Transcripts For CNBC Power Lunch 20171204

Lunch begins right now welcome to power lunch. Im Michelle Carusocabrera. The dow hitting record highs again, pushing closer to 25,000, just days after crossing 24,000. The s p 500, the russell small caps also hitting record highs but in the category of things that make you go hmm the nasdaq struggling again today because of a tech slump. Nvidia, micron, amd among the biggest declines check out what else is moving at this hour. General cable is soaring more than 30 the industrial wiring cable maker getting a 3 billion takeover from an italian rival facebook is down about 1 . One of the stocks pressuring the 100. The social media giant unveiling a messenger app for children more on this controversial move straight ahead on power. Michelle, thank you very much welcome, everybody im Tyler Matheson we begin this hour with that big market rally youve been watching all day today over 20 now of the s p 500 sit at 52week highs tracking the action at the nyse. There is some very interesting rotation going on, but the general theme is that the sectors that are most leveraged to tax reform are the ones that are doing better thats the general theme let me just show you something put out about a week ago about who would benefit most from tax cuts energy would get the biggest boost. Theyd be up about 20 financials and industrial, telecom would also get substantial boosts to their earnings tech would get the least of any sector, only 1. 5 . Thats a very low number look at whats doing well today. Generally, by the way, this has been the case for the last four or five days energy and financial, industrials, telecom are doing pretty well and technology is lagging. So there is some sense here that those are the outperformers here theres a lot of confusion of value versus growth story. It just so happens those who do well open these tax cuts happen to be in the value group bank stocks for example. Pe telecom like verizon exxon mobil. And of course the growth names which are also basically technology stocks. Apple just went positive have generally been down throughout the day as well as the financial tech names like visa and mastercard. So theres a little bit of overlap here with the value versus growth story and who wins on tax cuts. At the same time, companies that have had a dramatic outperformance for the last several day, retailers have notably outperformed they are, again today, some of these are up double digits since tuesday when tax cuts really had momentum transports, another group, generally has underperformed theres been a few exceptions but were seeing again very strong moves in the railroads as well as in the airline also today. Some of these again up 9, 10, 11 in four or five trading sessionings. Not far from the eyes. Dows up over 200 points lets talk more about this with jack av lynn, the executive vp and chief Investment Officer with bmo private bank. Jack, i think having heard what bob just says, you are going to be in complete agreement that you think particularly the sectors in telecom, energy, financial, industrials, value oriented plays for the most part, are where the actions going to be because of tax cuts, right . Yes, i think there are really two pieces there certainly bob talked about the lower tax rates. These sectors are saddled with very, very high tax rate, doing most of their business domestically but i think the other element here is the fact that if we do expect broader Economic Growth, which we do, then investors dont need the certainty of the large Cap Tech Companies that can pull a profit rabbit out of a hat no matter what kind of the economic environment and they can go into the you know, value oriented name, the industrials and financials and telecoms where perhaps you need a more favorable environment for them to grow so i do think that this is a way for investors to sort of stretch their flap their wings a little bit and say, you know what, i think now this rising tides going to lift all boat, not just those large tech names. Will Corporate Tax cuts produce an economic sugar high of corporate Profit Growth or something more enduring, something that actually does lead to more investment, Capital Spending and the like . Thats going to be, you know, thats really what im puzzling over right now i think we will get growth im certain of that. The question is, youre right, is it a doughnut or is it a steak. Its really hard to tell right now. I think if companies do repatriot the catch they have overseas or they plow money back into the business, you know, if theyre just buying back shares, if theyre issuing dividends, if theyre just kind of filtering money out, investors, you know, thats going to be positive but its certainly not going to be sustainable. We asked for weeks whether or not tax reform was built in. Clearly when you see the mega rally we had, doing it again today, maybe it wasnt the question is what do you do now right . The old saw is buy the rumor, sell the news. By the time this gets to the president s desk, we are assuming thats what will happen, it will get through conference, is it going to be time to sell the news . Is it all going to be priced in . Yeah, im not convinced its priced in. Because i do think there are some secondary questions and the certainly tyler brought it up. Youre right, we will get a boost in growth. And youre seeing it in the retailers. Youre seeing it in the down and out names. Theres no doubt about that. But then the question is, you know, who really benefits. Are Companies Going to spend on software you know, for example, why arent countries like ireland, singapore, hong kong, why arent they trailing if, you know, this money, this 2 trillion of money thats parked overseas, guess where its parked, ireland, singapore and hong kong. Thats going to come back here that should disadvantage those countries and were not seeing that underperformance yet. As youve heard throughout the day, big source of the optimism sending stocks higher today is about the tax bill. But the house and the senate still need to get a compromised bill and then vote on it how easy or difficult is that going to be . Michelle, before they can get to tax reform, they still have to pass a funding deal to keep the government open. Theres news right now happening that Chuck Schumer and nancy pelosi, democratic leadership, will be meeting with President Trump at the white house later on this week they said the white house reached out to them to have this meeting and theyre going in with an open mind. Now, as all of those negotiations are going on, republicans will still be working on hammering out those details of their tax bill. One of the biggest sticking points for the house has already been dealt with and that is the 10,000 property Tax Deduction that is now included in the Senate Version of the bill as for the other differences, the republicans say that they can work through them. The major ones are the individual rates the house has four, while the senate has seven and those expire after 2025. For the corporate rate, the house cuts it to 20 right away. The senate waits until 2019. Theres also the repeal of the individual mandate which is in the senate bill but not in the house version of the bill. There are also a bunch of smaller issues that do wind up becoming bigger battles. The senate keeps the alternative minimal tax. It doesnt repeal the estate tax. There are also different rates for pass through businesses and for repatriation President Trump also threw a wild card into all of these negotiations this weekend by opening the the door to a 22 corporate rate senator marco rubio is clearly miffed by this tweeting, quote, for days, ive heard that anything more than 20 on the corporate rate would be antigrowth and catastrophic. Less than 12 hours later, 22 is now an option . So its going to take republicans at least this next week to sort it all out. The house will vote tonight on who will negotiate for their side and the senate will pick its team as well this week thanks for that rundown lets break down the next steps in the tax debate. The potential winners and losers sara fagan, former white house political director under george w. Bush. And Jared Bernstein is former chief economist to Vice President biden. Im just going to take a guess here and say, sara, you like the bill and jared, you dont, is that right youre good youre sharp first you havent lost a step. No, not a step. 20 right now is where the Corporate Tax rate would be under both of these plans. Sara, when it comes to the interests of our audience, thats where theyre most focused. How likely do you think it is that 20 Corporate Tax rate stays or does it go higher to pay for other things i wouldnt be surprised if it went higher, a point or two. You saw the president give a little bit in that tweet over the weekend. Theyre going to have to reconcile these differences. And some of them cost money. And that is a pretty easy way to get where you can get both chambers to support the legislation, which is ultimately the end goal here. How about you, jared . Yeah, i think its a possibility. Every point on the Corporate Tax rate gets you about 120 billion over ten years so thats more money to play around with if you want to make some of the tweets we were taujust talking about on the bills popularity, i take it that our audience is focused on