Transcripts For CNBC Squawk On The Street 20171101

A delayed tax bill gop leadership in the white house putting off an announcement on tax reform as wrangling over how to pay for it continues. And tech is back on capitol hill for their role in the 2016 election and russias role we want to bring you up to speed on yesterdays deadly terror attack. Contessa brewer is in Lower Manhattan for us reporter good morning. Investigators are looking to see whether the suspected attacker had scouted this area in particular ahead of time or was he familiar with it because he was an uber driver Sayfullo Saipov left a note inside that rented home depot truck proclaiming isis lives forever in arabic. It was a home depot truck that he rented in new jersey. Investigators found at least one knife in the truck Law Enforcement believe saipov acted alone mowing down cyclists and pedestrians for 20 blocks. Its a very popular park path. And it ended, this attack, with a crash into a school bus very close to the World Trade Center near an elite Public High School and an Elementary School we now know that he emerged from that truck shouting allah akbar and waving around two guns that weve learned were a paintgun and pellet gun an officer ordered had i am to drop the weapons and when he didnt, the suspected attacker was shot six people, all men, pronounced dead at the scene. Two others pronounced dead at the hospital and theres roughly a dozen people still in the hospital recovering from their injuries five of the dead were argentinians celebrated high school graduation. What they know about saipov, they were able to question him and he proclaimed pride in the attack we also know that a review of social media shows that he had been reading isis propaganda online neighbors say that saipov from uzbekistan lived in new jersey with his wife and children they are interviewing his wife and they were from the same town in uzbekistan. The president tweeting out that saipov came to this country on a diversity visa lottery he says he wants to roll that back and wants meritbased visas to be back in play there is pushback right now. It has ignited a back and forth between the president and Chuck Schumer specifically contessa, thank you. By the way, the New York Stock Exchange will have a moment of silence for the victims of the terrorist attack at 9 20 strong open to kick off november after the dow and s p finished october with a seventh straight monthly gain all three indices posting their best month since february and were back, jim, to talking about november seasonality which is historically one of the best for the dow. Yeah. We went through the gauntlet september being the worst month. October, we know historically as a crash month and a lot of times when you get through the gauntlet, its smooth sailing for november and december. One of the reason that the futures are up is make it through august and september, q4 is up 81. Announcer yeah. And i tend to not like calendar posting but it is a breathtaking bull market. I started last nights mad money by saying, listen, its almost as if weve all coalesced to say we cant say what i said at the top it wasnt even a rotation yesterday. You were up at the same time that you have the industrials up and Technology Stocks up and at the same time you have a lot of the Interest Rate stocks up and the only thing left out is some of the drug stocks thats what it was like in the 90s mutual fund money when money just flowed in over the weekend, and these stocks are household names. When you hear the 90s i always think about 2000s. Oh, please. Wait a second of course there are a lot of differences, including the p. E. Lower. Although, its not low no. But its over 23 times, some people say and it depends on how you measure. Im just saying that these are companies who are real earners. They are. Let me give you one statistic, gdp to over capitalization is as high as it was in 2000. I like that stat. If you look at it, its now 130 or 140 of gdp, whatever the number is, but its as high as it was in 2000 and im hearing those illusions made more often. Its funny when i hear you mention the 90s because we all know how it ended. Right but you see it was the nasdaq. Okay. Lets say its a 40hour movie you know, hour 20 its still got a lot of head. Is that what you think this is, hour 20 of a 40hour movie lord of the rings 2, which i loved. I dont remember that one. Okay. What are they up to, star wars 9 . Star wars 6 this is Like Star Wars 2, the wrath of khan. Satisfactory tve the whales that was star trek. So maybe start on episode 3 we can easily play this 2000 game 2000 was a bridge too far of which there was great work as a polish general. And when he says, what have i done, is he saying it positively or what have i done . No, hes saying, why have i built it in the first place. Taxes are increasingly part of the conversation. Today was the day that House Republicans were slated to release their tax reform bill. Their rollout has been delayed until tomorrow, they say, as lawmakers look to finalize key details and urge the house to pass tax reform legislation by thanksgiving budget share says they are putting finishing touches on this but theres question about 401 k , corporate phasein, estate tax it appears to be in flux. Dont we think that the democrats, if you dont cut the rich bracket, which i think was really a sticking point, dont you think they have to come around to say so the top bracket remaining of i think thats going to attract democrats. You do . I do. I think the democrats were afraid to vote for a pay cut for the rich. Now, what will pay for this other than the nondeduct built of the state and local income tax. Thats why i dont think youll get tax reform. They dont have what to pay for it. No, they havent. That was gone by the spring, i guess. And then you have rigid republicans in the house that i think are going to veto something that doesnt pay for it. You do . I do. And how you crack down on that right what was it going to pay . At least two. Keeping the tax bracket at 39. 6 for a million and up, 200, maybe . The optics were really bad for the democrats. They had to get this some of the reports are floating the idea that Corporate Tax, whether or not its phased in, doesnt remain permanent tenyear sunset yes. I guess they can do that. I find there are almost no companies that i talk to now that expect much really . That think a lot will happen . No. And i deal with a lot of 30 to 34 percenters and they say, look, its not in their numbers. Did you hear jack lew this morning on squawk box . From 26 to 20 is where it gets more difficult to pay for look, a lot of the restaurants are in the 30s and now they are coming down i think they havent thought this through they say they are going to hit them with the big tax bill and, of course, the president likes to use the word massive because its one of his favorite words and i like to see how they give me a couple pieces of substance honestly, does anyone have any real great knowledge of whats in there just, to me, they went from an effort to really cut the Corporate Tax rate for purposes that makes sense to keeping companies here and getting it to invest more here to all sorts of things that make you contorted yes and i wonder about that overall. You want to kill something. You make it that complicated when they were doing tefra, i remember there was six months of trying to get gold coins trying to convert mr. Fisher, that great museum all the way down in the keys and it was just too hard at one point reagan just said to tip oneil, would you just solve this but theres no tip oneil here schumer . If it was schumer before this morning, it isnt now. Before this morning yeah. Well find out. Hopefully well get that legislation tomorrow. When we come back, ford is coming out with auto sales we expect numbers in the next 20 minutes or so. Futures are up were back after a break 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 its a big day for numbers well get to ford numbers here in a moment. Facebook and tesla, well get to adp that came in hot ism in about 45 minutes. Keep with that story, that you need the rate hikes a year ago. You see these numbers and youre ready for a rate hike. Yes well find out. Heres ford lets get to fiphil lebeau. Good morning, carl. Up 6. 1 for ford, better than the 5. 1 estimate fseries sales up 15. 9 last month. We knew there would be payback from the hurricanes. Look at the transaction prices up nearly 4,000 to 47,000 for some of the fseries fiat and chrysler down 13. 1 they were expected to be down 10 . We get gm in about 15 minutes. Phil, thank you see you in a few he mentioned hurricanes which clorox mentioned whats interesting is that yesterday, the last two downgrades of gm talked about fords resurgence and you look at fords stock that has done nothing. This could be the beginning of a move for ford. Weve got to see how they are doing overseas but its quite impressive and i think the fseries is doing well remember, Small Business loves the fseries we have a lot of Small Business, good news. So maybe ford is going to play catchup here i know the last quarter was terrible so theres a lot that has to go right but it is interesting. Its very good it could be the beginning of something. We kind of hope so because, holy cow, its probably the worst stock of the s p that is a major company. Really . Ford lowest p. Not the worst valued the lowest no, not the low it has the lowest valuation weve got to go weve got to go. I want to make sure people understand what you were saying. Take a look at the futures they are obviously up. We get the opening bell in a few moments. Dont go away. What powers the digital world. Communication. Thats why a cutting Edge University counts on centurylink to keep their global campus connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. 