. Were looking for the builders to lower prices. Clearly thats not happening kelly . All right, diana, thank you guys, quick reaction, microl seems roughly on track. The way the market has been viewing the Home Builders on track. Fits and start stock below their recent highs but still a decent up trend. Its not too much you didnt already expect. I would say gross margins, i didnt get the actual number sounds like theyre making progress thats the big part of the story. Capital allocation is the secon part of the lower debt, invest more in land, well have see what the mix is like lot to come on the Conference Call. All right well leave it there, stephanie, paul, thanks for joining us today. Thanks. Stephanie link, paul hickey. White house making another push for the gop tax reform plan today. A big part of the plan is a tax holiday to encourage companies to bring more than 2 trillion of overseas cash back. Up next, wooeell explain why m of that cash isnt actually overseas at all. Plus well dig deep into a new investigation that finds some congressional aides may be helping to write legislation that could impact the stocks they are trading and we always want to hear from you. Contact the show via twitter, facebook or send us an email, closingbell nbcuni. Com youre watching cnbc, first in business worldwide want a snack . Sure alright, looks like weve got chips, popcorn, pretzels . Pretzels plain, sourdough, spicy, sesame, honey mustard, chocolate covered, Peanut Butter filled, this ones in german, it says, reindfleisch . Plain. Great. So what are we gonna watch . Oh show me fall tv. Check out the best of the best handpicked fall shows on xfinity x1, online, and the Xfinity Stream app. Thirsty . There is more than 2 trillion of Corporate Cash pa parked overseas and the president wants to reform the tax system to bring a lot of that back. Steve liesman is here to pour cold water on it, saying overseas cash isnt really even all overseas steve . Kelly, were going to get to that in a second i want to talk about the winners and losers when it come to this corpora Corporate Tax cut and repatriation the market trades sometimes as if everyones an equal winner from the administrations proposal to cut taxes on overseas earnings and cut Corporate Taxes. Closer look finds definite winners, losers or those who winless. First lets talk about the overseas cash winners. Two type people have money overseas in part because theyre running Business Operations over there some have it overseas in order to protect it from u. S. Taxes. Tech and pharma are the two biggest thought to be in that realm. And it will benefit firms that avoid taxes and most likely allowed money to come back and boost dividends and buyback. Dont be looking for that to happen with companies that have money overseas in order to run those overseas operations. Lets take a look now at the issue of this next issue here about deduction winners. Some firms are going to lose deductions, others are going to keep it. Deductions on the block include Interest Rates those likely to be kept, research and development, r d credit, may stay one more, this big issue of capital versus labor the administration argues that capital, sorry, that labor, will profit from almost 70 of the Corporate Tax cut. Could go to workers. Theres a big debate in the Economic Community most disagree. Say that numbers too high maybe 25 to 30 and on this issue of overseas on this issue of the money being overseas, its not really overseas in fact, its already mostly in dollar denominated assets like corporate bonds, in treasuries and in money market mutual funds. Thats where they keep their Corporate Cash its only overseas, kelly, mostly for tax purposes. Well, but its still i dont its abroad michael its from an accounting perspective, its inaccessible domestically to be used directly for things like m a, Share Buybacks, dividend i think steves point and capital investment. Going to create this tide of capital coming to our shores coming into dollar assets that werent otherwise into dollar assets. You mean it might be kept in europe but still be invested in u. S. Its just categorized that way. Its at a global bank somewhere. Its not elsewhere. Like in the caymans yeah, its not actually piles of money, right . Its just an entry that says the federal government doesnt get the taxes on this because we decided, partners agreed, this foreign profits were keeping over there for some purposes. Even though they may be in the u. S. Bank . Yeah. The big point is, does the tax change catalyze the use of the money . Right. On some level, it absolutely does but many of the very Large Companies with tons of cash have been issuing debt that basically takes the place of that cash. Like apple. Using it for Share Buybacks exactly. Apple 100 billion in cash out there. They bring the cash back, are they going to pay down that debt some will pay down the debt or not bring as much back. Whats interesting, what we quite dont know, the white house framework suggests it will be called a deemed repatriation. What that means, qul you say you brought it back or not, were going to charge you the taxes on it on everything you have overseas. So you might as well call it repatriated, bring it back and use it theres no advantage to keeping it in. Steve, does that fit in with how theyre going to change the whole philosophy of the u. S. Tax structure, youre only taxed on things here Going Forward and no longer everything overseas yeah, it does, but there is this question as to whether or not it creates lots of investment or jobs talk to a lot of economists about this, they say theres three reasons why you would locate overseas if you werent necessarily going to serve that foreign market taxes are one of them. Wage