Down to 67 basis points today. Road map begins with the year of trump. One year since donald trump historic run, is there still room to run for the stock market rally that followed . A snap lifeline tencent posts a 10 stake. A snapchat redesign. A president ial warning to north korea, do not try us we will go live to beijing, the latest stop in the president s tour of asia it was the year ago today that donald trump was elected president , market history has been made with stocks constantly hitting record highs since the trump election, the nasdaq is up 30 and s p a 21 gain guys, if you look at first years of incoming president s, its third behind kennedy who had 26 his first year and bush 41 had 23 were going to look all morning long at the impact on m and a and how the tweet moved individual names. Its worth talking about. Lets get one thing straight, the rest of the world has been good too i dont want people to say if they hadnt been in america i do think theres an atmosphere that changed thats so pro stock. When you have a president who grades himself by how stocks do, you know hes not going to hurt the market most of the president s havent cared about the market i think jfk did because he lowered capital gains. Its been a great run. Great run. But summer is out this morning. Constant critic saying its crazy for the president to wrap himself up in the rally when hes going to have to take responsibility for a downturn, if and when it happens. You think he would do that . Are you kidding me . It will be someone elses fault not his. People were expecting that a year ago now everybody was panicking and here we are with these very, very strong moves on all of the major averages. The world turned around in this particular quarter, the dollar has gotten weaker, and the amount of m and a is incredible its less than it was in 15 and same as it was last year its not incredible. All right, the trillion dollar figure, proposed trillion dollar the number i saw indicated it was good. Certainly were in a little bit of an upcycle with the broadcom and qualcomm and fox and disney, at t time warner well get to later theres stuff going on no doubt. U. S. M and a, 1. 2trillion around election day november 6th of last year to november 2nd of this year. Thats the most of any first year of a modern president 1. 2 trillion, 12,000 deals right. Look, i think that the stock market came in under value i really do. It came under under value. Retrospect we know that but its mostly earnings, isnt it earnings have been great. This Earnings Period in particular is hard to find the disappoint, i would nominate mallen krot as the worst under armour was not particularly good either. I saw an upgrade yesterday was mentioned. Rbc i think. Rbc hope springs eternal. But the oils came back, transports came back industrials terrific, banks very strong left out is retail and i get that. Yeah. Carl, anything on the second year of the presidency in terms of what we can expect . Were going to start crunching susquehanna who went neutral on under armour. Adobe fully effects it will be an Online Christmas in the way weve never seen i think brick and mortar, about the numbers that will come out, i mean, youve got to shop, people well, target closing some under performing stores. We know sears and kmart adding to closures this year. Macys not that strong. If you look at Sector Performance since election day, amount erospace defense far and away number one and retail last. Everybody was in the ship Building Business then and stocks went big then they kind of leveled then they went up big again as the proposals became into law and boom. That was the group to be in. Meanwhile, when it comes to this administration and what theyve done deregulation. Legislatively, nothing. Dereg which added to conferen confidence. Thats the main thing it has done the thing it hasnt done excuse me. Last time i do that. The thing it hasnt done has made it so oil and gas went up as deregulation produced more oil and gas, they kind of it was selffulfilling. That industry which should be doing much better is overwhelm by it self. You can drill pretty much everywhere youre allowed to drill except in new york state. They want to drill almost in Like National wildlife refuges im not saying big inspections being done when theres an oil spill, you know, easy come, easy go remember when there used to be were going to talk more about what happened. Inventories are today. Its going to be a busy day for snap shares in the premarket tencent has bought a 10 stake in the company, acquiring those shares through the open market that information comes after snap posted that quarter loi loss and revenue miss with daily active users below estimates on the call he said the company is working snapchat more user friendly were currently redesigning our application to make it easier to use. Theres a strong likelihood the redesign of the application will be disruptive in the short term and dont know how the behavior of the community will change when they begin to use our updated application. Were willing to take that risk for long term benefits to our business. Rbc goes to hold, you made the point, it used to be confusing in a cool way. Now its confusing in a not cool way. This was a horrible call. Basically they said, listen, dont worry, all of the things you hear about us that are bad, they are bad, were getting to them give us some time. Isnt it fun people like snap, you know, you cant have a Conference Call like that. Thats the kind of Conference Call its a pitch to Silicon Valley we could kill it and we had spectacles. The changing the app and changing the way they deliver advertisements. Didnt they think that . Changing a lot. Not that many months after coming public. And of course after a quarter that was as we pointed out, very, very disappointing from a revenue standpoint, from pretty much most of the metrics used to measure the progress the company has made. Use up 4. 5 million, last quarter they were up 7 quarter before that they were up 8. Last year a quarter up 20. They came the right time. I dont care if its ten cent or fifty cent, nothing to buy here. Theres nothing to buy here. Tencent saw something to buy, 146 million shares practically. A lot of people bought at 17. Marking it down. The great thing about tencent they can average down and get a better price. They can keep buying yeah. If it goes to zero, they own 100 . Wont have votes though. Right. They wont have any votes evan, clearly i think he felt it i think he felt he disappointed people this is the First Quarter after disappointments i think he was sad. So jim, what im in speaking to people, they need to on board a lot more advertisers and facebook has 6 million advertisers. You know what they need just they need viewers they need technology, okay they need advertisers. And can also use Gross Margins. They are hosting costs and cost of sales for them that does have diane green, google. Does have the effect of compressing the Gross Margins but they are not good at all. Do you think its a company or just kind of a fraternity of people who have a website . You know what i think like delta house. I come back to this idea of scale, which i keep hearing more and more about, the inability of any company to truly challenge facebook or google or amazon and heres another example, how are they going to do it . How can you make out of this sort of small world that theyve been left with in some way i think pick at the pieces. They have a huge amount of money. So what they really say is well figure it out. Kind of like a special purpose vehicle. Well get this thing together. Dont worry about it what i didnt know, before i read this was how badly everything is working for snap you know, android, did you know did your kids know how bad it had gotten. I dont know what my kids are doing. I dont know if they are using snap or not. My daughter switched to insta. Finsta and insta recode has a crazy chart of looking at stories, number and surpri surpassed them like they were standing still. Now the next phase to go after people who are older than 35, jim. They are going to make why would i want my stuff to disappear . Appealing to those 18 to 34 was the original focus and now moving towards the older demographic. Spectacles i dont know when theyll get to you and me. Did they wake up one day remember they brought them up and we all wore them hardware inconvenieventory they had a big charge they threw everything at you but theres they have a lot of money, they are losing a lot of money going through it fast. The shareholders are going to be in revolt okay. No, the shareholders have no say. No say. This is really one of the Great Stories of all time. I mean of all time no no votes, really horrible quarters right out of the chute. Told you a lot of stuff, really funny, guys. My daughter says hes handsome there. Okay i have a selfie with him but i think im going to have to delete it. How do you delete . How do you delete on what put the little trash can . That will get you where you want to go. Boom. Sorry. You just deleted the selfie you took with evan you are so excited that day, you ran over to him and took the selfie rarely have seen you most sincerely sincere man in north america. How did you not know that . Did you really think im a tower of sincerity. I was calling you out on it. We should be fair, you have been spectacle on the share since you can use it but you have to sell it evan, did he wear a tie . No. Okay. Did he on that day . I think he borrowed a tie. When we come back, were going to get a lot more on the trump agenda, the president is in china as he continues his trip through asia. Well go to beijing for a live report dow is up six days in a row and four streets of six plus days in just [ keyboard clacking ] [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. The president continues his asia trip with a visit to