Been so much under pressure of late that rotation coming amid new fears about the impact of the republican tax plan. Joe, yesterday we give up 300 dow points today we give up 60 and now were negative by nearly 20. Has this suddenly become a sell the rip market becauseof fears over taxes i think that in the tech sector, yes, for the near term, thats probably the strategy longer term i dont know if thats the right play but i do think in tech thats what you want to do you want to sell into strength right now, but, again, thats a very short lived phenomenon, and i think everything thats going on this month is very short term oriented youre seeing a lot of moves in the Derivatives Market that are predicating what were seeing in the larger equity markets themselves, but its all short term in nature and once you flip the calendar into january you need to understand that the fundamentals will return in january. I hear you on that, but im wondering, stef, what happens between now and the end of the year, and and whether we see a market that were not used to seeing one that is so strong throughout the bulk of the year and would normally be so strong as a result into the end of the year is now upset in some regard because of expected change in tax policy n. Key states that matter, where big investors, hedge funds and Family Offices are run, and if theres a Lasting Impact of that, were just starting to realize. Weve had a nice year in the market overall i think what happens between now and the end of the year is what weve been seeing over the last couple of weeks, and that is this rotation. I i understand why its happening. Whether we whether this tax plan actually leads to better growth is to be seen because theres a lot of details we dont know, but the perception of a tax plan getting passed, leading to better growth and leading to better earnings some people are thinking that this tax plan could add ten bucks a share to the s p 500. But if you could add a higher tax burden to to people who may have thought, well, why would i sell now, maybe they are rethinking that, because i know advisers, because ive heard the calls, or heard of the calls are getting calls and asking whether people should sell. Well, they might Sell Technology and to joes point i actually believe you should take profits into tech even though i dont think fundamentals have changed materially once we get to earnings next year, the Fourth Quarter earnings, tech earnings will be good, but for now, yeah, maybe you sell tech, but i think that financials continue to do well i think cyclicals continue to do well back to my point if growth is better, value will do better over growth and small will do better over large, and you will continue to see the cyclical trades versus the defensives and thats what weve been seeing over the last couple of weeks, and i think it makes sense does it last into 2018 i dont know but between now and the end of the year youre asking mow what to do, i say you stay with the rotation. The selling yesterday and then the reversal yet again is a pivot point, josh, where we havent seen that. Youve not seen the dow give up a 300point gain off of seemingly no news whatsoever other than people are really taking a hard look at the tax plan. Yeah. Theres commentary from some of the lawmakers that they dont expect it to change all that much Goldman Sachs says what you see is pretty much what youre going to get, and if were rethinking this whole thing and the impact on the markets and your money. So ive got to be honest with you. I think that what went on yesterday is a typical market day. 300 points coming off a 24,000 dow is not the same at 300 points coming off a 10,000 dow, and volatility has been so low this year that we look at days like yesterday as though they were some aration. No, in fact, in most environments markets trade in both directions oftentimes been the same day and its not this bizarre thing from outer space and then Something Interesting about the reversal of yesterday and why its so important not to extrapolate a bigger narrative out of one trading session of the 77 s p 500 names that are up more than 1 today, all but five are run on the year and take the converse. Of the 84 s p 500 names that are down more than 1 today, about half of them were down on the year, so, in other words, yesterday we thought this was there was a whole new thing where, oh, they are going buy the laggards and sell the winners and today it reverses like it never happened, and i think we really need to understand that markets are a twoway phenomenon in most cases. This was a strange year. Yesterday was a normal day within a strange year. I dont know about that lets bring in steve weiss on the phone who thinks it could be something more steve, thanks for calling in. Thanks, scott you say this is a market like weve never seen before, at least a dynamic thats starting to take place. Absolutely correct, and you were alluding to it in your questioning. This is something that in my view, something that weve seen before and the reason being is that you generally wait until the new year to sell some of your big games because well defer paying your taxes for another year and pay estimates of the taxes quarterly what ive been seeing is that they are selling in 2017 for a number of reasons. Number one, hedge funds. Carried interest goes away for hedge funds. Private equity it stays in place pretty much but what i mean by that is that the carried interest was Capital Gains treatment after a year, youre a manager on the fees that youve earned now youve got to hold it for three years in position to get that same treatment. So they want to take advantage of the carried interest rules this year as Hedge Fund Managers private equity doesnt matter because they are holding it seven to ten years and maybe you take Steve Schwartz into that, maybe not. Hes going to be on in just a few minutes incidentally and im sure will fred frost will ask him about that. Youre making the case, steve, that that maybe unlike in other times investors are incentivized in some respects from coming changes in tax policy to sell now whereas they never even would consider doing Something Like that. And take a look at fifa also. If youre al Hedge Fund Manager or a family office, a significant retail investor, then youre taking the valuations in tech that maybe youre comfortable with, and you know your positions is too good because tech has done so well. If you wait until 2018 to sell this and youre a family office, youre selling the lower cost stock so your taxes are going dramatically if you own that stock. The sections are not all that great. Im going to let you run, but well discuss more on the desk and well talk more about this when youre