Transcripts For CNBC Squawk On The Street 20171102

For the first time in ten years. It begins with tax day on capitol hill after an unexpected delay yesterday, House Republicans set to officially roll out their tax reform plan this morning plus, dead serious about russia facebooks ceo, Mark Zuckerberg, promising increased efforts to police content on the social media platform and trouble for tesla, the automaker missing a model 3 production goal, reporting its largest ever quarterly loss. Right now, House Republicans and ways and Means Committee chairman kevin brady meeting on capitol hill as they get ready to reveal their tax plan. It calls for a corporate rate cut to 20. The repatriation would be 5 cash, 12 other assets, 30 of passthrough income subject to a lower rate there would be four tax brackets for individuals, the top rate remaining at 39. 6 and a phaseout of the estate tax. The journal saying that corporate will be permanent, with no phaseout although this has literally changed four or five times in the past day or two. I think its going to change the again. I think this is a very fluid situation. I dont think these numbers are necessarily going to be what the numbers will be. Those of us who watched lester holts brilliant interview with tim cook knows that were not competitive. And i know that there are i think something will be done that will make us more competitive. And something that will be done to give the middle class a tax cut. I really believe it. You do believe that i do believe that brady says theres a good chance its going to be rewritten again over the weekend, ahead of the markup, next week, of course, we know the president is going to asia, so congress is going to have this to work with on their own. You sound more optimistic, though, than you did earlier in the week i just think that at least were getting some Details Details make me feel for the but i still dont know how its going to be paid for and im waiting for that i think the level of detail, though, will actually bring out the lobbyists, which we havent really they havent even begun to fight yet and once they know where we stand on interest deductibility, where we stand on capex, where we stand, frankly, on the territorial system that may be implemented, but is going to have differences in terms of how it treats Different Industries for example, pharmaceuticals versus industry companies. And that is a real possibility im telling you, based on at least the conversations ive had, the fighting has only just begun. And so there are carpenters . Im saying that, you know, u. S. Multinationals, its not apparently just were going to a territorial system, there are different ways to treat different businesses theres going to be a lot of lobbying within that but you do believe something small will get done . Are you with me on that . The people i speak to come back to the idea that eventually this effort will fail and well end up with a tax cut and some sort of repatriation theyve been saying the same thing since the spring thats right. Im completely onboard with what youre saying. And there is a great deal of optimism, i think, in the Republican Party that they can get this thing through and done. But i continue to hear differently from they will fail, well get something small. Okay. So it willjust be a Corporate Tax rate reduction and a repatriation deal in the spring. Bin go thats where i am. I think it will be well received by the market. So what happens with so basically, personal isnt touched. State and local deductions they wont get that done. They cant get it done theres just too many that are fighting its the wrath of god to go after not to mention the passthrough taxuation and the loopholes that will conceivably open up. Now theyre talking about rules about doctors and lawyers and dentists how many rules its covered. I mean, really, people who do invisalign, invisalign, are invisalign people covered . This is crazy. Its a massive loophole and one thing li will also say its going to take a while to read the fine print on this thing. Dont expect on day one that we all have the knowledge of what really is in this bill its going to take a day or two to really understand it. But thats why well have something that will make our businesses more competitive and well have some sort of repatriati repatriation and im predicting that there wont be anything else but i think our president will say its massive and will get a lot of credit for it well, you know whos going to get briefed on this before you or me is our own ylan mui whos outside the gop Conference Meeting room on capitol hill this morning well be relying on her for details, somewhere we think in the 10 00 a. M. Hour. Ylan, good morning good morning to you guys. So House Republican lawmakers are just walking into their weekly Conference Meeting in the ways and Means Committee room, which is behind me and as you said, the details of this bill have been in flux over the past 24 to 48 hours. Axios and the wall street journal reporting that the corporate rate cut will be permanent. It will go to 20 and it will stay there but that seems to be very different from what house ways and Means Committee chairman kevin brady had indicated to reporters as late as last night, saying that the rate cut would be temporary and expire within the next ten years heres what we think we know about whats in the rest of the bill so far. The 12 rate for repatriation would be for cash assets, and there would be a different 5 repatriation rate for other assets thats according to nbc news there would also a new 15 minimum taxcompanies foreign earnings on the individual side, the top income rate would stay at 39. 6 . But again, exactly what income level is associated with that, still was up for negotiation as of late last night the estate tax would be graduately phased out. And it is still unclear, though, what type of compromise they reached over the state and local Tax Deduction to win over those republican members who come from hightax states, such as new york and new jersey. Now, the text of this bill will be made public at 11 15 a. M. So after this Conference Meeting is over, thats when the bill will be made public. Ways and Means Committee members, as well as House Speaker paul ryan and other members of gop leadership will then head over to the white house to deliver their plan to the president. Well keep you posted on all of it, guys back over to you really quick, ylan, a lot of reports indicating 401 k s remain uh untouched. Is that what youve heard . Reporter well, what weve heard is that they are no longer looking at lowering the limits of pretax contributions to 2,400 it will be higher than that. Where, exactly, they settle, still unclear. Ylan, well be talking with you a lot this morning thank you so much for setting us up ylan mui in washington get to some Corporate News weve got to touch on facebook, posting better than expected rau results last night ad revenue up 49 the company says it plans to boost spending to police content in the wake of russians using the social network in the attempt to influence the election on last nights Earnings Call, Mark Zuckerberg said he is dead serious about this ive directed our teams to invest so much in security on top of the other investments were making that it will significantly impact our profitability going forward. And i wanted our investors to hear that directly from me i believe this will make our Society Stronger and in doing so will be good for all of us over the longterm. But i want to be clear about what our priority is protecting our community is more important than maximizing our profits. Doubling their security staff to 20,000. Some people wondering if hes so dead serious about it, why didnt he show up to capitol hill i have to tell you, i dont know the answer to that, but i thought this was a masterful conference why . Because hes basically heading off any possibility that therell be a fine, a 1 billion fine, Justice Department investigation. Its a brilliant narrative because what most people had been afraid of was that he was going to say he was going to boost security, but it would have no exact on earnings. Which would therefore make it absolutely chimeraical, it would make it just a show. But if you remember, this quarter last year, they said that the revenues were going to be impacted by an ad load thats going to go down this time they talk about the bottom line being impacted by this i have to tell you, this is the call that you wanted if someones in the crosshairs of washington theyve being talking down numbers for a while. Thats what they do every quarter, they talk down their numbers a little bit as somebody said to me in a previous quarter, its almost like the business is so profitab profitable, they cant control it it is the stocks at 184 and then basically zuckerberg cuts numbers he cuts numbers upfront the stock immediately goes down to 179 to 180. Can i say what they if you actually Pay Attention to what theyre doing, theres a lot o people who feel that they dont have its mature, that its over they are doing personalized tv networks there are going to be 2 billion tv networks that theyll be able to advertise and ultimately, the Artificial Intelligence will solve what the ads come from. If i were a Network Executive right now, i would say, oh, unbelievable you create a blog of 500 men who are the age of 22, okay . About where youre going to go to work. And i would you know, every company that wants to get employed this will happen every company that wants to get employed, employees. You know, they will all advertise now. Its so targeted, its incredible this is brilliant, this is the way tv was supposed to be. I watch a lot of ads i dont want care about. The oil of olay. Do you use oil of olay no. But that what would virginia wolf do . Blog that my wife reads, they care estee lauder and apparently some other bad nonstate actors are state actors, too. And the targets is thats the draw the selfie generation you know theyre like doubling their sales in china estee lauder were back to estee lauder. Lets get back to facebook, though 49 topline growth the numbers are amazing and the bottom line on onex, im saying, is a sandbag but the costs are going up in a significant way. You dont believe it you dont care they saidthe ad load was going to go down and the ad load went up huge these guys are the ultimately underpromisers and the ultimate overdelivers the stock gets hit and then the next thing, you look at it, the target prices have to be raised and its at 200. And talking about the importance of in video and live video. Sheryl sandberg talks about the small and mediumsized businesses lined up against video. And im sitting here thinking, okay, i am going to advertise everybody who is in this zip code and theyre going to get it to me and im going to kill it and thats how every small to mediumsized businesses read this you want to call Sheryl Sandberg right now. Do you know that they probably have no Sales Department they just have someone answering the phone. Yes, yes, ill place that ad, yes, ill place that ad, i mean niet, ill place that ad theyve got to get some russian speakers absolutely. Its a global business. Theres no doubt about that. What else those are my words when we come back, well get to alibaba and their earnings beat well get to tesla, wider than expected loss, but elon musk is expressing some optimism stocks down in the premarket well get to ralph lauren, up 8 blue apron,ium, equ yum, qualcoo more theres the premarket. Were back after a break rays always been different. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. Alibabas up in the premarket. The companys Quarterly Results Beat Estimates monthly active users up 38 to 549 million. The stock is going to open above 191, david yeah, will be, the revenue number itself was a very strong number were talking 61 year over year cloud computing, theyre 99 growth their core commerce revenues up 63 year over year digital media. I mean, across the board, the one area of some concern this morning in talking to a couple of investors were margins, which was a bit weaker than some had anticipated. They did do a brick and mortar acquisition. There you can take a look at those core commerce margins, on the call, as well. Maggie woo, the cfo said, regarding your question on the longer term margin level, i think when we set our business goal, were focusing on value provisions, so were focusing on the revolutionary reform of the whole supply chain, digitize the offline business, and help the experience for merchants and consumers. So whether its light, higher margin or lower margin, as long as we can provide value. Im not sure that provides a lot of value but that was the one concern that stock up almost 3 this morning on those very strong topline growth numbers. Eat company that just has too much business. I mean, the amount of business they have. And this cloud plus 99, although you really didnt get a sense of how big that is, but that does tell you, what is going on at alphabet what is going on with amazon, right . These web Services Businesses, whats going within microsoft, as the web Service Business if you ask me what the best theme for earnings season, and this cinches it. Its web Services Business going to the cloud you either go to the cloud or you die. Its a really, really powerful secular theme. And who are the losers as a result of that who are the losers . You know, it would be on premise, but on premise, oracle is making a shift. I know. On premise, ibm is making a shift. Hp . Do i believe it hp . Loser loser. Good point dell, we dont talk about it, because its a private company but vmware is the biggest onborder they onboard to everybody. Theyre switzerland. And people thought that amazon was going to try to wipe them out. Just the opposite. But this secular theme means that you can buy these stocks even up here, because business theres enough for everybody. You look at walmart. Walmart is cloud the cloud. And thats big business. Alibaba is going to have its famous singles day coming up very soon. 11 11. And now you think im obviously a broken record. Who is going to kill it on singles day . Mentioned in the Conference Call, estee lauder oh. People give moisturizer and cosmetics. Why . Because the apple x is a story to end all stories by the way, i had allergen last night. Lest stop calling with restasis, the drug thats going to go off patent botox is the only solution to the apple x. There are some people who dont care there are some that arent vain and just dont care. Were not going to undergo surgery so we look better in our selfies. There are some people who are not vain whos that everybodys just going to get botox injections every day youre so vain, i bet you think this segment is about you. 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[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. Youre so vain you probably think this song is about you youre so vain warren beatty, right . It was thats mick jagger its beatty its warren beatty. Okay, its warren beatty. He is really vain he he had reason to be yeah, why not i mean he was man lets just say, lets move to the segment. Lets move on some people said they would like to come back with hands. That was an old line anyway, lets talk about newell. Newell in the mad dash Newell Brands okay lacking good. Worst in show for the quarter. Second guy down in a couple of weeks. David, this was get your sharpie out. These guys have been crushed and theyve been crushed by the channel, where they sell stuff theyve been crushed by its a jobelike story. You know, plastics, back to school, they said, was bad there really wasnt anything that was so the company, jim, ended the quarter with inventory up 18 year over year thats a suboptimal situation. Which obviously means theyre probably going to have to cut price and doesnt look good for gross margins. What what explains this these are the two that have been obliterated this call this quarter. Under armour and newell. Under armour is firing people and kevin plank has assured me, no more. No more focus away from the group. Mike polka was a very good executive, is going to have to trying to figure out how to get newell back on track david was the rubbermade acquisition just a disaster . Martin franklin yeah, thats what i meant lets just do this. Lets say it right now dont buy from Martin Franklin yeah. And dont sell there. Because youre going to get pantsed. Martin pantsed franklin. They got pantsed the products are not what people want david, this is like the worst aisle of walmart i loved this company, because i love sharpies, i like writing, theyre moving to china. I always thought their products are the highest quality. I always use their products. I love them but the fact is, the dogs wont eat it. Thats, like, you put new and improved on dog food, and the dog does not say, oh, i want it. So this is a real problem. And theyre going to expand it will share purchase, thats great. But i have to tell you, even the bulls recoil even the bulls recoil. And weve got a lot dow and jpmorgan, he believed like i did. But the numbers the decline in core business is extraordinary. Yeah. There will be a level to buy this, but its not yet not yet really i just moved it down yeah. Well be watching newell and it was jardin, of course, the acquisition i was referring to yeah. Were going to keep an eye on discovery and shares inned me in media. A lot more to cover. I want an extra half hour i want to preempt whevater were back right after this volatile markets. 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. Squawk on the street, live from the financial the opening bell in just about two minutes. Busy morning, even as we speak, the house gop is meeting to talk about the rollout of their tax bill which were now being told according to nbc and some other sources will be called the tax cuts and jobs act. Tcja. Tcja. Reform not in the title. There was some talk that it might be called the cut, cut, cut act. Nice. Wow. Well, they can do whatever they want, but lets hope they get something done and i dont know if they will. It would really help retail. Theres very high tax bracket in retail which brings me to ralph lauren. And an extraordinary quarter and a comeback quarter was there on tuesday. The place looks, you know, to the flagship, the place looks fabulous, but more important, the way forward plan that theyve been working its working and i you know, im thrilled for them, because they have been struggling and the numbers are making a comeback directtoconsumer up five but the adjusted gross margin was up 300 basis points. Very lean inventories. I like this story very much. Ralph lauren, back to 96. Going to be a nice open. Well get to a couple other names after the bell well do tesla after the bell. Apron, with the 47cent loss, is wider than expected. Although, revenue was a beat interesting. Yeah, they said revenue beat and the firings are going to start having a positive impact if they fire everybody, it could really theres the opening bell, the s p at the bottom of your screen this morning the big board, it is Water Technologies celebrating their ipo today over at the nasdaq also selling an ipo is funko, a pop culture Consumer Products company. Dont forget, later on today, well be getting the fed chair announcement, which we believe to be jpal. As for jada, claims at 229 really good, productivity at three is better than the 24. You see these challengers the challenger. Holy cow job cuts fall to the lowest level since 1997 yeartototal date down since last year. These numbers are electric yeah. What are you looking for how about yeah. Like, how about some enthusiasm . Im very enthusiastic tesla is down 6 this morning. A wider than expected loss biggest quarterly loss in their history. Revenue does beat up 30. Stock now is going to be down 21 from the september highs still up 50 for the no, about 45 an out of body Conference Call, once again, with out of body at one point, someone theyre trying to ask real questions like tonys like like, tonys like a serious guy are you kidding me, tony will you give me a break were going to make the most cars of any company in history thats what to do. Most cars of any company in history. They actually is a that yes when . In the Conference Call. Over what period of time . It doesnt matter its musk. Well, in q3, they did make 260, so thats a start the goal was for 1,500 they missed their target for q3. Now they pushed the model 3 target back three months to the late end of q1, where they see 5,000 vehicles a week. Margins are going to compress, jim. Which sort of some of these downgrades we had earlier in the month of ctober, jpm i think that, look, you go read the sales, they read very cogently but elon musk is still telling you a story about how unbelievable the car is. And that it will sell itself, and its like someone is trying to pin him down on loehner numbers. Someones like trying to talk about like the battery pack. Hes big thing hes up here hes day vinci. And these little that are asking questions. Hes mozart and theyre sally ari who heard of sally ari . Well, we have, because of amadeus, the movie but otherwise, we wouldnt have. Its like the others player in hamilton, hes a jefferson. Hes a nobody. This is ridiculous he basically said, i did really badly, but im the best there is, so you should love me and i mean it a lot. The only point in this Conference Call that to me had any bearing, when someone said, nvidias chips are ten times better than your chips he says thats ridiculous. All right, well get some headlines from dow jones on the tax plan this is all according to dow jones. Seeks a permanent cut on corporate to 20. Caps corporate Interest Deductions at 30 of cash flow sets a new 10 tax on highprofit overseas corporate subsidiaries four brackets, 39. 