china. Kayla is in beijing this morning with the latest. Good morning, kayla. Reporter good morning, carl. The chinese are calling this a state visit plus, all of the normal state and extra flourishes like a double date at the peking opera and private dinner at the for gbidden city n factories being idled to see the sunset in beijing at all but the hospitality today belies the hostile conversations that will take place tomorrow during an expanded bilateral meeting and several high level meetings set to take place topics to be considered, north korea, how do you thwart that threat how much more involved will the u. S. Be able to get china to be and what do you do about the 347 billion trade deficit made even more difficult by the fact the last time they had high level financial talks in july they broke down without any deal reached. There is some Common Ground this time around, roughly 9 billion worth of deals are set to be announced as part of a delegation that commerce secretary wilbur ross assembled. He made some comments about those deals during a signing ceremony tonight one of them, for instance, a 2 billion import deal by jd. Com for american beef and pork but 9 billion worth of deals mean you still have 336 billion worth of that deficit to chip away clearly theres a lot of ground for these two leerleaders to map they have a good rappaport but there are moveable objects and well see what those turn out to be this time around. They are expected to make a statement in the hall of the people tomorrow midday theyll have to reach some sort of conclusion, carl . Kayla, well watch for that during the day your time, night our time been with the president throughout his trip. Year ago his language on china and trade was harsh. Yes, and you thought he would crack down on steel and use 232, base he cically saying steel isa national treasure, were going to shut down he did not do that at all. Some of the steel people told me he sold us out he turned out to be a president that is helping the same companies that have done well in china before but he is trying he is pitchman in chief. So you may not like that he ended up going with the same wealthy companies always done well, opposed to trying to stop them from flooding our country, but ive never seen a president go out and try to sell like this these are countries like korea, we have terrible trade deficit going to china, youve got to buy more, thats an unusual stance it explains why weve had a trump rally. Hes out there literally drumming up business. Yes, lets go raise earnings per share to take the stock market up because its the barometer of what i do and does put people to work it is surprising hes got old Line Companies and new Line Companies but i think people are scared of him over there you know what, just go do some business go do some business. We want this guy off our back. That will work. At the same time, hes trying to ask china to cut financial ties to north korea and this interesting late stage diplomatic outreach, make a deal, he says. I think a lot of people felt that was in some ways a cave in. The state department has been adam antethis not hant rex tiller son is doing the same fabulous job as he did ats exxon, he reads the tweets when we do. It sure feels that way. Do you think he likes the new limit of characters . The president has been active at a 140 plus count on characters. There you go. It is interesting to think about twitter versus snap, how much better twitter is in terms of where it can go i think the president is not going to be on snap any time soon. Unlikely. Right no, hes not a snap guy. When we come back this morning, well get cramers mad dash and count down to the opening bell a lot we havent gotten to, including the Election Races last night and tax bill which we are expecting a marketed up bill in the house by the weekend. Although Big Questions being asked this morning about the timing of that Corporate Tax cut. Back in a moment 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. 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. Hes back and were back here together for a mad dash in person on this wednesday. And its wednesday. Thank you, hump day you want to talk about zelnick. We got a quarter and david, this company would issue a gain and go this and this no, this is now the great sector of the groewth story in the industry, grand theft auto and mba 2k and red dead number two, which my nephew, head writer and everything else, tells me its going to be unbelievable it needs nvidia chips, they report later this week the most amazing thing about this, hesdy verged from activism and blizzard, grand theft auto is the greatest entertainment engine of all time for gaining and because of the stay at home economy thats what they are doing that was the lesson of red robin gourmet. I dont know if you got that fully. I didnt get that fully people are not leaving their homes . They are not, calling door dash or grub hub, bring me a burger they got the six at the supermarket and sit there and just and xbox has got to catch up by the way to switch. Thats nintendo, microsoft. Satya has to get more competitive. Hes competitive with adobe with sales force. Its like a war between the states there. Thats an incredible chart. Look, weve got great recurring revenue and this is where time warner should have bought them but grand theft auto doesnt really have that same bugs bunny feel to it. No, it doesnt. Its a little more challenged could have worked it in with the grinch for disney. Grinch and grand theft auto. Congratulations on the david faber brokerage out. The house of david faber broke the story. Weve got other m and a to get to were going to revisit broadcom and qualcomm not revisit. Are you going hock . A little hock opening bell rig aerhi htft ts. Question. What is an answer htft ts. 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. 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 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 allow you to take advantage of growth opportunities. With a level of protection in down markets. So you can head into retirement with confidence. Brighthouse financial established by metlife. Youre watching cnbc squawk on the street. Busy wednesday, the anniversary of election day last year, more races last night nice wins for the democrats. The president is in china and snap chat earnings and tax bill. Washington post reports that Corporate Tax might go a year late to save 100 billion. Richard lefrak said thats splitting hairs. I dont think its going to happen at all. Maybe a little the differences are very sizable of what they are talking about and there are republicans who everybody kind of figures just lose their job immediately and in the states that must have some say i dont think theres anything that makes me feel like that theyve sorted out various rates for different deductions, the 500,000 mortgage, obviously the people will fight that youre alienating lobbyists who had so much power, i dont believe they wont be able to say, whoa, lets hold this up. Theres Big Questions about some republicans want the medical expense deduction preserved. Theres still the question of whether or not it repeals the individual mandate i cant figure it out. 48 hours before were expecting a marked up bill. Im looking through how many times can you call your accountant to ask how bad or bad. To become a pass through, whatever you need to do. This is the back bone of the economy. Ive heard that john oliver. Hes very funny, he thought i would hate him after that. I loved it. Lets get to the opening bell, s p at the bottom of the screen at the big board it is celebrating its ipo, four seasons education for Elementary School students in shanghai and nasdaq at the ulta, celebrating its tenth listing anniversary and Manhattan Store opening. Ulta has been in the cross hairs of a lot of shorts from elf, theres a sense that cosmetics slowed down but when you talk to fabrizio, its not they do stuff with mac in ulta beauty it settled in the low 20s area of the surviving retailers costco gets the low 20s and walmart is too low i keep hearing when i was out in Silicon Valley, walmart is spending a fortune to beat amazon and ive got to tell you, i think were going to be impressed with walmart and jet. Com. Yeah, you think so . And the guy who runs now dot com who was brought over you kept hearing that walmart is not going to be royaling the market, also diane green talked about the notion of trying to the amount of business shes the ceo of Google Web Services theyve got this analytic thing now that makes it so they are definitely equal to amazon because mark does the amazon one. I keep waiting to hear what satya has at microsoft and what hell do with azure. They have more business than they can handle. If i work there as a sales person, i would would be like 100,000, 500,000, a million, yeah, done then when you listen to the snap call, by the waythey pay googl a lot of money, you get the sense that nobody is calling hey, 3,000 . Wow, biggest of the year okay, ill go tell evan and he have ven, we just did 3,000 and evan goes we own the company a lot of marketing analysts looking at the shift in ad prices down as they went to problematic. Why didnt say say programattic has no margins whatsoever the street, my other job, i remember when they first explained it, i said, i get it, i mean well just make much less money. Yeah okay i didnt want to put it that way because i didnt want to make it so you were upset, jim. Meanwhile welcome to the show. Im trying to do other things, listening to you all i have is a new tie. I love that tie. Beautiful. I got it in milan milan thats beautiful. Thats a beautiful tie i want this tie wow. Jim stewart carl, youve got to feel that tie. That is so soft. Like a 500 count. Ive got to have that lets talk about at t and time warner. We can read minds at this point. Shares ever time warner are down this on comments from the company cfo john stevens and i was trying to find it in my mailbox here specifically. I know we have it. Lets put it up. Wells fargo conference and base he canal ically mr. Stevens changing the time line for approval of the deal heres what he said. All approvals have been received back from doj. Were in active discussions with doj and continuing i cant comment on those discussions but with those discussions i can now say the time in closing the deal is uncertain. Theyve been talking year end now they are not listen, if youre in their position lets go through this a bit. Weve got time. Youve been negotiating this for quite some time, the Consent Decree would have appeared at one point, then you get dell ra him put in as the antitrust guy. And he suddenly begins talking about the lack of we hair ybehal remedies, lack of Consent Decrees and having to do something structural thats where we are. We dont know how long this is going to take but if youre at t youre not going toput a time line on it, are you . Because theres no antitrust file jim, its a dream up. I love the way you say that. 40 years there has not been a vertical integration has been blocked. 