differentials are a second one. And the currency is the third one. This proposal here only gets at the tax issue. Whether or not thats decisive enough is unclear. I think mikes right, you want to focus on these companies that will bring this money back, and perhaps pay a onetime Cash Dividend or buyback shares perhaps into the future. But watch out, because dont trade these other companies that are over there running operations overseas thinking youre going to get a big windfall here and whether or not thats enough to make the cha e chance, say, you know what, im going to come build a plant in the u. S. Versus overseas because of the wage differential and currency differential, it may not be enough but it still makes sense to equalize those tax rates. Michael, what gary cohn, of course, in answer to a question at the press Conference Today did say, look, if thats what happens, and they basically buy back stock and issue dividends, thats cash thats kind of liberated into the economy. Sure. Into investors hand and in herery going to find a place to go in the economy. But mike, wouldnt that be an Interest Rate problem in the sense that if that money comes out of u. S. Treasuries and goes into Share Buyback and dividends, you could have a rise in Interest Rates as a result . Yeah, i dont know in its going to be if the tail is big enough to wag that dog. Right. Down the road if it became a big rush. In the corporate debt market perhaps. I learned a lot steve, thank you very much. Pleasure. Our Steve Liesman coming up, the ncaa rocked by a bribery scandal involving basketball coaches and a representative from adidas now nike is reportedly being investigated over its elite Youth Basketball Program find out how that impact could play out for the dow component. Theres an advertising backlash for local nfl teams after last sundays onfield protests what will happen tonight as amazon debuts its nfl game streaming package . Thats ahead in today eat fast take throughout my career, ive been fortunate enough to travel to many interesting places. Ive always wanted to create those experiences for others. With my advisors help along the way, its finally my turn to be the host. When you have the right financial advisor, life can be brilliant. Ameriprise i just saved thousands in less than a minute, i found out how much home i can afford. I like how you shop for loans the same way you shop for flights online. I didnt realize at lendingtree you can save money on almost any sort of loan. I consolidated my Credit Card Debt with a personal loan. I found a new credit card with 0 interest for 15 months. You just shop, compare, and save. And its all free. Go to lendingtree right now and start saving. whoo woman class, lets turn to page 136, recessive traits skip generations. molly i reprogrammed the robots to do the inspection. Its running much faster now. See . Its amazing, molly. Thank you. welcome back we begin with seema mody and a market flash. Reporter lets take a look at tyson foods moving higher after the Company Raised its guidance for fiscal 2017, its also announcing some restructuring changes which does include a reduction in head count by 450 positions, most of the eliminated positions will come from corporate offices in springdale, chicago, and cincinnati theyre looking at cumulative net savings of 200 million in fiscal year 2018 that will increase to 600 million by fiscal year 20 looking at shares up over 7 on this news, kelly back to you. Thats quite a pop. Seema, thank you very much. Well, its time for our fast take today we begin with the continuing nfl blowback over players sitting for the national anthem. Jp morgan now thinks cbs shares are going to sell off when ratings from the game this weekend come in it weak. The president is suggesting people boycott the games a tennessee businessman has pulled his check into cash and other ads for the rest of the season what do you make of this, michael . Clearly the issue is going to persist through another football weekend. I think the call that cbs is vulnerable to the reflex move, if they say ratings were down this weekend, its a cutsie its a derivative strategist saying we think theres risk theres a possibility. I tried to look at the cbs games to see if they were actually kind of, you know, not really appealing ones they have bears packers tonight. Im more focused on the rest of the season. Yes. Its not just about the ra ratin ratings. Whatever they do this weekend, its too early to tell what happens if you fast forward and talking about the super bowl and the ratings yeah, harded f for me to see thats cbs is of the publicly traded stocks the one thats most directly vulnerable, they own stations that are going to rely on that i dont necessarily think you can state this is big on view viewership or advertising line small advertiser. Existing trend of lower viewership of regular tv, right . Hard to separate all this out. All right. Next, tonights nfl game is being simultaneously live streamed by amazon which remember beat out last years streamer, twitter, to present 1 nfl games this season. With all the focus on the anthem, pregame ratings have been up but amazons pregame show tonight will feature former nfler barber and the australian chef curtis stone, michael, hawking footballrelated merchandise from amazon. They tried the qvc approach once it didnt play out so well is this the right time to this is amazon saying theyre going to opportunity, say were not going to try to compete with an actual pregame show. Which is probably smart. Probably makes sense. It does seem culturally amazon is incapable of playing it cool, doing anything but trying to sell you something. Im actually well see i want to know what it looks like. Finally, this story today, ikea