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The nasdaq is going to observe a moment of silence for the victims of the terror attack a 29yearold allegedly rented a truck, plowed down people on a bike path, 8 dead and 11 injured in the deadliest terror attack in new york city since 9 11. Heres that moment of silence. Question. What is an answer and how can you measure the value of one . Today trusted answers from trusted sources are rare and precious commodities. Theyre out there but finding them on your own has never been harder. Its why at Thomson Reuters we provide you with the intelligence, technology, and Human Expertise you need to find trusted answers. The answer company. Thomson reuters. Your kids go to college and you start trading. Yeah, 5 years already. 5 years, hmm. You ever call your broker for help . Once, when volatility spiked. And . By the time they got me an answer, it was too late. Td ameritrades elite service team can handle your toughest questions right away with volatility, its all about your risk distribution. Good to know. Thanks, mike. We got your back kate. Does he do that all the time . Oh yeah, sometimes he pops out of the couch. Help from real traders. Only with td ameritrade. Something we all think about as we head into retirement. Its why Brighthouse Financial is committed to help protect what youve earned and ensure it lasts. Introducing shield annuities, a line of products that allow you to take advantage of growth opportunities. While maintaining a level of protection in down markets. So you can head into retirement with confidence. Talk with your advisor about shield annuities from Brighthouse Financial established by metlife. Youre watching cnbcs squawk on the street. We get alibaba tomorrow morning. Its my wifes birthday i had to postpone it. We cant postpone a birthday. It will be her birthday regardless. Its not like a tax bill. No. The day in question will still be that day. I was going to hold it saturday postpone the celebration. Thats okay. I sent herb balloons on my ne iphone i didnt know you couldnt po postpone it. Kind of like a rainout. Can i just talk about fabrizio, a man who is very worldly but he could have ran Procter Gamble you know that. A lot of people thought he was in line to run proctor hes been in charge of estee lauder and has been for some time he looks at every airport in the world and those dutyfree stores are doing double digit business he understands what the iphone x brings you cannot use the iphone x without using estee lauder makeup it is dangerous. I looked at the iphone x yesterday and i said, who is that guy and then i started thinking about allergan i need botox. Youre not going to start wearing makeup. No, but im going to get botox. With the iphone x, everyone has to get botox where are you going to do it . Thats caibelo. It was a monster good quarter and his worldwide sales are back and i think about what would happen had he been running proctor. Theres literally a laboratory where they have all of these little branches and he picks and chooses and all of his stuff is like hes running what peltz wanted and can i just say, mr. Freita understands that you pay up for your iphone and uber and for makeup and i told him that you did you talked to me about the selfie generation early. You were early. And this new iphone x you were impressed by the camera yes whats different . I had a zit coming. You can tell do we still use the term zit sure. By the way, at your age, thats a good thing. Meanwhile, guys, attorneys for facebook, google and twitter going back to the hill today theyll appear before the house and intelligence committees for hearings on the russian meddling in the election. The hearings are set to begin at the bottom of the hour yesterday the attorneys were grilled by the judiciary subcommittee this is an exchange between senator al franken and facebooks counsel about political ad purchases in foreign currencies. You cant put together rubles with a political ad and go like, hmm, these two datapoints dont add up senator, its a signal we should have been alert to and, in hindsight, its one that we okay, okay, yeah. Theres a lot of agreement today that facebook took it on the chin the most. Oh, did they ever i mean, they just its a fair point. It is. Rubles, its a fair point i dont take rubles it was amazing wow. The company is run by liberals franken was his best thats the franken i was looking for. That was unbelievable. I thought they made every single point. It was very good. Stocks are going to open at 182. Yeah. Things are going to be can you imagine something good now remember, we have the quarter and after the quarter the stock spikes and tends to go down and the insiders sell and people get spooked and then the quarter isnt that good. They typically have a Good Conference call where you give them rave reviews. Its like a cross between, say, tax, which was very good that was good and hamilton. My wifes seen hamilton three times. I would go again. If somebody took me. Ge is going to open dangerously close to teenage levels as jpm goes to a street low. It is it gets worse. And keeps talking about Free Cash Flow and the counting headwinds, lower revenue and power assumptions but its nothing but down after that bizarre day that it went up when they reported all of the bad news and then they give the interview. Get this, hes having a Conference Call at 2 00 today. If you really want hes unbelievable if you want to buy this stock, please wait until after the Conference Call where he is going to rip them to shreds. Down eight straight days. Theres the bell s p at the bottom of your screen its vanguard doing the honors at the nasdaq. Provider of Enterprise Software celebrating its ipo. We have forward. Lets move on to gm with fill l phil lebeau. Phil General Motors is down 2. 3 but the estimate was 7. 3 . Keep in mind, with october of last year, it was a huge month for auto sales that said, General Motors inventory, the raw number is down a little bit compared with september. 80day supply and estimate for Industry Sales rate for the month, General Motors believes it will come in at 18 million vehicles if thats the case, guys, it will be stronger than many people have been forecasting back to you. Phil, thank you 18 million run rate is higher than we had been thinking. Those are amazing numbers and explain a lot about why the rails have been up rail car autos explains why the payroll numbers are up its good. Its all good. And ford was good. I cant find a hole in it. I just wish people got more credit because they did the retooling, the man fired from ford, he did the 150 you were never hot on it for the first day. Feeields was dealing with so many crosscurrents and decided to do a major takeout of the number one product but got derailed by the spin on the Autonomous Car and forward thinking and he did this retooling and text the news and how about walmart today, expanding their online items three times, 3x for shopping season tripling their toy assortment, looking at free twoday shipping on 2 million products if your order is 35 or above. Hes a tiger. Hes a tiger not unlike mike parker ive spent a lot of time talking to kevin plank yesterday and i think when you get the stock this low, the ceo of under armour, you really are betting against a man who is reenergized and realizes he took his eye off the football. So i think that stock is overtly punished much im continuing with what walmart is doing and knows who is weak and it goes right after and toys r us is there are a lot of people that work there. There are obviously they are already in chapter 11 so, you know, they had the financing in place yes to get them through the holiday season. Get them through christmas. I dont know, i read that piece and said, i guess mr. Lampert will have to they are the greatest thing and everything youve heard about sears is wrong and its like sears does everything and its mr. Rowbock and yeah. Ill see you there listen, we know a lot of the history here weve been following it closely for years in terms of the decline. One thing that that journal did do, though, is point out how much money esl has loaned to sears. I hadnt focused on that as much as i should have they become their main creditor in addition to becoming their shareholder. A rolling of the dice there. Yeah. I think if youre a holder of esl, you wonder, why did this guy continue to be a good stock picker and Value Investor and everything that he seemed to be for a period of years when he was getting a Strong Performance . Why did he have to morph into a retailer a lot of people want