40 years so the idea what do you have to go back to i dont even know the idea this is blocked from the very beginning seems highly unlikely, however, politics seems to at least be something people want to talk about when it comes to the perceived opposition from the department of justice. The president has made no secret of his disdain for cnn and coverage of its administration, of the most recent reports from Robert Mueller when they were reporting on pending indictments and ended up being manafort and gates, that was the other guys name. The question continues to be raised, is he somehow trying or being perceived to apply pressure to gain leverage on cnn through delaying this . We dont know. Theres no proof of that it comes up in the dialogue all the time around this deal. On the investment front, there are still plenty of people who think timeline delayed perhaps but if they go to court which conceivably if they want to try to block it, they have to. At t would meet them there and everybody thinks at t has an incredible strong case to win would delay it even more. I caught off baker hughes halliburton, technology. Theres nothing they can do to remedy because theres no real violation. The question is if you allege a structural defect and they need to sell something what are they going to sell by the way, the Justice Department has been a little apolitical nixons wasnt and jimmy hoffa, jfk, when they set up to get hoffa, otherwise, justice is supposed to be like guys, hey, listen let me figure this out. The president theres like a body of law, david. The president most recently said in a radio interview, im not supposed to be involved in the Justice Department and not supposed to be involved with the fbi and doing the kinds of things i would love to be doing and im very frustrated by it. Well, id like to know what the Great American thinks about this. I think he thinks i dont know what he thinks. I think hes probably staggered. Its hard when you have theres no what are they going to do . What are they going to divest . The first few games of march madness . They have been working towards and those comments from mr. Stevens indicated they had an agreement on a socalled Consent Decree which would have behavioral remedies for a period of time around the deal and then theyve been delayed i think a lot of people are wondering, well, why quickly Elevation Partners antitrust reaction is that this is overdone, deal trading now only 60 probability of closure, we think that market implied probability is too low. Arbitrary ka preeshs ruling, i really think so. We havent had a ruling. Intervention. Delay. Delay, youre really youre a diplomat all of a sudden just like the facts, okay time warner is in the bottom five of s p laggards. Im shocked by this i remember when they proposed it, antitrust, you can check off the boxes. And no, there was well, its its taken longer than people anticipated. David faber when he breaks the news then the companies have to do the deal the pressure they feel when you break that news. David, people are buying colgate, furiously betting theres going to be some sort of deal and i regard that as a bgl is it a bgl . Bgl you bag the people by talking about colgate. You get it up and then you liquidate it bgl. It may be i dont know ive heard nothing i dont even know where the news source is for that. They no kraft heinz has to do something. Theres a belief they have to do something separately. We talk so often about the limited ability of kraft hines heinz to do anything in a less than friendly way which they hurt themselves with the failure to execute at all on the unilever bid. Theres a reason colgate is independent, they have fiercely guarded their independence for years and years but you see kraft heinz stock going up and people think there has to be something going on. I dont know. Do you think ackman will get involved with kraft heinz . Is he still going to come on after yesterday i thought you asked very nice questions, actually. I was sweet. You were. I was very sweet. We might go a couple of days without ackman on the air. You think so . I saw richard gel fond was on. And spencer was on no, come on, spencer was not on he was hes on today thank heavens. And we were talking about food i want to get to wendys, down 4 back to april levels it was a miss, revenue was light and they see labor costs going up four. Whats incredible, that was a really big miss. Mcdonalds, which is the labor king and burger king, which is quick serve restaurant are not seeing this. When i went to wendys recently, i shop low prices and terrific experience but the winners are the winners are mcdonalds and quick serve. And its just its almost an issue of price wendys is just min xul amount more but i think mcdonalds has the scale. People for a moment just wendys was a big miss, im surprised. After the red robin. Should have believed something, little more red rob bin. You know whats done okay shack, coming off 30 around labor day. Maybe its paid its dues. What is a shack per share . Same shack let me ask you something. Is it same shack number kind of like ges accounting like what ges accounting they dont use same store. They use same shack. Ge is watching, come on, one show, just one show can you not mention us. We mention adp i think its only fair to mention the things we mention every day ge hanging in above 20. Is it really . Yes. Its really trying to flat line and hold that line. Walmart is leading the dow, jpm dragging it. Lets get to bob pisani. Good morning, carl, this was a crumby open, 51 declining to advancing stocks, transports down, expediters having problems on earnings. Banks are down again the 10year yield has been down four days in a row energy is trying to consolidate the new 56, 57 trading range for oil industrials kind of weak defensive names and Consumer Staples on the upside today. Its one year since election, you heard the guys talking about. Lets talk about who gets credit the president claims hes responsible for the stock market rally and s p is up 21 since President Trump was elected but the entire world is up 21 look at this since the election, hong kong, korea, india, japan, germany, i can go on and on, global stock market rally. What is responsible for the rally . I think you can look at several factors that are obviously influencing whats going on. Number one, we have record u. S. Corporate earnings and were going to continue to get the expectation is we will continue to get record corporate earnings, that is the number one factor in the rally that were seeing number two, weve seen the return of Global Growth. The u. S. Outperformed Global Markets for the last five years but in the last year, weve seen some Global Growth and other markets have now started to play catchup with us as a result of that. That is number two most important factor in why were getting a stock market rally around the world you can also throw in a relatively benign Federal Reserve and mr. Powell looks like he may continue that. Thats a big threat to the market if they get more aggressive in 2018 i do think President Trump should get some partial credit for this rally and particularly the more business friendly environment thats out there theres certainly a perception when you talk to people in the markets and business people, concerning president in the markets that theres tax cut is going to add to earnings, theres a perception that it will and that there is a generally more business friendly Regulatory Environment overall if you look at the s p 500, i have asked many people, david costen yesterday, strchief strategist at goldman sachs, what would happen if tax cuts went away . He said the s p would be worth around 2400 rather than the 2587 were seeing now thats a 7 drop in the markets, thats typical of what people say if this tax cut thing goes completely away. More on trump and the markets at my trader talk column, trader talk. Cnbc. Com. Ipo in china, a lot of chinese nationals here today for a big china ipo. Education ipo zr are doing well, ten million shares at 10. Looking at indications that are a bit higher, 11 to 13, saw flashes of public ind indication another big chinese ipo, sogo, one of the Big International mobile Search Engines out there, 45 million shares, 11 to 13 is the price talk we have possibly ten, maybe 11 ipos this week, busiest week of the year well have another ten next week the markets opening up a little bit but still down on dow 30 points. Busy on ipos and m and a. Another week might have been by far the biggest story and still a big one, broadcom unsolicited bid to acquire qualcomm for 10 billion, 60 of that in cash. Thats the offer weve yet to hear from qualcomm officially rejecting it but