bought task rabbit. People use taskrabbit to find handymen to do things like assemble ikea furniture. Why not . Maybe a problem into a virtue, right, for ikea makes a lot of sense. Dont know how you can extrapolate this, say other retailers want to figure out amazon is trying to do this, too, by sending people to help put things together. Without a doubt. They feel if this is the model Going Forward, they have to participate in it. Sure. Ikea can be longterm thinking about this whole thing, dont have to make next quarters numbers. I think it makes sense. If it helps make the stuff easier to put together, a little cheaper for that piece, too. Thats part of the fun, isnt it okay. Im calling you next time i need to oput one of these things together. President trump making it easier for ships to deliver supplies to puerto rico after the devastation of Hurricane Maria. Up next, well head live to the island for the latest on the relief effort and faulk to one ulpert to find out how long it cod take to rebuild puerto ricos infrastructure. Hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at td ameritrade. 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We did so with the s p 500, threepoint gain to 2,510 on the bell, a new closing high, same for the russell. The small caps adding four points to 1,488. By the way, for good measure, the dow transports up 40 points today. Thats a new record close as well. Speaking of transports, we a news alert on hhs secretary tom price. Kayla, whats happening there. Reporter kelly, a mea culpa from the hss secretary regarding his private air travel 400,000 worth from may until now as reported by politico. He says h e regrets making these decisions although acknowledging all travel was approved by hhs officials. He said his staff and he are continuing to cooperate with the inspector generals review he says he will be taking no more private chartered flights while hes in his role perhaps most notably, kelly, he says hell be personally reimbursing the u. S. Treasury writing a check today to reimburse the government and the taxpayer for all of the travel that he took on the taxpayers dime so a mea culpa from the hhs secretary after the president when he was asked yesterday about this issue, and secretary price specifically said, well see, which has been the enigmatic response of the president when hes displeased with his officials hopefully this will take the edge off the situation or at least the hhs secretary hopes it will back to you. All right thats quite a move. Kayla, thank you very much Kayla Tausche. Time for a news update lets get back to sue herera at headquarters. Heres whats happening at this hour, everyone, secretary of Defense James Mattis paying an unexpected visit to qatar after President Trump said he was willing tomonthslong dispute between qatar and gulf neighbors. First Lady Melania Trump holding a roundtable discussion on the problem of opioid abuse joined by health and Human Services secretary price and the white house counselor who you just saw, kellyanne conway. I plan to use my platform as first lady to help as many kids as i can with the many many issues they face as they are growing up drug addiction, especially opioid abuse, is one of those issue and i look forward to working alongside the president ial opioid commission. Dramatic video emerging of wednesdays giant rack collapse on Yosemite National parks el captain. A 100 foot by 100 foot by 100 foot piece of granite peeled off, about the size of an Apartment Building it fell 2,000 feet to the ground the video was shot by a climber who was above the area that broke off. One person was killed and several others were injured. Youre up to date at this hour ke kelly, back downtown to you. Wow all right. Sue, thank you very much. Recovery efforts under way but slow moving in puerto rico after Hurricane Maria ravaged the island and destroyed much of its infrastructure lets talk more about the problems facing puerto rico right now with colleen newman, independent Energy Consultant, former Energy Adviser to former puerto rico governor fortinu kelly, welcome. Thank you for having me, kelly. Glad youre here. Today we heard that the white house is giving puerto rico a waiver from the jones act for ten days the jones act requires you to, i think use u. S. Equipment to move things in and out of islands. What will this mean for puerto ricos recover roy well, i mean, think youll be able to bring more ships in and also goods will be cheaper i mean, in my opinion, i think that it should be waived i think it should be waived until they you know, they get the humanitarian situation under control. Yeah, that would certainly make sense yeah. Anything that could lower the cost and make it easier for people to get supplies i read recently that theyre only getting ten flights a day in and out that compares with 180 or so normally so, again, you know, what are people supposed to do, even in terms of getti inting supplies y need to rebuild right now . Right now supplies are coming into the ports and the distribution is really just a big problem. In terms of getting off the island, the cruise lines are starting to bring ships in and taking people to florida, which i think is really great. You know, i think moving some people off the island is a good thing. Its an island of 3. 