to be in retail its a hard business. Have you looked at alibaba . We get a lot of focus on the report coming in tomorrow. Yeah. And the stock over the last year to date, year to date its incredible. Thats incredible some companies go up and you look at their stocks and facebook and universal display, all of that. Yeah. And the new Technology Behind apple. Sometimes people forget softbank, its worth mentioning, we talk about softbank in relation to sprint or anything else they might do the value of their alibaba position has gone up at softbank, which is important. And a longterm view. It certainly helps. It helps these people are so rich. These companies, they have so much money what did they do over in japan did you see sonys numbers sony reported fabulous numbers. Streaming, also, which is theres a whole thesis and a huge beneficiary of streaming and dont forget spotify im not kidding, artificial intelligence. Yeah. You know what was the best quarter of yesterday, it reported no one paid anything from samsung all you read about are these executives being fired read samsungs quarter they cant meet demand for these important chips and for flash and thats why micron broke out. Under armour has been the worst of the quarter yeah. We have some towel throwing on under armour. Ge duked it out and gave up a hit of 1990 and change. Remember the 2 00 Conference Call, its going to be curtains. Target of 17 so far this guy has been right, down from 19 i guess it goes to 17 because its like the ceo of ge. You know, hes getting his profile up as much as he can and wants to be number one maybe he is. I dont know hes been right jeff immelt. 1999 was a good year. That was the year before the crash. Want to get to rockwell again, guys, its worth following up no conversations going on. It was yesterday, of course, and we told you about the most recent offer of 15 and cash that had been firmly rejected and both companies came out yesterday after our reports confirmed on both sides that that offer had been made there are no conversations going on right now but, as you might imagine, the key is, do you get rockwell shareholders in enough of an up roroar to say, come on guys theres enough value for us. And as i also reported yesterday, its worth mentioning again, people close to rockwell say a number of Different Things they see these as two emerging companies, very different. They dont necessarily believe emersons currency, that the stock price is worth taking. They see this as something of a, quote, hail mary pass by the ceo of emerson and so they are firmly in the no thank you camp the question is, theres a belief that there are other potential bidders. You have siemens and then here, will honeywell have any interest absolutely. With the splitoff, you can figure out which division it goes with. And hes got a great Balance Sheet, by the way. And finally, analysts weighing in. Deutsch bank says something is wrong with emerson no intention of emerging with emerson and nor does rockwell feel compelled to find an alternate suitor it would be hard for emerson to be hostile they missed the annual meeting in february at rockwell. So theres not really a great path there but scott davis, thats a name i remember, scott davis. Sure. He says, with all due respect to the rockwell folks, this could be the type of transaction that rockwell needs to move to the next level and you have differing opinions. Eaton would be a nice opinion for them and i dont know if you read this, but they had a quality problem with cummins and they did a deal and combination, and cummins coming back today. The truck business is so strong. These plain vanilla businesses where the yearoveryear businesses wreaked like when they had big new trucks. Of course, the Drug Companies have no big drugs and the Truck Companies have big new engines are you saying its a pipeline story its a pipeline story they have all of these great new engines and china needs them it really is incredible. By the way, just now, allergan, brent saying that hes not going to break up the company. Obviously not breaking up the company is sending the stock dramatically lower how is the quarter . The quarter was in line but the breakup was meant to propel them. Wow. This is bad. Well, zillow was good. They had a great quarter. Trying to pivot quickly from drugs to companies that also have great new products. The innovation of rockwell, the innovation of somebody you know, partner is innovating but they said we missed the quarter because we had quality issues but were going to fix them. It was the most transparent quarter. I have to hand it to cummins. We dont have an acronym for these industrials. Im on it wow. Yeah, hey, its light on some competition. I think the quarter was fine and they are doing they are going to be doing the alive game and you know, david, the games where you go watch other people play games and they did that they said its going to be a digital quarter. Ea historically conservative, those selling it now, youll regret it come holiday time. I think the stock you sell off of that is game stock because they have really taken it to the woodshed but that company ea is not a sale down here people dont understand that ea doesnt like to talk itself up well, ea is down and pizza is down the day before the quarter, he tells you that the nfl is working the business and told you it was going to report the quarter. Explain that. I dont understand that. Very big sponsor. They are . A huge sponsor. We lowered numbers he took it down from 3 to 7 to 8 to 12. There was a remarkable article in the New York Times yesterday that didnt get enough talk about how theres too many restaurants and not enough people going out because they are staying home but right now it looks like between lea and papa johns, the stay at home thesis is not working. Overstored and over restauranted. Wow its a big time you know, i worry. I worry. I have a restaurant. Thats why im worried and you know what its like for a takeout guy . You cant give people an open beer dows up 108 being led by dow dupont and goldman lets go to bob pisani. Happy wednesday kicking off november with strong gains. Were in the middle of a global stock rally. Let me show you what is going on 20year high with the nikkei and strong progrowth gompments ver and japan. Vietnam, nineyear high. Look at europe historic highs in germany today, in norway and in sweden as well. Tenyear highs in belgium and netherlands and france as well broad european indices etfs are at twoyear highs stocks at 600, sort of like the s p 500 in europe. Thats a twoyear high ftse, also a twoyear high and earnings are doing okay in europe they are not as great as they are in the United States the stock 600 is like the s p 500 of europe. They are up 3. 5 on earnings not as good as we are but still pretty good. We have very good numbers in italy, portugal, the uk and belgian. Their companies are doing well over there lets review, why is the Global Market doing so well number one is the economic expansion. Number two is improved earnings globally which goes along with that, obviously. Here in the u. S. , we have moderate fit leadership with powell tax doing well as well a lot of earnings to point out metal to mining stocks are doing well blowout numbers from u. S. Steel. Its dragging the sector along with it. Money keeps flowing into the market thats another factor. Liquidity keeps blowing up october. 56 billion. More than 3 trillion under etfs thats up as much as 16 for mutual funds and the money is going into those big inflows into u. S. Equity index funds, like the s p 500 funds, the small cap russell 2000 and even the overseas like efa and the emerging market etfs thats where the market is finally, two quick ipos, engineering software, that price is at 13 thats the high end. And argentine cement producer, 110 points up on the Dow Jones Industrial average carl, back to you. Thank you, bob pisani its a busy morning for macro. Rick santelli is there good morning, rick. Reporter good morning. Many think that the bureau of labor statistics will be stronger well know soon enough and we also have ism and after yesterday, various in the seasons, you can call them softer indices and they are not the most quantitative. A lot of the sentiment, consumer confidence, we have a twoyear meeting and nineyear highs virtually october 2008 since twoyear notes closed where they are currently sitting which is a 162 yield. If you look at one week of trends, its lower unlike the 2s, 3s and 5s. The ucurve flattening is no surprise dynamic with a central bank that is just generally maybe turning the battleship along with other central banks, maybe the bank the england 30s minus 5s is at a tenyear flat two years, nine years, those are obviously related. Lets look at what is going on with respect to Foreign Exchange if you look at the dollar yen, this is fascinating, the bank of japan really didnt do anything. Their currency is suffering a bit. But there was a bit of a game going on before we all knew that now you see the dollar index and thats in favor of the dollar and the dollar in the 114 area has been crucial weve been above it but its starting to look as it wants to escalate through that level with vigor. Finally, a one week of the dollar index theres a 95 violation or 95. 