that is the expectation on both price and on the potential ability of the acquiring company not to get it done on antitrust grounds theyll build a defense on that. Less than a month from now december 8th, thats the deadline a month exactly, the deadline for nominees to be on the board which will be decided at the companys annual meetings and scheduled for march, although that could slip a little bit broadcom is interviewing candidates for that board right now. Going through names and talking to potential people who would stand for their slate to challenge existing Board Members at qualcomm, to use that as a ability to replace them and therefore get what they want, should and when qualcomm firmly rejects them doesnt mean they are going to do it but they certainly are keeping their options open and they are very serious about potentially following that slate by the december 8th deadline to challenge board seats for the annual meeting that follows the number of months later that certainly will potentially at least the idea of it will put pressure on qualcomm to come to the negotiating table. Will it work probably not will a proxy fight work to put pressure on them to come to the negotiating table and perhaps raise at some point along the way again prior to the annual meeting . Maybe, thats what youre trying to figure out here and trying to design for if you are broadcom, certainly, but this is going to get elevated it would seem to the next level in the not too distant future and the question will be what will be the response and what will qualcomm shareholders have to say what is their view 70 thats probably not going to carry the day. 75, 80, where would they go to when they do challenge for the board or who they choose to wait a year and a half before they can make sure they have antitrust approvals, it doesnt seem they want to. Hes an aggressive man, your friend hock tan. My friend i havent even met him. An upgrade from qualcomm, they say the upgrade doesnt assume the deal closes but call reflects the attractive risk reward among the possible scenarios and the fact that the worst case scenario, nxp not closing and apple not being resolved is not a likely outcome. Sorry, we had it for you, now we can quickly move through it because essentially the same thing today. I have a cramer report. Give it to me. Ive got more to tell you. Qualcomm loses against apple. Qualcomm has trouble paying the dividend qualcomm is without a portfolio and greatness, because they always talk about how great they are. Whats your safety net hock tan thats how its going to play out. His level of confidence, david, when i talk to that team, the level of confidence just tells me they have a card up their sleeve but its not their card its apple i think apple prevails if apple prevails, this stock is going to be much, much lower and theres broadcom saying come to papa tan by the way, real quickly on nxpi where a lot of people think thats the pill qualcomm could pay 140 bucks a share and completely screw the deal that broadcom might want to have. Its not going to happen. Of course, broadcom would rather the deal died completely but theyll do it. Well see where they end up. Theyll go up. Hock tan he needs a deal because they have to get out of the cell phone business. They need that deal. Thats not incorporated into the price hes willing to pay, the benefits of that deal. Elliott is a shareholder that advised many people not my Charitable Trust wont tender. But we have to move on. We have things to get to, including Rick Santelli at the cme group in chicago take it away thanks, david the flat track continues in treasuries now lets look at the individual components and lets look at the shortened represented by the one week chart of twoyear note yields, a very slight upward curve, upward slope. 10s, exact opposite. We looked at six days in a row this could be the six day yields or lower hasnt covered a lot of ground but breaking away with the short end. We started 2. 38 and here we are seven basis points lower in yield. It isnt only tens and twos. Look at the one week chart of tens and twos, covering a lot of ground at 68 a one week chart of 30s minus five under 80 the following spreads, it isnt only the biggies, ten minus five since september 1 stt, getting close to 30. Minus 10s, its hovering right under 50 so the entire curve, and various pieces may at some point invert without the longer inversions, kind of like the chinese yield curve. And finally, the dollar index. I picked the july 1st start. You know, its toying with some significant levels above the market, but it really is holding some of the breakout levels at 94 you see the righthand side, really tight consolidation traders are selling volatility, but still a bit bullish, the dollar back to david, carl, and jim thanks, rick. Well talk to you soon when we come back, former twitter chief dick costolo well get his take on the company doubling the amount of characters per tweet dow, financials struggle to get out of the gate. Were back in a moment [ keyboard clacking ] [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Talk to one today and see why were bullish on the future. You myour joints. Thing for your heart. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Casual fridays at Buckingham Palace . Alright, off you go. Surprising. Whats not surprising . How much money nathan saved by switching to geico. Fifteen minutes could save you fifteen percent or more. Aerospace and defense have led the market, but technology not far behind up almost 39 since election day a year ago today dow do 37 wnpoints more squawk on the street continues in a moment. 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I like the harley. Younger people like the ducati millennials yeah, millennials and they disgust me. They should get a well see you tonight mad money at 6 00 p. M. When we come back, a closer look at the trump rally one year after the election ngoway. At fidelity, trades are now just 4. 95. 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. Your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Hey ron theyre finally taking down that schwab billboard. Oh, not so fast, carl. Oh no. Schwab, again . Index investing for that low . Thats three times less than fidelity. And four times less than vanguard. Whats next, no minimums . No minimums. Schwab has lowered the cost of investing again. Introducing the lowest cost index funds in the industry with no minimums. I bet theyre calling about the schwab news. Schwab. A modern approach to wealth management. Street. Im Carl Quintanilla with sara eisen and david faber. Dow is up six days in a row but settling back today alt the open, down about 36 points the president in china, obviously the Election Night last night, the anniversary of last years snap earnings and the tax bill our road map for the hour begins with one year under President Trump. Well take a look at the bull run since the election and the companies under fire since trump took office. Snap shares are getting slammed as results disappoint and the companys ceo pledges a redesign of its app. In the hot seat, the former ceo of yahoo, Marissa Mayer, along with the ceos from equifax testifying on capitol hill about Cybersecurity Breaches we start with the markets this morning, down a little bit. The dow coming off its sixth straight day of gains. Just fractional declines though. This as we hit the oneyear mark since the president ial election where we have seen all the major averages rise over 20 so where do we go from here . Lets bring in Liz Ann Saunders from charles schwab, and gabriella from jpmorgan. Reflecting on one year, what strikes me is how wrong everybody was, not just about the election but what stocks would do under a trump win so easy to find. You find it all over cnbc and some of our competitors. Bridgewater predicted a 2,000point drop in the dow if it happened and look what happened since what did everyone get wrong . Not to make this a political statement, but i think the primary reason for the move we have had in this period of time were was a function of two things that occurred preelection, which is two very important inflection points. One in Global Growth all 45 oecd countries are growing now. The first time in ten years. 33 of them have accelerating points of growth, and the corporate earnings predating the election its the counterfactual. Its easy to say the market probably would have done well under any circumstance in the election, but i think those were the most powerful drivers. And some of the other predictions, gabriella, emerging markets would not do well in an America First world. They sold off quite sharply in the beginning, Technology Companies. Donald trump bashed on the campaign trail that was considered a bad bet. Those have been bigger winners than the s p 500 this is not about politics. Its not about the market responding to policy its much more about these underlying global reflation trends and thats something thats very positive for emerging markets, for example. The other thing to think about is we didnt actually see a lot of those negative things that people were expecting that could have been very dangerous to emerging markets such as protectionism, right so theres both things going on that have helped some of these asset class. Global reflation as well as the lack of protectionism that some people were expecting. We would rather have it this way, right we would rather have the market reacting not to policy but to global reflation more steady than policy often is its always nice when the market is reacting to fundamentals the other important fundamental which has been the entire underpinning for the market has been a massive amount of global liquidity. Any market is a function of supply and demand. Prices go up when theres more demand than supply given the shrinkage via stock buybacks, the 5,000 only having 3800 stocks in