many of the benefits in this tax cut for those who are shareholders, for those whose income is assetbased. But it is a very unpopular bill with the public. Its Approval Rating is really very low especially for a tax cut. Im with the majority. That said i dont think thats true i think it depends how you really . Guy it depends which media youre watching, right why are you talking about National Polls what twitter feeds you follow and with all due respect to the public who i love and respect dearly because they watch us, how many people have read the bill im making a factual statement about National Polls your point is well taken if you get into this bill, you can find something to like, especially youre someone who depends on assets and lots of our viewers are. I get that im just saying National Polls thats fine, think weve learned the last year and a half what polling can do and what it cant do i guess my point is that theres two sides. Individual and corporate i want to focus on individual for a second i have no idea how the tax bill is going to affect my family tyler probably doesnt michelle probably doesnt. I dont know all the details i dont know what the final result is going to be. Im going to ask each of you this jared, e kni know you dont likt as a whole is there anything you could live with, the Building Block yeah, you know, i think that the corporate rate at 35 is out of sync with the rest the world. No question. When i was with the obama administration, we made a solid proposal to take it down to 28 . Dave camp took it down to 25 . So there is some Common Ground the problem is, you really should do that in a way thats revenue neutral. The fact this thing is deficit financed is the thing i dislike almost the most about it. Unlike brian, i think actually we know, i think all three of us, because we live in new york and new jersey, were going to pay more in taxes i would think youd love that. Thats all i know. If you think about middle income america, which is i think where jared was going on the other point, that its not popular, when you talk about the provisions in this bill, and ive done a lot of research on this and sat through a lot of focus groups on tax reform when you talk about doubling the standard deduction, the first 24,000 of income is tax free. Doubling the child tax care. Its very popular. Theres a lot in this for Middle America as well as for corporate america. I think one of the ironies for as much as our audience, you know, loves this tax reform, we see it in the stock market, is that when people at the higher incomes go to do their taxes next year or in 2019, theyre going to realize they probably didnt get much of a tax cut, despite whats being reported by at least some of the press. No, when you look at it very closely, it really looks like a Corporate Tax cut, which is paid for by wealthy americans no, jared . No, i mean, the way they kind of pay for the Corporate Taxcu is that the individual side, all that stuff phases out by 2025, 2027 so if you actually look at the tables from the nonpartisan score keepers, taxes actually go up on average for families below 75,000 in 2025 now, they might decide what if it doesnt do for the next two years to people who are in the income categories when it comes to ordinary income for people in the upper income categories, they get a larger break over the next few years than people in the middle. It is absolutely the case that people in the middle get a relatively small break think were all making a point we can all agree on, which is i think its going to be pretty hard for people when they first of all, theyre not going to see anything in 2018. Maybe some changes in withholding tables i think in 2019 when they file tax, its going to be fairly hard for them to figure out what this plan is doing for them. Just for the vagaries of time, just kind of a separate issue here, the republicans are obviously pushing this through weve seen the video where theyre literally written in the margins. Many of these senators probably have not read. Does the Mueller Investigation and sort of everything thats going on there, does that speed up the gops time line at all . They got to get this through just in case there are more headlines ahead . Well, i think that could be a very small portion of this speed that we see taking place on capitol hill i think a bigger reason you see that happening is theres real momentum here. And for a chamber that hasnt gotten a lot accomplished, chambers on both sides of the aisle in years, the fact that something this large has momentum, you see some of these more moderate republican senators coming around, supporting this, getting behind it, that the leadership in both houses recognize this as a key moment and going home over christmas over a long break probably stalls it and they want to get this done because they have the momentum. All right, ladies and gentlemen, thanks for joining us, sara and jared thank you more on the proposed merger between cvs and aetna. How this deal might change, reshape the entire Health Care Industry with the markets up big this year should you lock in your profits now or let it ride and hope more gains . Its the debate today. We have more on power ncluh. Market fallen back a bit well keep an eye on that for you. It is a deal that could reshape the Health Care Industry agreeing to buy aetna for 69 billion. The ceo of cvs speaking exclusively on squawk box this morning about the deal i would expect within the next couple years youll see a dramatic change in terms of the store being not just about products but Service Offerings that can help people on their path to better health. Really work as a complement to the medical community in terms of ensuring, you know, that those consumers are following the care plans that their physicians have laid out for them lets look at how cvs and aetna are trading. Both of them are down. Aetna down about. 7 the big question is, what does it mean for investors . Bring in deutsche banc analyst glen santangelo. I understand i guess being down, jeff, if youre cvs, because youre paying a lot of money im not sure i understand down nearly 5 . Why isnt this deal being reacted to more positively i think the issue is its not crew accretive in the first year also cvs is going to stop their Share Buyback program. 2018 estimates are probably coming down. Would you sell cvs stocks no, we continue to hold the stock and we do like the strategic merits of the deal financially it just doesnt bring a lot to the table here. Youre saying they pay too much theyre definitely paying top dollar very high multiple after several years of outperformance for Health Care Stocks takie ining on a lot of debt we need more cvs stores, dont we i think we have enough drugstores. I dont know, what do you think . I mean, glen, im sorry what do you i mean, you know, i need one within 400 yards well, i actually think if you looked at 80 of the population lives within only a handful of miles from a cvs store let me ask a more serious question and it goes to the goes to the manner of who might be next here i have this theory that there is over the next two decades going to be a massive, massive consolidation of insurers and health care providers. And this is one of the first such consolidations. Am i barking up the right tree or the wrong tree . No, i think youre barking up right tree basically, the if you look, United Health care was probably first in terms of this retailization of health care model. They own Surgery Centers they employ physicians they have urgent care centers. They really have the retail delivery model first and theyre going to own Hospital Systems to the extent they dont already and or Hospital Systems are going to go and become insurance providers if theyre not already. Well, thats a big leap i dont cover United Health group. I dont want to comment on that. To your earlier question with respect to whos next, investors are obviously asking a lot of questions about walgreens here walgreens here after they ultimately complete this asset transfer from right aid, theyll actually have more stores than cvs and so they dont have the pbm business in house and its just really a pure traditional retail model and so investors really think theyre the company that has to do something jeff, is it possible part of the decline were seeing at least with aetna, which is, you know, getting bought essentially, is it possibly because people are concerned that the doj isnt going to allow it with all the uncertainty raised, which is yes, vertical integration, in theory, nothing should stop it this is vertical integration where you can argue this pharmacy provider could capture a part of the market and close it off now the same with at t and time warner. I think its definitely an issue. Everybody got burned by the first attempt that was a horizontal merger that got stopped. At t and time warner is what everybodys thinking think youll see a huge push from data privacy advocates here thats a huge concern whenever health cares involved doctors arent allowed to refer their own patients if they own like a stake in an mri facility, et cetera, but it seems to me that the rationale for this merger is exactly that kind of thinking, isnt it its definitely to steer patients to the lowest cost setting. The Home Infusion center theyre going to add more Services Like that over time. I