Transcripts For CNBC Squawk Box 20171121

And shanghai up 18 points. The dax up by a half percentage point. Similar gain for the cac in france the ftse in london up by a similar amount the yield in the to twoyear, up 1. 763 also look at gold prices because they were under some pressure yesterday gold down about 1. 6 1,27 1,279. 50 lowes is recording 1. 05. Above the estimates of 1. 02. Three cents above estimates. The revenue number that im looking at, at least sales, 16. 8 billion thats a bit above looking at this forecast company sees fiscal year eps of 4. 20 to 4. 30 if thats not an adjusted number, its below the 4. 50 on the estimate here. 1. 05, three cents ahead. The company is supposed to earn 87 cents next quarter that would have gotten the company to 4. 50. They beat it by three, so they only need84 cents in the fourt quarter to hit that number maybe thats adjusted. If its not adjusted, its below the forecast maybe theres something there. The adjusted number may be different than the 4. 50. Looks like theyre lowering Guidance Company repurchased 5 500 millin worth of stock hurricane related sales about 2 200 million Comp Store Sales up 3. 5 total sales up 5 . The numbers for the fullyear are reflective of a loss on extingishment of debt and the gail from the sale of interest in the australian joint venture it doesnt give us numbers for the break out on the plus or minusthat. Which is never an operating result so you would add that back in once you see what total was. The stock is up 1. 54 if they were lowering guidance by 20 cents, 30 cents, the stock would not be up now. The Justice Department filing a lawsuit to challenge the at tchlat ttime warner mer. Leslie picker has the details. It was in the works. Three, four days ago we thought it would we couldnt figure out when. Or what they would say. And the cut issscuttlebutt, alln stuff going back and forth they didnt mention that not in the lawsuit any way. The Justice Department argues this deal would harm competition and thwart innovation. The government says the transaction would hinder rivals by forcing them to pay hundreds of millions of dollars per year for the right to distribute time warners networks which include tbs, tnt and cnn speaking yesterday at ts ceo Randall Stevenson spoke about what he called the elephant in the room theres been a lot of reporting and speculation whether this is all about cnn. Frankly i dont know nobody should be surprised that the question keeps coming up because weve witnessed such an abrupt change in the application of antitrust law here. But the bottom line is that we cannot and we will not be party to any agreement that would even give the perception of compromising the First Amendment protections to the press when hes talking about that change to antitrust law, hes talking about challenges to vertical mergers, which involve purchases along the supply chain as opposed to competitors are rare. Since 1979, the government has only challenged 23 vertical mergers. Three were abandoned by the parties, while the rest were approved the government has never won a single case. Thats according to harvard. At t said it was prepared to go to trial as quickly as possible. Leslie, we will watch this. April 22nd is the date to watch. All of this has to happen by then or they could extend, too they could. Would they they could. The break up fee for antitrust purposes is only about 5 500 million. Quite low. If you are at t you would want to stick with it. If youre time warner, would you want to stick with it . Is there another bidder or somebody else who could pick m them off at a higher price today . Potentially, but they could face the same antitrust concerns why wouldnt this influence whats happening with fox . You would think this will put a chill by the way on all major Large Consumer oriented branded deals not just media. Ierbroader. Unless you think this is really about cnn. Then everybody could be blocked. Sounds like euro antitrust not what you would expect from a Republican Administration with a Republican Congress its interesting because last week he talked about antitrust, how he does not view that as regulation, he sees it as antiregulation, because they basically have to do less patrolling after the deals go through. He sees it more as policing than regulation thats how he kind of this seems like its based on being too big. You cant see necessarily the unfair advantage that the company has. But that was part of the populist argument donald trump was making when he was running for president. I think we all need to figure out whether this is about this particular transaction and this either cnn or a particular view from the administration, or if this is a true if there is a broader view on the world to be had. We have a guess we can get to. Do you think the guy at the Justice Department would have heard from trump or do you think he knows what trump wants . I will bet you good money that at t will pursue discovery to try to see all of the email traffic and other documentation between the white house and the doj. Will the white house claim executive privilege on that if there is a form of communication . This is, by the way, going to be one of the great soap operas of our time be like the l. A. Times reporter, yeah, trump told him he cant do it trump said,ya, you cant do this. Get rid of cnn yeah that happened. Do you you need to actually know that. It would be funny if hes right. We want to bring in frank lafflin into the conversation. You listened to what at t had to say yesterday. Im sure you read the complaint by the doj if youre a betting man, and now youre no longer betting just on whether the companies will operationally be good or bad but betting on a lawsuit which way do you bet im betting that at t will ultimately win this. Appears to me, im not a lawyer or pretending to be one on tv, it appears to me with all the case law and precedent they have for how vertical mergers have been handled, particularly with the safeguards put around this to protect consumers, that they would lose the case seems to be preposterous the Justice Departments case appears to be based on what they presume at t will do to raise prices and restrict competitors that does not seem like a Good Business move for at t and would on the get more juscrutiny in t future i dont think they have a strong case the department of justices case rests in part on quotes that they have selected previous quotes made by executives at at t over the years about competition. You say those quotes are taken out of context theres one interesting quote where they say, you know, giving effectively these combinations, if left unchecked could cause harm its that key thing. Left unchecked if you look in the broader context of what previously directv and other executives said, they were making the case that for other examples of vertical mergers, such as comcast, nbcu, if you dont put appropriate safeguards in, there could be competitive harms at t has been offering these exact safeguards which is all they were arguing for. Once the deals were put through and they put the appropriate safeguards forward, you didnt hear complaints from them. I think that will give justice a weak case. What did you make of the pricing pressure they would have with turner assets and others in terms of the fees, carriage fees they charged to other distributors given the distribution they would have on a national basis, which the Justice Department seems to separate or differentiate from the footprint that comcast has you are making the argument there that they would have enough market power that they could raise prices enough on that content then all of a sudden cable customers would their prices would be too high, they would disconnect and be forced to flock to at t. Thats ridiculous i dont think they have that much market power. You have plenty of other employeepriced options. Look at at t that came in, a big proponent of a virtual pay tv product with directv now they drove prices down caused concern for my clients about the margin and the revenue impact, but theyre leading the industry in moving that direction. Pushing customers that direction. Theyre out there lowing prices, why they would restrict the content makes no sense i think about fighting city hall i know where that expression came from. I know youre saying the government doesnt have a strong case, but you remember what happened to the Financial Firms that said like jamie dimon, saying theres no way to fight these guys cheaper to pay you are sure these guys, the heft and size and clout of the government, i would be afraid. You think at t eventually prevails and the government goes away after they lose you think thats a possibility they are putting a lot of lawyers to work on this. Thats the other downside we do have a lot they need to work. Arent you afraid of the Justice Department if they came at you for something they have unlimited resources and a lot of time. But you also have legal precedent. As you mentioned before. The number of cases until you dont do you anticipate both companies would continue to extend the transaction date, the april 22nd drop dead break update if the case were continuing could you see one side decide that they wanted to walk from i dont cover time warner i cant comment on them. I would expect that they would especially at t. Mapping this out, i think the trial could be over by the second week of february according to the timeline they laid out probably a twoweek trial. Fast forward 60 days, get a verdict a few days later it could be done inside of that time frame, but well have to say. This is important for at t they strongly believe they have a case and they will continue to move forward and hope the past precedent and similar remedies for similar transaction also prevail. Lets game this out in terms of what you think it means for the companys performance between now and whenever something gets resolved one way or the other on this if it drags out longer than that, lets say to april or by early summer, lets assume it gets decided sometime between now and the next eight months what does that do if anything to at ts performance if they go ahead and are able to finally complete there deal, what does that mean . If the deal gets turned down or the conditions put upon it are so onerous they wont do it what does this mean how would you tell people to react to this stock today. Youre sort of back to square one, where they were today they still have a powerful wireless and individuvideo entertainment. Theres ways to get access to some of this content, they just wont have as much control over it as they like. Its a far better story for them to get the content if not, they have a Good Business they can continue to move forward with. I dont think theres a lot of estimates out there come bipi t time warner. Just expect them to keep moving forward. The stock is at 34. 64 you tell people to buy it here we have a 40 price target. We think it will mean revert to 13 times earnings. I think its just been a bit overdone here. Based on a lot of irrational concerns about subscriber losses on the video side. We think theyre on the right side of that trend with directv now to capture the changing trends in individual yo cvideo. You have ever been audited . No. Have you ever been audited by the lowest learner irs cant say i had that privilege. I cant either. But i can only imagine i have been audited by the other irs, they do whatever they want. They strike fear and terror into your heart they dont care. Theyre great people wonderful. Thank you. Frank, thank you. Can you tell them how to spell kernen at ts outside council is going to be joining david faber that will happen at 9 10 a. M. Eastern. Join in the fun we have things to get to we do more news out of washington when it comes to the media front. The fcc chairman ajit pai will unveil his plans to roll back Net Neutrality plans today veteran cbs newscaster charlie rose has been suspended after allegations of Sexual Harassment eight women have come forward to say mr. Rose groped them, walked around naked in front of them and made sexual advances towards them the Washington Post reports that the women were employees or either with employees or wanted to work for charlie rose. Cbs suspended rose pbs and bloomberg suspended distribution of his interview show in a statement rose apologized for inappropriate behavior but said he doesnt believe all the allegations are accurate when we come back, lowes just out with earnings well dig through the report with brian neagle next squawk box will be right back. So youre looking for male customers, ages 2554, who live within five miles of your business . Like these two. And that guy. Or maybe you want to reach women, ages 18 to 34, who are interested in fitness. Namaste. Whichever audience youre looking for, well find them were the finders. We work here at comcast spotlight, and we have the best tools for getting your advertising message out there. Anywhere, any way your audience watches. Consider them found. Lowes reporting its quarterly numbers just a couple of moments ago joining us now corporations are people what have we decided the Supreme Court yeah then you can say that joining us now is brian nagel from oppenheimer what is with that yearly forecast thats below expectations, brian. Are you adding back debt extingishment . The street is expecting 2. 50 what are they expecting to earn . Theres a onetime item in there. You look at the guidance they laid out for the year at the press release. Its the same as what they had previously, basically in line of the consensus estimate of 4. 50. So they boeat by three cents the stock is up less than a percent now. How is Everything Else what was the estimate for samestore sales how did it compare to what the company did . In line . Overall, this was a good quarter. The conversation we have a lot, when we look at lowes results, compare those to home depot, the number everyone will focus on is the Comp Store Sales, lowes did a 5. 7. That included benefit from the hurricanes the negative would be home depot did a 7. 7. Looking at lowes in isolation, this was a good report once again, its not as good as what home depot reported a week ago. Why am i i didnt see that what did you say it was 5 5. 