6 for millionaires plans and estate tax repeals in 2024 so thats maybe a little bit later than pushing that out a bit. And curbing state and local deductions, no details on that quite yet. Thats a key question state and local tax deductibility. Carveouts discussed for taxes, but youve got 33 members of congress from the nine top states, in terms of state and local, and what that ads up to, or state taxes and they need more than that they cant lose 33 not a chance republicans. You know, they can only lose 22. This is not workable. Im not saying its dead on arrival, im saying its just not workable because it wont fit into reconciliation theres just not enough revenue being raised whats the matter . Im looking at discovery stock price. This morning, the Company Reported earnings and, you know, its funny, because on the advertising metric that a lot of people seem somewhat concerned about, discovery actually came in nicely. Advertising revenue up 3 , 407 million. That was above a lot of estimates. But there does seem to be overall concern about subdeclines. Keown and company, for its part saying thats discouraging you can see the stock, though, had been down as much as 8 . Of course, since they announced that deal to acquire scripps, the stock has had very few days where it has seen a price increase in its shares very few and its down yet again from the scrips point of view, i mean, i dont know, with mman. Viacom was there with an allcash deal. They could have gotten to 90 bucks. Instead, they went with discovery, cash and stock. Some of their shareholders may be wishing theyd chosen door number b. Is it the teva of the entertainment business no, i dont think so. Why what is the teva . Which one are you referring to as the teva. Teva went from 50 to 11 lets talk about teva why do you not like them so much because the stock is down another 16 today . If i hold the chart upsidedown, id love them. You would its terrible this is once an enormous company and now its going to be a 10 million market value. Well, they paid 40 billion for the worst part of what was activist, which became aller gen. So did they get pants ee eed Brett Saunders they got ralph lauren pantsed, black label and whats interesting, brett said on the show, mad money being the show, theyre going to be selling they own 10 of this company and they cant sell it fast enough they say theyre going to try to sell it without impacting the stock, but right now, theyre going to be selling it right now. Theyre running out of room its only 11. 57 to go i have a pithy maxim about tesla teva. Stocks dprgracefully and fabulously stop at zero. They dont go to minus 5 or do that stuff you know when you play fantasy football and you have a couple of interceptions and you have like minus 3 hmm mm, not in this business, theres no minus 3 this thing is starting to put up some valiantlike statistics when it comes to a 12month decline. Down 73 over the last 12 months it cant go through no, it cant. Of course, you always think about perrigo and teva and mylan. Teva wanted to buy mylan, mylan wanted to buy perrigo. They should have taken every bid they possibly could have and shareholders should have just gone away. Its unfortunate theres no i mean, its not like the browns or the giants, they wont have a good draft pick next year, right . Theres nothing like that. No. But what is the future for this company . Theres no tank you cant tank and a get a good draft pick no. What happens to these companies . Im not sure. Is there any chance that act lan comes in and shorts them they could hope for that. We have a lot of Conference Calls. He comes on every show and talks it down. And then it goes like herbalife. Maybe you should suggest that thats being mean hes doing a very rigorous job on adp, which had a good number. Hes doing a great job i was just surprised, this is a reference to, he switched his short position to puts but if it was really going to zero, why did you need to do that well, obviously, you have one option now i know all the reasons im being rhetorical its rhetoric. Understood. Thank you that ralph lauren number is going to drag up a bunch of names. Lb is the best s p gainer. Gap, ross stories, macys. Lp, sales were flat that was a big victory for them. I think that macys hit that it was a panic lull that we saw earlier about macys i think it was a panic lull. I dont think macys is i think that were going to talk about gannet. This is the ceo of macys, as opposed to the company, the media company. All im saying is give gannett a chance no gannett, usa today, gannett . No, jeff gantnet, whos tryin to transform macys in a very difficult environment. Okay go it qualcomm is up a little bit bmo takes its target to 57 we talked about it earlier in the week for much different reasons. They need to close this xpi, theyre talking about not being able to close it until 2018. Thats the autonomous driving. I have to tell you, speaking of semis, broadcom just preannounced a better than expected number and the stock is down my Charitable Trust owns it. This is a great quandary to me, when he preannounce up, why is your stock down . Qualcomm had a decent quarter. Earlier in the week, carl referenced it. The journal focusing on the dispute with apple and the fact that apple opening with other suppliers, and chips for some of its other products, ipads and the like the nxpi deal, youre not going to hear much from qualcomm until they have to communicate but at 117. 39, it is not clear whos going to tender to a 110 deal i would rather tender away from it. The question is, what will they raise to . What will be the number they need to get people to commit who can can they get to commit they may have made a blunder, because there were opportunities for them to tie people up, lock people up. But a 115 price im told by some of the large holders, and get them saying, okay, we will tender at this price they didnt take that. They may regret that well see. Well see. But they havent got all the approvals yet. To your point, its going to be 18, most likely. It takes forever to get a deal closed these days. Yeah, it does great analysis apple, of course, reports tonight. Therell be a lot of questions about iphone x production. Piper has some pretty good statistics on upgrade sbepintens going into this cycle. I think the upgrade intentions will be extraordinary. You have to go see it. I feel like its a little facebook like. The stock did advance. I expect the stock to get hit. And then buyers come in. Its not expensive a tim cook saying a lot of the right things to lester holt. So commonsensical, you kind of just say, why isnt anyone listening . Tim did talk to nightly news last night, about a bunch of different things. Market cap and the effect of fake news on social media. Take a listen. I dont believe the big issue are ads from foreign governments. I believe thats like 0. 1 of the issue. The bigger issue is that some of these tools are used to divide people, to manipulate people, to get fake news to people in broad numbers. And so to influence their thinking and this, to me, is the number one through ten issue. By the way, Morgan Stanley has a piece out saying that sales for the holiday, traditional retailers, will be negative slightly for the First Time Since 08, because of budgets going to the iphone cycle, and then typical amazon gas prices, migration. I agree i think that apple is the one thing, device is the one thing that people will pay up for. 1,100. Youll disguisubsidize it its not as much subsidize as a monthly plan over 24 months. Youll hardly notice, because its so great. Its like, do you ever notice that you get charged every month. And its like, okay. I get charged every month for netflix. Okay i get charged every month for spotify. Okay these are things you just get charged. And you know, i say, okay, thats a bargain i think the Service Revenue is going to be the important component. You have to see if that grows. You have to see if it says its not going to do a fortune 100 company. Hes got to go to fortune 75, which is about 38 billion hes got to raise the Service Revenue forecast thats what he has to do okay. Dows essentially flat, getting some highlights of the tax package, which is worth looking at on twitter, if you get a chance lets get to bob pisani on the floor. Hi, bob. Hi, guys. A mixed open here, but europe has been drifting all ining low. That bank of england stock drop. The s p 500 for europe, it was just about flat when it opened and you can see drifted down you can see around 8 00 when they announced the panbank of england rate hike. Stocks drifting lower there. Sectors here in the u. S. , stocks are down, a defensive tone to the Market