just think it would raise the hackles of a lot of regulators. I think theres definitely some risk. Youll get a second request and a yearlong review i think the state officials are going to look at this too. Thats political where theyre asking for jobs and investment and Different Things in their locality all righty, gentlemen, thank you. Good to have you thank you very much facebook introducing a new messenger app targeted just for kids is it a safe way to get kids into facebook or a bad idea for kids as young as 6 years old that debate is coming up on power lunch and were continuing to watch the big rally for the dow but also look at tech stock, nasdaq is a little lower by almost 11 points well be right back. Let out your inner child at the lexus december to remember sales event. Lease the 2017 is turbo for 299 a month for 36 months. Experience amazing at your lexus dealer. Welcome back to power lunch. Check out whats happening with the dow jones transportation index. All member s positive theres some of the biggest gainers here more on that and all of our other record markets cinupomg right after the break. No matter how the markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. And i am a senior Public Safety my namspecialist for pg e. My job is to help educate our First Responders on how to deal with natural gas and electric emergencies. Everyday when we go to work we want everyone to work safely and come home safely. I live right here in auburn, i absolutely love this community. Once i moved here i didnt want to live anywhere else. I love that people in this community are willing to come together to make a difference for other peoples lives. Together, were building a better california. Im contessa brewer. Heres your update for this hour European Union Commission President says the deal on the terms of britains divorce from the eu has not been reached but he did say the position between the sides has narrowed to a huge extent and was confident a deal could be reached before a december 14, 15 summit of eu leaders. Supporters of representative john conyers held a rally in detroit this morning the 88yearold congressman faces Sexual Harassment allegations from former staff members. He has denied any wrongdoing facebook is launching a messaging app for kids it will allow children to communicate with their parents and parent approved friends and parents will be the only ones they say who can add friends or delete messages. Nasa has nailed an engine test on a spacecraft 13 billion miles away last week it sent commands to fire backup thrusters on voyager one which was launched 40 years ago. Those this rusters have been eye dell to 37 years the thrusters can now point voyagers antenna toward earth maybe nasa should get in the business of building stadiums because we have stadiums that dont last that long cool stuff, thank you, contessa lets get a check of the markets. The dow, s p 500, the russell small cap, dow transports, all of them hitting record highs dow was up more than 300 points earlier. Right now its higher by 198 however, the tech drop is putting pressure on the nasdaq you can see not participating today, lower by more than 15 points what is doing well, disney, boeing, home depot, those are the stocks leading the dow higher at this hour. Macys, Discovery Communications and gap, theyre leading the s p 500. Now with those moves today, 2017 is turning into a blockbuster year for investors check out the major averages so far this year of it the dow is up about 24 year to date. The s p 500, 19 the nasdaq, despite the downturn in the last week, its crushing it, up 27 the big dilemma for investors what do you do should you take the money and run or let it ride for more gains. Mike with a closer look at that question. Or maybe, you know, lock some in, let the rest ride, or let it ride and brace for turbulence. Those gains you mentioned today, it is definitely making people feel as if maybe they got tilted a little more towards stocks that they even expected. Here is why the market deserves the benefit of the doubt at least into december and beyond perhaps. That is the seasonal tendencies specifically in years that have behaved like this one. If you look at all years that basically had a similar gain through the first 11 months, similar low volatility like we had this year, december has been up 80 of the time another interesting stat that i discovered, december has never once in history been the very worst month of any year. So the worst month so far this year wasnt bad at all it was march and you were basically flat, down. 04 . If that rule holds, youre at least going to be flat, perhaps have a good shot at gains for december heres where the noise comes in. Youre seeing it today you mentioned that divergence were seeing as this tax cut expectation gets priced in, its going to be uneven its probably going to cause some unintended consequences we have this unwieldy situation where the winners year to date, those big tech stock are potentially the big losers in a tech stock scenario. We cant expect quite as smooth as a ride this year. The benefit of the doubt rests with the bulls into next year. The first major pullback lets say 5 pullback in these situations is almost never the big one. So that you also have as a measure of comfort. Got it, thanks, mike. Moving to specific stocks, shares of American Water works, theyre riding the rally, stock up more than 25 the Company Provides more than 15 Million People are water and Waste Water Services here to talk about the impact of the tax bill, also the growing cyber threat facing america is the companys president and krp eo good to have you here. Thanks, its good to be here. Tell us about the tax bill moving through congress right now, if it does become law, is that going to be good for your company and why . It will absolutely be good for our company but also for our customers. Theres a lot of debate about just who this tax bill will benefit. One thing about regulating utilities in American Water is that because of the way we do a regulatory financial model, basically every dime that we get from the tax cut will go back to our customers. Given the status of the aging waste water and Water Infrastructure in this country, that means we can put more capital in the ground without impacting the customer bills so for us, the income tax benefits that we will get will flow directly to every customer we have of all socioeconomic levels and they will all benefit by having stronger systems and their bills wont go up as much. Its not like you would lower rates and give them money back to customers youre saying that incremental dollar that you have will be reinvented in infrastructure you believe needs to be improved in. Its both we can both put downward pressure on rates. But in this country, we lose about 2 trillion gallons of treated water a year because the infrastructures in such bad shape. Waste water is the same. So we know that we have 20 years to 30 years of investment we need to make and our big issue has been how can we do that without impacting the customer bill so much. What this does is give us leeway to do more of that, but also take that pressure and in some cases we could actually have the pressure go down on the bills. So forgive me for being a little skeptical but let me go to two questions if i might, susan. Why and its not just your company, its all kinds of Infrastructure Companies or ones where in my town, the streets are totally torn up right now because of gas main reinstallations. So why was all of this updating of infrastructure postponed . And have you run the numbers, looked at this tax bill and said to yourself, okay, heres how much more were going to be able to put to work soon because of it do you know . Well, let me just speak about American Water because waters a little different from electricity and gas. So this data has been basically back upped by the epa, the American Society of civil engineers. This country did most of its investment in water and waste water in the 1940s at American Water, weve been investing over 1 billion a year so our system is in better shape. However, were trying to play catch up so were an acredit rated company and we actually have the financial where didall to put more money into the ground for investment but we didnt want to have a big impact on the water bills of our customers. So we purposely kind of pulled that back. We have a multidecade plan in place. This allows us to accelerate that and have the latitude to not put the upper pressure on the customer bills so its only because of wait regulatory accounting works. Right. O prudently occurred, you get recovery for for every dollar, we can put 7 of capital in the ground with no impact on the customer bills. This looks like its going to get through. I want to shift gears. Are you frustrated weve had no movement at all nationally on infrastructure we will be thankful to see when it gets finished. Do you think its going to happen do you believe infrastructure will happen after the tax bill i do believe infrastructure will happen. The one thing though, least for the regularer tory sector, it wl be Infrastructure Investment water is heavy. To move it requires a lot of electricity. Its way more heavy than oil for example. I cant think of anything more horrific, we have some kind of cyberattack on the electric grid in this