7 okay the overall sales up about 5 . So thats good how are the gross margin numbers of 34 how does that compare to home depot . Its about the same weve seen now with these hurricanes, probably a bit of noise. There the hurricane related sales, which lowes called out to be about 200 million in the quarter, there was a lower margin theyll talk more about this on the Conference Call. Gross margins were in line with what the street was looking for. You will growth margin degradation and the hurricanes weighed more on the quarter. I thought the estimate was 3. 5. Thats because the company for the year is forecasting 3. 5. They dont see the 5. 7 continuing so there must be some of the hurricane in there, i guess that got them to 5. 7 in this quarter. Right . Thats correct. I think lows also takes the tact of trying to set their guidance low. They beat in q3, they didnt raise guidance i dont know if i would read into that theyre expecting a slowdown, but that probably implies theyre setting theb bar lower for themselves what is your rating . Outperform rating, and a 100 price target outperform with 100 price target how about home depot same. We have an outperform rating, 178 price target. Brian, thank you. Thank you we are also watching shares of Urban Outfitters. The retailer posting earnings of 41 cents a share revenue beat samestore sales rose 1 that defied street expectations of a 4. 5 decline. That stock up this morning close to 3. More coming up this morning. A 30 million hacker heist the victims are use eefrs cryrs cryptocurrency startup. And we will talk to vista jet about private aviation during the Holiday Travel season. As we head to break, a look at yesterdays s p 500 winners and losers today, the new new york is sparking innovation. You see it in the Southern Tier with companies that are developing powerful batteries that make everything from cell phones to rail cars more efficient. Which helps improve every aspect of advanced rail technology. All with support from a highlyeducated workforce and vocational job training. Across new york state, were building the new new york. To grow your business with us in new york state, visit esd. Ny. Gov. Welcome back youre watching squawk box live from the Nasdaq Market site in times square. Good morning. Welcome back to squawk box on cnbc look at futures at this hour the dow is up about 55 points. Nasdaq looking to ep open about points higher. A Digital Currency startup called tether says it has been hacked and claims 31 million of cryptocurrency was stolen. This is one of the conundrums when it comes to various cryptocurrencies, even with the blockchain, how things can get stolen because of the anonymity involved, it is gone and gone for good thats terrifying it is terrifying. Bitcoin hit a new high the price approaching 8,200s before pulling back. The market value of all cryptocurrencies climbed to 2 22 billion yesterday. Thats a stunning number. 2 242 billion of people putting their money in cryptocurrencies hoping we will figure this out. It is amazing i need to find the value of my 25 bitcoin from five years ago. Where is it i dont know. This is part of the problem. You have to find the app where it all went. Its somehow owned by you somewhere . I imagine somebody sent my 5 or 25, just to see what it was i dont know where it is now it has to be worth more. Its like my ge stock which i cant find killing me i lose money every day i dont have the certificates. Have you tried to get new certificates expensive its expensive. Maybe not worth it. It would have been worth it at 28. Or 60. On the wall street agenda october existing home sales are out at 10 00 a. M. Eastern. Janet yellen will take part in a conversation with former bank of england governor mervin king this evening medtronic, campbell soup, dollar tree and hormel will report before the opening bell. Sales force, hp, and hewlettpackard enterprise will be out after the closing bell. A positive finish for stocks on monday with small caps outperforming. Lets get you caught up on the broader markets. Joining us is karen cavanaugh, and chris ressler. Chris, lets talk about the small caps for most of this year small caps have underperformed. You think thats about to change 2016 was a great year for small caps what we saw in december after the election was the trump trade. There was great expectation for a lot of tax reform, tax repatriation thats taken a lot longer than the market expected. But were coming back into that period where some of those elements are going to probably have some clarity. We think the small caps are benefitting from that. Repatriation will probably cause more m a in the marketplace as Companies Like cisco or hp try to bring more money back to shore. You dont think the nax cuts will necessarily be driving growth for smaller businesses, but because the Big Companies will do so well with rotateiation that in turn probably a bigger driver for the asset class. A lot of them are nontaxpayers any way. The lower tax bracket wont help the older economy small cap companies, great theyll do better where theyre paying high tax rates. But i think that repatriation for Technology Companies where we spend a lot of our time that will be the bigger driver well talk about names in a moment your thoughts on the broader markets. We did see an update for the markets if we managed to put together a second day of gains today, thats the first time in a couple weeks we have seen backtoback gains for the dow and nasdaq some people think we are hitting a plateau what do you think . I dont think were hitting a plateau at all we have a pro growth administration we are looking at tax reform it will happen earnings are double what we expected at the beginning of the quarter. We had over 6 Earnings Growth things look better for the Fourth Quarter we have a global synchronized expansion. I think things will be Getting Better once we get that tax reform, the market will take off investors will be caught saying where did that come from its already in the works. We will see some good things for the rest of the year and into 2018 that was a long laundry list, not just tax reform. If tax reform doesnt go through, youre positive on the prospect for stocks, correct right were so centric about tax reform here in the United States but i think investors are missing theres a global synchronized expansion going on. The numbers were seeing, the Third Quarter of germany, 0. growth even poland had its best quarter in five years. China is holding its own good numbers out of japan. This is a global synchronized expansion. Earnings will be the ben factor of that. I think investors are too concentrated on whats going on here in the United States. Looking at the wrangling with tax reform and are missing that. Chris, lets talk about some specific areas in hightech. You mentioned small caps karen likes some of the small caps mention specifically the ones you like in technology because of the prospect of tiakeover targets. You were talking earlier about cryptocurrency being hacked or stolen Palo Alto Networks is trading up nicely and we think the whole sector should do well. One company we like is fireeye we love the management team, entrepreneur running it. We think that his heart is in that company thats the type of i investing we want to do. Other areas are the optical space. The Chinese Congress just ended, trump it back from china we think theres significant orders out as they build out the 5g and optical networks, we think theres a lot of value in the optical names. Also potential consolidation in the spiace. Earlier when talking about time warner, given the antitrust issues in that transaction, do you think there will be a spill overeffect in terms of how corporations outside of the media space or that transaction think about making deals when you do mega monster deals, you will always attract the attention of the government to say what sort of anti trust or what sort of and ty competitiveness could occur in there. The smaller can companies youre not dealing with large market share. Those transactions really dont get a second view. Do you think there will be a larger chill on deal making at large . Until we have real understanding of what the tax environment looks like, you could see that are you going to have cross border transactions in say the healthcare space those will be probably suspended for a period of time as you get greater clarity. Karen, youve been positive on stocks for a long time. You did list all the things that really stocks have going for them is there anything that worries you or anything that you look out and say this is an area ill keep an eye on i wonder about the high debt area that caused concern in the markets recently high yield, there is high levels of debt theyre serviceable now. You cant blame companies for loading up when Interest Rates are so low so i think there could potentially be a concern down the road, aggressive fed tightening could throw rain on the parade for now, things look pretty darn good theres always something where something happens in china thats the second largest economy in the world so it would cast a chill over the rest of the worlds economy. Right now things are looking good theres always geopolitical risk, thats something we have to live with thats one of the facts of life. Right now i think things are very positive and investors are just too skeptical karen, good to see you. Chris, mank thank you for coming in changed it. It said thank you bh bob hope, bob huggins, bob hoskins, bob hayes bob i cant think of anybody. I got them all. Thats what you were doing . I was no i was listening it said thank you bob h. I was trying to think who they were thanking. It was supposed to be a t. Look at these shiny thing thithings over here. Easily distracted. Comments from the ceo of at t. And later we will talk about craig moffett, we had nathanson, yao were ba now were back to more fet. Youre wchating squawk box on cnbc will they stay true to their words . Or did they promise you one thing. Only to do another . Right now, congress is talking about tax cuts that will add trillions to our National Debt and hurt our economy. Its time to tell congress. Dont borrow more money from china. And leave more debt to our kids. Keep your word. Tax cuts shouldnt add to the National Debt. I am the proud father of aeness very strong little girl named adelaide who was diagnosed with infantile spasms an incurable and debilitating form of epilepsy. Its been a devastating journey that has robbed my baby girl of normal development. Thats why i have launched the my shot at epilepsy campaign and im asking you to join me. Take your shot at the hamilton pose, donate to help us find a cure, and lastly, share it on social media. This is our shot to take. Learn more at myshotatepilepsy. Org u. S. Equity futures at this hour, had a solid session yesterday. Down most of the morning, then down earlier today it was unchanged now the dow jones indicated up 54 points. Nasdaq up almost 23. S p indicated up 6 intuit expecting better than reported earnings. The company is backing its forecast for the year and for the Current Quarter and guidance is largely in line with estimates. Shares of zto express are slumping today the chinese Package Delivery Company Reported earnings and revenue that fell short of forecasts. Agilent technologies posting results above estimates. The maker of chip testing equipment, its current forecast was lower than where the street is. Lets talk airplanes and travel the biggest travel season of the year is upon us. Our next guest brought the sharing economy model to private aviation with a dose of luxury we have the chairman and founder of one of those companies. We all want to travel privately. Can we afford to do this the macro trend is corporations are getting rid of airplanes, in a shared economy concept which i think we brought to this industry, customers only buy the hours they need. Thats really a trend you see all around you made a key distinction. Youre saying corporations youre going after corporate customers, not consumers were going afteromers as a often the ceo of a company has wealth and a private airplane. Lets put it this way for those at home who are thinking how much money do i have to have, total net worth to think about having an arrangement with you, what do you think that number is its really probably a net income of about a million dollars. Net asset value of 25 million its a question of how much disposable income do you want to allocate by flying private if we focus on the corporations, theres a big install base theres 7,000 airplanes in the market around the world. Andhave kids f youre going to stiff them. If you spend all of your money when youre alive, thats what we think about dont you want to loaf as much money as you can 22 million for the estate tax. The interesting aspect, theres 7,000 airplanes in the market around the world that fly 1. 