15, on that day we still closed under 95 took us forever to get above 94. 95 looks almost as sure especially considering the statement most likely will leave the impression of a december rate increase. So safe traders. Carl, jim, david, back to you. When we come back, steve case on capitol hill in the hot seat tax reform and a lot more. Dow is at 119 to kick off november dont go away. What we do every night is like something out of a strange dream. Except that the next morning it all makes sense. To power global ecommerce Fedex Networks are massive, farreaching and, yes. A little magical. Fedex. Com slash dream giveyoure finished curse you, heman, 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. The dow is halfway between 23,000 and 24,000 for the first time record high, 23,507. Up 130 led by Goldman Sachs back in a numite time for jim and stop trading. I have barely been able to touch on oils which are really been on fire with oil at 54 i want to focus on another company, clorox with a great quarter. What does clorox have to do with estee lauder, which is up 12 its a little quiz passed over to be ceo affprocter and gamble, goes to clorox, sets it on fire unilever like when nar deli and mcnerney didnt get the ge job i think any one of these guys, ben odore is a genius. He uses the web to sell products and he has quietly built one of the great Consumer Product stories. Getting good hand from mr. Canalis who got out of venezuela, bit the bullet in venezuela. Yeah, thats a real company. Men of the world not from cincinnati. No offense to sara eisen and none taken well see her in a minute whats on mad tonight . Theres a couple losers out there. I got them i got cypress has been a great stock, and tom hayes has done a great job and we all laughed at him. Not unlike the way John Travolta laughed at sissy spacek in, remember carrie. Yes were all going to laugh otyou well, theyre not laughing now, tyson. Lets hope it doesnt come to that oh, man whats the matter what did i do wrong . A scary movie tonight, mad money, 6 clook. Dow, 23,500 back in a mitenu [vo] progress is an unstoppable force. The season of audi sales event is here. Audi will cover your first months lease payment on select models during the season of audi sales event. Whether its connecting one of or bringing wifi to 65,000 fans. Campuses. Businesses count on communication, and communication counts on centurylink. Traders theyre always looking for advantages. The smart ones look to fidelity to find them. We give you research and datavisualization tools to help identify potential opportunities. So, you can do it this way. Or get everything you need to help capture investment ideas and make smarter trading decisions with fidelity for just 4. 95 per online u. S. Equity trade. Fidelity. Open an account today. Welcome back to squawk on the street. We have some breaking news ism october read for manufacturer remember how strong chicago was . Not as big a leap here were expecting a number north of 59. 58. 7 that follows 60. 8. So 58. 7, well, you have to go back all the way to july, yeah, just a couple months ago, 56. 3 these are still all rather lofty numbers. Lets go through the internals, shall we new orders, 63. 4 sequenchally following 64. 6, so down a bit, but anything with a 60 handle is pretty powerful considering we have the labor statistics at the end of the week, the Employment Index within this report lost its 60 handle 59. 8 just a couple tenths away, but our last look was 60. 3 lets go to september construction spending. Were expecting a down number. Up three tenths of 1 . We did a four tenths loss of last month now stands at only up one tenth. The fallout of this is still a twoyear note at a nineyear high at 162. The long end is firm but not as firm as the short end, henlts the flattening, and the dollar index up ahead of the feds statement this afternoon thank you very much good wednesday morning welcome back to squawk on the street. Im Carl Quintanilla along with sara eisen and david faber dow is up 118. Halfway to 24k between 23k and 24k, and s p up more than ten. Our road map for the hour begins with a longer wait for the tax bill House Republicans delaying the rollout of their tax proposal until thursday as the party makes lastminute changes. Well tell you what to expect in the final version next the tech giants, facebook, google, and twitter testifying on capitol hill again this morning for their role in the 2016 election, what it means for silicon valleys influence on d. C. Later this hour and finally, terror in new york city. Eight are dead, almost a dozen injured after an attack in Lower Manhattan. Well take you live to the scene and bring you the latest as david says, eight people killed, nearly a dozen injured after a man drove a pickup truck down a bike path in Lower Manhattan yesterday in what mayor de blasio called an act of terror Contessa Brewer is live and joins us with more behind me is the scene where this violent attack happened and in fact, were seeing the fbi coming in to this closed off street and now teams of forensic investigators coming out if i step out of the way, you can see them donning those white suits and now searching for any clues they can find in a crime scene that stretches at least 20 blocks along the west side highway here this is a 29yearold suspected terrorist who is a native of uzbekistan he came into the country in 2010 under a diversity visa lottery we heard from President Trump on a tweet this morning criticizing that program we may hear from new york senator Chuck Schumer on the floor of the senate shortly as well records show that safuelo saipov married a woman from his same town in ohio he registered two auto businesses in cincinnati and has associations from states in florida where the fbi is currently searching a home, to new york, where the attack happened yesterday police say saipov was acting alone when he rented a home depot truck in passaic, new jersey, crossed the river, and in Lower Manhattan, drove on his recreational path for joggers and cyclists, plowing down people in his path 20 blocks south of that, he swerved off the path into the path of a school bus, and an eyewitness named anthony watched the crash and initially thought it was an accident until he saw the driver emerge with guns in his hand he said thats when he knew School Children nearby were in danger at that point, i started pushing and telling kids, get back in the school pushing them and screaming, guy with a gun shooter, get in, get in. The paint gun and the pellet gun that were used were not Deadly Weapons the rented home depot truck was. This using small trucks mow down people is a tactic isis has been pushing. Investigators found a note in saipovs rented truck proclaiming isis lives forever it was written in arabic i did reach out to home depot this morning and got not so much a statement on the violent attack back but the requirements for renting a truck at their locations. They say a drivers license, insurance information, and a deposit on the credit card are all required the nypd said it has had multiple conversations with rental truck agencies about this threat in the last year. Saipov had been a professional truck driver with a commercial license. But in the last six months, he passed a background check and had been driving for uber. Uber says it will assist in this investigation however it can guys Contessa Brewer Downtown Manhattan for us contessa, thanks very much markets are up this morning all the major indices hit record highs on the first trading day of the month ubs director of floor operations is here with us at post nine to talk about what some viewers may be wondering you have this terror attack. Tax bill is delayed by a day why is the action so strong . Well, new money for a new mumth. Thats a beginning and as bob pisani pointed out earlier, its kind of a global celebration of the loose money thats around. Youve got a big rally in tokyo. Abe has the majority he needs, and he got reelected to office. And that caused a little celebration there. So there were some worrisome things out there, but the market is not concerned i mean, i expect that washington is going to be an absolute cauldron of rumors between now and the weekend. The president is going away for a week in asia a lot of rumors popping up already. But again, none of them have affected the market. Its a lack of details here. And until we get that, i dont think things are going to kick in so far, all weve got is a delay on the tax bill and nothing much beside that. Thoughts about november seasonality . Q4 seasonality i think its there. Repeating things, you even go back to the terrorist event that was a rental truck, if you go back to the original bombing of the World Trade Center that was done with a rental truck blown up in the basement, so these terrorists find a way to get things done much of what we see in wall street is somewhat repetitive, but to the repetitive, november looks like a pretty good month its certainly starting out that way. Though october and september were supposed to be horrible and they turned out to be very strong months. You pin the global rally, art, on easy money. But