country, that would also be very bad for water and sanitary purposes and Everything Else when we think about the importance of Drinking Water what are you guys doing because of those concerns . How do you prevent even somebody poisoning the Water Systems that you run . Michelle that is a great point. So we do know 13 of the electricity generated in this country is used to treat and move water about 4 and the other 9 is to heat water, use it for dish washing, bathing, et cetera so youre exactly right. Electricity and water are intertwined. In fact, the department of defense and department of Homeland Security working with the electric Utility Industry did a study in 2014 called the black Skies Initiative about if there was a huge outage for 1 Million People over 25 days, they found that the most critical thing that would happen is the lack of Drinking Water and sanitation so some of the things were doing, we voluntarily, the water industry has the ability to voluntarily adopt the nist standards that Electricity Companies are required to. Were working with the department of Homeland Security and department of defense and in waters case were working with the centers for disease control. Were also working with state agencies our goal is for our critical assets that serve 80 of our customers to have backup generation so even if something happens to the grid, were able to keep the water flowing. And the other issue you mentioned is the contamination events thats the number one thing that we have to guard against not just those who may try to contaminate the water but emerging contaminants that are happening naturally, whether its lead in flint or algae blooms in lake erie or lake okeechob okeechobee we have to make sure the water is safe. That means ensuring theres not natural contamination, nor are there contamination sources from more nefarious players scary stuff, thank you, susan. Thank you so much lets flow right on to the bond market. Rick santelli at the chicago mercantile exchange, rick. Well, brian, you know, if you look at a twoday note, you can see, weve traded up as high as 181 yield. Not just today but we topped there on friday as ell which is a new marker. But it still doesnt change the camp were going to be coming back to october 2008 for a while because a twoyear note in 08 traded as high as 3 if you look at a 10year note, what you want to Pay Attention to is that low on the left 2. 04 first week in september. Because the highest yield close since then has basically been the only yield close higher than unchanged. The 2. 46 around the third week of october seems like the two 40s continues to be very good resistance but were certainly knocking on the door a lot of times. If you look at pound versus the dollar, yeah, you know, its reversed a bit there was no instantaneous decision made today. But with regard to brexit, it still looks awfully strong if you look at a september 1st for the pound versus the euro, 1. 1421 was todays interday high third week in september, Pay Attention to the 1. 1425 level should a breakout occur, brian all right, rick today is kicking off what could be a very crucial moment for the future of Sports Gaming in america. Billions of dollars literally on the table in this highstakes battle well have the very latest ahead. As we head to break, take a look at some of the etf winners in todays rally. Retail rallying big. Its one of the hottest sectors in financials d anthe food and beverage sector also posting high gains for every hour that youre idling in your car, youre sending about half a gallon of gasoline up in the air. That amounts, over the course of the week, to about 10 pounds of carbon dioxide. Growth is good, but when it starts impacting our quality of air and quality of life, thats a problem. So forwardthinking cities like sacramento are investing in streets that are smarter and greener. The solution was right under our feet. Asphalt. Or to be more precise, intelligent asphalt. By embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic. That data runs across our network and we use it to optimize the timing of lights, so that traffic flows easier and travel times are shorter. Who knew asphalt could help save the environment . Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. The Supreme Court today hearing a case that could eventually lead to sports gambling being legal across the country, not just in las vegas so the justices heard oral arguments in the case of Chris Christie versus the ncaa a final attempt to overturn lower courts rulings on the constitutionality of Sports Betting. For years christie really fought to bring sports gambling to new jersey but this has been struck down in court, widely opposed by professional and college sports. Today, the sports leagues favor a national law as opposed to individual state laws. And more than a dozen states are watching very closely. Legislation ready to launch. If the Court Decides in favor of new jersey its very clear the federal government overstepped its grounds. I think it violates the tenth amendment. Thats why you saw so many governors join as mici on this today its Sports Gaming, tomorrow it will be Something Else at least 150 billion is wagered illegally each year, at least that much. Legal sports gambling could open the door to major revenue and tax money for the states thats one reason theyve joined in support of new jersey already racetrack and casino owners are making preparations the American Gaming Association weighed in after todays hearing saying states and tribal sovereign nations have proven to be effective facilitators of gambling were not expecting a decision until the spring experts say scales may be tipping in new jerseys favor. This is really a case about states rights versus federalism if the courts decide in favor of new jersey, who knows what we could see in the future in terms of gun control laws, doctorassisted suicide. Contessa, thank you heres something to chew on. About 50 Million People will probably bet on the next super bowl, almost all of them doing it outside of las vegas. In other words, illegally. And thats why if the federal ban is lifted, your next guest predicts an economic windfall, including about 150,000 new jobs created, billions in new tax revenue in casinos across america packed with sports betters. Joining us from d. C. , he is the one that actually had the statement that contessa just read jeff, welcome to power lunch how do you come about your numbers . Literally just taking all the people that are using louie the bookie, which is actually my grandfathers last name your grandfathers what never mind. Now going to do it legally . You think it will eliminate the illegal gambling business . Louie the bookie is small time today most people are doing this illegally on offshore websites where you can bet on a game as fast as you can order an uber. There are millions of americans right now sending their money to these illegal offshore operators. The only way we put these guys out of business, bring that money home, is create a regulated market in the u. S. Its going to take time to build it in each of the states to make sure were offering this in a way with smart tax rates, other smart policy, that put the illegal guys out of business that should be the objective unfortunately, this failed federal law has created the legal market and its going to take time to get rid of it but im confident a Legal Sports Betting market is around the corner new jersey is obviously the battleground for this. Im sure youre keenly aware if anywhere if this goes through and we start to see Sports Gaming in new jersey, how long will it be, because theres casinos i think in every state except for utah and hawaii i may be wrong but its close. How long will it be before theres Sports Gaming in almost every state . Weve got casinos in 40 states across the country. 15 of those states have already introduced legislation that would put them in a position to regulate Sports Betting. Pennsylvania just passed a law within the past couple weeks that has their regulatory parameters for Sports Betting including an absurd 36 tax rate so we still got some work to do on that front. States are lining up the states are right behind new jersey new jerseys extremely well positioned i heard governor christie talk about how they could be up and running later this year, later in 2018, after the ruling comes down we think other states will be right around the corner. This has potential to be a massive market the winner hearse as here are n the Casino Industry. If you can keep more eyeballs on some of these games, a lot of these games that people are tuning out on, the potential for them is extraordinary. So you know Sports Betting works pretty well it seems to me in lots of countries around the world. You think of Great Britain where all of the major leagues basically in do you think all major leagues in soccer and so forth, they run ads all the time there is a lot of talks about how wonderful gaming will be for the finances of states and localities and in my cases to me and my observations like in atlanta city, it has not worked. Well, i look at the Casino Industry across the country. I see an industry thats thriving in many, many markets around the United States your own number will show that when you look at Casino Industry and stocks it is doing quite well Atlantic City