9 million hours, the waste in the industries, that means theyre utilizing about 260 hours per year thats where we came in. We use those airplanes 800, 900 hours a year, and that allows to us drop the price. But we needed to build a Global Infrastructure so clients can call on us and draw on the infrastructure and know what product theyre getting. So you brought the price down to what . People sort of broadly say if you want to be on a big jet of some sort, a big, private jet, its a 5,000, 6,000 an hour project. Thats just for the direct operating costs. Now if you lay over that the actual cost of ownership, you are looking at 25,000, 30,000 per hour at a utilization level of 253 hours per year you drop that hourly rate because you distribute that over many more hours. So 10,000, 12,000 a corporation per hour that makes sense until you think about how big the market may or may not be. If theres players like wheels up and net jets who also operate in this space, how do you compete and distinguiscguish yourself if you look at the top end of the market, which we are looking at global express, the intercontental business, thats where we would be quom pecompeth the fractional guys. Fractional ownership is still another form of ownership. You carry the depreciation thats making that hourly cost like 22,000, with us, we fly for 15,000 people are tied of owning an asset. Thats the trend of the ondemand economy were in youre transforming the industry in your own way is there anything going to truly transform the industry where you go from 5,000, 6,000 an hour down to a 2,000, 3,000 situation . Depends on the asset class. You mentioned the king air product. Thats a lower asset cost. The king air will stop three times between here and l. A do you own all these assets yourself vista jet owns the entire infrastructure how many airplanes do you have 72 aircraft, all identical. Are you embracing or scared of flying cars and flying taxis . It will bring in a whole new level of complexity to the airspace that should transform the price point. For the short hops, yes. For the long haul you need large aircraft to get from a, to b to c. Andrew, did you read the with musks teasing people with that, not really worried about the people up there, what risk theyre at, youre worried about the people on the ground, if you have a hub cap maintenance on husband kappe hub caps and this thing comes flying down to the ground. I worry about that with drones yeah. Im worried enough about being up there i need antigravity. I dont want gravity is scary. People down on the ground. And also theres air whatever is propelling you, theres going to be huge drafts of air if these things are all over up less you have antigravity, theres going to be resistance are you going to be a believer or not . Its going to come overtime youre pointing it out its a huge issue. If stuff falls down. This is a regulated industry were in Public Transportation there are stiff rules which everybody has to obey. I cant believe were talking about this totally jetson stuff thank you very much for being here great seeing you. When we come back, much more on the department of justties s justice suing to block the merger of a a. A e. At ttime warner. Before we go to brk a eacheck of the markets. Alright, off you go. Casual fridays at Buckingham Palace . Surprising. Whats not surprising . How much money nathan saved by switching to geico. Fifteen minutes could save you fifteen percent or more. Welcome back to squawk box tonight is the premier of the proph prophet here on cnbc. Lets get a sneak peek of markus lamonus in action. Theres one particular moment that i never reveal. I have an artist friend named roland barry one day roland called me, and roleened said theres a history between patrick and i. I actually am the one who started the business snoo through my experience with him i felt like i always didnt get the whole story, and also, i wasnt comfortable with the flow in, flow out of money and how that worked. I personally wouldnt do business with him personally i wouldnt the fact that roland was never mentioned ever seems like a really calculated omission from patrick you never thought to say anything about other people, other businesses want even for a second honestly, not really. Okay. That lets me know what your logic is like. So im telling you that logic doesnt work for me. Hmm ouch that is the profit at 10 00 p. M. Eastern and pacific on cnbc a that should help offset costs related to air berlin. Janet gel yellen announcing shes going to leave the fed once her successor is sworn in she had the option to stay on the feds board until 2024 with her departure, though, President Trump will have four open seats to fill on the board of governors yellens term as chair ends on february 3rd coming up when we return, the Justice Department suing to block the merger between at t and time warner. They say it harms consumers. At ts ceo says that decision defies logic we have a full analysis and breakdown of all of it next. As wei head to a break, check ou the futures. Dow opens up about 53 points higher squawk returns in just a moment. The chase mobile app changed the game for us. We had this plan to go to the hottest place on earth, harness the energy from the sun to develop popcorn. We thought we had the right equipment, we quickly realized we needed more. We were able to send a Wire Transfer to a local vendor and get more Solar Cookers delivered, right here in death valley. Manage business expenses from virtually anywhere. The chase mobile app available with business checking. Chase for business. Make more of whats yours. 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. I thwell wait. What did you meetthink about her . 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Learn more at myshotatepilepsy. Org the Justice Department calling at ts deal for time warner illegal and harmful to consumers. At t ceo Randall Stevenson is fighting back. This defies logic it is unprecedented. Ive done a lot of deals in my career, but ive never done one where we have disagreed with the department of justice so much on eventhe most basic of facts. The latest on the department of justice roadblock straight ahead. Investors are waiting some doelts on tax reform what you can expect from todays trading session and where perhaps you should be putting your money to work right now thats coming up wake up and smell the traffic. Londons new Trial Program for city buses to battle smog with coffee details straight ahead as the second hour of squawk box begins right now live from the beating heart of business, new york city, this is squawk box. Welcome back to squasquaw box. We do have green arrows across the board. Dow looking like it would ep on up higher, about 60. 5 points higher s p 500 up about 7. 5 points. The nasdaq up about 23 points. Got a number of headlines to tell you about making news right now. Home improvement retailer lowes reported quarterly profit of 1. 05 per share. That was 3 cents above estimates. Rival home depot, lowes saw sales boosted by the quarters hurricanes dish Network Customers are without cbs tv programming this morning. Two sides have been unable to come to an agreement on the new carriage contract. It just says it offered to extend the old contract while talks continued. Cbs accuse dish of punishing subscribers instead of negotiating a fair deal. All of these conversations then feed into the whole time warnerat t thing in terms of how regulators think about some of these things. Well get the latestread on th u. S. Housing market. At 10 00 eastern time. The National Association of realtors out with existing home sales for october. Economists expecting a rise of. 2 of an annual rate of 5. 4 million homes. Our big corporate story of the morning, the department of justice is suing to block at ts proposed acquisition of time warner, and at t is firing back. Julia borestein joins us with more we had been waiting to see what happened now we know. We absolutely have been waiting, becky, and now the department of justice has officially filed a civil antitrust suit to block the proposed mega merger between at t and time warner assistant attorney general saying this merger would greatly harm american consumers. It would mean higher monthly television bills and fewer of the new, emerging innovative option that is consumers are beginning to enjoy. At t responding right away saying its ready to go to trial immediately. At t ceo Randall Stevenson stressing the deals clear legal precedent. The department of justice hasnt blocked a vertical merger in nearly 50 years. Stevenson addressing what he called the elephant in the room, cnn, saying he doesnt know if the d. O. J. s suit is tied to the president s criticism of cnn and that the company refuses any agreement involving even the perception of compromising the First Amendment. We believe quite strongly that any divesture of at t assets or time warner assets is not required by the law, and we have no intention of backing down from the governments lawsuit. We are in this to win, and absent a reasonable compromise, it doesnt violate our principles, and be expect to do just that. Stevenson warning the doj taking a position it hasnt in 50 years could have what he called a freezing affect on commerce in general. Andrew thank you for that. We have a lot more to talk about. Why dont you stick around well have you participate in this if we can for more on at ts antitrust battle against the department of justice, we want to bring in mark patterson, a professor of law at fordham good morning. You look at this straight on the law. What do you think happens . I dont think there is a straight up of the law Randall Stevenson is right there hasnt been a case like this that has been pursued in court for many, many years, and so no one really knows what the law is anymore, but its certainly true that the d. O. J. s arguments about how this could be anticompetitive are standard, as it says in its complaint. Standard. You say standard, but im making you the judge and im putting you on the bench okay. You read the complaint. You know the deal. You think what i think i need to hear all the evidence rather than just some of the evidence, but i think that if you look at the complaint and you see the d. O. J. s theory and you see that it has quotes from at t and direct tv that suggest that they are aware that they can do exactly the sort of harm that the d. O. J. Claemz they will do, thats fairly compelling those sort of bad quotations have been very compelling. The overlaw on this story is that its somehow political. That it is somehow coming from the president who made some comments about cnn and about when to block this deal before there is a lot of chatter about whether at t will try to get discovery from the d. O. J. Itself to try to see what kind of communications took place between them and, by the way, we should say the d. O. J. Says that they have not been influenced and have not had communication with the white house about that. Will they be successful in that and could that influence the case like this its hard for me to imagine that the administration could get the d. O. J. To bring a suit if they dont think they have a good suit. They dont want to bring a suit in a high profile case like this and then lose. I think they think theyve got a good case. I think they probably do julia who is in l. A. Just got a question julia. Yes my question is Randall Stevenson has been talking a lot about how the landscape has changed with the rise of the digital giants like netflix and amazon who really change the content landscape. His argument is that because of them they have even less of a chance of doing anything anticompetitive with their scale, which is relatively, you know, small compared to these tech giants. How do you think the changing of the landscape with these new big players is going to change is going to change how this plays out in court well, i think the d. O. J. Is going to argue that those are different markets. That most of those new services dont provide news broadcasting like cnn i think that its going to argue and it does argue in its complaint that thats just a different market, and thats not going to prevent at t from doing what it might do if you are outside of the media world right now, and you are a ceo of any Large Company thinking about doing a transaction, does this lawsuit have a chilling affect on that meaning, do you look at this and say this is a deal specific issue to this particular deal again . Maybe theres some politics involved or not. Or do you look at this and say the d. O. J. And this administration are going to take a much more aggressive approach in terms of antitrust says i think every case is dealspecific, but i do think, yes, i think it shows only that they might take an aggressive approach in the media markets. I think media markets are hard i do think its possible that talk about change in the media markets and talk about fake news has possibly made the d. O. J. Feel like what we need is a little bit more a little bit more competition Fox News Channel is fine. Well i will tell you, by the way, i was calling around yesterday and even prior, most media executives want this case to go to trial they dont want at t and time warner the last guy said that at t has a lock this gentleman says you are with me im a the remarkable sense of confidence among media executives that this transaction should be approved and that, in fact, they want them to go to court because they think that they will win and, therefore, it will put the d. O. J. Back on its heels for future deals its not their skin in the game, though no, and, you know, the rest of the media, what, environment wins either way. I mean, if at t loses, they also sort of get some sense of what the rules are because we havent had a case like this for so long if you were advising comcast, verizon, or disney right now, all of whom are looking to one degree or another at fox, you would tell them wait you would tell them if you want to do your deal, pursue it now, and youll get sort of pulled into this case potentially or not into this case, but it would probably become an element of the case what would be your guidance . I think that to the extent that the d. O. J. Loses and this merger happens, then its going to be harder for other mergers to get through, and i think thats part of what happens with, you know, the comcastnbc merger every time the market gets more concentrated, the next one becomes harder because the market has changed and the competitive effects are greater. Julia do you think the fact that the other merger that wee talked about, all the interest the in the fox assets, that would be more of a horizontal merger, and that is mostly about entertainment assets and then some vertical integration overseas do you think thats considered a different situation, or do you think that theres to be a direct correlation between how that deal and the one that were and the at t time warner deal are handled . Absolutely. Vertical mergers are different, and at t keeps saying that the d. O. J. Hasnt that the harm of vertical mergers is not as great. Its also true that the benefits of vertical mergers are not always as great. Usually when you have a horizontal merger, the benefits are consolidation of operations. They become more efficient we dont have that can you explain this to me . I dont know if you saw the other big headline yesterday in media land that got overshadowed by this is that the fcc is going to completely do Net Neutrality. From a policy perspective, its the irony on the same day Net Neutrality on one end, which is really all about competition to a large degree, and then to go after this deal how about just trying to please the bhous even if theres been no communication between them if this is sessions and Company Looking at this and saying, hey, we havent come down on the right soide of the president on lot of things, so we want to make sure we make him happy on this, even if theres been no communication. I dont think thats the way it works the d. O. J. People are pretty does the fcc in your mind and the doj communicate . Do they do things in sync . Do you think that the f. C. C. Decided they are their own view of the world and d. O. J. Has a different view of the world . Well, i think newt neutrality is a different question. Its not a change in the structure of the market. Its a change in how firms can behave in the market i think they do communicate, but i dont think that one of those factors plays into this greatly. To the extent that Net Neutrality is gone, that allows a greater opportunity for various sorts of discrimination, and thats one of the concerns in the at t case that could raise concerns. Final question. There is this april 22nd deadline there is an expectation this will be an expedited case, or at least that at t will ask for an expedited case you can look at a calendar can you get all the can you get a decision by then that depends, right i think, you know, you can present a lot of evidence between now and then, and whether the judge wants to push this case forward and i would imagine a judge would want to push this case forward, is its going to make that determination. Were going to leave the conversation there thank you. Thank you thank you its not even thanksgiving, and we have christmas and then we have davos, and then we have right . Way to sell it. You say it like its a holiday. You have thanksgiving, christmas, and davos its not a holiday. We sit outside for three hours its like 12 degrees but we have an amazing guest list the biggest we do it for the audience we do it for the audience. I hope they appreciate it anyway, when we return kidding. Not really. Management watching when we return they can send somebody else. Then we would be mad yes then but we do like the at t pebble beach. Were going this weyear i think so. When we return, we talk markets and tax reform april 22nd thats a long way off. Futures at this hour up 61 on the dow the nasdaq up 23 the s p up seven later, london tries coffee to power its buses. More on the citys latest program to battle poor air quality in a minute. Stupid youre watching squawk box on cnbc is this a phone . Or a little internet machine . 