its more than that, isnt it its really the synchronization of the Global Economy all working together something the imf talked about, why they raised their forecast something you can see apparently in the consumer staple earnings. We talked mondelez yesterday today its chlorexand estee lauder real sales growth coming from north america, asia pacific, yourm, all sort of working together for the first time. Youre right about the Consumer Staples they have been an absolute standout over the last couple days in fact, they led that rally that we had yesterday. And i think that was another thing. It was more of a consolidation day of pause, and now youre going in, new money for the new month. Youve got generally easy money around the globe, and as you say, there are no particular weak links the amazing thing is everything is holding up together the biggest question mark is can china sustain the kind of growth that its seeing but so far, everybody is kicking in gear. And it looks like its going to be a pretty good month here. Is the market set for powell . Everything assuming we get it on thursday yeah, i think anything else would be a bit of a surprise and see where we go. There is some outside feeling that he may try for multiple appointments there are several vacancies. They have said not to expect others but, you know, hes in the business of surprising what about a Powell Taylor vice chairmanship . What does that look like in terms of policy and market implications i think in terms of market implications, its a little less bullish than powell alone. But not particularly negative. They think that taylor may in fact be rethinking the taylor role even as we speak. Last hour, we were talking to jim about where it feels like where we are in the course of this bull market closest analogy he came to was the mid90s where you had big money flows on mondays, for example, just coming in over the transom. Wasnt yet about momentum, per se, in a narrow band of Tech Companies. Do you agree yeah, i think thats a reasonable analogy there are some other troubling signs, and i wrote in my comments this morning that the bulls to bears ratio is the highest its been in 30 years. And we keep talking about this as the most hated bull market in history. And its got the highest bullish ratio in 30 years. Not quite happening. Art, thanks see you soon when we come back, this morning, changes being made today to the gop tax bill, as republicans delay the rollout of their proposal until tomorrow. Kevin brady tweeted out a picture of himself well talk about that. Former director of the National Economic council for president clinton and obama Gene Sperling win join us with what to expect when were back in a moment. But theyre not what people really invest in. What people really invest in, is what they hope to get out of life. But helping them get there takes a pure focus. Because when you invest their money without distraction, hidden agenda or competing interests, Something Wonderful can happen. They might just get what they want out of life, and maybe even more. I cant wait for her to have that College Experience that i had. The classes, the friends, the independence. And since we planned for it, that student debt is the one experience, im glad shell miss when you have the right financial advisor, life can be brilliant. Ameriprise House Republicans delaying the rollout of their tax proposal until tomorrow. Our ylan is in washington and she joins us with the latest what are the lastminute changes and disagreements, ylan . The fundamental question here is whether the bill is just delayed or whether it will be derailed house ways and Means Committee chairman kevin brady said lawmakers are making progress on this bill. He still wants to debate this in committee and then vote on it next week. And if you see that timeline start to slip, i think republicans will then get really nervous about trying to get this passed on the house floor before thanksgiving or perhaps even at all. So there is still a lot that is in flux here, but heres what we think we know so far about whats in the bill two sources are telling me that the corporate rate will no longer be phased in. It will go down to 20 immediately. Now, this is something that markets were clearly against as well as conservative groups such as Heritage Action and americans for prosperity still unclear, though, what happens on the back end. If this corporate rate reduction is temporary or if its permanent, and if it does expire, how high it might eventually go. Now, republicans are also planning on keeping the top individual rate at 39. 6 but the income levels that are associated with that are still under negotiation. Were also hearing that the estate tax will eventually be phased out but that one wont happen right away the big holdup, though, in this is still how to handle the state and local Tax Deduction. Not all republicans are sold on this idea of keeping the property Tax Deduction but getting rid of the one for income tax so guys, right now, republicans were supposed to be meeting across their party today to discuss all of these changes that has been postponed until tomorrow as well i think what youre going to see instead is a lot of behind the scenes maneuvering back over to you what about passthroughs . Do we know anything about how theyre going to be treated under the lower corporate rate not a lot of information there. The 25 rate for passthrough businesses still appears to be in the tax bill. The big question there is how are they going to write the rules to insure it doesnt just become a big loophole for the wealthy. That is still undetermined all right, ylan, well see if they can get it done by tomorrow ylan with details of the republican plan. For more on washingtons tax reform efforts, were joined by Gene Sperling, former National Economic Council Director to president s clinton and obama and Maya Macguineas. President of the committee for responsible federal budget welcome to both of you gene, as ylan reported, they are keeping the top tax bracket where it stands at 39. 6 and phasing out the estate tax gradually. Does that mean we could see more democrats support it i dont think its even a close call i mean, yes, its better that theyre keeping a top rate, if that happens but theyre still going to get rid of the estate tax and just to be clear, that only helps the tiny number of people who have an estate over 11 million couples that have an estate over 11 million. Think of that. Even if you were going to leave 10. 5 million to your heirs, you right now pay zero taxes so this is this is still a tax cut thats going to give over 200 billion just to estates over 11 million as you just mentioned on the show, youre still trying to afford a passthrough rate which in a lot of ways doesnt make as much sense because over 90 or 95 of the people who are actual Small Businesses right now would not benefit from this. So youre going to see that this is going to be evoverwhelminglya very expensive tax cut for the 1 they have given themselves the ability to increase the deficit by 1. 5 trillion i have never seen either party put out a tax plan where they say its okay to increase the deficit by 1. 5 trillion, and they still cant make their numbers work theyre still looking to do a mother of all gimmicks on the 401 k theyre still struggling so this is a tough sell to their members. But i think even if they get through that, its going to be a tougher sell to middleclass americans. Maya, we havent gotten to salt i wonder if you think brady has cooled the fire on that front. Well, i think theres going to be a good deal of resistance to all of the reforms to the big tax breaks that are necessary to create a real tax reform bill. So the problem here is that we have over 1. 5 trillion every year in tax breaks and for each and every one of those, salt is a great example right now, there is a massive constituency and a huge lobbying force between behind protecting the tax breaks. What i dont think has been made well enough to the American People is the case that every one of these tax breaks involves one group of people subsidizing another group. In the case of the state and local Tax Deduction, for instance, people who live in lower tax states who presumably are getting lower benefits because theyre not paying as high tax local and state taxes, have to then turn around and subsidize people who live in higher tax states who are getting more education or health care, whatever things those taxes are buying its not at all clear that thats a fair policy its certainly in many ways the Home Mortgage interest deduction, the health care explosion. In many ways subsidizes things where it puts capital in places that dont always make the most sense. Theres such a strong constituency, its hard to reform these, and its absolutely necessary that we do so to pay for this tax bill. And the key is making this tax reform not tax cuts is what will help promote growth in the economy, which is the real reason were doing this. If this is this big budget buster and does add theyre going to put in budget gimmicks, it could add 2 trillion or 3 trillion, thats going to undermine growth and thats the purpose of tax reform. Maya, as one of the people on