is an area where that state fell behind and it did not appreciate the competition thats forming on its border and it struggles because of that. Thats a market that all of us are interested to rebuild. We have seen the market strengthening the past several years and closing some of the property when you look at industries nationwi nationwide, it is all right. We have to innovate. I guess what i am driving at is not the overall help of the gaining industry and casinos and Atlantic City. Maybe i chose a bad example because there are a lot of problems where developers spend billions of dollars Building Hotels when they should not have, it was a problem they thought they would have a lot of customers and automatically people would flock to it. Whether how much of the promises of new jobs and increase tax revenues really flow through to the states and help them i am a little skeptical that it happens. It is a great question and my point today is this is not a panacea and i am not going to over promise what the results are going to be. I am here to tell you a thriving and gaming industry in the future has to adapt. We cannot provide our grand participants product tylers point, you have knowledge that the competition is offshore. It is going to be the nature of the state to tax what they do in state which to me sounds like they wont be competitive. If they want to be competitive offshore, theyre going to have to lower the tax rate dramatically again, the volume tax dollars actually flowing at the bottom line thats questionable tax rate have to be set in a reasonable fashion that tax rate needs to be some where in the 10 or 20 range which is all new money for the states but this idea of 30 or 40 tax rate that we have seen and some aspects of casino gaming is not working in this instance you are also protecting the future of the industry you want to attract new customers and new market and you have to be able to provide new products it is about protecting todays tax revenue as well as growing them well see what happens with the Supreme Court case, thank you, jeff. Jeff freedman. The big analyst calls that you need to know about including one stock is up 75 this year. Why it could go up to another 20 . Street talk is on deck take a look at the location going on today nvidia and miycon tech leading and Synchrony Financial and citizens financial is leading higher is what they hope to get out of life. But helping them get there takes a pure focus. Because when you invest their money without distraction, hidden agenda or competing interests, Something Wonderful can happen. They might just get what they wanted out of life, and maybe even more. Im not really a, i thought wall street guy. Ns. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade time now for street talk that we think you need to know first of all, blue apron, the upgrade sending shares soaring today, analysts say this can be a stabilizing point. The ceo dickerson is calling it a positive move. This is crucial. The lyndon facility is a good sign for the stock right now it is 3. 90. Look at the gains. Final stock. The company is hitting air tarts next year. Even with the huge 70 gain in the past year, the target on the oc of 112 bucks and indicatinin another 12 . It is all about insulation insulation and information, i love it all. How much will it help the economy of tax reform and from super cars to suv, lamborghini is throwing in its hat facebook targeting ads with a new messenger app, it is a major backlash coming. The second hour of power lunch begins on the other side of this break. Welcome to the second hour of power lunch, i am Michelle Carusocabrera where do you find value in the market right now facebook for kids, the company is launching a new messaging app for the under 12 facebook is under so many scrutiny right now, is this the right time to do a kids app we are show right now, is it for real or are we suffering a post holiday power lunch starts now. Lets get a check on this big market rally you have no choice because well give it to you whether you like it or not. You are going to like it. You are going to like this dow and s p is hitting an all time high. The dow was up right now you see it is up 183 thats lthree quarters of a percent. Financials in the lead right here the bank etf, kbe, the highest level of ten years, the regional etf. Krte, retail on the move today, macys and kohls and gap and foot locker among the top s p. Have not seen those etailers doing well home depot at an all time high up 2. 6 . Transport keeps on trucking all of the components of the index are higher papal and amd and adobe, the worst performers in. I see, i am onto you. Well start the second hour of power lunch with your money. Lets get to bob pisani with this energizer bunny. A lot of interesting rotation going on sectors that are going to see the biggest boost from the earnings, the biggest boost from their tax cuts are the ones that are out performing today we are seeing energy, financials and industrials and telecom generally do better. Technology as you heard before is a notable lagger. It is not surprising to see that the biggest gainers from the tax cut are the four that are listed here so take a look here. Energy and financial industrials and telecom would have the biggest boost to their earnings from a 20 Corporate Tax cut Technology Important would have the least boost, only 1. 5 from the tax cut and as a result, we are seeing this rotation and it makes some sense since last tuesday, this group, these groups, financials, industrials and telecom have notably out performed technology some of the debates of values of growth moving on technology is not just the fang stocks that have down recently if you look at the semiconductors and robotic stocks and social media stocks have been down Cyber Security and these are all various etfs that you can buy in the sector thats the Overall Technology we are not out of the woods by the way. The nate bisenate bill would pu tax cuts until 2019. There is questions of the final Corporate Tax rates maybe. The president suggested maybe he would settle it at 22 these models are based on 20 . We would not get as much of an earning boost. This is not a settled issue yet. Well see a lot of drama in the next week or so. Yes, hence we are watching so close whats happening when it goes to conference bill. Bob, thank you very much markets seem to love this tax reform bill. A lot of the revenue goes straight to the bottom line, whats the impact though of the economy . Steve liesman is looking at those numbers. Yes, the impact on earnings and the stock market can be different and economically impacting. Most wall street scoring the bill here is the business economic. They average responded, Goldman Sachs at. 3 goldman is riding in their commentary, we know the effect of 2020 and beyond looks minimal. We projected increase in potential growth thats the important part of that sentence right there of around 0. 2 the idea of the economy being stimulated when it is growing strongly already the concern is leading to higher rates and a tighter fix. We are seeing that in the markets. Take a look at the contracts for the probability of the hikes in twelve months. And then the idea of two rate hikes thats coming in march three hikes by november and we just begun to price it only 24 probability, guys, of that fourth rate hike of a 4 percentage point the good news is the markets catching up. It is not especiallily tight overall. And then you would not necessarily take the best advice thank you, steve. Lets head to Julia Boorstin. All right, Discovery Communication has taken an ownership stake in own saying the company is paying 70 million to increase stakes in the adventure 24. 5 allowing the company to result the the Balance Sheet the company is unlocking more values from their partnership and extending commitment to the network and let us continue the strong Work Together over the years, discovery has spent more than 2 million on the joint in adventure discovery shares is now 5. 