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Welcome back were here were glassed in were warm welcome back to squawk box. The futures right now are hot. Hot to trot. Up to 73 now on the dow after a good session yesterday we dont know about a pullback with Katie Stockton who we had on yesterday saying there was a pretty good session up yesterday. Up eight today up 26 on the nasdaq. Lets talk markets now as the anticipation builds for tax reform joining us for that is anastasia, Global Investment strategist at Jp Morgan Private Bank here on set is sam stovall, chief investment strategist at cfra you work for that guy from ohio, the attorney thats different than the cf you are at cfra a company known for Forensic Accounting as well as the traditional Wealth Management research and what does all that expert teeds well get to you in just a minute, anastasia what does all that tell you about the current state of the equity markets i mean, its a global synchronized economic expansion along with strong earnings with the fed that might be a tightening and with tax reform on the horizon have i got everything, or are there other things to think about too . You are absolutely right, but i think a lot of people do worry about tightening, and they say, oh, the fed is creating an environment Something Like edson gould used to talk about three steps and its done, et cetera i think people forget that traditionally the fed funds rate is 1. 3 above the rate of inflation, which means if this were a normal environment, we would be seeing fed funds at 3 and slightly higher. Not 1. 125. Taylor would have it at 4 . Well, i think that basically because of the low inflationary environment as well, that the market is not overvalued at this point. How do you know that thats not the internet, technology, and theres a lot of things that are holding down normal the internet and technology are not going away thats part of how we operate today. Whatever we do inflation numbers, we back out, like, energy and food. You know, if you you back out what is the real inflation rate do you really think there is no inflation . I think that the numbers that we see are as accurate as we can get coming up with them. When we go under 4 of employment, why dont we worry that there will be Wage Inflation . Or hope that there will be Wage Inflation . Well, we would like to have some Wage Inflation. I think that we would like to see the fed add more arrows to its quiver so that it does have something with which to fight the next recession i think, however, that when you try to say, yeah, but isnt 2017 just like 1987 all over again ready for a crash, i say no. Back then you had fed funds at 7. 25 . You had the tenyear note at 9. 5 we are nowhere near where we were back in 1987. Anastasia, do you take issue with anything sam is talking about here some stress in corporate funds someone said this is like the dress rehearsal for the real strets was that you that said that, or was that sam i did say that. I said that this might be a practice run for the spread widening that we may see in the future i dont think this is it because really, there was not a big systemic issue it was a technical issue theres a few names that drove a lot of this i do think it caused attention to the valuation. Not so much in the stock market, but specifically in the high yield market, and were seeing spreads that are white tight were seeing slight default rates, 1. 3 , which is below the historic 25year average of about 3 that does warrant a degree of caution here thats the reason were not saying, you know, be out of high yield bonds, but what we are saying is definitely adjust down wards. Some of their expectations that we have for returns for next year, and as a result of that, that makes us look to equities once again as the place where we want to be overweight. I did also want to add one point you asked, joe, if i take an issue with anything that was said its not an issue, but i did want to elaborate on inflation i think we will see a rise in u. S. Inflation in 2018, and you mentioned Wage Inflation you are right. It hasnt been coming, but if you look at the latest wage numbers and the annualized pace at which theyve been increasing, its finally inching to that 3 , and i think that could drive inflation in 2018 along with a few other factors why isnt the entire bond market not just corporate, but why isnt it because of central bankers around the world over the last eight years or whatever, why isnt the whole thing just totally inflated and perhaps overvalued i think if someone like left rip van winkle went to sleep, and we had 8 Interest Rates and the Unemployment Rate was 5 , now we have 2 Interest Rates and the Unemployment Rate is 4 . When they come back, wouldnt you wake up and say this is not computing . It makes no sense, does it well, i think the fed is definitely going to do their job at pushing up rates in 2018. Especially in the front end of the curve, but in the back end of the curve, you are right, it is still the dominance of Central Banks around the world that are continuing to keep those yields suppressed. And we are continuing to see this tremendous appetite for duration from pension funds, from insurance companies, and thats why any time you have an up tick in the long rates, you do have buyers noneconomic buyers, that are coming in and scooping up that yield its not the biggest bubble in history just the whole yield curve, bond market, sam, because of the central bank i think central bankers certainly have been involved with it, but, again, i think its reflective of inflation we are in the we are in the lowest quintile of inflation since world war ii, and when you talk about valuations, actually the average p. E. In this lowest quintile is where we are right now. We are truly reflecting i think. You have air bnb, and vista jet earlier today, so just basically, yes, people want their services, but they want to pay as little for them as possible you went and paid for the tsa precheck youre not even going to need it not anymore not anymore all right. Anastasia, thank you thank you been to our new set we havent seen you. Well see you. We had sam today well see you in december, lets hope sam, well see you. Thanks. Whats that tie say mullenberg. The college thats right. Thats right excellent or the money manager. Or the hospital but its the college. Coming up when we return, the d. O. J. Drama the government officially filing that lawsuit to block at ts acquisition of time warner our good friend david fabar will join us in a bit to help break it down. Also, a new look or maybe we said say you should be looking out for facebook theres a new king of social media in terms of market value that story and other headlines when squawk box returnin st ment. S and a gentle wavelike motion. Liberate your spine. Aflac. And reach, toes blossoming. Not that great at yoga. Ya but when i slipped a disc, he paid my claim before i knew it. So he had your back. Yup. In just one day, we process, approve and pay. One day pay. Only from aflac. Whether its connecting one of or bringing wifi to 65,000 fans. Campuses. Businesses count on communication, and communication counts on centurylink. Move over facebook theres a new king to social media when it comes to market value. Get this, chinese internet value tencent has surpassed facebook in terms of market value just a day after it became the first Asian Technology firm to reach the 500 billion valuation mark. Tencent shares hit a record high of 439. 6 hong kong dollars during trading hours overnight its 534. 5 billion u. S. Dollars. Facebook closed yesterday with a market cap of 519. 4 billion dollars. Tencent also beat alibaba to become the First Chinese Technology Company to hit that 500 billion market capitalization market. He is in striking distance of amazons 542. 7 billion valuation mark let the gaemz begin, or at least continue london is looking to cut smog, and its got a really unique way of trying to do this. Its going to be using coffee just like we do every morning to power the citys famous red double decker buses. British startup biobean has joined with Royal Dutch Shell to create a diesel fuel to use in buses. It has 1600 gallons of coffee oil in partnership with the london transportation authority. Thats enough to help power the equivalent of one city bus for a year thats it . Just one the startup collects used coffee grounds from caves and factories and transports them to its recycling facility there the grounds are dried before coffee oil is extracted biobean estimates that britain produces 500,000 tons of coffee griends a year most of which are discarded in landfills where they can emit harmful Greenhouse Gases the company also sells coffee logs which are used in fireplaces and stoves as an alternative to wooden logs wonder what it smells like i just want to know how much that to finally get something, how much well, not just how much cost, but how much energy do you use getting that along the way i wonder if its actually if you go find all of that, transport it back to the place, and it fuels one city bus for a year i guess if you are talking about much more mass scale, maybe that pays off maybe anyway, President Trump is going to spare yeah okay all right. Thats what i thought. Hold that thought hold that thought thats when we come back also when we come back, the d. O. J. Filing a lawsuit to block at ts takeover of time warner at ts ceo Randall Stevenson is fighting back responding to the governments move. We have those comments next. Right now, though, as we head to a break, take a look at the u. S. Equity futures dow continues to pick up gains up by almost 80 points the nasdaq up by 26. In every town, across america. Small businesses show their love to you. With some friendly advice, a genuine smile and a warm welcome they make your town. Well, your town. Thats why American Express is proud to be the Founding Partner of Small Business saturday. A day where you get to return that love, because shopping small makes a big difference. So, this saturday get up, get out, and shop small. 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 i am the proud father of aeness very strong little girl named adelaide who was diagnosed with infantile spasms an incurable and debilitating form of epilepsy. Its been a devastating journey that has robbed my baby girl of normal development. Thats why i have launched the my shot at epilepsy campaign and im asking you to join me. Take your shot at the hamilton pose, donate to help us find a cure, and lastly, share it on social media. This is our shot to take. Learn more at myshotatepilepsy. Org good morning, everybody welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in times square. Among the stories that are front and center this morning, today marks the last day of the talks, and the fifth round of negotiations to rework the nafta trade agreement. Key point of contention in todays discussions is over the materials that are used to manufacture automobiles and what countries they come from in the meantime, shares of Urban Outfitters on the rise this morning in the premarket trading. The apparel retailer reported quarterly profit at 41 cents a share. That was 8 cents better than the street was expecting Urban Outfitters also posting an unexpected increase in Comp Store Sales as a result. That stock is up just by about 1. 