this desk, of course, is going to be paying or not being able to deduct state and local income taxes, you can imagine a lot of us have something to say about it, but will you hear from the politicians who are going to vote on it in those states and the republicans as well is typically that, well, we give a lot more in revenue to the federal government than we get back in services to your point of subsidizing, they respond it goes the other way as well. Thats sort of a different point. We have a progressive tax code where the states with richer taxpayers do pay more to the federal government its sort of odd that we turn around and ask some of the states that tend to be lower income states to go back and subsidize. I understand i live in a high tax state everybody wants to have as low a tax bill as possible, but i think the point is that giving tax cuts or having these subsidies that exist when we already have a huge deficit and congress has proven itself completely unwilling to cut spending is going to make things worse. And the real gain is, can we create a tax reform bill that will grow the economy, which will actually grow wages and do so in a way that benefits people more broadly thats better than a shortterm tax cut that will have to be offset down the road because it will add to the debt a real improvement to the economy is how we should structure the tax reform lets look at the big picture, getting rid of tax breaks for smart tax reform would be really worth it exploiding the debt, i would say, is not the right way to go. What i was going to say, it also completely falls short of the president and republicans promise for once in a generation tax overhaul a la Ronald Reagan in the 80s, if we just get the individual and corporate cuts. Gene, question on the timeline what ylan laid out, there are a lot more things that we dont know in the plan than we do at this point we dont know the Child Tax Credit thats something that ivanka trump and republicans are pushing for. We dont know what the individual tax brackets are going to be. We dont know the passthrough rate we dont know the repatriation rate if they do manage to figure it out in the next day, and we do get the plan tomorrow, then that leaves ten legislative days on the calendar before thanksgiving, which is when they want to pass the bill. Is this realistic . I think my opinion is that they were on a track to get it done by christmas, you would have had a feel that this was much more precooked. And you dont get that feeling at all right now and look, i just think that fundamentally, theyre going to have problems because i think people are looking at polling. Theyre looking at the fairness. And theyre just worried, you know, the reason theyre having trouble selling it to their republican members is that even the republican members are worried they cant sell this back ome i mean, you know, thats a nice conversation youre having with maya about future reform, you know, tax expenditures, but how does a republican congressman in california, new york, or new jersey say, hey, ive just agreed to essentially raise your state taxes by 25 to 35 . Im going to essentially give this huge hit, and by the way, the money is not going to really give you a lower tax cut its going to maybe over 2 trillion in tax cuts to do a 20 tax rate for large corporations who have not been giving raises when they have had profits in the past its going to give a big loophole to people who have passthrough income. Its going for things like an estate tax this is the problem. This is not serious tax reform that benefits the middle class so you can understand why even these republican members in these states like new york, new jersey, and california, are saying youre asking me to vote against my the my constituents i cant sell this as a middleclass tax relief, and they cant all right we have to go, but ill give you guys a chance just to put some percentage odds on, say, completion by the end of the first quarter. Gene whats the number . Ill give them 50 because they are so desperate. I have never seen this kind of desperation. That might increase their chances of some passage, but it dramatically increases the chances were going to see something messy, ugly, that ends up increasing the deficit by over 2 trillion and will be used as an excuse to cut medicaid in the future success may happen, but it wont be pretty. I would give high odds theyll get something done, tax cuts in all likelihood thats the unfortunate part. 75 , 80 theyll get tax cuts. Lower odds it will be real reform reform is what we should have. That can grow the economy. The point is the timeline doesnt matter nearly as much as getting it right i encourage them to use this historic moment to do a responsible, paidfor, and progrowth tax reform that could help us increase growth in the country for a sustained period that would be worth it lets see what we get, if we get it tomorrow. Guys, thank you very much. Gene sperling and Maya Macguineas coming up on the show, well take you back to capitol hill for the latest in big techs hearings in front of the house and Senate Intelligence committees where next, the latest from day two of the fed meeting with the president s decision on the next fed chair on deck for this week as well. More squawk on the street ghafr is and respond 60 times faster. It lets you know where your data lives, down to the very server. It keeps your insights from prying eyes, so theyre used by no one else but you. It. Is. The cloud. The ibm cloud. The cloud thats designed for your data. Ai ready. Secure to the core. The ibm cloud is the cloud for business. Yours. Im done. Im done. Im done. Done with figuring it out for myself. Im done with surprises. If youre on medicare, you know how complicated healthcare can be. Im done with complicated. Thats why we work hard to make it easier. 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Like preventive screenings and most immunizations for a 0 copay. And, in many cases, routine vision and hearing coverage. And only unitedhealthcare offers renew, our health and wellness experience, where you can earn rewards for making healthy choices i deserve someone who looks out for me. If youre done with complicated, so done. Turn to the people who can help make healthcare easier. Open enrollment ends december 7th. Call now to learn more or to enroll in a plan from unitedhealthcare, like aarp medicarecomplete. [sfx mnemonic] welcome back to squawk on the street. Im phil with breaking news. October sales from toyota rising 1. 2 thats shy of the edmunds estimate of an increase of 2. 5 , but now when you look at all of the major automakers as we start to get these reports of last month, it looks like its going to be stronger than expected, sara well get the sales rate later today, but most believe were looking at a rate in the 17. 5 to 17. 8 million range back to you. All right, phil, thank you. Keep us posted its also day two of the fed meeting with the decision expected at 2 00 p. M Steve Liesman joins us with the latest what will you be watching for today . Last time, sara, when we visited with the fed, it said Economic Growth was, quote, rising only moderately since that september statement, the u. S. Has printed a Second Quarter of 3 growth, and it looks like the fed was right the hurricanes did not materially alter the economic outlook, so the question is whether the fed which as you know is on the verge of new leadership is thinking of a change the most modest of the change could be the fed upgrading what it says about growth and it could be the fed is feeling a need to nudge the market to think more along its line of how much rates will rise next year at pantheon, they write, were on alert for the possible upgrading of the language used to describe the pace of growth the market and fed are aligned on whats happening this month and next month no rate hike announced today but in 2018, the two sides go separate ways. December rate hike probability, 86 . Everybody is together on that. But look at this the average number of 18 rate hikes forecast by the fomc, three. The number priced in by the market, just one the first one, you only have a 61 probability coming in june 2018 so the fed, i dont think is going to want to make waves knowing full well the president plans to announce a new fed chair tomorrow but eventually, either under this chair or the next chairman, the market and the fed are going to have to reconcile on the outlook for rates in 2018, carl. Steve, a lot of people have been looking at number of fed chairs who completed a first term and were reappointed, and then the track record of yellen. Why isnt she getting another look, potentially . A lot of consternation pointing out the history, as you said, that most of them get that second term. The other aspect is that she seems to have done a decent job, a lot of economists point out. Shes brought down unemployment, has a steady core pce, and i just did the counting on this, carl 8100 points on the dow since she took office. Not too shabby Steve Liesman in washington, going to be a crazy back half of the week thank you, steve lets get to sue herera in the meantime for a quick news update good morning, carl. Good morning, everyone heres whats happening at this hour the new york rangers and the las vegas kings stood with fans for a moment of silence at Madison Square garden last night to remember the victims of yesterdays terror attack as well as last months mass shooting on the las vegas strip. The cost of californias recent Deadly Wildfires now topping 3 billion that is triple the amount previously thought the fires killed 40 people and destroyed nearly 6,000 structures facebook stepping up its security efforts saying it will double its 10,000person Security Workforce by the end of next year. Facebook just admitted 126 million users nay have been exposed to content posted by russiabased operatives in the last few Years High School students in chicagos south side got a big surprise when the former First Lady Michelle Obama and prince harry popped in for a visit. Hyde park academy is located across the street from the future site of the obama president ial center. The pair stayed for about an hour thats a great way to start your day. Thats the news update this hour carl, ill send it back downtown to you all right, sue, thank you when we come back, tech giants google, facebook, and twitter continuing their testimony on capitol hill this morning. Well talk to former yahoo ceo Dan Rosensweig dow is up 103. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. The hill is under way. Kayla is in washington and is watching the latest. Good morning good morning, carl. Were about an hour into the hearing that has become a bruising back and forth between the two leaders of the committee, republican senator richard burr of North Carolina and the democrat from virginia, senator mark warner about the insufficient controls that the companies have in place to deal with russian infiltration in opening remarks, the republican chair said the responsibility lies squarely with the companies. Very clearly, this kind of National Security vulnerability represents an unacceptable risk, and your companies have a responsibility to reduce that vulnerability. This is about National Security. This is about Corporate Responsibility and this is about the deliberative and multifaceted manipulation of the American People by agents of a hostile foreign power. While the testimony submitted by these committees by these companies, rather, to the Judiciary Committee yesterday dealt with metrics and usage, their comments today are dealing more with what they are doing about this problem facebook, for one, affirmed it would double or more than double its security engineering staff and use technology to crack down on banned content and political ads from outside the United States google making some similar claims as well and twitter recommitting to doing that as well but interestingly, these companies are not really finding that they are saying the right words to these committee chairs. Senator mark warner said that the companies have been insufficient in their dealings so far, at least their early dealings with the committee and said he believes the activity they have uncovered is just the tip of the iceberg thanks in part to pressure from this committee, each company has uncovered, i believe, only some of the evidence of the ways russians exploited their platforms during the 2016 election. It is clear that the conversation and the work between this committee and these companies will not end today just this morning, senator burr asked twitter to provide information to the committee to actually prove that less than 5 of its bots or less than 5 of its accounts are bots because he said they believe its more than that well keep you posted as the hearing gets under way back to you. Warner suggesting some studies show it might be 12 to 15 . Thats a number well have to wonder about for a while thank you very much. For more on this, the big tech hearings, were joined by former yahoo coo Dan Rosensweig, who is at post nine good to have you back. Great to be here. The lawmakers seem mad. Heres warner to these companies. We frankly are blown off by the leadership of your companies do they deserve the pounding theyre getting today especially well, my experience with these kinds of committees is theyre having very different conversations than theyre really having with the people that theyre talking to. This is a political debate going on but there is some truth to this, which is, you know, the debate over whats a tech company, whats a Media Company ten years ago, that debate was we always had that at yahoo, and a lot had to do what is your multiple now its what is your responsibility and Media Companies have different responsibilities than Tech Companies do. But the fact of the macter is these are the largest distributors of content in the world. And users cannot discern between what is content that they produce versus what is content someone else produces. And their ad targeting is actually so good you can do this effectively, and thats a problem. It does need to be dealt with. I think its a combination of the companies doing better jobs themselves, but i also think that the government needs to understand, you know, what is okay and what is not okay. Because the political debate is not actually helping did you hear something yesterday where these companies, are they accepting more responsibility of what crosses their platform well, you had three lawyers up there so im not sure what i heard yesterday. Look, i think that they know that this is an issue. I think that theyre embarrassed than this is an issue. I think they want to do something about this being an issue. The question of what to do is hard how can you discern when i was running magazines, it was easy to discern what was a piece of content written by an editor. Now, an ad, is that content, is that something youre supposed to watch over . What are the rules if youre inciting someone in texas to go to a rally, is tloot okay or not okay these are issues we have never had to debate before the discussion is helpful in that matter. It brings up a bigger question which is what are these hearings really about . Are they about the russian interference in the 2016 election or just about how big and powerful and influential these social Media Companies have become in our society my experience is it depends on which senator youre talking to so some of them are trying t make the case to the president that there was russian interference because he does not yet has chosen not to acknowledge it some are saying its your responsibility of corporate governance, because they believe companies should regulate themselves and no more government regulation. Some are concerned for National Security its difficult to know senator cruz is worried about the liberal bias of some of the people who work at facebook and other social Media Companies my experience is that technology has no bias the technology was designed to say, if you look like this, if you like this, im going to serve you this piece of content or this ad remember, people at facebook dont write content. Its the technology that serves the content. What you should be able to serve and what kind of targeting you should be able to do, those are worthwhile debates and im glad were having them. These companies have such powerful Business Models and sail is only growing and their power in our world seems to be as well, but the one threat is government regulation. Do you think that hearings like this eventually do lead to more conversations around limits and around things that might mitigate their ability to continue to grow well, in this particular subset of political ads, its not a big amount of their revenue. No, it doesnt, but theres a larger dialogue going on about their power. Right, and so the question is, the challenge with Technology Companies is, look, the oldest one is maybe 75 years old. And the bigger you get, you think okay, you cannot be competed with. And then of course, what happens to ibm and hp and yahoo and what happened to aol. So they dont seem to stay on top forever. So i dont know that more regulation is the right decision but i do think in terms of their size, i do think that there are regulations in terms of what can be distributed and how it gets labeled because its really difficult to discern you have so many different age groups looking at these things with absolutely no context so i think that theres probably room for that. In terms of breaking them up, we have seen that movie before. I think theyll keep coming at them, but im not sure its going to happen anytime soon bill gates can tell you about that from back in 2000 we have you so often to talk broadly about technology, but its worth acknowledging cheg itself, now a 1. 