it, limited ipo activity in the last eight years, and 25 trillion of excess liquidity sitting on central bank blassheets and it has to find somewhere to go, and its gone into asset markets where are the cracks in that . You see any reversals in any of this, whether its household credit or we keep talking about high yield all year. To little avail. I think what we have to think about in 2018 for the next few years is we shouldnt be expecting the same pace of returns that we have gotten this year out of the u. S. We should not be expecting double digit returns for the rest of the expansion. It is still a later cycle kind of economy, right . We are expecting Earnings Growth to moderate. And thats why when we talk to our clients, we talk to them about are you too overly concentrated in the u. S. Are you really appreciating that there is a global reflation rally. That it is about other houses on the block beyond just the u. S. I get this argument, and you see it in overseas markets, no question about it. But then, how do you explain the sharp spike in confidence from investors and businesses, small businesses, and consumers postelection . I think the calculus there was not so much about an expectation for immediacy in the fiscal policies, whether it was tax reform, regulatory reform, but i think the calculus was its not going to get worse from here tax rates are not going up from here the regulatory structure is not getting tighter from here. Thats what represented the surge. The good news in terms of the prospects for some of this fiscal policy is its not in the numbers yet. Where dont know a single economist who upped their gdp forecast because of tax reform or tried to put into the calculus the regulatory piece, which has been an ongoing piece. I dont know any analysts who tacked it on to corporate earnings numbers i think that would be the upside if we eventually got those things, but i think during the election what boosted that confidence in animal spirits was sort of a sigh of relief on those two major fronts, it doesnt get worse from here. And the deregulation, which seems to be less talked about but happening on an agency level in the government and impacting certain agencies whats going on with bond yields here treasury yields back down to 2. 30 on the tenyear boons at the lowest level since september. Why are yields moving south again . Its been very interesting to see the extent of flattening of the yield curve. And i think it speaks less about Economic Growth or inflation expectations, and its much more about the tremendous amount of liquidity we still have floating around the market. And when we think about 2018, thats something thats not likely to continue right . We do have the ecb theyre not calling it, but they are tapering their qe purchases. We do have the fed ramping up its process of bringing down the balance sheet. So that dynamic is likely to change but we dont look at this flattening of the curve and think its a harbinger of doom in terms of the economy. Regional banks are on pace for their fourth day down. We havent done that 6 july. Is that a reflection of the curve or some of the complications we keep hearing about regarding the tax bill, both i think probably both, but also, correlations have crashled were getting these sector rotations that are a bit more fierce than when we were in a highly correlated market, both in the Asset Classes and in the s p 500. Youre going to continue to see that correlations stay low. Its to the benefit of active management, to the benefit of the notion of diversification, but it also means youre going to see sharper moves within sectors. And within the u. S. , but also globally, right . We have had a very sharp move down in correlations amongst Global Markets so what moves the u. S. Doesnt necessarily move europe, and thats a really Good Environment for that international diversification. Thank you for joining us. Thank you so much with a look back and a look forward, one year. Liz ann and gabriella. As we have said, its the oneyear anniversary of the president s electoral win. Ameamon javers joins us with a look at the companies that have been in the president s crosshairs since day one and even before. Good morning, carl. I dont have to tell you we have never seen a president who has tweeted like this president has done as a core part of his political and his media messaging, getting his message out there to the American Voters around what he calls the filter of the media we have never seen a president willing to criticize and praise american businesses by name as this president has we asked the cnbc vaunted data team to take a look at the tweets the president put out naming specific companies. More than 15 specific Companies Named by the president in tweets over the past year looking for some patterns here as to exactly what gets you on the president s criticism list and what gets you on the praise list some surprises and some things that are not so surprising in all of this. Not so surprising is what you have to do as a company to be criticized by the president , including distancing yourself from trump or the president s family that will get you a negative tweet. Building a plant outside the United States. Overcharging the taxpayers in the president s view, all those things could get you as a company a negative tweet from the president. How do you get a positive tweet . Pretty much the inverse of that. Open a plant inside the United States announce a Job Creation Initiative or invite the president to an event at your plant with your workers. All those things seem to generate positive tweets from the president. Heres whats surprising, though, is that this isnt just pixels flying out there into the air with no real value there is a real measurable dollars and cents impact to all this take a look at this stat that we dug up in looking at all these different tweets of the president. Positive tweets seem to have a 1. 1 immediate stock price impact in the very short term in the wake of the president s tweet. The inverse of that, negative tweets down 1. 2 overall in terms of the stock price this is right in the wake of that tweet a very shortterm impact, but our data team did see it and that can be expressed in dollars. Takeaic l a look at this. Positive tweets seem to generate 1 billion for Companies Short term, the negative tweets down about 1. 3 billion theres a number of caveat here which i probably dont need to tell you one of which is a lot of factors impact these stock prices. There are things going on in these sectors overall that are bigger than the impact of the trump tweets so its very difficult to sort of assign an apples to apples comparison in terms of whats actually moving the stock prices, but you do see the spikes up and down after the president tweets when you measure them, on average, thats what you come out with fascinating impact here. A whole new paradigm for companies and their pr teams and investors. Eamon, thank you when we come back, a disappointing quarter to say the least for snap well break down what it means for the stock and the future of the company. Shares down almost 13 plus, were keeping an eye on capitol hill for you this hour the former ceo of yahoo, Marissa Mayer, along with the former and current ceos of equifax are getting ready to testify before the Senate Commerce committee. Well monitor it for you, bring you any highlights and headlines. Quk t see wl be right back 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. 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. His family. His steinway, which met a burst pipe. So grant met his insurance you are caller number 12. Which didnt quite cover the steinway. But what if hed met pure insurance . Owned by members. Hed have met lisa, your member advocate. Whod introduce him to gustav, a temporary address, and help him get tickets to the mozart festival. Excuse me, grant likes beethoven uh, the beethoven festival. Pure. Love your insurance. Welcome back to squawk on the street. Take a look at snap right now, down about 13 the company reporting the earnings miss due to the spectacles product they face competition from rivals such as Instagram Michael grahams an analyst, Victor Anthony is an analyst good morning to you both what a story overnight victor, you had a hold you keep it. You take your target down to 13. And you have a section about Silver Linings what is silver about this . Well, yeah. I mean, you look at engagement was up, so that was positive they noted on the call last night that a number of advertisers on the platform is up about five times since the beginning of the year. Ad impressions were up by triple digits ad loads are still low compared to if you see the narrative coming out of facebook, theyre pulling back on ad load growth i think snap has the ability to increase ad loads in the next one or two years with all of that said, plus the 10 cent investment puts a floor on the share price all that said, they did miss revenues for the third consecutive quarter. Thats a very, very big negative on my part yeah, you broadly say the model remains a work in progress, which is not often something we say about companies that are already public. Yeah. I mean, in many ways you can probably argue they probably went public too soon what also is happening in the market, if you look at the earnings for the Technology Companies in the third quarter, all of the subset platforms with a few exceptions, all of these subscale platforms are having a difficult time driving per user modernization within the presence of google, facebook, amazon, and netflix to a certain extent and you also tack on the fact were in the midst of an advertising recession. Thats what you have seen play out with the numbers coming out of snap as well as the fact that theyre having an inability to monetize because of the programmatic shift thats pressuring cpms. Michael, i want to get