9 Palo Alto Networks is another premarket whipper. The Cyber Security company beating estimates by 5 cents with quarterly profits of 74 cents a share. Paulto althougho, as well as its rivals have seen a boost in sales after global ransom wear attacks as well as the equifax data breach. Ridehailing firm, uber, has the biggest push to roll out Autonomous Cars. It noted yesterday it would sell uber tens of thousands of luxury suvs between 2019 and 2021 outfitted with the automaker safety redid you understand answery and core autonomous driving. Uber will add its own selfdriving technology to the autonomous we talked to the new ceo of uber two weeks ago. The idea is that over time uber will bring Autonomous Cars into the fleet, meaning there could be areas like in arizona where you know on a given day that its sunny out everything looks good. Its an easy route for that route theyll send you an autonomous driver, but if its raining or if its a more complicated route, they would send you a human driver. Just to make sure over time you would meld these things its not going to be that theres going to be an area where all of the cars are going to be autonomous at one time its going to be sort of trickling in there are some parts of arizona where straight lines. Its just straight. As long as theres not a thats why there are there are certain cities where this that are more but thats and thats, by the way, you know, wamo is testing their stuff down there too. Is it because of the way its laid out gridlike its very gridlike and easy. You cant do that on the east coast because all those roads are winding horse paths. Its raining and dark, and, you know what is it, tuesday its coming up President Trump belgium President Trump is sparing a pair of birds from being the stars of holiday meals today this is the first time his first thanksgiving pardons after the ceremony, the pardoned poultry will start their fowl freedom at virginia techs gobblers rest its an exhibit where theyll be cared for by students and veterinarians at the universitys Poultry Science Department where they theyre strutting their stuff. Look at them shaking their feathers shake your tail feather, baby. I didnt know there was a Poultry Science Department that would be where you could do that eightwinged chicken where. That you have been desiring for so long. For chicken wings its the humane way of doing it so youre not killing as many. Well, think of how many chicken wings we eat on nfl sundays and, you know, Buffalo Wild Wings you can eat the boneless ones because those are just reconstituted. If you want real chicken wings, it would be nice if you got more than two per chicken. Just saying. We can do that kind of stuff now. I think you get four per che chicken. The wings and the drumsticks as talks continue in the bid to renegotiate nafta, main street Companies Stand to be impacted by a new deal kate rogers is live outside minneapolis, and she joins us with more on this story right now. Kate, good morning hi, becky good morning were live at pge solutions where theyre just Getting Started for the day. Small manufacturers like this one are closely watching each round of nafta renegotiations. As you said, the fifth round wraps up today owner susan Carrie Hanson says her biggest concern is simply the unknown. About 10 of this companys business comes from manufacturing custom parts for big Companies Like john deere and bobcat that they then export to mexico and canada biggest concern as an owner is not knowing the impact to us, and then how is that going to affect our end customer . I dont understand how the negotiations are going to affect us, but i do know that shipping to mexico or canada, our customers are not going to take a price increase she says shes not overly confident in the administrations ability to renegotiate this decades old deal, but she does hope they take into consideration what it might mean for a Small Manufacturer like this one also, the national Small Business association, its a nonpartisan Advocacy Group they say theyre very supportive of free trade deals like nafta, and says only about 5 of its membership reports being flegtively impacted by free trade. Back over to you okay. Thank you. Coming up, best selling author tim phares out with a new book, tribe of mentors short life advice from the best in the world he will join us to discuss meantime, check out the futures which are up across the board this morning squawk box will be right back. Did yon the National Debt . Ssman get elected by talking tough will they stay true to their words . 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Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. 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. The department of justice is suing to block the at . Ttime warner deal david faber joins us now with more on the story. David, earlier its not related at all, but i think about the Financial Sector when they thought about fighting some of the when you go up against city hall, and they just said lets just, you know two 2 billion, 3 billion, 4 billion was better than trying to deal with the government. I know everyone says at t has a really strong case, but doesnt the the d. O. J. Just scares me, and i dont think they do things lightly, and im wondering whether im wondering whether that is true that at t is going to win, and we dont need to worry about it, or whether the doj is just so formidable that its Like Fighting city hall what do you think . You know, i think its a great point, joe i really do. I think that while in the weeks leading up to this, that weve been speculating about the possibility and so many legal experts have weighed in and others have weighed in saying untested theory, at t would have the upper hand without a doubt, and obviously, since it was filed yesterday at 5 00, the lawsuit weve heard more of that i think your point is well taken. Theres always a great deal of uncertainty when you go to litigation particularly when you do it against the u. S. Government. I think that thinking somehow that at t has got a locked up case here would be a big mistake. Of course, that is reflected to a certain extent in time warners stock price if people really believe that they were going to prevail without a doubt, i think the stock price would be a good deal higher closer perhaps to the implied value of its deal to be acquired by at t. There is no doubt they have a strong case, joe you are right. You go up against the government you never know what you are going to expect. This doesnt happen very often youve got to go back to 1977 to see the last time that the government litigated a vertical merger and went all the way to a decision they lost that one, by the way United States versus hammer mill paper back in 1977 before that it was ford motor in 1972, and, again, these are just vertical mergers that kind of has been the key here, hasnt it . The fact that vertical mergers, where you are not taking out another competitor do not, it would seem, pose harm to competition is what at t is going to rest on at the same time when i see how formidable the government is, i dont really understand this deal, and i think its like i think theyre living like in the past i mean, im so if i were these old line media companies, i would be so afraid of facebook and google and amazon. I mean, they need to get, you know they i still dont think theyre going to be able to compete as with these other places as well, and its i dont really understand what year theyre living in for challenging this i mean, i am on ore tat ts sidn that i cant imagine this is the biggest thing we need to worry about in terms of consumers and Everything Else. I would worry about the other guys youre not alone. I read the complaints, as many others did listened to doj officials and spoke to some yesterday as well who, you know, their argument is lost on some people because, joe, it goes basically like this when you back into it, theyre sort of saying the turners content, basketball or whatever theyve got on there, is must have its must have that they are in such a great position and hbo, must have that nobody that they can exert enormous power over distributors maybe in march. Maybe in march maybe in march i would agree with that. During the ncaa maybe during the ncaa. They have direct tv now, which is an example of the competitive world were living in where now, they do have sports on there, but with all these new bundles that dont have that turner content, because people dont want to pay for it they dont want it anymore i dont know how you make that argument obviously a lot of people think the turner piece is perhaps some of the weaker parts and assets of that company my question for you is what are you hearing about the future of potential fox transaction in terms of comcast, verizon, disney, and what their reaction or players in this may or may not do, whether theres going to be a wait and see attitude, whether theres going to be a maybe jump in now because well see what happens with this case. What are you hearing you know, andrew, comcasts effort to acquire the entertainment and distribution assets of fox had this question of regulatory from the very beginning, given, of course, it was comcast nbc that the current d. O. J. Seems to have a problem with some of the behavioral remedies there how could they possibly allow them to acquire more content well, in light of this, its hard to imagine. Imagine if you are fox are you really going to sign up a deal with comcast with the serious risk that it could be blocked . Dont even know the answer yet from a court, which we wont get for quite some time and the current effort to block it it makes that deal more difficult, although, frankly, comcast is focused to the international assets, but the content assets here in the states were also of interest disney still work on it, andrew. Theyre not as beholden or as at risk from the antitrust david, i imagine we talked to some of the same d. O. J. Officials yesterday about this one of the comments that they made, which i found interesting, was how they differentiated the comcast transaction with nbc which clearly they dont love, but given the footprint of comcast being so much smaller than at t, the question, therefore, what is the inference if verizon were the one hookup with a fox right i dont know the answer. Being that they had nationwide coverage or that direct tv does. D. O. J. Seems to be pointing as much at direct tv as they were at the Wireless Network of at t versus the 30 of the country thats covered by comcast. Of course, as you know, direct tv is in retreat i mean, theyre losing subscribers, you know, a large amount of subscribers every quarter. Yeah, National Versus the 30 seem to be one key concern for the regulators do you have any idea how they might look at an interaction that would be coming from, lets say, one of these new media guys, like a facebook or a google or a yahoo or twitter even if they wanted to tie up with any of these things thats sometimes what people say. If you are going to get big numbers coming in, it could come from one of those arenas how does that fit into, because you cant rook at them as National Versus they have a Huge International footprint, but its not in exactly the same world . No, it isnt. Your point or your question, becky, is an interesting one what if facebook were to step up and say, you know what, we want to get larger content in a real way. Were going to pay for some of the content now. Were going to buy a movie studio we want to buy these assets. They distribute all over the world. What do he they got 2 billion users . Its way bigger than any of the old lean media guys. Exactly how do you define that in temz of a distribution mechanism vertsz what we have with at t and direct tv. Its a great question. We all know the decisions that are being made now in the Media Industry are being made in relation to the power of amazon and google and facebook and netflix. Theres scale. Theres global scale its not necessarily at ttime warner that was worrying people as much as it is those four and the power that they represent. Im not sure this changes any of that its those now i get it. Its those four turner entities that i never heard of that i cant define which ones . The one for the ncaas. Its like i dont even know what i have to look through the guide to find one of the games that i have in my pool. Cant you stream them now too, though . Theyre also on espn, right . They share it with them . I dont know. I find myself going to turner places where i have never the first word is turner, but i never heard of it, and i need it thats why i can never cut my cord, i dont think. I need it in march now i see what it is its about the final thats it its about the final four. Thats must have, and that is why this lawsuit is no. Now its clear. Now its clear they will they will. They will thank you. All right so the tie goes on for is that it . I got here, and i just rushed down i rushed down. Its okay for us. Were cas. We have to wear the i put makeup on no tie no tie. You dont want to seem im getting too old to do that to people tell me about it. Tell me about it thats what i say. Makeup doesnt work as well anymore. We need a scalpel or surgeon we do or a Plastic Surgeon on site at all times. Or a needle or filler im looking into all that, david. Looking into all that. Good. Let me me know give me a memo on that you have a couple of years. Ill let you know. Okay david, im seeing you. Well talk to you later. See you on squawk on the street in a bit coming up, is he already sitting next to me im psyched about this, where author tim ferris will join us were right back after this short break. Timothy ferris is out with a new book today called tribe of meantors and its a compilation of wisdom from leaders in every industry joining us right now is the author himself, tim ferriss. Thank you for being here today lovely to be back i love how simple your formula is for this. You talked to over 100 leaders, people from tim mcgraw to maria sharapova, to Business Leaders we all know like steve case. You asked them the same 11 questions. What were those 11 questions, and what answers did you get the 11 questions were partially its 8 of the 11 fine tiened from a podcast i have 300 opportunities to finetune it the questions are questions that i would want to ask tease people if i bumped into them at a dinner party or in an elevator, and if i had to choose two because they take a while to go through, but one would be what failure has set you up for later success, whether you knew it at the time or not . Tell that story. And the second would be what techniques or strategies do you have for saying no for me right now thats a big one. Thats a huge one i want to talk about that in a minute, but lets start with the first one. Your favorite failures Ashton Kutcher gave you a great answer for this. He did. Unbeknownst to many people, he had a brief stint with a criminal record, and i think it was burglary when he was 18. He felt he was put in prison . Yeah, he was. The intense shame that he felt from that let him to want to prove to the world that he wasnt that guy, and because the low of that shame was so intense, it also led him to feel more comfortable taking risks than he did. Thats been a huge component of his success. His track record is just phenomenal that would be one example. Then you have people like