4 Million People i also wonder, colleen, we spoke actually with the head of the Power Authority recently, prepa. Yes. Which had to declare bankruptcy before all this happened because it has such high debt level. Right. Should that now be privatized, how should that now be aid eed in order to get power bark on for this island and keep it sustainable Going Forward well, you know, i think a couple things. I think privatization is something the puerto rico Oversight Board was considering not publicly, but sort of privately prior to the hurricane, but, yeah, i think the hurricane certainly changed the dynamics, you know, prepa will get some aid from fema which is good to kind of bring the system back up and i think they need to bring it back up, but they also need to look at how to make it more of a resilient system for the long term colleen, ive been asked, i just wanted to, tucurious for yr take, what difference it would make if puerto rico were a state right now, if that becomes something thats more important to residents Going Forward what would crow syou say, what difference would that make well, i think the main thing is puerto rico is at a deficit, it doesnt have senators, has ha nonvoting member of congress so when things are being considered for it in congress, they need to rely on folks like the florida delegation and the new york delegation, other places where there are puerto rico populations and these folks have their own people to deal with you know, their own states and their own priorities and they need someone squarely focused on this which marco rubio, schumer absolutely. New york officials have been as well yeah. Yeah, to their best. Colleen, thanks for joining us. Yeah, thank you. Colleen newman joining us independent Energy Consultant from puerto rico more people could soon be facing charges in the ncaa bribery scandal. Which major brand is now under fbi. Well tell you coming up. First, the federal government keeps a close watch on pharma and Energy Companies some congressional aides are making top dollar as they trade ahead of investigations. The investigative journalist behind a bombshell report joins us next. Uatincn, rst in business worldwide every year we take a girls trip. Remember nashville . Kimchi bbq. Kimchi bbq. Amazing honky tonk . . I cant believe you got us tickets. I did. I didnt pay for anything. You never do. Send me what i owe. Ive got it. I mean, you did find money to buy those boots. Are you serious . Is that why you dont like them . Those boots could make a unicorn cry. Yeah, tears of joy. The bank of america mobile banking app. The fast, secure and simple way to send money. Who watches the watchers, a question politico is asking about congressional staffers and stock trading. Politico investigated congressional aides and risk of conflicts with stock trades and how some staffers make top dollar as they trade ahead of investigations or legislation. Joining us is the author of this piece, maggie, thanks for joining us yeah, thanks so much for having me, mike and kelly. So, just wanted to kind of call autout a few examples hereo people are aware of what were talking about. Probably the most prominent example, you talk about a Senate Judiciary matter involving mylan pharmaceutic pharmaceutical, aid to a member, dick durbin, sold 4,000 to 60,000 worth from the portfolio and his own within the span before members sent a letter to justice about the matter and justice met a half billion dollar settle with with milan. In this particular example, is there any ramification for somebody whos an aide and is trading on what we might call inside information yeah, well, so when we did this story, you know, its theres the difference between having inside information and having conflicts of interest, you know, if there is evidence here of inside information, thats something that the s. E. C. Could investigate but the s. E. C. Doesnt have a lot of options when its going to look into members of congress. Whats interesting is that theres a very few rules keeping aides and lawmakers from holding and buying and selling stocks and companies that have business before the committees they work for could be lobbying them heavily or otherwise have address in congress. We found a number of opportunities of these for these real conflicts of interest that are surprising to the public i think a lot of people find offputting. Yeah, you guys already reported in the past, this is back from may, that 28 house members and 6 senators each traded more than 100 stocks in the past 2 years placing them in the potential cross hairs of a conflict of interest on a regular basis. Now as you mentioned, there are 12,500 staffers, all of these people if it was in the executive branch would be in violation of federal conflict of interest law paesotentially, ri . Yeah. Thats another thing i think most people dont realize is in the executive branch, people are expected to sell all their stock before they take on a job that could pose a conflict of interest with their work or if you happened to, you know, stumble onto an issue, you didnt know you were going to be working on, youre expected to recuse yourself. Congress has placed no such limits on itself for lawmakers or aides there are a couple kind of loose guidelines but for the most part people are allowed to hold whatever stocks they want, and we found examples of aides in the dozens, senior aides who seem to be holding and buying and selling stocks that have to do with their work and, you know, the policing on capitol hill around this is mostly expected for people in offices to do themselves so theres not much oversight, either yeah, you give by the way, these disclosures are only made if the aide only makes s ks s example, paul ryans chief of staff whose wife bought shares of occidental petroleum, before congress announced plans to lift the ban. Nancy pelosis spouse bought shares s both cases they sa their brokers acted without their involvement. Yeah, and, you know, a lot of people have a stockbroker and people who make trades and troez brokers can make a lot of trades without someones involvement, it becomes this gray area because theres also nothing to keep someone