your view, and specifically drill down on what do you think this redesign could look like and might do for them. Yeah, you know, one of the things thats really happening in this marketplace is when advise tizers go to facebook, theyre so impactful because it has such great data on users what were seeing happen at snap is some of the initial advertisers went on the platform, maybe had an okay experience, but as snap opened up the platform to the great massive advertisers,theyre coming on and saying were not getting great value for that spend. Theyre driving the prices for each ad lower. Thats not a great trend for snap and i think, you know, one of the key drivers there is that snap has to do a better job of getting more engagement from its users. And then capturing the data from that engagement. So i think that the app redesign, which is going to take several quarters, probably, to become solidified is really oriented on those two things helping to improve engagement of the user base and also helping to do a better job of absorbing better data from those users victor, im wondering why you have confidence that its going to work. There appears to be a very large disconnect between this company and what it delivers on a quarterly basis and wall street expectations and also, the entire business. That Conference Call didnt inspire much confidence, the fact they said tie have to totally redesign the app because its not working and hard to understand, and they dont know how its going to impact the user which is what made it so valuable to begin with i had a difficult time hearing the last part of your question sorry its a little loud down here i wanted to know what gave you the confidence after the Earnings Call and after the big mismatch of expectations between wall street and what the company has been delivering on a quarterly basis. To buy the stock and to see the longterm vision here. Just to be clear, i have a hold on the stock, so im not making a recommendation on it. But you know y have seen companies with the right level investment over time, it could possibly work. The visibility into whether or not they could drive up pricing on the platform, that visibility remains low today. I do think the platform redesign is fraught with risk you know, whenever you see these huge platform redesigns, theres a chance users could defect on the platform i think its the right thing for them to do i think right now in order for them to drive users, they have to capture, i think, users above 34 years old the older users have to come to the platform i think they have acknowledged that theyre Going Forward with that redesign my confidence is low, though which is why i have a hold on the stock. Michael, over to you for a second what do you make of the 10 cent investment it may be helping the shares be down less than they otherwise would be given how bad that report was. Yeah, i think its definitely helping. Its interesting because it didnt really come up during the earnings process last night, but when snap files its 10q, you know, this ownership level was disclosed. 10 cent has been an owner of snap since 2014. Its not quite clear how much that ownership is ramped up until very recently, but snap did say it was a little over a 10 stake as of yesterday. You know, tencent has been doing a good bit of investing in some u. S. Internet companies. I think in part, theyre trying to sort of learn and get access to executives and sort of understand whats going on in the ecosystem. Its obviously an extremely well run company with market dominance in its home market to me, it doesnt really mean that snap shares are overvalued or undervalued its opportunistic for tencent to gain a bigger hold and try to figure out how they might be able to enter the market more completely one day really quickly, victor, i want to get your take on twitter. Journalists love to obsess about the 280 character count, but there have been some smart pieces about what it might mean for the model, whether or not it does drive engagement or time spent. You have thoughts on that . I think it definitely drives time spent, which ultimately will be a positive, longer term for advertising growth clearly, they have tested it, they have seen positive results. Theyre deciding to roll it out to the masses. I think its a positive for them longer term. Michael yeah, you know, twitter has some similar issues to snap. The product has not been proven to really drive higher engagement twitter is also struggling a bit with user growth so i think, you know, both properties have the need to keep innovating on the product front. You know, raising the character count, i think for twitter, is something thats probably going to help. To me, they need to just do a better and faster job at innovating and trying to make the product more appealing to the masses you know, its really useful for consuming realtime news and as a platform for thought leaders to disseminate their views. As you were just talking about with President Trump in the previous segment but i think that for twitter to really become more of a mass market, everyday, mustuse product like google and facebook and amazon, and some of the other internet leaders, i think theyre going to have to do more than raise the character count well see clearly, obviously, stock not responding very much today guys, thanks very much talk good to talk to you. Were keeping our eyes on the hill this morning. Marissa mayer, someone we have not talked about in a while, testifying today about the Security Breach in 2013 at then the tech giant yahoo, which affected, we now know, 3 billion of its users a number that kept going up and up and up with each consecutive estimate thats probably going to be one of the focuses of the questions, which is what did you know when and why did it take so long to disclose it, from 1 billion affected users in october to 3 billion after they had been well into deal talks and announcements with verizon, which knocked 350 million off the deal price because of the scope of the hack. As we head to break, take a look at shares of taketwo interactive. Jim cramer and i went over this earlier. Great quarter. Stronger than expected Holiday Season sales forecast. The Video Game Publishing Company getting a boost from its latest nba game. Ongoing strength from grand theft auto quk t see bk. Oc sawonhetrtack after this [ keyboard clacking ] [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Listen up, heart disease. You too, unnecessary er visits. And hey, unmanaged depression, dont get too comfortable. Were talking to you, cost inefficiencies, and data without insights. And fragmented care, stop getting in the way of patient recovery and pay attention. Every single one of you is on our list. At optum, were partnering across the Health System to tackle its biggest challenges. It is the oneyear anniversary of President Trumps electoral victory. Courtney reagan joins us with a look at how the Retail Sector has performed since election day. Retail has had many headwinds that arent necessarily political or policy related. There have been a number of those, too, since President Trump has been elected looking at the group broadly since the election it has shown about 7 versus the s ps gain of more than 21 . You can see the clear down trend, though, in this chart despite sort of gains here and there. Overall, its been trending lower. Retails biggest win since trumps election, definitely squashing the border adjustment tax, which the sector argued would have forced companies to raise prices around 15 . Many retailers pay the highest levels of tax rates. A lower rate would definitely be cheered by most of the retail group, but stocks havent proven theres a strong belief so far its actually going to happen. While most retail goods are made overseas and not in canada or mexico, a renegotiation of nafta could upset some trade, particularly for mens denim makers much of that actually is done back and forth across the mexican u. S. Border. Which Retail Stocks have performed the worse since trumps election, since were talking about the down trend a scan of the stocks, under armour is the biggest loser, down 59 those losses arent so much politically rected the ceo made some comments about the president on cnbc that turned out to be controversial and moved the stock. Mattel is down 58 foot locker stock has lost 56 since trumps election on the flipside, the best, as of todays market open, its actually best buy, up 46 . Amazon, the Company Disrupting nearly all others in retail. And other sectors up 42 since trumps election despite some negative president ial tweets about that Company Home Depot number three, up 32 . Back over to you guys. I wonder if this is it seems like this is going to be a really important sector to watch in the coming year to see if the job growth can continue. Biggest industry in terms of employment, and with such structural headwinds that youre talking about, if he wants to get more jobs and higher wages, retail could be a big focus. Yeah, its so interesting we know that the president has really pointed out sort of the manufacturing jobs, the coal jobs, but really, look at retail we talk about the Department Store losses a lot when they show up in the jobs report every month. Certainly, labor in retail is a really key area, and the president could potentially have some pretty major sway in this area so i think thats a really important thing that we should be watching Going Forward. Not just next year, but in the years to come as well. Yeah, think 40 million jobs or so smout exposed to retail. With some connection to retail, exactly. Courtney reagan back at hk, thanks when we return, the ceo of zilla, Spencer Rascoff is with co renter his Company Reported rerdevue growth. Squawk on the street continues in a moment. We are the driven. The dedicated. The overachievers. We know our best investment is in ourselves. We dont take no for an answer. We fight for what we want. Even for the things that were once a given. Going to college. Buying a home. And not being in debt for it for the rest of our lives. But were only as strong as our community. Who inspires and pushes us to go further than we could ever go alone. Sofi. Get there sooner. Im sue herera heres your cnbc news update at this hour. U. S. And Chinese Companies signing a series of business deals worth about 9 billion as President Trump arrives in china. 