Energy trying to break through to a twoyear high on oil stocks, on oil energys up fractionally consumer zrediscretionaries are weak russell 2000 again underperforming today. This has been going on for more than a month now, since the early part of september. So i would hope that this would narrow, once these tax cuts would become a little more clear, because the russell 2000, obviously, they would benefit. Thats a noticeable underperformance for the small caps apache came out, ive been watching some of these oil Company Earnings a gain of four cents they were expecting a loss but people gave up on these oil stocks a long time ago its going to take a lot for people to get pack in. But most companies have generally been positive, since the earnings came out. So cabot, i think were having some breaking news here, guys. Lets go back to you bob, thanks for that. Just for some details on this tax package, lets get back to ylan mui in washington ylan reporter carl, weve been able to confirm that the Corporate Tax rate going down to 20 will be permanent. It will not expire as lawmakers had previously indicated to reporters. In addition, we also have some Additional Details about the changes to the individual code it looks like the Child Tax Credit will rise from 1,000 to 1,600 and there will also be a credit of 300 to take care of those who have nonchild independents, perhaps elders we also see some details about the writeoff for the property Tax Deduction. Remember that the state and local Tax Deduction was one of the key holdups in releasing this tax plan. Now lawmakers are looking at allowing people to write off property taxes, up to 10,000. In addition, the alternative minimum tax would continue to be repealed thats something that lawmakers have said they wanted to do origin originally also the estate tax. Thats something that we had heard from multiple sources would be gradually repealed. Now according to the documents that we see from House Republicans, that would now be immediately repealed however, the exemption for the estate tax would be doubled. And then it would be repeal after six years. So those are a few of the breaking details that we have of this tax plan. We will be providing you some more information as we have it, guys ylan, thank you ways and means has some interesting charts, guys for instance, if you make 191k, your rate will go from 28 to 25, down a touch but if youmake 416k, 33 to 35 pay a little bit more. Look, i think that thats a winner for democrats i think the democrats will like that and they do need some democrats if this thing has any hope at all. Democrats probably like that, the way the direction thats going. And certainly different from what President Trump might have talked about in the beginning. I still think, im not going back on this this is too hard and you cant get it done. Its just too hard the process is too hard. And i dont trust the process. There you go theres a lot to go between here and a signed piece of legislation. I dont hear you saying a vote by thanksgiving with the way the president no, i genuinely believe therell be a small Tax Deduction for the middle class that will be repatriation and some decline in Corporate Tax phased in over time. But thats it. Because to rewrite the tax code, as anyone is old enough to remember, as i reported it it during the 1990s, whatever pay whoever pays you that check, and it was rather remarkable every month, you would look at it and it was glacial every time they wanted to do something, there was five new lobbyists that would come in and say, listen, you cant do that and the money got spread around. Finally, you had to have the president go to the hill the hill have a but you were also talking about what was a bipartisan effort there in which corporate went up. Corporate rates went up. Corporate rates went up but it was simplification it was simplification here, just the passthroughs alone yeah, its just too much. How youre going to truly regulate that and make shoure tt people are not taking advantage of it or that people are not suddenly becoming contractors. No. As opposed to employees it becomes very, very difficult. It will be interesting to see the language around that and how theyll police that, because it could be a giant loophole. Its going to be a replay of repeal and replace which means, youll have to find other avenues to accomplish something just not getting it was too hard this turned out to be harder than people thought. Everyone thought that when you cut taxes, Everybody Loves it. But this is not a cut for its not an understandable cut the numbers you gave, i get. But people who live in iowa would say, are you kidding me . The guy who makes 100,000 plus, were helping that guy how is that possible and then that guy gets that guy tends to be in new york, so he gets banged again so its way too complex. And with complexity means ion, youve gmeans yo know, youve gt ot to keep it simple this is way too complex. I studied tax law and my head is spinning by this thing market seems largely unphased by some of these details were getting and were expecting more later this morning lets get to the bond bits Rick Santelli at the cme good morning, rick i agree, carl largely unchanged. As a matter of fact, down here, were kind of treading water in front of tomorrows big jobs report lets look at some charts, shall we one week of twos, you know, tight range, tens very similar, bunds very similar the dollar index, very similar but yet, many things are at very important levels as you look at the dollar yen, you can really see 114s important. In treasuries, that 244, 245 urn chan changed is important we keep bumping against 114. Whats interesting is, if you look at the dollar yen chart yeartodate and a tenyear chart yeartodate, wow, instead of 114 in dollar yen, its basically the 240 area in tens all of these markets could brea. Should be an exciting friday and today this morning on productivity was awesome carl, jim, david, back to you. Rick, well see you in a bit. Still to come this morning, forms wells ceo, dick kavacevich s p hasnt been down two Straight Days in a couple of months up four or five and slightly negative for the moment. Zar one of our investors was in his late 50s right in the heart of the financial crisis, and saw his portfolio drop by double digits. It really scared him out of the markets. His advisor ran the numbers and showed that he wouldnt be able to retire until he was 68. The client realized, i need to get back into the markets i need to get back on track with my plan. The Financial Advisor was able to work with this client. Hes now on track to retire when hes 65. Having someone coach you through it is really the value of a Financial Advisor. 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 talking about tax reform this morning as some of the details have been released by house weighs and means theyre going to brief reporters around 10 30 around 11 15 a. M. Eastern time youll see brady and ryan and scalise who might give a sense of what the count looks like. We got to know. Its fluid they emphasized that its fluid just like the Affordable Care act. Got to get to the senate too. Oren hatch has already been very involved but Senate Finance will be more so. Its a pinata where they end up there you even may face that same problem on state and local in the senate too you have some republican senators from high tax states. Call me when you get a little closer in 2018 except for repatriation. The market sort of backing you up on that neither up nor down on the details. Right yeah a couple things. Trading lets get jim. Let facebook come in. Theres no hurry dont leave the stock. Thats really important. I dont want people to leave the stock. Last night i had tyson foods theyre growing mid single digi digits by the way, antibioticfree chicken. Kraft, this is a company thats growing at. 3 thats unacceptable in an era where we have companies, transport Companies Like Xpo Logistics growing at 20 , plus, plus, plus, high double digit. You cannot have. 3 and think that youre going to have a winning stock no matter how much you cut. Its still in the end. Its the inside of the story tyson is on the outside. Everything thats in the core of the store is doing poorly. The only thing i like for them is when you go to ginos and ask for whiz whip which is what ill do on sunday thats cheese whiz. You like that its got the yellow orange color. They took that out of the macaroni and cheese. But they added the color back, general mills. You can have your bottle upside down, straight up, eat the bottle, doesnt matter in the end, kraft heinz is not what you want. Protein, this stuff, this is bad. That quarters bad they have to buy somebody. Which is not going to be easy as weve said many times. They need to get bigger, bigger. Who are they going to buy, david . Story for another day, my friend. Jim, before we run out of time, whats on mad money tonight . Sorry, my bad we got Shopping Center sz and they have tom farrell. I dont want the show to end, but it does end. I know. It rolls on. You got to leave them wanting more. Thats right. Like a good ma shijishen, jim, well see you tonight. When we come back, a lot more on the tax reform bill plus the unveilg tinofhis legislation later. Dow is up three points stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. Win an uncertain world . K predictable income pgim sees alpha in real assets. Like agriculture to feed the world. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over 120 billion dollars in real assets. Partner with pgim. The Global Investment management businesses of prudential. Good thursday morning. Welcome back to squawk on the street. Im Carl Quintanilla markets largely unchanged as we get details now of what is being called the tax cuts and jobs act. That is going to be our focus for the next couple of hours. Our road map for this hour begins with those details emerging on tax reform House Republicans set to hold a News Conference on their new proposal in just over an hour. Well bring you the latest and take you there live. Several big earnings moving this morning including facebook, the social network with a huge jump but says spending on security will hurt profits finally, the president is expected to nominate jay powell as the next fed chair. That in just a few hours from now. What will it mean for the markets . A lot to get to on this tax plan lets get to elon muy as we are about an hour away from the gop News Conference in which Republican Leaders will go into detail on this good morning again reporter carl, weve been able to confirm so far that the corporate rate cut down to 20 will be permanent, not temporary, as lawmakers had suggested even as late as last night. Want to clarify on the estate tax, heres what lawmakers plan to do. They plan to immediately double the exemption for the estate tax. Currently it stands at 5. 