pat oswa oswald, standup comedian and actor. Favorite failure, every time i got on stage and ate it and woke up the next morning, the world hechbt ended its less and less scary to fail you get used to the idea of taking risks when you hear all these stories, it gives you more confidence to derisk maybe certain choices youre considering, starting a company, quitting a job and to realize that most losses or mistakes are really survivable the second thing that you have said that i think all busy people probably need to take a lesson from is how to say no gracefully, and you came at this from an interesting perspective. Even some people who said no to you to this project. I reached out to a lot of different people dalai lama there were a lot of nonresponses then there were a fair number of polite declines. Some of the emails were so incredibly well crafted and so smart in the wordsmithing that they used that i then responded to the people who refused to be in the book to say can i put your refusal email in the book, which i did. Some people said no, like danny my myer then you have neil stevenson, an incredible Science Fiction writer many, many others. Wendy mcnaughton, who is an illustrator. You can copy and paste basically the language that they use to make it easier for you to say no to all those invitations it makes you feel good when you get a response yeah. Exactly. I like them more after being rejected, which is a real jedi trick. Give us a couple of the articulations. Ill give you a couple of ideas. Then well get people to buy the book oh, no. For sure there are dozens of different tools in the tool kit. What was your favorite, though one of my favorites is using the word policy or vacation to make it a blanket refusal. For instance, i was once refused for a lunch date with a very famous tech investor, and he said, sorry, im just taking im on a no meeting diet for the next month as a policy im saying no to all meetings i said thats interesting. No meeting diet. I start using no Conference Call diet no this, that, and the other thing diet people just roll with it it was incredible. There was no feedback, no pushback that would be one. Because its not you. Its me. Thats the way of breaking up with somebody. Almost inevitably what they say is im so busy right now, im overcalendared that any response i give you, any time i were to give you would find me distracted i would love to do it later, but anything you are going to get right now will be mediocre what about later, though . This is the thing, i cant do it now, but if you leave me alone, im going to you have to be really careful. There are people who take that approach, and then there are other people like Dustin Moskowitz that says the first no is the cleanest and the easiest. You have to do it very clearly and very, very early he has a slightly different but similar approach to saying no. The best way to say no is not to respond at all time i thought you said you like to get the no. Well, i like as the recipient for people to send me a polite no, but if you have, as i do right now, 355,000 plus unread email, then the act of just parsing that would take the rest of your life in that respect, cultivating selective ignorance and being abouting comfortable with letting a lot of the trivial slide, which is another theme that comes up a lot, and thats really important no conference to obscure for andrew normally. Arent you overcalendared . Im going to use that. He thinks i would go to the opening of an envelope too overcalendared im overcalendared. Going and get the book tribe of mentors we have a lot to talk about. Back in a moment Small Businesses show their love to you. With some friendly advice, a genuine smile and a warm welcome they make your town. Well, your town. Thats why American Express is proud to be the Founding Partner of Small Business saturday. A day where you get to return that love, because shopping small makes a big difference. So, this saturday get up, get out, and shop small. 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. Zpliefrmts mernler road plok a this has the whole world questioning what they can and cannot do. The ceo of the Telecom Giant vowing to fight back and win reaction from wall street is straight ahead plus, will companies be heading to court more often . Well debate the impact on the dealmaking environment as the final hour of squawk box begins right now live from the most powerful city in the world, new york. This is squawk box. Good morning welcome back to squawk box here on cnbc, live from the Nasdaq Market site in times square im joe kernan along with becky quick and Andrew Ross Sorkin if you have a conference where you need a moderator or lets get a check on the market. Its andrew. Dont give it please. Futures up right now. Up 90 almost on the dow jones. I dont know how to say no. You cant say no. They got nine on the s p. The nasdaq up 32 points. Strong session indicated by these numbers that were looking at here. Lets take a look at treasury yields, which are i will is it below 240, which how long someday well go up. Okay. Lets get you caught p on the top story of the morning the d. O. J. Suing to block at ts proposed acquisition of time warner the agency calling the 85 billion merger an he illegal combination, but it says it harms consumers and stifles innovation it would bring together at ts more than 100 million wireless subscribers and pay tv customers with time warners networks to include cnn and hbo. Reports circulated that officials demanded that at t and time warner must sell the group. Randall stevenson, ceo, spoke last night about what he called the elephant in the room theres been a lot of reporting and speculation, whether this is all about cnn. Frankly, i dont know nobody should be surprised that the question keeps coming up weve witnessed such an bankrupt change in the application of antitrust law here. The bottom line is that we cannot and we will not be party to any agreement that would even give the perception of compromising the First Amendment protections of the press any agreement that results in us forfeiting control of cnn, whether directly or indirectly, is a nonstarter. By the way, i spoke to Randall Stevenson at the conference just a few weeks ago, and i asked him about the argument that at ts tieup with time warner would give them too much control and would harm consumers. The ideas that somehow were going to take distribution and content and create something thats so powerful that we disrupted google amazon, and facebook, and netflix, it borders on comical to be quite honest with you. What were trying to do is build a platform that gives us an opportunity to compete with those guys lets bring in craig moffitt. He is the all right Senior Analyst and cofounder of moffitt nathanson. So many different things, though, to get into, but just to start out, you have a feeling of who prevails when its all said and done you know, its very hard to say at this point. Look, the it is not true to say that this is a novel application of antitrust theory thats just not the case the section 7 of the clayton act, and it was amended in 1950, makes very clear that vertical mergers are subject to exactly the same anticompetitiveness standard as horizontal mergers theyre less frequent, and theres less of a trial history, but its just not the case that this is some kind of novel application of antitrust theory, right . We know why we do antitrust in this country, and thats protect consumers. Is there merit to the notion that these poor old line media guys still have the clout to be that way with facebook, amazon, netflix, google . I mean, they need to join forces to succeed in this world, dont they no i mean, look, whats the argument that the d. O. J. Is making tell me the d. O. J. Is saying that there are two potential arms here one is, remember, 70 of time warner content is sold to someone other than at t itself its sold to comcast, to charter, to dish network and so on at t, because they directly compete with those companies as distributors through direct tv, has an incentive to raise the cost to their competitors, and that will ultimately raise prices to consumers. Thats argument number one argument number two is by the way, you can simply withhold content particularly from new virtual mvpds say, amazon or apple that wants to get into this business to create a novel competitor. You can simply withhold the necessary content and keep them you dont think thats a remedy that would prevent them from charging other distributors or for keeping it back thats the kind of thing thats been happening before. Thats whats so interesting in this case because behavioral remedies are actually pretty clear. Remember, this case of using vertical market power in media, anticompetitively, was so obvious even 25 years ago that there were laws specifically passed to prevent it happening those were the Program Access rules that were created in 1992. They sunset in 2009. When comcast bought nbcu in 2010, they knew that, look, this is the risk, and so lets voluntarily agree to be subject to the Program Access rules as if they still exist. They say they dont like behavioral remedies. He said there is two problems with that. He puts the d. O. J. Or in that case the fcc in the position of being a regulatory watchdog, and we dont want to be that those things inevitably sunset, and when they end, we can do that whats interesting is the back drop, the couple cast Consent Decree expires in a couple of months, and so comcast will theoretically be in the position to do the same kinds of things i was just describing for at t, which is withholding content, for example, or using content to retard the growth of alternative competitors. Thats what has the d. O. J. Uneasy let me ask you a question, which maybe is even more complicated. Could you see the d. O. J. Taking steps against companies that are already currently constructed this way im even referring to to comcast. Or potentially, by the way, to digital companies, whether it be a facebook, google, or amazon or others that are trying to either get into this space or even just looking at them given what given the way theyve described this situation and said, you know what, we dont like it this way thats a really interesting question its one weve been getting from our clients a lot in the last couple of weeks. I dont want to get too far over my skis in saying that as a nonantitrust attorney that my opinion is worth all that much its a little hard to see exactly how that would happen. My guess is its highly unlikely, but, again, thats the concern. Heres a really interesting takeaway from all this, though. That is if at t at t could make a reasonably novel legal argument here and say that when congress wrote these rules in 1992, they specifically put a sunset provision in the rules because they wanted to create this alternative form of competition, which is eventually allow vertical competition to happen if it happens that youre allowed to do this, you can make a pretty good case that suddenly it goes from being possible to being strategically necessary to being vertically integrated because the only way you can compete is if you own musthave content. It sounds like exactly what Randall Stevenson was saying in the conference maybe he was talking about competing against facebook and google and that sort of thing you can make an argument that the only way i can compete against comcast and at t is if i also own vertically integrated content that i can at the very least threaten mutually assured destruction if we dont exchange content. Its a really different world to imagine, right if at t is the only place where you can get hbo, but comcast is the only place you can get cnbc and thats a completely different world than the world we live in today but the incentive for distributor that owns content is not that no. Thats not true, andrew. You can make the argument, and Randall Stevenson has, that we would never want to withhold the turner content because we just paid a lot for it, and its profits are maximized by wider distribution its a simple math problem, right . Thats the margin that i make on my distribution business, multiplied by the market share gain that i would get by having the content exclusive where. You can say you want that content exclusively. You could at least do the math and find out. Can you make that math work you would need to know the numbers for what is the expected uplift for a given piece of content in terms of the market share for distribution times the margin of that distributor right against the loss of wider distribution for the corn tent sometimes it would work, and sometimes it wouldnt. What do you think this means for fox . Well, if you end up going down the path of saying the d. O. J. Loses this case particularly if it loses the case because at t argues that this was, in fact, the intent of congress in putting a sunset on this, then you can argue that Everybody Needs to be vertically integrated and suddenly there is this verticalization oddly enough you can certainly imagine that thats what the d. O. Jfrmt is trying to prevent here, but it is one possible outcome were not going to decide now what finally happened. You think anyone finally says, okay, were out of here . Well, i can certainly i can still imagine that there is room for a settlement here really . Thats what we are saying before this actually came out. That it was negotiating something by the government. It doesnt seem like a negotiating tactic, and the fact that dell rahim went out of his way to make a speech at the a. B. A. Last week talking about how bad behavioral remediesare makes it awfully hard for him to retreat to behavioral remedies he wouldnt have dug himself into that position unless he consciously wanted to foreclose that you would have thought that that was the place this would end up. It just is less likely now is there any incentive for or just explain the incentives for time warner and the at t to extend, if they need to, the deadline of april 22nd meaning, who stays, who goes, how does that work . I think both companies at this point will extend, and so you dont think this gets wrapped up by then i doubt it. Remember, although people had said time warner is close to where it was before this deal was originally proposed, media multiples have compressed. The market by no means has said there is no chance this deal is going to happen. I think both Companies Still would like to get this deal done, but, look, its again, i just want to emphasize, it is not true that this is some entirely novel application of antitrust theory and, therefore, this case for the d. O. J. Has no chance thats just not the right reading. Its very hard to say who is going to win, but its not a slam dunk either way okay. All right thanks we appreciate it maybe well have nathanson on tomorrow okay. Is that okay . Does he agree with you on all of this he does look, we actually just cowrote a blog post for our clients this morning about exactly this topic, and this is for obvious reasons this is all we talk about these days. Yeah. All right great. Later today on cnbc at ts outside council Dan Petrocelli will join david faber on squawk on the street. Thats at 9 00, 10 00 eastern. When we come back this morning, a busy morning. Were going to get you caught up after the break. Plus, are you ready for the shopping mobs . It is almost black friday. Weve got a rundown of the potential winners and losers from one of retails most crucial days of the Holiday Season thats next. Stay tuned you are watching squawk box right here on cnbc 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. Welcome back lowes, dsw, and dollar tree are among the retailers out with earnings today Courtney Reagan joins us right now. Shes got a rundown of all these results and more courtney, good morning as if it wasnt a busy enough week for retailers we have mixed results for some retailers. Like home depot, lowes beating the streets expectations on profit and revenues. Comp store sales up 5. 