19 documents were signed during the ceremony the deal spearheaded by commerce secretary wilbur ross and chinas vice premier addressing the imbalance in china trade has been the central focus of collaborative discussions between President Trump and president xi and achieving fair and reciprocal treatment for the companies is a shared objective. A pakistani judge rejecting a plea from former Prime Minister shareef to have three corruption charges against him merged into one. That leaves him to stand three separate trials with hearings stretching out for months. He was indicted last month and dozens of prosecession catalans blocking a highway in northeastern spain as part of a regional strike. The blockade caused long lines of trucks and cars on the highway, which is close to the border with france youre up to date. Thats the news update this hour over to Jackie Deangelis for the eia inventory report thanks so much. Watching crude prices a little lower after this eia inventory report we got a build in crude oil, which wasnt expected. 2. 2 Million Barrels and a draw in gasoline of about 3. 3 million. Those two balancing each other out. Its a mixed report, but what i found interesting inside the report, the u. S. Production number 9. 62 Million Barrels a day thats the highest that we have seen since the most recent peak, june 5th of 2015 traders are going to be focused on that. What that means is as crude prices have been elevated, you have the u. S. Drillers they are drilling more, and they are breaking through some of those records. Remember, the trade isnt necessarily being impacted by this report today. This trade has come a long way really quickly up 5 in a week, up 15 in the last month alone and a lot of that has to do with whats going on overseas and in saudi arabia as well a lot of this support is baked into the price, but right now, trading at 56. 64. Back over to you guys. Okay, thank you, jackie President Trump arrived in china overnight. Kayla joins us from beijing. Shes got more on the president s trips, as we hit that oneyear mark since he won the office kayla. Reporter good morning, david. President xi welcoming President Trump today with some rare hospitality in modern china. Some private events at the forbidden city before bilateral talks between the two countries get under way in earnest tomorrow trump coming off visits to two close allies and military partners where they pledged closer cooperation on north korea, and on twitter just a few minutes ago, President Trump surpassing the great firewall that blocks twitter in china, tweeting that pyongyang should not try us reiterating his warning from earlier today, and saying that underestimating the u. S. Would be what he calls a fatal miscalculation here on the ground, trump is expected to pressure china to cut financial ties with north korea further to try to balance the trade deficit, but im told any longterm policy deals are unlikely an a state affiliated newspaper here in china has dovish diplomatic speak it calls for win win bilateral operations between the two countries and says, quote, trump holds high the banner of America First, but the chinese leadership will not prioritize the interests of the u. S. Over those of china beijing washington competition should be benign so now doubt, china will have a wish list of its own what could be on it . Heres some things they have asked for in the past. They have wanted to be recognized as a market economy they have wanted a fast track to do deals in the u. S. Both of those were denied by the Obama Administration according to trade officials that i spoke to in april, Trump Officials granted china their willingness to recognize this one belt, one road infrastructure initiative, but one thing they still want is they want further engagement on this bilateral investment treaty well, that had been negotiated by treasury secretary steve mnuchin, who is not here so its unclear whether that would progress at any point during the day tomorrow. Its going to be a jampacked session here in beijing. Well bring you more as we have it but expect a lot of developments, both on the National Security and the Economic Security front. Back to you. All right, we will, kayla, thank you very much from beijing tonight. Watching zillow today, recording its highest profit ever in its latest quarter, getting a boost from strength in all of the real estate firms marcus places. The revenue outlook also came in above consensus. Still shares are slipping about 2 this morning. Joining us now for cnbc exclusive interview, zillow group ceo Spencer Rascoff. Welcome back nice to see you. Thank you good morning, sara revenues up 25 looks like the growth is coming from agents spending on advertising. Whats driving that . Give us a little picture of the business right now sure. Revenue overall up about 25 about 70 of our revenue comes from Real Estate Agent advertising. That part of our business is doing great. And what happened is earlier this year, we transitioned from a fixed price model to an auction price model. Instead of zillow group deciding how much agents pay, now the market is choosing thats having a benefit on our business now, the hard work begins of trying to help agents improve lead conversion. That means helping agents with Software Tools and training so they make sure their advertisin is more effective. They can convert and become transactions when that happens, agents are willing to pay more, and everybody wins, the advertiser, the consumer, and us 98 growth rate in premier agent spending, stuff like that. Duds it Say Something about where we are in the housing cycle, the strong outlook you provided we did see newhome sales leap in the month of september, up almost 20 , though not quite the numbers on existing sales. Yeah, i think our Revenue Growth really says something about how agents spend is shifting from off line to online when you have the huge audience share that we have online, we attract the lions share of the ad budgets as they shift online. In terms of overall housing, housing is hot home values are up about 7 year over year. Its a sellers market and whats happening in housing is constrained inventory we have 12 fewer homes for sale today than we had a year ago and so because of limited inventory, home values are going up its harder for buyers its better for sellers. Which makes this tax bill really interesting, spencer, especially after what the nahb said about the morgtgage interet deduction. How damaging would that be the tax bill, its hard to opine on the tax bill because its a moving target there are parts of the tax bill we think would benefit housing things like increasing the standard deduction, which in theory should help middleincome renters save for a down payment. There are parts of the tax bill that will hurt housing on the margin on the mid its important to remember its about an 80 billion subsidy for housing. Theres only a slight reduction in that. For us, in our view, its a very large amount of subsidy to housing that doesnt really stimulate on the margin incremental housing trance acti transactions theres a lot of other ideas that could be on the table, like helping firsttime home buyers with a tax credit. Credit assistance. Tradeup buyer assistance. Those arent really on the table. I think the tax bill as proposed today mostly side hp steps housing, not directly aimed at housing. You dent think it will hurt housing values and markets like new york city, where those big mortgages are needed it hurts it a little bit. On the margin, in very expensive areas. Taking the whole kuncountry as a whole, its small. Overall, only about 10 of houses fall into the m. I. D what were talking about is reducing on the margins. Yes, it will hurt highend home values in new york city, for example, but frankly, what will hurt the homeowners more is changes in the tax rates overall, not as much the m. I. D so i think overall, tax policy as proposed today, it just, as i say, side steps housing and focuses on other parts of the tax code you mentioned housing prices are rising 7 , does it still make sense to buy over rent or do you have to pick which market youre talking about you definitely have to pick which market, but more importantly, you have to think about the time horizon in most parts of the country, the time horizon where you buy instead of rent is long. In new york city, its a relatively long time horizon because its so expensive to own as compared with renting theyre both expensive, obviously, but in other parts of the country, the time horizon is very short like in detroit, if youre going to be in a home for more than a year, you ought to buy, not renlt. This is a very important metric. You can find it on the web on sites like ours and elsewhere, but thats what people evaluating rent versus buying need to think about. We have been doing this whole theme on cnbc today looking at the economy and industries and stock through the prism of one years since President Trump was elected. Your stocks up about 15 in 12 months just a little behind the overall market do you see a big impact in the Housing Market on business confidence, or through Mortgage Rates as a result of last years election i think regardless of how you voted in the last election or whether you approve or disapprove of the president , i think we can all agree the economy is strong. There hasnt been great wage growth, but theres been