5 . It yahoo used to be at 50 50 split between discovery and oprah and now oprah is going to have 25 25 . Oprah retains her 25 and maintaining her role at the network and having the editorial input but it gives discovery more skin in the game. Now, oprahs weight watcher investment and this deal, i would imagine Oprah Winfrey is going to continue to go up i wonder if shes the richest self media mogul in the United States, male or female shes got to be up there Oprah Winfrey is the most successful woman in media. I dont have the latest number but i am sure well hear more of how all these deals acrosssucio her. Julia boorstin, thank you very much. Lets get back to the market. Here is the question how much of todays big rally of this recent rally is fuelled by optimism and tax reform verses general global optimist. Michael aroney and mona, you are on the set i am going to go to you first, bless you. Thank you it is all tax reform and it is all tax reform and i read this morning all this european money is coming to the United States, are they putting money here because of our tax reform there has to be more of it than just tax reform. Why am i yelling . I think this movement is driven by tax reform the Senate Passing their bill was probably in our mind the biggest to get tax reform through. They needed to get 50 out of 52 senators they got 51. That was impressive in our minds. They were able to adjust bob corker once that passed in our mind, we are going to get the conference between the house and senate coming up with the reconcile bill the probability of tax reform increased over to 75 the dow is up by 30 , 33 since the election of last year. We are not zriebidescribing thee thing. If we believe tax reform is getting done and you know the markets question. What has he done for me. Whats next in our mind, what we are seeing here is this rotation going out of tech and into some of these value names and Energy Financials we continue to like some of these value names. As it continues to raise rates they get the benefit of rates and tax reform and howell as the fred chairm fed chairman who likes federation and opec last week says 2018 cuts are remaining in place for the next year. I think energy, the names have not quite caught up yet. You are not worried of selling on the news. No, i dont think so. I think that essentially whats happening is the santa claus reality is starting early and this jolly old elf is bringing us lower taxes and higher profits as mona and bob pisani pointed out we are seeing it is put into area benefiting the tax reform the other thing thats driving this market are much approved earnings and still easy Monetary Policy and still slow inflation. Do you like u. S. Equities more than international . Actually i think there is better value opportunities outside of the United States and in places like europe and japan and even emerging markets. So although the Growth Prospects from an earning perspective maybe roughly on par, evaluations are better outside the United States. Monetary policies are still easier lets not forget that europe is going grow faster than the u. S. And last year and this year. If you can continue that momentum, can buy strong growth, thats a win for europe. The market continues to remaining attractive as well people piling into the industries that intended to pay the highest effective tax rates and benefiting the most if you stay here in the United States well, for my perspective, the sectors looking attractive in the United States are technology and financials and healthcare technology, you benefit from the Revenue Growth and Earnings Growth that you are able to generate of what is a slow growth and Economic Growth environment, there you are getting the growth financials i would agree of what mona had to say. Less regulations should help them as well and that should be at benefit. Healthcare, i think you have some secular tail winds that would support healthcare just finally quickly, whats the risk of running out of buyers stocks go up when people buy all the money on the sideline. At some point, is the sideline going to run out of money. You know, the market does not go in a Straight Line forever. I used to think that. I used to think that, too typically we see a little bit of slow down in the economy we would not be surprised if we take a breather there or some of the surprises, get your wish list ready and well be doing that, too. Christmas break, awesome. Well think about it. Michael and mona, happy holidays to you both. Appreciate that shares of netflix is up 50 so far this year one analyst on the street thinking they can go much higher joining us now initiating the coverage on netflix this morning with a buy and a 250 share a target why do you like it so much, jane moo when you take a look at this market, you are seeing rapid evolution and visual context consumptions a lot of unknown and especially companies trying to compete with them with netflix of the right instincts of the most appositpi moment, pioneering and binging, that should give you conference in the strategy and the Competitive Position as it relates to numbers and the stocks, it is just the streets are under. When they move from a disrental and return model to a streaming model. It was a brilliant move. It predicted what was going to happen in the United States around the world but, they dont own there is certainly first mover advantage i guess as you say here. That does not mean that their mote is impendable, is it . We think that number is going arrive to 175 millions as you look at international, it is barely starting to scratch the surface and as it relates to half of the content is coming from originals i would argue that their pulse on what consumers like is better than a lot of their peers and especially because when you consider that they dont necessary equate budget with commercial success over the titles i think when you package those things together, i think we have a winning formula that perpetuates the cycle. Tell me why you are not worried of disney getting into the state that gets so much content that they can send down the pipes. You would think of any potential competitors out there. They got the most know how to be a threat to netflix. Look, i would kid you if i was not worried at all about this at the end of the day, here is how you think of it, the disney is a very small portion of their International Growth it is only exposed in three countries outside of the u. S thats not really going to be a factor for the business. But when you do consider disney, the question is how robust of an offering are they willing to make and the fact that their prices are going to be lower than netflix that maybe much more concentrated than disney content only and on top of that, they still dont know what theyll be doing with espn and the cash cow for disney this is three geayears out. I dont think disney knows what it is going to do much less. James, thank you very much. We appreciate it good to see you thank you here is still to come on power lunch. Cvs wants to buy aetna and lamborghini getting in on the suv game, well show you how to drop your kids off at the soccer game in style and so quickly, they wont know you left the house all th a matnduch more coming up on power lunch. Farm to table on a blockchain, helping keep shoppers safe. This is a financial Transaction Secure from hacks and threats others cant see. This is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. This is not the cloud you know. This is the ibm cloud. The ibm cloud is the cloud for business. Yours. Cvs and aetna announcing a 69 billion deal of healthcare the big question is will it get into the regulatory process . Most stores said absolutely yes. However, doj is blocking at t from buying time warner. Could this healthcare deal is at risk as well joining us now, adjunct professor. Good to have you here thank you david goodfriend. A lot of people thought under the Republican Administration there will be a lot of friendly reviews and a lot of deals we are seeing two primary change number one, the new head of the an coventry trust is making it very clear that he prefers structural as opposed to behavioral remedieremedies structural means i am going to block this deal or sell a bunch of access off as oppose to giving you a bunch of rules. The second thing is in the trust division is more aggressive in general. There was a merger that closed between two companies between the jet filtration business and under President Trump, the department of justice went back to them to unwhine the deal. Thats highly unusual. I think we are seeing more aggressiveness out of this antitrust agency in the past a big question that a lot of people have is what role is politics play and thats something i can talk about hold on one sencond, there is a legal process, right doj is going to prove their case in court with at t and time wan warner and a lot of folks think theyll struggle to do that. By the time we get around to see whether or not this deal happens, we can see a decision there, right thats true so sentences are already made by thejudiciary. There is a dotted line between the at t deal and the cvs deal thats the presence of the new competitors and new threats from the likes of amazon. At t justifying its merger by saying look, we are the little dog here and well face competitions from a lot of platforms. Cvs and their announcement this morning says we expect more competitions and expect to do a lot of Data Analytics. Thats a keyword for somebody interested in the Technology Platform the question that i have is this, is that good or bad for somebody trying to get a merger close. I dont know if this competition is going but i think it is is it something where it is like no, the only way we can compete is better Data Analytics and it is happening around all the time okay. Frankly, the department looks at actual facts on the ground. Tyler got a question. We dont know what the administration or the dojs opinion is of this deal. In the two cases of the at t and time warner, which was the jet fuel one. Yes where do you think and what is the empitast and where is it coming from . It is from the left and right start to converge, there is a droei growing conversion of antitrust should be stepped up you heard donald trump talking about this on the campaign trail. It sounds like he was reading off a labor union group or al franken. Yes or klobachar, and Chuck Schumer and the point is this, how we reach the point in our economy where we basically got oragopolies everywhere i am making of a political point. Donald trump and the democrats often agreed on issues of competition of policies. The question is will it start to play out in the way this administration forces. My hope is it is about economics and about the law and not about politics and not about playing favorites. Well find out. Well find out thanks david, it is good to have you on lamborghini. The company is in vailiunveilin Miles Per Hour well take a break and there are a lot of them. More power lunch ahead finally. Hey ron theyre finally taking down that schwab billboard. Oh, not so fast, carl. Oh no. Schwab, again . Index investing for that low . Thats three times less than fidelity. And four times less than vanguard. Whats next, no minimums . No minimums. Schwab has lowered the cost of investing again. Introducing the lowest cost index funds in the industry with no minimums. I bet theyre calling about the schwab news. Schwab. A modern approach to wealth management. You myour joints. Thing for your heart. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Lamborghini is introducing its first suv. Phil lebeau is joining us from chicago. Here it is, it is called the urus base price is 280,000 i am sure it is much higher as you add on other features. For those out there saying come on, are there that many people want to buy a 200,000 vehicle suv . You bet there are. Now you are seeing others getting into this game including bentley and Ashton Martin will begin and you will have the roles of suvs. 21,0 21,0 21,000 last year and 20,000 is expected to be sold. Thats why you are taking a look at the chairs o f a volkswagon it is important for the lamborghini brand because it has to keep up with everybody else who on the ultra luxury side, theyre rolling out these utility vehicles and there is a market out there for vehicles. Ultimately, guys, you know whos looking at this . If they cancel 3500 of those high profit suvs, why dont we it is farrari. Is that lamborghini it is a turbo v 8 i mean thats something. Thatll get down the road yes you and i both know that the majority of these vehicles are going to be driven around in many of these markets by a driver a driver thats going to be escorting somebody around and of wealthy individual it is not the ultra rich out there going off roading in these vehicles while the performance is impressive i doubt many of these will ever truly put to the test. Okay, let me practice phil, thank you hold on hold on. Where to, there mathis oh. Lets get the defenders money. Contessa brewer is in line with the lambo and here is with the news update. Panyway, whats happening today, President Trump spoke about moore. Hes been in gulfed in controversies since multiple women came forward of sexually assault conduct when theyre in their teen years and moore was in his 30s a new york state trooper found 27yearold Ryan Rodriguez and the girl in syracuse on friday the teen has been reunited with her family texas a m introduced its new football head coach, jimbo fisher hes the highest paid College Coach by values. He comes to the aggies eight years in he won the 2016 national bcs championship it is truly an honor to be here in front of you today i always admired texas a m from afar and it is great to be here for texas a m. Thats your cnbc update at this hour. I will send it back to you, brian. Contessa. Thank you very much. The oil market is closing for the day. Lets go to dom chu at the commodity desk we are poised to close down by nearly 2 here. Around a percent and a half or so of the u. S. West texas intermediate it is a shorter term for oil prices over the past few weeks, many specta spectators have been buying oil. U. S. Oil production is near record territory and we continue to see a trend higher in the number of active u. S. Oil rigs michelle, a pull back today and we dont know if a signal beares signs to come. Our next is related to oil we know that bitcoin is extremely popular in Venezuela Venezuela is going to have its own crypto currency. In case you wanted to know how to say that in spanish theyre going to call it the petro. They are the Oil Producing country. They have decided theyre also going to produce their own crypto currency. I wonder if you see countries like venezuela doing this, does it have more regulators here in the United States where they start to look at these, see, they are enabling transactions that would otherwise we would have prohibited. I wonder if we have the Power Capacity to do the data center needed to run the crypto currency i am told of big farm connected computers reducing this. Wow well see. After fleeing the sector over amazon fears retail is suddenly out of nowhere is back in vogue will the retail rally last or iesrsea tm l al after the Holiday Season you cant predict the market. But through good times and bad. At t. Rowe price. Weve helped our investors stay confident for over 75 years. Call us or your advisor. T. Rowe price. Invest with confidence. Here is whats happening here retail appears to be a touch exaggerated. Here is an example of what we have seen the past month the biggest of 11 of 20 trading day. It is nothing comparing to the move that we are seeing. Nordstr nordstrom, 22 and macys 40 thats in a month. Will it come back for reel lets bring in our simmon, our analyst, i know that some of these names have kept you up at night. You have been redeemed on some of these names but i wonder whats behind this rapid come back what happened in changing this much it is a dangerous thing to say right now. I have been redeemed i take it back. So we are approaching year end and there is better than fear results to put in perspective and a jeoke that we have been making it is price for death and we are finding out it is really sick we are having a better than fear holiday. Yes, it is a nice welcome set of news to come and find out that things are not as dead as people thought. Now, i do think there are dynamics and obviously the tax conversations today is relevant. Heading into next year, i think you want to pick good, strong and fundamental companies and understand there are still going to be market share donors and market share recipients and you want to be on the recipient side we showed on power lunch back in july that many of the big names that were target and macys were trading at 0. 1 timeshare. Maybe less than zero and it is a real estate play does the market realize that the market share takers and makers that some people will survive amazon and if so, who are they if you look at what the market is deciding what it is worth and investors are deciding those sales are going some where else quickly the way that we have done this and anything i feel contrary of pitching amazon and it is a first time that i can say that in a while the mark share theyet share is away we have talked about ulta before and you think of cosmetic retailers that you sit across someone that tells you to shop and michael kors is still cheap and they can benefit the place where we would avoid are the companies that could see that share or the brands that perhaps are a little bit and watching the share coming back, it can hurl it more. Simeon seigal it is good to see you coming up today facebook introducing a Facebook Messenger for just kids. Is it a way for kids to communicate or a way for six years old to start using devices or more importantly facebook that debate more on power. news anchor downtown traffic is still bad. Expect massive delays. radio channel changing news anchor 2 all lanes on highway 50 remain closed at this hour. news anchor 3 the stats are in and this city leads with some of the worst traffic, with the average driver sitting in gridlock the equivalent of three days a year. For every hour that youre idling in your car, youre sending about half a gallon of gasoline up in the air. That amounts, over the course of the week, to about 10 pounds of carbon dioxide. Growth is good, but when it starts impacting our quality of air and quality of life, thats a problem. So forwardthinking cities like sacramento are investing in streets that are smarter and greener. The solution was right under our feet. Asphalt. Or to be more precise, intelligent asphalt. By embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to study and analyze the flow of traffic. Then, we will take all of that data and we use it to optimize the timing of lights, so that traffic flows easier and travel times are shorter. And sacramento is just the beginning. With advances in cameras, sensors, and network speeds, we have the ability to make cities smarter, and happier. What excites me about this technology is that were using some of the most cuttingedge machinelearning, and ai, to help solve the most fundamental challenges that cities face around the world. Who knew asphalt could help save the environment . lani and the possibilities are endless. There is a controversial new product for facebook it is a message app for kids as young as 6yearsold Julia Boorstin is live reporter the app is free and will have no ads facebook wont be making any money off of the service and wont transfer kids to regular Messenger Service or facebook when they turn 13. The app is crafted from inputs with parents facebook is the latest to target kids amazon has kids focus skills where parents can activate for echos smart speakers. Facebook is looking to lock in on users before getting hooked on snap chats. Now, there are concerns of screen time of exposure to content. It was just last week that youtube removed over 150,000 videos that exploited