5 million for individuals. That will double, but after six years the estate tax would be totally repealed so a little bit of a twofer there on the estate tax. On the Child Tax Credit, were learning that the credit will rise from 1,000 to 1600 and there would be an additional 300 credit for other dependents now, on the state and local property tax issue, this has been a major point of contention for republican lawmakers who come from high tax states like new york and new jersey. What were learning is that the deduction for property taxes will remain for amounts up to 10,000. Now, on the 401 k plans, that has been another thorny issue for republicans. All that were learning that the document that we have reviewed from House Republicans says is that the benefit for pretax contributions to 401 k s will be retained but unclear at exactly what level and if it will be different from the current 18,000 level that exists. Now, members are still meeting there in the ways and Means Committee room that is right behind me. Chairman kevin brady began Briefing Members at about 9 30 with his power point presentation the full text of this bill will be made public at 11 15 well bring you more details then. Its a good day for kevin brady today. Thanks for more, lets bring in austin goolsby, former economic advisers chairman and Grover Norquist president of american tax reform good morning, guys. Good morning. Grover, we need a good 30,000foot view to start. What about this is reconciliation compliant the whole thing is structured to be reconciliation compliant thats why it took so long to put it together. This has been negotiated with the senate as well so theres a great deal of agreement already between where the house and senate are, as well as being prenegotiated with house members. So something very close to this is what will pass the house and the senate the top line news is the republicans just won the house and senate in 2018 this is an amazingly progrowth set of policies and where were told you could never see 3 growth again by the people who brought us 2 growth over the last 8 years, were already at 3 this will take us up to 4. Its a very strong progrowth jobcreating package wait, 4 groewth thats what youre saying . Were 3 the last six months. Thats a quarterly number thats not an annual number. Annualized the last six months so youre talking 4 growth, austin is that realistic to you no. Did he say 4 its 40 growth. Better than 2 which is what we lived through. You know what the biggest problem for this tax plan is no ones read it yet, and the worst thing thats about to happen to it is people are going to read what it actually says. What youre going to see is theyre going to abolish the estate tax, so billionaires get a huge tax cut and theyre ending the deduction of interest on Student Loans theyre going to end the medical expense deduction, cap the mortgage Interest Deduction, cap the local and state Tax Deduction. A whole bunch of things that there are middle class people who get tax credits or breaks now, there are going to be literally hundreds of thousands if not millions of middle class taxpayers whose taxes go up so that we can cut taxes by a lot for the biggest corporations and the highest income people. Thats not going to fly, and if you try to shove 5 trillion of cuts into a 1. 5 trillion suitcase, its not going to fit. So thats where the rubber will hit the road grover, especially on that point about state and local income tax, capping it at 10,000 for property taxes only, theres sure to be a lot of pushback to that. Sure. And what about all the republicans in the high tax states, there are at least 50 of them why would they be on board with Something Like that that would raise taxes on a very important demographic on both coasts no, actually take a look at what this does the most important thing it does, its going to create jobs. You take that cooperate rate down to 20 and allow us to be competitive in the world which we have not been for too many years. We go to full and immediate buzz expensing for the next five years. Ask companies what that will do to make it easier for them to invest, for job creation the biggest winners is not whose taxes get cut how much although thats very nice, but the guy who didnt have a job for the last two years whos going to get a job, your brother, mother, sister, all of the family members that can become employed who have been unemployed because the recovery weve been through has been one of the worst jobcreating situations over the last 8 years that the country is seeing we need to create more jobs. Those are the winners. The jobs that get created, the businesses that get created. There are 30 million subchapter s pass group corporations. Thats 30 Million People that are going to see less taxes and yes, corrupt machines will no longer have subsidies from other states to subsidize their very high property and income taxes, but the American People will see significant tax cuts theyre doubling the standard deduction up to 24,000. Its a little hard for the left in playing the politics of envy to miss that point austin look, the thing is, grovers argument comes from a place that says if we have this trickle down theory of howme the economy works, lets cut taxes for the richest people and that will grow everyones pie. I just think Something Like 28 of the country thinks that we need to do tax cuts of the form theyre proposing, and how are these republican senators going to explain to their constituencies who say, wait a minute, my taxes are going up, i cannot deduct my mortgage interest i cant deduct my state and local tax . I cant deduct the interest on Student Loans, and youre cutting the estate tax for billionaires thats good for me and grover is going to tell them, yes, it is good for you. I just think theyre not going to think thats good for them. Grover, hes not even mentioning stocks at record highs. We had two quarters of double digit profit growth. Claims came in today at 229,000. How do you sell urgency on this . There are too many people who dont have jobs, too many people who say that theyve gotten out of the labor force because theyve given up looking for work we saw the Labor Force Participation drop during the obama years. People are getting out of the labor force not because theyre old. These are people 25 to 55. The reason why Hillary Clinton and obama lost the election last year was they produced a lousy economy for much of the country. This is a job creation bill. They can play envy all they want, but at the end of the day jobs will trump left wing envy, and this will bring the jobs the democrats are scared because of what this will do in the 2018 election. Grover, what makes you so sure that theyre not scared, just to be clear, the democrats are not scared good. Grover, for the 4 growth, what makes you so sure that if you cut the corporate rate down to 20 which many big corporations already pay rates in the 20s or even below that and get this onetime repatriation rate that its actually going to translate into more jobs and higher wages, something that we havent really seen at a time when corporations have been doing quite well we havent seen it because among other things the marginal tax rate is 35 . What were moving to is a 20 marginal tax rate. The european average is about 20 . China is at 25 were at 35, higher than china, higher than socialist china is not where you want to be you add, its not a onetime repatriation were going to a permanent territorial tax system which economists have told us we should have done 50 years ago. That will allow us to be more competitive internationally and were going to full and immediate business expensing this is what kennedy and reagan moved towards in their bill in taking the long depreciation schedules and going to full business expensing, taking the tax on estates, George Mcgovern played that politics of envy and carried one state with it. You can play it if you want but the polls show people dont want to tax other peoples lifetime earnings which is what the death tax is, and its not only bad economics, it kills jobs and destroys capital its lousy politics. The democrats are free to have that issue. Go ahead, austin. I see youmaking faces. No, im not trike to make faces im smiling. My point is very simple im not talking about envy im talking about how do you explain to a middle class person why their taxes are going up while your cutting taxes for someone else theyre not going up. I just think thats not logical. The second is, look at europe. Look at the lowest Corporate Tax rate in the world in uzbekistan. These are not places that are busting out the doors with growth these are magic bean stock beans that have been promised to us before that when george w. Bush said lets the very same people advocating it, lets cut these taxes for high income people, for corporations, lets allow repatriation of money and that will generate massive growth, it didnt work we did this and it does not work to do something thats going to be twice the size of the obama stimulus which the people condemned for increasing the deficit, i just think at a moment when the Unemployment Rate is as low as it is, is just illfounded and not a good idea. Finally, grover, when were trying to draw analogs to the reagan era, Bruce Bartlett was asked whether or not these cuts are in the fine tradition of ronald reagan, he said thats just a lie, too. I know because i [ bells ringing no. Reagan began to take the corporate