7 thats ahead of estimates too. There was a 200 million revenue benefit related to hurricane sales. The comp sales estimate for the Current Quarter is a little light compared to analyst consensus. Shares are slightly lower in the early trading. Just about 2 . Now, shares are sharply lower for shoe seller dsw after missing on profits by 8 cents a share with light revenues and disappointsing same store sales. They were forecast of 0. 8 , but they actually fell 0. 4 . Dsw shares are down more than 18 before the open here dollar tree earnings beating by a wide margin on stronger revenue. Comp sales stronger than expected for the Namesake Stores those were up 3 the same metric a little lighter at Family Dollar shares are a touch higher proopen. Urban outfitters beating across the board after the bell on monday after November Comp sales. Analysts are a little concerned the Gross Margins could be more compressed than the company is forecasting in the Holiday Quarter because of urbans discounting history. This time of year. Holiday quarter expenses also expected to be higher with some increased marketing spent so that too eats into profits urban outfitter shares are down just a touch now they were sharply higher after the bell yesterday and then lower. Well see where that settles out when the bell actually sounds. Becky, back over to you. Court, thank you very much. As courtney mentioned, wither counting down to black friday thats one of the most crucial retail sales days for the holiday sustain. For more on the winners and losers from this season, lets bring in shes director of Consumer Research at thompson reuters, and thank you for being here today its good to be here. What do you think we know that there are going to be big sales yes is this really bigger than what were seeing during the rest of the Holiday Season and how does this match up to what we saw last year the average discount is thats something we discovered in a collaboration whats different this year compared to last year is the amount of emails consumers are receiving right now, and theyre receiving about 42 more than they did last year, and the discounts that theyre receiving are only in certain categories right now. Theyre expected to go, you know, wide as we enter the black friday weekend in other words, the retailer is getting much better at reaching out to us and trying to tell us exactly now, its also very interesting and different that we just saw Dollar Stores report stronger than expected earnings while all of the value stores are actually Getting Better with the discounting, in fact, about 43 of their inventory was discounted last year thats expected to drp to 25 . Also jump by 25 you mean . No, jump to 25 instead of saying thats a drop thats a drop theyre discounting less, and, also, what is key is the average of the discount that theyre giving last year this time around it was about 18 . Thats about half right now around 10 what this is telling us is that the value stores actually are going in the Holiday Season more confident. Weve heard Walmart Raising their full year guidance, and also they know that perhaps this selection that they have going into the Holiday Season is what the consumers want, and theyre willing to pay slightly more than the discount. At least theyre hoping so not necessarily better news if you are a shopper looking at where to shop. Great news if you are a investor good news for the consumer. Thats in terms of promotions. The mint year, like lord tayl taylor, theyre going to be giving everything away over 60 of their inventory. Yes, this is a slight jump from last years 66 to 60ers approximate. Still, that over 50 of your inventory and sale is worrisome because this is definitely eating up profits and margins. Although, if you are looking at a story this year over last year, it sounds like in all cases the retailers are planning to go into this offering fewer promotions than they were last time around. Right if you are a consumer and you are being offered less than 40 discount for a product, then you are not really getting a really good black friday deal what does this mean in terms of highend retailers . We shouldnt necessarily expect many discounts from them no. As always, expect very little. Its about 25 of their inventory will be on sale, and the average discount will be only 10 not to expect much of the luxury retailers. Within, you know we talk a lot about whats on discount you know, we dont talk much about whats not discounted. Whats not discounted are active ware, which is still hot, sleep wear, estimates, and so what retailers are hoping is that they lure you in with these promotions and that you will pay slightly more or full price for the other items for the Holiday Season thank you so much for joining us today coming up, breakfast at your door i hop has some good news for pancake lovers oh, great. Well explain next then, later, the d. O. J. Suing the block to at ts 85 billion merger with time warner. Spiaat 4a. About m a and a ecl 80 m. Eastern timeut d 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. Deere and couple at rw bear that firm saying it is seeing stronger than expected demand. Thats a high speed computing company. The latest target of activist investor starboard values. Its taken a 10. 7 in the company and is urging it to explore potential sales as well as reexamining its spending Signet Jewellers are taking a sizable hit in premarket trading. Take a look at this. The retail reported an unexpected quarterly loss and a big are than expected drop in Comparable Store sales you are looking at that stock now off almost 17 this morning. And i hop is rolling out a new Delivery Program i hop and go allows users to place to go orders online and add delivery through amazon. Com and door dash. Now, for now the feature is only being tested in select cities in california, texas, oklahoma, washington, and utah thank god. Good i wonder if you i go in there and its like i havent been in a while, but i want to order everything off the menu. I dont even want to pick. Bring this side of the all good. Isnt it . It is e i havent been in for ages. Strawberry waffle i mean strawberry waffles. Are you a waffle or pancake guy . Both. Both. They have a new thing the cheesecake some sort of cheesecake thing i saw an ad for that they were doing it looks like its probably 4,000 calories we should go. You worry about sugar, but you love i hop i love ihop. He loves donuts i love doughnuts. Have you ever been to normas in new york city. All of that kind of stuff. I mean, all of it. Okay. Coming up, has the market used up all the good news . Were going to have the debate right after the break, and then, later, former cea chair austan gool sba y challenging the tieup with time warner we will talk m a at 8 40 a. M. He lon me weava t more coming up on squawk box in just a moment. 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. Good morning, everybody. Welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in times square. Among the stories that are front and center today, several Food Companies out with the quarterly numbers this morning campbells soup earning 92 cents a share for the latest quarter. That was 5 cents below what the street was expecting the bottom line was impacted by lower demand for soup and higher cost for carrots didnt realize carrots was such a big part of it, but i guess so as a result, campbells is cutting its full year forecast and that has the stock down by 7 7. 75 . Hormel also announcing that its going to be merging its grocery products and its Specialty Food businesses. The stock is up by almost 3 in the meantime, fed chair janet yellen has a public appearance tonight shell be speaking at nyus stern school of business at 6 00 p. M. Eastern time. Yellen announced yesterday that she will be stepping down from the fed when her term as chair ends in february zbriefrmgts lets g lets get to the markets futures have continued to climb. Corporate results remaining strong, but as the market already used up all the good news maybe not this morning dow futures up by 95 points. S p futures up by nine the nasdaq up by 32. Mike santolli is here. A little bit of a tongueincheek question as to whether the markets used up all the good news considering were right near new highs market seemed well supported yesterday. Of course, we talked about how the bears might have lost their last good chance for 2017 last week however, if you look at the last month, the market has been the average stock especially has been stalled out as the economic surprises have continued to be very positive. You look at the city economics surprise index all the macrodata, indicators are a great example and it has been good. Yet, its been Technology Stocks it raises this question whats going on with the stock and bond markets. We have that flattening yield curve, which may not be an economic single. I do think that its really more a matter of time its a matter of the markets having to kind of, you know, kind of digest the gains for this year, and maybe wait for that Fourth Quarter chase to the up side if were going to get that it does, i think, going into 2018, guys, bring up this question that Goldman Sachs has raised too, which is kind of too much of a good thing i think good news is still good news its been about six months where everyone has agreed, and the fundamentals are great, and markets have responded positively to that i guess its a matter of waiting for how much good. Which way do you go up and down. If you get tax cuts, you get some kind of a boost, does that cause ae general lift, or is that going done a big rotation like we saw after the election mike, thank you well talk tax reform mike just alluded it congress is home for the thanksgiving break, but next week the senate will push for tax reform well be front and center. Joining us now former cea chairman austan gool sbs goolsby now kevin hassett, he cant say enough about this plan i imagine well get the opposite take from you. There was just one part that i just thought, well, austan must really be excited about that we had mnuchin on the other day. He is doing exactly what you tried eight years ago. We admit it when you take away the deduction, theyre definitely going to pay more isnt that thats great why dont you get behind this full force that helps lobby to get this thing passed. You have been one to have wealthy people pay more for the whole time you saw the actual numbers, right, joe the reason that doesnt it doesnt excite me is that its not even true. Youre choosing one deduction that you are saying, ah, see, the millionaires will lose that deduction. You forgot theyre abolishing the estate tax and that the actual score came out from the joint Tax Committee. We know that it shows that it raises taxes on more than 50 of the country by the end of the deal well see what happens, but it zebts in the senate it not on goes to 22 most people, thats not an issue for a lot of people, and the rich people that are at risk with the estate tax, you know how they they got second to die insurance. They got trusts set up i dont know dying and then having it pass to your heirs doesnt seem to be a big giveaway to the rich. The other thing that you said, austan, is that you dont know whats in it that means nobody knows whats in it. How come the democrats are so sure that its so awful if you dont know whats in it . So far what we dont know whats in it because theres a house version and the senate version. Beth of those versions have a lot of things that most people do not like. Thats the only reason theres unsesht. Joe, what i dont understand is why they didnt start with things that they knew could get some democratic support. Why start that would be raising taxes raising taxes. That would be raising taxes and increasing regulation. We know what you guys like we saw what happened for eight years. Thats why theres republicans in there they dont want to do those things its thanksgiving week, man you got to settle down thanksgiving week. Lets remember the Obama Administration proposed cutting the Corporate Tax rate 34 from 35 . 28 lets be fair. 34 instead of 35 . 