6 billion Market Release you have transformed the company, dan, from selling and renting text books to a services company, and those revenues are growing very rapidly and youre producing a lot. Cash flow youre going to keep it going . Yeah, look, we think were just at the beginning. You know, weve had tremendous performance. Our team has executed brilliantly on the transition. We announced it several years ago, almost right here, in fact, that we were going to make this transition now that were a pure digital company, all education services, helping students pick the right school, get better grades, get tutored, get an internship, get a job, what could be more important . The fact is we have millions of students who are seeing chegg as the primary place where theyre learning and where theyre able to pass their classes and get good grades. Theres not enough support for kids chegg is the largest dreblth to student network. Frankly, were only at the beginning. The transition took some time. Now that were there, youre seeing accelerated growth, accelerated profits, accelerated cash flow. Accelerated stock price yes, accelerated stock price. We think the stock price is a reflection of the fact people are beginning to understand, education is a trillion dollar market its not a small niche vertical. Its not a singular forprofit college or one publisher there are 36 Million Students in the u. S. Every year, 15 of the u. S. Population, 7 of the gdp, a trillion dollars were leading that transformation of how students learn. And the business is reflecting it and the stock price is finally reflecting it. Do investors think of you as a College Story . And if so, is it increasingly a High School Story . Its increasingly a global story. Which is initially, we rented textbooks to college kids because High School Kids got theirs for free. Since that business has become a small percentage, now its about what college do you go to, homework hem, tutors live online in an attempt to get into a college. Or to get skills to get a job. This is about the education and the skilling up of todays students so that they can get into college, pass it, 50 of kids dont pass college. Chegg students pass it at a higher rate. They graduate faster these are the kinds of things we think will transform, helping students get educated regardless of what goes on in the political world. We see millions of students coming, we have 10 million visitors a month now we have millions of students subscribing to our digital stuff, which we didnt even have four years ago when we came out and went public. I just think this is a massive marked investors are beginning to see that, and we just believe were at the beginning and we couldnt be more excited. Good to have you here, as always speaking of facebook, the companys actually set to report earnings after the bell this afternoon. The stock has been pretty strong going in julia joins us with what to expect on these numbers. Morning, julia good morning to you, Sara Facebook stock and its ad sales have seemed invincible right now, over 90 of analysts have a buyer overweight rating on the stock, and the stock is up some 40 in the past 12 months this despite a barrage of negative headlines from negative measurement to its role in the russian manipulation of the election facebook has a consistent track record of beating wall street expectations, and now Analysts Expect facebook to grow its earnings 17. 5 to 1. 28 per share, while revenue is projected to grow more than 40 to over 9. 8 billion this morning, Aegis Capital increased the value to 215, writing facebook has been largely impervious to the ad pressures plaguing the traditional ad platforms, predicting earnings upside in the coming year. Analysts are watching to see how much instagram and video ads can drive growth theyll also watch to see how much cost will be pushed higher as the Company Invests more in video and also expands its Employee Base and its Security Force in particular. Well be listening on the call for the impact of those new hires on facebooks bottom line, plus any commentary on the impact of the scandal over russian purchased ads and what the Company Expects from the proposed regulation thats in the works. Back over to you just how costly its going to be if they really are going to take control of the issue. Julia, thank you coming up, be sure to stick around for squawk alley when a former aol founder and ceo steve case joins us for his thoughts n the tech hearing going on i washington more squawk on the street right after this are you sniffing around ge stock, thinking maybe after all this decline its a good value theres a chart you need to see if you are go to tradernation. Cnbc. Com to see it more squawk on the street coming up. Lets get over to cme group. Rick santelli joins us for the santelli exchange. Thank you, david. I would like to welcome my guest, mark olson. Thanks for taking the time this second day of a twoday fed meeting. I guess thats as good a place as any to start. What do you see with regard to todays statement and what do you think about the next meeting in december . Well, first of all, i think today, we will not see any action on the fed target rate. I think that will wait until december if it were going to be today, i think we would have had more indication that something was going to happen. It will be interesting to see, this is the first month of the normalization process that you and i have talked about for several years, of getting the Balance Sheet reduced. It will be interesting to me to see if there are statements on that fact, and the point that Steve Liesman made about whether or not theyre upgrading their expectations for growth. Those are the two things that will be, i think, of the greatest interest for todays meeting. You know, i agree with your last statement in particular. Pr listen, im agnostic when it comes to what to do about it but either hard not to see that whether its domestically or globally, there seems to be something organic that hasnt happened in the last handful of years just based on the data alone. Do you believe, mark, that all the priming of the economic pump that weve been doing for basically almost a decade is finally starting to catch, were actually starting to see the economy maybe being able to survive without training wheels . I think thats exactly right. But i also think that the fact that it hasnt been as apparent tells us the depth that we were in during the last 10 years, because all of that stimulation had to have made a difference. But the fact we were now seeing aggressive inflation or Aggressive Growth suggests to me there was more of a deficit there than we recognized at the time i got you you know, i had jim bianco on and we talked about you obviously in an interesting conversation, that in the fall of 05, you as a board of governor accidented. It was right after katrina everybody understood katrina was the influence on the decision on your part. My point is more general it seems as though our central bank doesnt like any dissension they always try to make it look unanimous. As we look at who may lead the fed, the chair, three vacancies that may be filled, do you think, mark, we need a fed, fmoc group that has more contrarian, thinks more outside the box, not necessarily all trying to force agreement among the entire group . Well, i think one of the important roles of the chair is to try to get a consensus. That is a critical, i think, success factor for being chair so they will continue to work with that. I think if people have a dissent like i did 12 years ago that there ought to be a very good reason for that. When i did that, i spent 40 minutes with chairman greenspan talking it through he told me where he thought i was wrong. He probably ended up being more right than i was, but i think it made an important statement at the time yes, i think a reasoned logical dissent is a very good thing occasionally several of the other governors at the time came up to me and reminded gave me that same feedback. I understand. Thats an interesting story. He tried to twist your arm a little bit. Thats precisely the point, he did not try to twist my arm he was very accommodating, and he told me what he thought so he disagreed with you so he disagreed with you, i misunderstood, but he didnt necessarily want you to change your mind, just disagreed with you. There was no effort whatsoever to turn my vote around he just listened and stated his position. I got you mark, thank you. Its always interesting to go back if we dont understand the past, were certainly for the going to be any more clear regarding the future lets see what the statement says today david faber, back to you. Okay. Thank you rick santelli. Lets go to jon fortt to give usa look whats coming up on squawk alley. Jon. Big earnings after the bell today. Facebook among them. How are they going to do were going to dig in with the top analysts on Facebook Stock is up 5 over the last five trading days. Doesnt have room to run eheitr way. Well find out coming up on squawk alley. Lets get started. Show of hands. 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On the heels of Higher Oil Prices wti and brent crude up a percent in early trading check out shares of cabot oil and gas, Marathon Petroleum and valero, some big leaders so far today. That does it for this hour of squawk on the street. Lets head back for squawk alley. Thank you very much welcome to squawk alley, Carl Quintanilla with jon fortt. The dow briefly crossing 23,02 23,500 for the first time ever, records for s p and nasdaq bob, its broad and grobl. It is Global Markets starting with strong inflous, record highs several factors closing those strong inflows most importantly a Global Economic expansion along with it we have improved earnings global