rate down in 86 but the democrats insisted on lengthening the appreciation schedule and that hurt the economy. Were doing two things, taking the corporate rate down permanently and going to full and immediate business expensing. On the individual side, the good news is the democrats can say anything they want but this bill will be passed before christmas and the American People will be able to see their taxes cut. And thats a problem for the democrats politically. Certainly the calendar that the gop has in mind. Austin, grover, thank you, guys, for helping us understand a complex issue on a busy day. The Home Builders are going to be part of this equation because the mortgage Interest Deduction is something they have been paying close attention to diana ol ek is watching that. Good morning, the Home Builders moving lower on the news that Interest Deduction will be capped at 500,000 for newly purchased homes. The current cap is 1 million so whats interesting is they preserved it for current homeowners so youre grandfathered in but if you purchase another home, newly built or existing home, the cap on the mortgage Interest Deduction is 500,000. Also if you look at the general framework of what was previously released and we now know is going to be the standard deduction, that would lower the number of people who would use the mortgage Interest Deduction. Tax policy commission estimated that 4 of households would claim the deduction down from the current 21 if the standard deduction went into effect which it did, so i guess that really lowers the importance of the mortgage and Interest Deduction anyway of course, the housing industry is not happy about this. This from nar president william e. Brown he says, it appears to confirm many of our biggest concerns about the united framework eliminating or nullifying the tax incentives for homeownership, puts homeowners and middle class homeowners at risk and from a cursory examination of this legislation, it appears to do just that back to you guys. Home builders have having their worst day in several months thank you very much, diana lets get to kayla she has breaking news on the president s ceo dell brags. The president will leave tomorrow for that fivecountry, 11day trip and when he goes to china hell be joined by 29 executives and officials, a list of which we just obtained. I want to show you some of the blue chip names that our viewers will be familiar with who will be joining the president in china when he lands there. Names like lloyd blankfein, the ceo of Goldman Sachs the ceo of qualcomm. Also andrew lib bris who has previously served on the now defunct president s council. The ceo of boeing Airplanes Division this has been a delegation that as its taken shape will announce million billion dollar deals in export its no surprise that the ceo of sen ear energy is on that list and a ceo of alaska gas line we await the details of exactly what this group is going to announce but know that the white house and the department of commerce that have been assembling this list and it has just become final, theyve been looking for companies who have done deals that are large and ready to announce that when they hit the ground in china. Well bring you more details as we have them carl kayla, thank you. When we come back this morning, big earnings movers to get to theyre taking a bit of a back seat this morning as we Pay Attention to taxes were going to change that facebook beats, tesla wider than expected loss. Well get inside their quarters. Later, former twitter Ceo Dick Costolo will join us. Stay with us y . Thank you clients . Well jd power did just rank them highest in Investor Satisfaction with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to wealth management. Expectations the stock is actually down though on growing costs. Julia is with us to break it down including that Conference Call everyone is talking about. Sarah, thats right whats driving down Facebook Stock is the company is warning that next year total expenses will grow between 45 and 60 and Capital Expenditures will roughly double that outweighing the fact that facebook beat expectations on every single metric. Earnings of 1. 59 per share were 21 cents higher than wall street projections while revenue instead of decelerate is as expected accelerated to 49 growth to 10. 33 billion with this 2. 07 billion users, twothirds of them using the service daily, those user numbers were a hair stronger than projected but the big headline, ceo Mark Zuckerberg saying that the company is prioritizing security over profits ive expressed how upset i am that the russians tried to use our tools to sell mistrust we built these tools to help people connect and bring us closer together and they used them to try to mund mine our valu undermine our values what they did is wrong and we are not going to stand for it. Zuckerberg as well as Sheryl Sandberg reiterating the companys investment in technology and people to review ads as well as posts. I am dead serious about this. And the reason im talking about this on our Earnings Call is that ive directed our team to invest so much in security on top of the other investments were making that it will significantly impact our profitability going forward. Sheryl sandberg saying facebook will continue to accept ads on issues, that they believe in free speech they want to a lot more transparency about whos buying and whos targeting what guys, back to you. Facebook shares are down about 2. 5 thank you. Alibaba out with earnings this morning ahead of street estimates. Revenue up 61 the company says its driven by robust momentum in its core ecommerce business. Daily average users up 180 compared to last year. They are also talking about 549 million china Retail Marketplace mobile Monthly Average users the only concern among investors and the stock is up lets call it a little less than 1 right now, was on margins which did decrease made some brick and mortar investments over the course of the quarter and generally speaking margins were less than people had anticipated, what, 62 versus 57 versus 62. Overall Revenue Growth very strong Strong Enough to sustain a stock price that already was up about 112, 113 during the course of this year. Not a disappointment for those who chose to invest here with its 61 top line growth. Pretty stunning. I always want to mention by the way when it comes to alibaba its worth mentioning soft bank theres a look at the margins, thank you it owns almost 30 of the company and has benefitted from this enormous rise then theres aaba, remember, some 384 million shares of alibaba as its main asset. This is the old yahoo remember that . Which has also been up 84. 5 this year it continues to trade at a ki discount to its underlying value based on the fact that it would be taxed were it sold but thats another area where tax reform plays a role if you were to get a favorable scheme that would narrow that discount conceivably because if they were to sell it they might not suffer the same consequences. It always reminds me of amazon and i know obviously there are very important differences in the businesses but the way that ma is trying to reimagine retail, invest in brick and mortar and super markets after growing the ecommerce business. Their Cloud Business grew 99 year over year to about 447 million. Thats coming up in november. 1111 that stock higher again later this hour, the ceo of the National Retail federation joins us with his thoughts on what the gop tax bill will mean for the retailers. Ghaf squawk on the street rit ter this with the dow down about 70 points 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 stocks are down at the moment but bitcoin continues to march higher again this time soaring right past that 7,000 mark for the first time ever. The latest company to be interested, amazon it secured three domain names relating to crypto currency. Amazon crypto currency. Com is an example of one the Company Never acknowledged any plans toaccept bitcoin or get into Digital Currencies but they do appear to be exploring something at least related and the speculation is rising of course with the price. Bitcoin also got a boost from the cme group saying it is going to launch a futures market, guys, just adding to the legitimacy and potential liquidity from the Overall Technology when we return, much more on the republican push for tax proposal the gop News Conference under an hour away, well of course take it there live. Well also talk about the impact the bill could have on big retailers. Stay with us usaa to me means peace of mind. We had a power outage for five days total. We lost a lot of food. We actually filed a claim with usaa to replace that spoiled food. And we really appreciated that. Were the webber family and we are usaa members for life. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Good morning, everyone heres your cnbc news update at this hour. At least 15 people were killed when two fuel tankers exploded in a town southwest of the afghan capital, destroying a nearby bus 27 people were wounded a security official says a sticky bomb destroyed the two tankers and that set off the explosion which engulfed the bus. Prime minister Benjamin Netanyahu greeted by british Prime Minister may, netanyahu is in london to attend a dinner marking the 100year anniversary of the ball four decoration. Police z arrested a man of killing three people at a walmart in colorado last night this is Surveillance Video of the suspect. According to witnesses, we walked into the store and opened fire on a group of people near the cash registers. Houston defeating the Los Angeles Dodgers 51 in game seven. That led to a wild postgame celebration in the astros clubhouse. Houston came into the league as an Expansion Team back in 1962 congratulations to them. Thats the news update this hour sarah, back downtown to you. Houston strong. Thank you. My poor dodgers though. But thats okay. Sorry davids poor mets didnt make it neither did my poor reds. Gop lawmakers getting ready to make their tax reform bill public the Retail Market is a significant sector of the equation, saying a strong tax reform proposal could provide a major boost to the sector and the economy. Lets bring in the president of the national federation. Good morning, nice to be back with you were very optimistic, pleased in what weve seen so far. Lowering the corporate rate to 20 , simplifying the code, lowering the rate for passthroughs to 25 , those are big positives in our view. Retailers employ 42 million americans in this economy and generate one in four jobs across the country. Anything that we do thats good for businesses and consumers in the middle class we think is going to be good for the economy over all so were very optimistic with what weve seen. Theyre also Closing Stores and facing a wave of bankruptcies and slower traffic and the threat from online how does that play into the fact that youre saying this lower Corporate Tax rate will result in more jobs and higher wages . A couple observations i was at the white house earlier this week with the president and a small group of industry ceos the president asked me this very question, said whats happening with retail. It was an opportunity to talk about the transformation thats taking place across the industry, the way in which technology is being deployed, the jobs that are being created, and the fact that while there is an enormous amount of change happens as there is across the country and other industries, were still creating jobs, were going to drive 3. 