28 is not going to do it start from something where there could be agreement dont start by were going to raise taxes on literally everyone making less than 75,000 so that we can pay for a giant tax cut. I think thats not exactly whats happening you go to zero on a lot more thats what the Tax Committee says the joint Tax Committee didnt have the final provisions that are in this plan, and wait a second now youre arguing youre taking his im saying the joint tax rate that came out, nobody believes in the numbers that they came out with thats the official number, joe. This is not who is so theres thats the number so when you hear all these guys youre kidding really knock me down with a feather andrew is with you on this so all these guys, when you have hanson or you have paul ryan or you have any of these guys saying that its were focussing on the middle class, and its a tax cut for the middle class, theyre all just lying through their teeth or they dont know what theyre talking about. Which is it . All i tell them is look at the data look, joe, you and i are men of data let us just look at the numbers. The numbers are out. Just look at the plan. When you do things like this, you say, okay, were going to abolish the estate tax on people that have 20 million. Back to the estate tax. Skbro when you say things that you know the senate bill, the medical expenses stay that you can deduct them. But the so you dont the student Loan Interest goes away. Were going to tax student scholarships as if theyre cash income, which the students wont be able to pay why do this . It doesnt make any sense. Cut medicare because youre constrained with 1. 5 trillion that theyve settled on to be able to do reconciliation, and they want to get to 20 of do you see any benefit in getting to 20 . Its crazy. When barack obama proposed the stimulus, half as large that was explicitly temporary for two years, you say, oh, the deficit is going to be horrible. No, no, no. Theyre proposing i dont want to line the pockets of unions and not a single shovelready project was done instead were going to line the pockets of the people paying the estate taxes no, were im im begging you shes going to give the knee jerk reaction about corporations or rich people too, and we shouldnt try to get to 20 and be more competitive globally i was part of proposing that we cut the corporate rate. I just want to do that paid for within the corporate system. Dont ask the middle class to pay for that it doesnt make any sense. Thats an interesting point if you can close the deductions and the loopholes within the corporate system and then get the tax lower as a result instead of them saying, okay, somebody else is going to have to make for up and were going to the individuals in a way to do that. Thats an interesting logical argument guys, i agree with exactly what becky just said we think the chances are that were going to get the tax bill will get signed voted and signed this bill absolutely zero but that something gets passed relatively high, but theyre just going to have to scale back their ambition the republicans are trying to cram 4. 5 trillion of stuffing into a 1. 5 trillion turkey oh, very timely thats not going to work. How do you think it doesnt its railroad paalred the house. Where is the Sticking Point in the Senate Something passed the house. Okay. Something passed the house it was very different you think ingoing to become e conference it will make it to conference, but what is then kind of mushed together between the two will not be able to pass both houses . Yes correct. Theyll have to scale it back. Theyll have to scale back the taxes on the middle class because i dont think that they have yet faced the full opposition of the groups that are going to get hit because those groups are saying, well, maybe the senate bill will be different. Maybe because each chamber has to pull together a very delicate blend just to get their own membership on board, but those two blends will not help the other house. Indeed. Yeah. I think those blends will have a problem. Were back to, you know, cutting the rates for all of the you know, all the lower rates come down, and we go to zero we get rid of brackets and go to zero, and then we get to tax credits that are double. The calculation you mentioned one. The other calculation is that people eventually get anywhere from a 2,000, 4,000 range if you make a certain amount of money. If there is job creation from this, these are people that arent making anything right now, and they end up actually having a job when you that part is good if you could add more jobs the Unemployment Rate is up 4 you see the president out bragging of how strong the economy is how is it going to increase from that because wages could go up, which didnt happen for eight years. Then the gdp could go up to 3 , which also didnt happen for eight years. Okay. Joe, the numbers are out the official numbers they looked at the bill, and we know what it does. Theres not a people are arguing every day. Polar bears are weve had people on here arguing about whether its 4,000 or 400. Most of the lower tax rates go down the upper tax rates i thought you would be happy it stays where it is. It stays at 39 point im happy with that dont hand me a 1 bill while youre stealing my wallet. I mean, look at the bill why would they do that . All of those tax cuts go away, and they get rid of the exemptions, so if you have a family with three or more kids actually taxes are going to go up and then they get rid of a bunch of deductions that middle class people are going to have and the official numbers show that by the end of the bill, literally, the entire economy of people making less than 75,000 a year as their taxes go up youre talking about the end of the senate bill going up. Youre talking about a lot of the stuff sunsetting you are going to love this 3. 5 growth. Were going to have you back on. Were going to have you back on, and its going to be hard to swallow. Its just you know, so many good things happen with growth that well have you back, and i dont know how youre going to explain all this, but, anyway, thank you. Well see you. Great to see you guys wrrks. Thank you, austan i was quiet the whole time. Thats when im doing my bidding. The Ripple Effect of the at t and time warner merger. Youre watching squawk box he ocnren bc 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 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. I thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. It this lawsuit has the whole world questioning when and what they can do. This throws a huge degree of uncertainty to anybody contemplating joint ventures, anybody contemplating m a, and thats one of the key concerns about this to take suddenly without any notice and just upturn 50 years of precedent on a transaction leak this can have nothing but a freezing effect on commerce in general. That was at t ceo Randall Stevenson speaking out on the potential effects of the d. O. J. Suing the merger to time warner. We have the Vice President of m a strategy at interlinks is this going to put a chill on deals. I think we have to look at this deal and the upper echelon, right . It is unique in the sense, and when we look at deals above 5 billion, they represent less than 1 of the announced deal volume its not a great health check of the overall market the regulatory concerns, i think, are really up and down the value chain. Let me ask you this in north america there was a sense after President Trump was elected or early on there was a sense there was going to be a wave of big m a. Then there was a sense that actually maybe big m a was going to be out of favor because people are worried about tweet storms by the president. They were worried about synergy numbers and whether the idea that two companies would come together and take jobs were going to be difficult. Yeah. And so there was a sort of pause almost on big deals. Yeah. And yet, somehow this summer the attitude shifted yeah. Big m a was back. Yeah. Its a bellweather that really dictates kind of the health of the market, but when we look at our data, its really about the entire plarkmarket, and the numo announced deals were predicting and able to see in that early phase of Due Diligence thats been healthy. Really across the board. Four years in a row were seeing announced deals grow, and we can say now with confidence, 2017 is going to be a record year for total deals announced. Over 50,000 plus 2018, q1 will grow globally as well how big a portion of that deal making is in the media, telecom, Technology Space . Its interesting. Particularly in north america we see that sector be a little weaker right now you see mega deals happening, but really its not trickling down, and we saw a lot of the consolidation happen already, and we predicted that actually last year. Thats already happened, and its cooling off from some of the mega deals this jobs issue, which is a huge one, when you look at the deals that have been announced, how many of them rely on synergy numbers . You know, big synergy numbers that if theyre going to slash jobs a good amount, right . That is definitely a driver. That has not, by the way, impacted we have not heard the tweet storms on those . No, no. Thats the thing i think deal makers are taking that into account. The assumption right now is were in a good position related to the jobs and the ability to get their sin erj ys and cost cutting. We have other factors driving m a in terms of historically low Interest Rates theyre starting to creep up globally low inflation. Negative rates. Theres some stuch thats weighing on the minds of deal makers, but generally, the conditions are right the geopolitical and Economic Uncertainty especially around free trade is something we hear. Matt, thank you for coming in thanks for having me. Thank you when we return, jim cramer joins us live from the New York Stock Exchange here are the futures right now have we hit the triple digits . Yes been waiting for it this morning. Up 100 on the dow up almost ten. Double digits on the s p and 33 on e sdthnaaq well be right back. We need to be ready for whatever weather may come our way. My names Scott Strenfel and im a meteorologist at pg e. We make sure that our crews as well as our customers are prepared to how weather may impact their energy. So every single day were monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. During storm season we want our customers to be ready and stay safe. Learn how you can be prepared at pge. Com beprepared. Together, were building a better california. Lets get down to the New York Stock Exchange, jim cramer joins us now were hearing two things, vertical mergers arent dangerous for consumers and we all know that and then were hearing we heard all morning long this isnt unheard of, that in the past vertical mergers have been looked out closely because the same thing that happens in horizontal can happen here as well does the government have a point or not the government has a point in the old days you have mentioned what happened if facebook decides to go in and amazon and what happens for alphabet these companies could be networks in a heartbeat. And suddenly, you know, lets say they bought time warner, or one of those, would that be nonvertical . I think the Justice Department absolutely has a good case if you look at the current universe but any one of those companies has enough cash to buy cbs tomorrow i think the Justice Department doesnt have a great case. If i look at the actual small group, then maybe you could make it but boy, the world has changed. Its like i remember sirius and xm were trying to merge, oh, no, only be two satellite its like, theres pandora and spot its like i see what youre seeing about those two and i think thats the same thing here i even said that i hope these guys are able to get together and still dont think theyll be able to compete with these new age companies. Im with you entirely i remember when they put an apple jack in my car there goes sirius and xm because now kids listen to exactly their music. The universe changes so quickly but Justice Department is looking at the landscape now landscape in the future, i look at any one of these companies out west and think, do they want to be the next content provider beyond what they are already providing . And the answer is sure they do this is a great opening for them if justice stops us. This is par for the course. The times theyve picked to go after like a microsoft or somebody, you pick them at the High Water Mark and things have moved on in the business world. Right, right. I just yeah, microsoft, that was the peak of 1999 but look, i think that stevenson made a lot of good points. I dont know if stevenson hes like a tough point man they need a better point man stevenson is a teleco guy, they need an entertainment guy. Steven son is too flat in his defense. You know, think about jamie dimon and all of the Financial Guys just said id rather just its you call it a shakedown or what you want to call it. You cant fight city hall, can you . Im with you. They cant im with you its a shame because i think the merger made a lot of sense. Nanyway, thanks, well see yo in a couple of minutes. The ceo of marvell one day after they announced they would buy cavium most etfs only track a benchmark. Flexshares etfs are built around the Way Investors think. 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Chubb got us a place to stay in the same school district. Otherwise it could have been a nightmare. Dad. Chubb turned a disaster into an adventure for our kids. Mom. And no one missed a day of school. [lagale force winds,s absolute chaos out here accumulations up to 8 inches. Dont know if you can hear me, but [monica] whats he doing . [lance] can we get a shot of this cold front, right here. Winter has arrived. Whooo hahaha [vo] progress is an unstoppable force. Brace yourself for the season of audi sales event. Audi will cover your first months lease payment on select models during the season of audi sales event. Welcome back, were in the chairs and President Trump will be in for a fowl mood, hes going to be sparing two lucky turkeys at the first turkey pardon ceremony. The birds head to gobblers rest exhibit where they are cared for by students and veterinarians in the science experiment it starts at 1 00 p. M. Eastern time. Remember gobblerss knob . They say this is gobblers rest, after theyre pardoned and live out the rest of their day. Ill pardon you okay, you are doing turkey . Absolutely. But not in the big thing outside . Not the fried turkey. A whole turkey . We do the whole thing, of course. Doing a breast and ham, both. Breast and ham both. Your favorite stuffing . Yes, by far i like desserts too. Pumpkin pie. Apple pie, its all good. Join us and make sure im not thinking about food at all squawk on the street is next this defies logic and it is unprecedented. Ive done a lot of deals in my career but ive never done one where we have disdisagreed with the department of justice so much on even the most basic of facts. At ts Randall Steven son responding to the doj suit to block the bid for time warner. Welcome to squawk on th