job creation gdp growth is strong that helps housing, for sure what we need in housing, though, is more houses we face a housing shortage, both on the foresale side and on the rental side as a result of the recession in 008 there were hundreds of thousands of homes and Apartment Units that were not built between 2009 and 2012 through the economic recession, and now in 2017, going into 2018, you see the impact of that is limited inventory, means its a sellers market, home values are going up what we would like to see is progrowth policies that help development, help Home Builders build new homes. Help apartment wildings come online thats what really helps housing from here. General economic environment plus more Housing Units created. We have been hearing that supply shortage for a while now. Spencer, thank you always good to check in with you. The ceo of zillow group, Spencer Rascoff. Getting news on sanctions in cuba Michelle Carusocabrera joins us good morning. Just got off the call with senior white house commerce and treasury officials about the new regulations announced this morning in terms of thiment pablth on our viewers, theres a list of 200 entities connected to the cuban military that you can no longer do business with if youre subject to u. S. Jurisdiction, specifically 83 hotels thereat are part of that list and also the port where the cuban government had been trying to encourage investment. If youre going to be traveling there and you havent booked it yet, you cannot stay at the newest, nicest hotel in the island, its 600 a night. Youre going to have to stay somewhere else previously, grandfathered in hotels are still okay. Remember, marriott haa deal with the sheridan, which isnt nearly as nice, but its more restrictive, your ability to go there and where youre going to be able to stay and spend your money as a result of whats been announced this morning back to you. Thats big news thank you very much, michelle. Michelle carusocabrera at hq. As we go to break, take a look at stocks dow down for the first time in seven sessions s p and nasdaq if lowered today would be backtoback losses only the third time thats happened in two months ngow dot ay. Once again. Yeah. Lot of Tech Companies are reporting today. 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. 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 it is one of the best performing stocks this year that wall street analysts have gotten all wrong. Find out that name at tradingnation at cnbc. Com. More squawk on the street coming up. Former yahoo c erko Marissa Mayer in the hot seat on capitol hill shes testifying before Senate Commerce along with the current and former ceos of equifax adede roy joins us with more on the hearing. Hi, there the hearing got under way about 40 minutes ago, and Marissa Mayer along with the equifax executives have given their Opening Statements in her opening statement, she talked about yahoos breach, which affected virtually all of its 3 billion users. Right now, you can see a live shot there of former equifax ceo Richard Smith speaking Marissa Mayer said the Company Learned of the breach in late 2015, at which point they notified Law Enforcement and users. She also apologized for the hack as you know, yahoo was the victim of criminal statesponsored attacks on its systems resulting in the theft of certain user information. We worked hard over the years to earn our users trust. As ceo, these thefts occurred during my den itenure, and i wat to sincerely apologize to each and every one of our users upon questioning, she testified that she still doesnt know how the intrusion took place. With the rise of statesponsors attacked, no company is safe from hacks we also heard from current equifax ceo. He, too, apologized for the breach that occurred in his company with 145 million americans. He, too, has apologized and said the company is taking steps to secure itself from future attacks. Mayor appearing before the committee after being subpoenaed, and the committee is taking a look at how the breaches happened and how consumers can protect themselves well monitor the hearing and keep you posted on the latest developments thank you lets send it over now to john with a look at whats coming up on squawk alley. Its going to take more than a filter to make snap earnings look any better than they were plus, twitter has some changes now with 280 characters rolling out to everybody, so what is twitters former Ceo Dick Costolo think of all these changes in social media . Well ask him on squawk alley. [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Lets go to cme in chicago Rick Santelli, good morning, rick. Good morning, thank you id like to welcome my first time guest ira, thanks for taking the time today. Absolutely. Glad to be here. If you look at the news cycle over the last three months to two years, intrigue, cuba, russia, government agencies, politicization of things in politics and relationships and trying to find transparency. Im not talking necessarily about the times we live in, im talking about the similarity to 54 years ago i was born in mid50s, november 22nd, 1963, john f. Kennedy assassinated we had a jfk doc release, about the end of october, early november, another one yet to come at the end of april my question to you, sir, a, why all the redactions b, is there something to this story the public needs to see that you think may be coming out eventually maybe is an open ended term we cant speak to what we dont know because by definition we dont know it. The government explained the redactions as something done against the president s will the president said he wanted to release everything, not a single redaction and was prevailed upon by intelligence agencies that there needed to be continuing redactions and further review. The reasons for that broadly described as sources and methods, information that would compromise government sources or governments ability to use the same people, use the same methods, in the future put peoples lives at risk to the extent were talking about information from before 1963, obviously every year that goes by makes that more and more attenuated to the extent files contain documents relating to the investigation of the assassination that might have been generated in the 80s an 90s, its a bit more understandable. You know, ira, i remember it so well. I also remember Lyndon Baines johnson said much released after 25 years that point in time came and went an everything was swept under the rug. Im very fascinated with the fact that President Trump wants a review, wants more put out there. It really is disturbing that whether nowadays its the irs. The public never learns. Sometimes when theres issues the government did things they shouldnt have or didnt give us complete information, all parties seem to agree on a solution, but the public never seems to be included in that loop do you think at some point in the next several years, pending the current president s review, that people of my generation and people now looking for answers will actually get that type of transparency and be completed . It might not be anything there to see, but we need to feel confident in that answer. Well, i agree i think that even mr. Trump said, i want it all out there. Remember, last year trump was speculating maybe senator cruzs father was involved in the assassination, which turned out to be obviously nonsense. Hes saying he wants it out there and held back by the agencies what the agencies are trying to protect, people who believe who dont believe in the oswald acted alone view of the assassination ira, were almost out of time, let me interrupt you this cannot be my opinion about individuals, they are too old or passed away. Any redactions would be ongoing relationships with countries like cuba and russia or the fbi and cia. Wouldnt that make sense your final thoughts. I think well know more in six months they say they are going to unseal everything in six months thats not absolutely necessary to hold back they will either live up to that or they wont. Ira, thank you. Its such a fascinating topic. I really do think if youre a young person today, youre going to be looking another 50 years down the road, and i hope you get a lot better answers than my kennedy generation have generated. Back to you. All right, rick thank you. When we come back, the ceo joining us on earnings report. Stock moved despite better sales. Former ceo of twitter weighing in on the companys new character limit. On snapchat, you wontant wto miss it. Big show ahead on squawk alley. Dont go away. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Another day of work. Why do you do it . Its not just a pay check, you actually like what you do. Even love it. And today, you can do things you never could before. Youre developing ai applications on the cloud. Finding insights hidden in decades of medical documents. And securing millions of iot sensors. So get back to it. And do the best work of your life. And do the best work of your life. 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 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. Stocks marginally lower, Energy Stocks among biggest drags so far today. Following Prices Crude Oil lower on the heels of supply data in the United States and demand data out of china as well. Shares of range resources, Newfield Exploration has among the worst performers in the sector keep an eye on that overall as we watch what happens with oil prices that does it for this hour of squawk on the street. Lets head to New York Stock Exchange for the start of squawk alley. Back to you guys. Thank you very much 8 00 a. M. At snapchat headquarters in california, 8 00 a. M. On wall street and squawk is live. Good wednesday morning welcome to squawk alley. Im Carl Quintanilla New York Stock Exchange. Joining us former ceo dick
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