5, 4 growth. I guess the other observation we would make, weve heard the Global Commerce ceo of walmart say this and you mentioned alibaba, i was in hong kong a few weeks ago, they were talking about the fact that there can be no ecommerce without stores and no stores without ecommerce i think the world is starting to recognize theres a role for both channels but its going to look differently than it does today. But stores wont go away its going to look differently but still plenty of opportunity for retail to grow. Matthew, some analysts are suggesting that soft line comps will be negative this year at traditional retailers for the First Time Since 08 because were going to spend our money on a new cell phone or buy it on amazon or were going to spend it on gas. Does that sound right to you well, carl, lots of change is happening and we know since the recession we have a different kind of a consumer we know people are spending money in different ways on experiences and on hospitality, travel, lodging. We know that the share of the dollar in terms of Discretionary Spending has been distributed differently in the last decade thats one of the reasons that retailers of all shapes and sizes, whether its apparel and soft goods or others are trying to find a way to bring that experience and technology into the store, into the way in which they engage with consumers i think theres this competition and a shifting of the way in which costs gets distributed across the economy, and retailers are going to get their share for sure they just got to continue to be creative and find new ways to make that happen. What about consumers, matthew . Based on what we know so far, it does look like they are slashing the state and local Tax Deduction, limiting it to 10,000 for property taxes only. Arent those important consumer bases on both coasts of the United States, high spenders, and is this going to lead to a boost in consumption is there enough of a tax cut here for ordinary people listen, weve been intimately involved in the conversation about tax reform since the beginning of this year weve talked aboutit with you on a number of occasions the Retail Industry pays the highest Corporate Tax of any industry, 35 . But of those 2. 5 million businesses out there, those retailers, 95 of them are Small Businesses with one location half of them have only five or fewer employees. I think our objective all along has been lets keep our eyes on the prize here the objective is lets make this a more competitive economy, simplify the code, lets lower the rates. Lets have some faith and some confidence and some trust that when we get those things accomplished everyone is going to benefit ultimately. If we get hung up on the details of who are the winners and losers on a very discreet parochial basis, were never going to get anything accomplished the objective should be whats in the best interest of this country, in the best interest of the middle class taxpayers, working families, consumers, voters what works for everyone. I think the emphasis on lowering the rates, simplifying the code, a number of other changes. Chairman brady has the toughest job in town. Hes done a magnificent job of getting us this far. We want to help make that a rerealr reality. Rather than get sucked into the debates of whos the winner and loser, lets focus on the overall objective which is lets get tax reform done. When the Home Builders says all the resources we were going to put into supporting well put into opposing, you think thats a one off . Well, im not going to get into commenting on other industries i know jerry, jerry is a great advocate for his industry. Were trying to focus on the big picture here we were very involved in the conversation, as i referenced a minute ago up to this point on tax reform we continue to be. Weve got enormous resources set aside and being deployed now to support this plan. I think ultimately this becomes about whats good for the country and whats good for americans, whats good for Small Businesses, the middle class i think at every turn here chairman brady and the committee, when theyve looked for sortheir north star, guidin light, over all philosophy on how to do this is whats progrowth and promiddle class. If you think about, that a lot of these skirmishes on the side are going to fall away because theyre going to look very parochial, very narrow, and thats not what we need right now. What we need is a big picture and really reach for the stars and try to get done the most we can get done because if we do that, everyone will benefit in the long run shortterm theres going to be disruption, but if we do it the right way we should have confidence and faith that were all going to be better off if the economy grows at 4 , 3. 5 quarter after quarter and gdp growth were going to have more jobs, wages are going to increase, people are going to build more stores, people are going to build more of everything and do more of everything maybe not more stores. Not more stores you heard me, yeah Economic Growth more warehouses, more distribution. All right no more stores i hear my favorite jesuit skeptic over there i know what youre saying. Thanks, matthew. Definitely happy that you do dodged the biggest bullet, the border adjustment tax. Thank you very much. Thank you talking about retailers under pressure, underarmour continues to sink, the stock finding itself at the bottom of the s p 500 again today. The news, they lost two key execs, andrew duncan, the chief marketing officer, and pamela catlet, the scp and general manager of the womens and Youth Division both departing, mutual division from the company guys, investors dont like it because these were celebrated big hires, especially andy duncan the stock rose when he came from act zon, was considered a big hire for underarmour clearly this is a company in the middle of a transformation and restructuring and theyre making tough decisions around that. Theyve got this new coo and president thats taking control of the business. Investors dont see a light at the end of the tunnel just yet. When we come back, the president is said to make his decision on the next fed chair in a few hours former wells fargo ceo Dick Kovacevich is going to join us on squawk alley on his prediction and what it means for the markets. The dow is down 22 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 stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. How will the nomination of the next chair of the Federal Reserve impact the mke aartsnd your money good question. Find out on trading nation or squawk on the street coming up getting some headlines from dow jones related to the department of justices continued investigation of the plan by at t to buy time warner. Let me share those with you right now. The Justice Department, according to dow jones is considering an antitrust lawsuit against the acquisition. They are also in settlement talks and that typically does happen youll have the talks. Whats important here perhaps is the idea that theyve met in recent weeks with the doj. They havent made a final decision but they are not, again according to dow jones, close to an agreement or settlement this is unexpected the timing is pushed out here we are in early november. Expectations had been this might have closed as long ago as a couple of months in fact you did have finally an antitrust competition chief put in at the doj. But what the grounds for a lawsuit trying to block the deal would be remains somewhat unclear and, frankly, would be unexpected by many of the participants given this was not seen as a potentially anticompetitive deal horizontal in nature, not what were talking about here of course, the president s opposition in the form of at least his various threats on twitter about cnns coverage and earlier this year pomore pointed references, always a question in terms of what the review would be like but frankly many of the legal experts certainly that ive been speaking to through the months would have maintained and i think continued to that it would be a hard case for the government to win if they were to make it again, dow jones not saying that they will but they are considering an antitrust lawsuit. The stocks are halted. I want to make sure i understand why, whether its for an imbalance or anything else at t is not halted so time warner is just halted. Its got to be an imbalance, guys. Indication 89 to 93 as you can see from your screens. Could this be because the president hates cnn . That was always the concern it was it was the concern that would the executive try to reach down or would the doj in some way respond to perhaps what they felt was his desire to see this deal blocked, but that really has receded a great deal as a concern. Frankly, you go to court and so the governments got to prove its case if