children and included offensive contents pulling them town from youtube it is an area of incredible focus but opportunities. Thank you very much, it is facebook for kids. Our lar carolyn nor at Common Sense Media is not clear it is the best for the interest of children let me start by asking you, do we know enough to know conclusively whether it is a safe product for children of ages of 612 to use. My parents like myself are most concerned about are texts and images that disappear so shortly after they are sent or received and therefore they are gone and you dont know what your children are watching or what they are saying. There is no doubt in my mind that families are going to be able to teach kids how to use Facebook Messenger for kids safely and responsibly the real issue comes in with facebook nontransparency of how they are using data and kids post facebook owns instagram and instagram retaining some rights and images of people post. We do not know how theyre going to be using data and i can imagine the scenario where your kids befriend someone on facebook saying they have a reading problem and their messenger friends of someone thats a reading specialist. Facebook knows that. They can target ads to the parents and target other things. It is very unclear about how facebook were used and you can guarantee they are monotizing the data larry, your response to that, is the data thats a big concern and how facebook may use it to advertise to adults . Well, first of all, adverti e advertising to adults is a fair game if they decide to do that the point is it is not about adults it is about kids as i said, this is training wheel for social media and messaging. Millions of kids are on facebook and instagram and snap chat and lying of their age and there is a study showing that parents permitting kids to lie about their age to go on social media. Now, they can do it legitimately and parental control and my friends from common sense pointed out, it is not so much of the safety issue. To make a service. When i heard this larry, it sounded like a playground for pedophiles who are eager to get in there are uconn vinyou convinced or h seen enough details that you are sure that children will be safe for people pretending to be what they are not i see for example in the video that we have been watching that there are avatars. Why could somebody pretending to be the dinosaur or the individual of cartoon thats being shown right now. People in our family and people in our community and appare a parent has to prove every contact. You are not going to have strangers and could an uncle be a predator and on the service . I am and as for predators and any other strangers, there is a social graph thats hard for a person to go on the service to create an environment making them credible if they were not who they are. I am not saying anything is impossible i am saying messenger kids is safer than Services Designed for teens and adults that many are using anyway how do you react what larry just said . I think it is a great opportunity for parent to teach their kids how to use messaging program safely my question comes in with what parents are opting into. We dont know the sculpt of the privacy issues that parents are opting into that facebook does not even know how theyre going to use the data in the future. Thats something that we really should be concerned about because facebooks track records with using data is not great whats the point . Whats the benefit of this, larry . Why do you need this first, federal law of privacy of children. Why do you need it because kids are already on social media and theyre going to be by the time they get to 12 or 13 or 14. This is training wheel they dont go cold turkey of any parental training. Theyll be on their own with no supervision, i would rather have them of a few years of social media and messaging used they can internalize it. Larry and carolyn thank you. Appreciate it. One market watcher says we can be set to a downturn a so how old do you want to be when you retire . Uhh, i was thinking around 70. Alright, and before that . You mean after that . No, im talking before that. Do you have things you want to do before you retire . Oh yeah sure. Ok, like what . But i thought we were supposed to be talking about investing for retirement . Were absolutely doing that. But theres no law you cant make the most of today. What do you want to do . Id really like to run with the bulls. Wow. Yea. Hope youre fast. I am. Get a portfolio that works for you now and as your needs change. Investment Management Services from Td Ameritrade. 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. Welcome back to power lunch. Record high levels for the Stock Market Health care remains one of the sector laggards in the s p, down almost by a percent in trading today. Shares of alliant technology, illumina, Thermo Fisher scientific among the drags each of those stocks has been a marker leader year to date with align doubled in value ibb down about a percent, brri, back over to you. Watching that dom chu, thank can you. Its now time for trading nation. Dow at 23 this year, 24 in a month. Whats going to happen in december bo boris, ali wall with oppenheimer. As mike santoli said earlier, december has never been the worst month of year ever in the history of the 100plus years of the stock market do you think this year we could have a december to forget . I think given the way that this years gone, anything is possible i do think, heres what we know, its not just the u. S. Rally its a global rally. Global markets all across the world are now approaching 1 trillion mark. The other thing is bibituated t continuo continuously once the market teaches people how to habituate a behavior, if we get a catalyst to the downside, a small selloff, you may have a rush to the exits to lock in profits for the year and create a Snowball Effect the most intelligent thing right now, volatility is low, buy insurance, so youre not part of the sweep to the downside should it occur. We havent seen it. Well see. Contrarian call. Anything in the charts that suggest that december could stink . Nothing in the charts what were seeing very consistent with a healthy midcycle bull market, we expect it to continue talking s p 500, first, the breakout above 2,600 last week, i think thats going to be your new floor, thats your new support level. Thats how we gauge Downside Risk one reason why we do think this up trend continues is its being led higher by the right areas of the market you know, for instance, with the new highs the s p high beta index is breaking to the upside. Heres a gauge of your most cyclical stocks in the market. I see this as a sign of healthy risk appetite. Tough to make the case for a market top when you have such, not only broadbased leadership but pro sick sickle leadership as well. Okay. Youre obviously not, boris a little more concerned. Thanks very much something to watch for more trading nation, go to tradingnation. Cnbc. Com check please is next. And now the latest from tradingnation. Cnbc. Com and a word from our sponsor. Low volatility is generally associated with rising markets but that doesnt mean that all of your holdings will increase or increase by the same amount call markets can be a good time to ensure your Portfolio Allocation is in line with your longterm goals. So if youre overly concentrated in a specific stock or sector, due to market appreciation, it may be a good time to nsercoid taking some profits on your winners. Its all yours. Wow record time. At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. Check please. We have been talking insist se sently and facebook and the new messenger app theyre creating for kids 6 to 12 years old its a real touch stone, social media and parents. I would ask brian, whether you have the ability to read do you read your kids messages . Im an you can but havent. There are program you can use that you can monitor i hate to do that but the reality is every i dont know how you feel in america, every freaking argument we have in our house michelle, my favorite libertarian says its a a dictatorship, of course, as a parent, you should read im just saying i agree. Theres always the one kid, 9 years old who gets a smartphone. Every day your kid comes home, everybodys got a phone. Whos got a phone . Bobby. Hes 9 he wanted it for safety. The phone can be dangerous. Is this just the new version of dont talk on the phone too much back when we got our own princess phones at home, dont watch too much tv, dont play too many video games just a new version. I wish they talked on the phone. I wish they talked on the phone. There is no talking. Its only texting and its very it is literally under covers. God, we side old right now. We are old. Hold on thanks for watching power lunch. Heres my cell phone. Closing bell starts right now. Nobodys seeing these texts hi, everybody, happy monday welcome to the closing bell, im kelly evans at the new york stock exchange. Feel like we did this last week kind of like this, with the dow up and nasdaq down. Exactly were seeing a repeat of this action im bill griffeth, by the way. Jampacked hour. I dont know how were going to fit all of this in we got this rally on wall street, much bigger earlier, though media stocks in particular have been getting a pop famed media investor Mario Gabelli will be with