from picking up the phone and saying, hey, maybe you want to invest more in energy, maybe you want to invest more in one particular company so there are just very few safeguards in place there that i think watchdogs for years have said is inadequate on capitol hill maggie, i guess it might be hard to kind of isolate any of these individual situations and figure out exactly how the circumstances came about, but i wonder, theres one thing if theres going to be a provision going into a law, and a staffer knows about it and then decides to trade upon it, its another thing if they initiate something being put into a law in other words, if they can kind of rig it themselves and then trade upon it in advance or during is there any way of knowing if thats the way the conflict might run at times to influence them to actually change the composition of legislation h. You know, that becomes kind of the perview of the s. E. C. , in the house theres the the house has a Watchdog Committee that con look into that, you know, and gather material and gather emails and information, for the purposes of what i can know as a reporter, i can hear rumors, i can hear things from people but figuring out whats going on inside someones head, someones motiveis very difficult which is why people say there should be actual rules structuring what someone can and cant trade at a certain time. You know, theres also the possibility that maybe, you know, if im an aide and work on Energy Issues and have a portfolio that has k has tons and tons of energy stocks, it could influence my Decision Making consciously and unconsciously. Theres a lot of room for unethical behavior. Maggie, we have extremely tight rules as im sure you might at politico as well making sure were not involved in any trades and certainly nothing thats not disclosed when it comes to you mentioned this if it were the executive branch, behavior like this could potentially be violating federal conflict of interest law whos going to make a law that says lawmakers and aides must stop doing this . You know, thats the problem, and the number of times, you know, when ive been talking to people about this investigation, they put out, everyone points out to me, you know, the president is also exempt from these laws its just the people who write the bills dont always want to put themselves under a stringent ir requirements as theyre willing to put other people in the executive or judiciary its one of those paradoxes. Congress has regulated itselves with a number of ethics issue but happen after a big scandal the abramoff scandal is when we got Ethics Reform in washington and doesnt seem like the hubbub earlier this year about tom price or reporting at politico has been enough to Push Congress over the edge to regulate itself more with stock trades they have done this, addressed this issue once before in 2012 they passed a law called the stock act. They actually went back a year after the stock act was passed and very quietly revised the law and kind of made it easier for lawmakers to do this kind of stuff and not come under scrutiny theres less disclosure than there was supposed to be. I got to say, its outrageous maggie, thank you for all your reporting on this and joining us to talk about it. Thank you so much for having me. Maggie severns from politico. Another news alert from washington, Kayla Tausche, whats happening we told you earlier about twitter Public Policy executives visiting capitol hill today to talk to staffers at the senate and the house intelligence committees and just earlier this hour, the Ranking Member on the Senate Intelligence committee, virginia senator mark warner, talked to reporters and didnt exactly give twitter a ringing endorsement for its performance. Presentation that the twitter team made to the senate intel staff today was deeply disappointing. Their response was, frankly, inadequate on almost every level. So certainly some harsh words from the virginia democrat about twitter executives testimony today in front of the staff level of those committees. Well see if we get any comments from the republican side or whether we get any further comment from twitter which released a lengthy statement talking about the efforts that it has gone to to remove several dozen, in some cases, accounts linked with those on facebook that have been proven to be linked to russian entities but it seems that this controversy is not going away any time soon, and senator warner said it wasnt just the 2016 election, that that activity from russia is going on on twitter to this day kelly . H. All right, kayla, thank you if i were them, id want to stay on Congress Good side. Absolutely. I dont know if its a matter of showing the depth of their own inquiry, who came to present it. Maybe they dont know enough about exactly the source of a lot of accounts and that is, in fact, something that frustrates the committee. Good point. Another major Athletic Wear Company is now under the fbis microscope as the ncaa bribery scandal widens well have those details next. Coming up on Fast Money Energy is the best performing sector this month. A technician has three names you can still buy, stop of the hour. , you interfering imbecile give us one good reason we shouldnt vanquish you to another dimension ok, guys, hear me out. Switching to geico could save you. Hundreds on Car Insurance. Huh, he does make a point. I do like to save money. Catch you on the flip, suckas geico. Because saving fifteen percent or more on Car Insurance is always a great answer. Welcome back we have a news alert on equifax. Aditi roy, whats happening there . Reporter hi there, kelly it appears on thursday, october 5th, former equifax ceo Richard Smith is scheduled to testify in front of the third