it feels its anticompetitive, well see whether they choose to do that my expectation would be, at least based on what i heard, that at t would be happy to meet them in court and try to prove its case well see. Were not there yet according to dow jones certainly. The expectation was this is going to get done by year end . Without a doubt and continue to be what they say at at t. Frankly, carl, i have people close to this who believed it would have been done already six weeks ago. So the delay has been concerning people because were past one year since they actually announced oh yeah were past a year. Randall stevenson for his part has been confident on Conference Calls that its going to get done, right yes. Minor delay. Yes, they have. They felt very confident on the antitrust fund for sure lets get over to Rick Santelli at the cme for the santelli exchange. Rick thanks, david id like to welcome my very special guest today, dr. Judy shelton, an advocate of sound money. Dr. Judy, thank you for taking the time today. A pleasure, thank you, rick well listen, when it comes to the central bankers of the world, sometimes its all about foul language, not foul, fowl. We know about hawks and doves. Dr. Judy, you added a third category maybe you can tell our viewers. I think youre referring to my piece in the wall street journal recently. I think we no longer have that same dichotomy of wanting a hawk or a dove because a hawk these days might be looked upon as someone trying to sabotage the progrowth program and a dove could be a good republican like jerome powell, the next chairman. What i think we need is a woodpecker i mean someone who hammers away on the importance of a sound doll dollar it means it should be a stable, reliable, dependable value thats the most important of our legal tender. In the past youve written extensively obviously on this topic and you bring up things like many of the policies at the United States might take in the future can be negatied by foreig exchan exchange so how do we get to an area where we can create a more dependable, less volatile environment for the reserve currency of the world in the form of the green bank im happy youre emphasizing that because just to point out how a volatile currency can undermine what youre trying to accomplish, if for instance youre trying to lure back companies who have headquartered overseas and you offer a better Corporate Tax environment, they may also have to consider whether the currency aspect will cause them to lose more by returning to the United States you could also see what youre trying to accomplish in your trade reform policies equally undermined if suddenly the dollar gets stronger or weaker relative to other currencies because theres no question that trade and capital flows are very much affected by shifting currencies i think we need to get back to thinking about our money as a unit of account and since the dollar is the worlds dominant currency, we have to think whether we can come up with a common Reference Point so that we have a stable monetary foundation that would support global trade based on everyone following the same rules, a level monetary Playing Field you might say. Well, it all sounds good. Im not sure how were going to get there but i do know one thing. Theres three governor vacancies at the fed i know somebody who would be a good choice for one of those i think im speaking to herat this moment. Thank you so much, dr. Judy shelton. And now were going to go back to squawk on the street. Very kind, thank you. Sentelly time warner shares have reopened. There was an imbalance little time ago, frankly, casting doubt on the ability of at t to complete the time Warner Acquisition because ofpotentia opposition from the department of justice, which might come in the form of a lawsuit to try to block the deal dow jones saying its not definite that that will be the case, but they do refer to talks about a settlement that have not advanced or not at least close to an agreement, you can see, of course, that stock trading down sharply. Certainly, when you consider what the value of at ts acquisition is to time warner shareholders memories of 2011 and tmobile, right . At t has been down this road before they have, they have. Now that one most people day one said how are they ever going to get this done, going in 4 to 3 and the largest player buying number four, but this one, thats not been the case and theres many people who would be a tough case to be made by the department of justice. Well watch that. Mane while tech executives from facebook, google, and twitter facing tough questions on the hill their companies played in the election how did those impact the bottom line joining us this morning, ceo of chorus, of course, former ceo of twitter. Good to have you back, dick. Good morning to you. Good morning, thanks for having me. I got to get your take on just the tone that zuckerberg said when he says protecting our community is more important than maximizing our profits this will significantly impact our profitability going forward. Is the cost of fixing this that material well, id start off by saying theyve done a pretty good job of nailing down maximizing profits. So they can move on to some of the other issues they are facing i thought that was a smart thing to say a good thing to say, especially on the heels of jack dorsey announcing they were going to get aggressive about some of these things so i think its, obviously, an important thing to be doing. In terms of the steps they are taking, twitter ruled out some solutions zuckerberg talked about doubling their security staff do you expect more, and do you expect more estimates of how Many Americans were exposed to some of this content as weve seen over the course of the past few weeks, the numbers keep changing. I think thats not due to any onification, i think they are learning more. I dont know whether the numbers will go up or down, but they seem to be learning more about how broad this was and i would expect that to continue for quite some time as they uncover more and more of what happened these things are always an arms race not like spam, where you have spammers trying new attack vectors and you figure those things out and go after them i, frankly, dont believe theres already an extraordinary amount of money spent on security abuse and spam inside these companies. I doubt that it will impact profitability that dramatically. I think thats just something that was important to say for optics, but they are already on top of these things and getting after them more aggressively, and i think theyll continue to do that. You dont expect any sort of broader soul searching from some of these companies about how they handle fake news, how they handle hate speech and harassment and terrorism and so many of these bad consequences that have come with the proliferation of social media, more than 2 billion users on facebook around the globe. You dont think it will be material dont get me wrong, im not saying theres not a lot of soul searching inside these companies about whats happened and their role in whats happened and what they need to do going forward. Im just saying theres already an extraordinary amount of money and time and effort spent on this kind of issue, abuse, spam, fake accounts and i expect theyll redirect a lot of those existing efforts towards this, and add more resources to those existing teams theres an extraordinary amount of soul searching going on inside these companies about whats happened. A lot of internal debate inside all these companies. And, you know, a lot of discourse about where they should be focusing their efforts and how they should be focusing those efforts. Dick, we always like to check in with you on tesla after the loss last night, their largest ever, pushing back the model three target now theres some word as we parse the tax bill that some of these electric vehicle credits might be at risk, and with that the stock is taking another leg down this morning, down 8 where does the myth of tesla and musk himself stand today its important to distinguish between the important work a company and a person like elon are trying to do and the stock price. Back in may i mentioned we thought the stock was way out over its skis. Thats no, you know, thats no comment about what i think about the work elon is trying to do and how important it is. I own a model s, its like, you know, the best car ive ever owned. I just think the stock can get, and the story can get way out ahead of the companys ability to deliver on the promise, and i think what were seeing now is those two things startingto come back together so, is a 20 drawdown that weve had since september enough you know, look, im no prognosticator about these things, but it still seems just personally expensive to me the companys got a long life ahead of it. Its an important company, but i think the story got way out ahead of its ability to deliver. Do you think any of the blame goes to elon musk himself for overpromising and underdelivering . To be frank, no i think your job as a ceo is to paint a vision for your employees and tell a story to your employees and your investors about where you want to be and where you want to go and to, frankly, set aggressive goals, you know, and try to get your team to execute against those goals. And hes doing that. And elon is always going to push the envelope you dont build a company like spacex by saying were going to make small, incremental changes. So i think elon is doing what hes always done, hes pushing the envelope and being aggressive, and i think hell continue to do that. And i would expect him to continue to do that. We expect you to keep coming on the show, dick, thats all we care about good seeing you. See you soon when we return, an allstar lineup of coverage as we get ready now for the gop News Conference on tax reform well have former labor secretary tom perez, his reaction to that and more, voeduding all of the big players inlv dows down 6 points. Dont go away. 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. Good morning, its 11 00 a. M. On capitol hill, 11 00 a. M. 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