congressional hearing he will be appearing for. The first one is scheduled for next tuesday in front of the house energy and Commerce City second one is the Senate Banking committee on wednesday and now we have a threefer with the house Financial Services committee. Smith of course just stepped down this week as the ceo of equifax in the wake of that massive breach he was replaced at least on an interim basis by a new ceo who issued an apology in an op ed piece. He says the company will be offering free locks for customers to lock access to their credit lines aditi, thank you very much. Meantime the fbi is looking into nikes Youth Basketball Program and the widening of a bribery scandal rocking the ncaa eric chemi has the latest. Reporter kelly, two adidas employees were arrested on tuesday. With the case now out in the open, theyve been able to go after more targets according to many reports, the government served nike a subpoena to look into its elite Youth Basketball Program nike says they firmly believe in compliance with laws and fair play in all sports there are no allegations against nike in the complaints and we are committed to cooperating with any government investigation into this matter one of the adidas employees arrested the other day had previously been director of nikes elite Youth Basketball Program. Three of the assistant coaches arrested work for nike sponsored schools. The original government complaint described the wigged for one particular player, describing how adidas might have to raise their payment because there was possibly more money available to attend a school from a rival shoe company. Most people believe the shoe company is nike. At the rate this case is going now, it likely will become bigger than just two employees at one company and that brings us back to the debate about the entire purpose and approach of the ncaa experts have long said the system is broken because so many colleges and Companies Make billions every year off the players, who by rule get almost nothing in return. This has brought up renewed debate about whether players should get paid directly, creating an open market for their services espns jay billis likened the system to prohibition where a black market economy was created. He says thats exactly what the ncaa is doing now with its players. Back to you, kelly i know, i was an ncaa player, this was division 3 womens lacrosse im sympathetic to the point people are making, acknowledge it for what it is and dont get the feds involved. Eric, thanks very much for updating us. Reporter you got it, kelly its the perfect plane for a pampered pup some alliteration, too at tlyonles 8 million jet thsru ge to the dogs, after this not rebalancing your portfolio. Focused on what you love, not how your money will last through retirement. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. Thithis is the new new york. E . Think again. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov secret lives of the super rich has gone to the dogs. Robert frank is here with a look at a jet that is tailored to a couples pampered pooches. Reporter just when i think youve seen it all a california couple were tired of traveling without their dogs or putting them in commercial. They bought a gulfstream 4 and made it the ultimate puppy plane. The 8 million aircraft was recently purchased by retired financier scott simon and his wife hillary and today, theyre meeting to pick out materials with a modern look i want to stay away from the pattern and do more of this. Reporter their ultimate goal, to make their flights as comfortable as possible for their beloved travel companions, their two young sons and their three giant fur babies theyre called moscow watch dogs, a very rare breed. Reporter thats right, the duo wants to bring status, mishka and milla on a Family Vacation for the next three months, skilled craftspeople work fulltime renovating every inch of the planes inside. You could buy a stable of ferraris for what this costs reporter these pets would never fit in the back of a ferrari. Now they wont have to theyll be transported in comfort, whenever their owners want to go one of my favorite lines is when the jet designer says, were used to designing for people, not dogs and when the private jet designer is designing for dogs, weve reached a whole new level of excess. I was told there would be puppies in that video. 300 pounds worth of dog im not surprised they dont want to go into coach. Exactly the whole point of this was theyre redesigning the interior over a period of many weeks and months to make it, what, water resistant . They spent millions of dollars to make sure that all the materials and the setup of the plane was amenable to each of their three 150pound dogs. Each weighs 150 pounds . 150 pounds. Each of the seats in that plane is 10,000 each, because its made with a fabric thats biteproof, slobberproof, and scratchproof. Is there a place they can walk them, so to speak they can walk up and down out on the wing in case you havent guessed, the secret lives of the super rich debuts its new season tonight at 10 00 p. M ill watch it. Thank you for joining us fast money begins right now. Fast money starts right now. Live from the Nasdaq Market site overlooking new york citys times square im melissa lee. Tonight on fast, the gop tax plan is sending the market to record highs and could create a boom for an unlikely set of stocks plus mcdonalds is the number one pick for, get this, hot smokers. Will the late night munchy runs send shares even higher . Pete has been on fire this year, knocking pitch after pitch out of the park. Now hes one stock with a major rebound. Well give you the name. One Energy Stock Going from worst to burst this is a group thats