back here tomorrow i want to get, fisher, your take on this. I mean, steve brings up a good point with the fifo which basically says, you know, if you wait until next year, the lowest cost stock you have to sell. Maybe thats why the carried interest thing could be right, but i think josh is right, too you know, 300 points in the dow one day in a 24,000 environment is nothing on the other hand, im seeing a lot of more volatility in all the equity indices in the last week and people know that theres some uncertainty out there and should you sell or not . Im sure earhearing from some of your friends who are in this particular area who are wondering what the implications are going to be because of the new tax policy. They are all just going to florida. I almost got run over by two of them on the street i mean new jersey, connecticut, they are flying down there, man. Its done everywhere you go, some of it dont you think that plays into a decision not only about a real estate location but the stocks in your portfolio given whats been a 20 upside year for the s p. I mean, the only thing thats happening is how many more years vul a 20 upside and its good news and bad action. I mean, whats the next catalyst after this tax plan thats going to make the market go up more . Yes, the earnings could be up 10 more but the market looks past that. Give me more, give me more, whats next. Capital allocation from repatriation. The market knows that why is the market not expecting that you think that a lot of that is already in the market whats the next thing maybe infrastructure could be it because people dont think congress can get an infrastructure bill done otherwi otherwise earnings are getting priced in. I dont know if thats priced in, from Global Growth and continued Global Growth overseas. And what happens if the earnings go up and the market takes the earnings to me the earnings have gone up or gone down and now if the earnings go up a lot because of the tax plan or just because of growth and the market doesnt go up, then what . I guess well have to address that then. I think theres more upside to earnings and the stocks follow the earnings cycle. I think whats baked in already to some degree is how much this tax cut and how much growth is actually going to be there. I mean, i could be wrong thats not my level of expertise. I think its the greatest debate to have right now given the 20 year, pete, and whether you think as some have suggested otherwise on this prom, too, like jeremy segal, that youre pulling a lot more than maybe you thought you would into 2017. Certainly could be. 2018. And so many of it is also in the market. We talk about rotation all the time, right, and when we normally say that we talk about rotation within the market itself and right now what were seeing, technologies being sold off and what are they buying they are buying financials and various industrials and those with the higher tax. Heres the other interesting rotation how about the fact that this is something i monitor all the time in the options world, right . We talk about volatility its still exactly where its been, scott. Between 10 and 12, sitting right at 11 right now. Its going back and forth. November was a huge month in the options world. As a matter of fact, the last three trading sessions and the first two of december, were averaging 24 million per day versus 17 million per day going into november, so what does that really mean. Maybe were seeing a bit of rotation from stocks into options and that way people can still be involved but they are also hedged in a respect because if we see a big pullback, a sharp pullback, the stocks are not being held by the same folks. They are actually rotated into the options themselves. Mark, how much of what weve witnessed so far in 2017 and when you talk about rotation has been about this invisible catalyst of regulations being lifted. I think thats the bulk of it i think that, you know, with the freedom the market moves on the perception of reality, not reality, right, so the psychology, you know what, im not going have to worry about being, you know, for every regulation theres two being taken away i think thats been as big of a dynamic if not more than taxes. If that were the case, excuse me, sorry, why did financials get a bump right after the election and then spin their wheels for eight months . Probably because it was a crowded trade and everyone had it off im not a expert in finances im looking at the overall picture. The overall picture to me, can you imagine earnings go up 10 an the market goes nowhere, what does everybody do . I like to look halt things that dont make any sense because things that dont make sense make money things that make sense never make money. Well, maybe that maybe that point makes sense if its a little off. Look, youre not the only one who is suggesting and maybe youre winding around in the way youre suggesting it, that the benefits of the tax plan arent going to be as great as people think. Maybe they will, who knows. Who t goes back to technology and my question, so does technology benefit really from the lifting of regulation . Not really other sectors do. Take it to a lower tax bracket. And they already have a lower tax bracket so technology is kind of left to stand on its own with as stephanie rightly points out and maybe technology is being sold right. Well, if you believe the Financial Times technology will have more regular las vegas. Everyone is concerned about whats going to happen, you know, in europe and what squeeze they are going to put on all the tech sector and privacy rule and all kinds of stuff, right, so, i mean, if youre looking at it regulationwise, technology is one that benefits the least. Goldman sachs has an index on your bloomberg rate and the high tax rate stocks and if you tracked it over the last week it went absolutely vertical as we were getting closer to the Senate Passing the bill and then the day after they did, it looked like the Empire State Building in that three or fourday period and that tells you that tax reform was not priced into the market because these are the stocks how many times did we hear it was though everybody said it was priced in. So i kept saying it wasnt, but i think mark makes a really good point and the one we should be most wary of, you think about these big years of Earnings Growth like like the year 2000 we had already started pulling that in in 98 and 99 so you didnt real very a recession but you had a market collapse because we were no longer looking at good news and hitting the buy button and sentiment and fundamentals, they are somewhat tethered together, but they do not move in a straight line. They are not parallel and we absolutely could get the benefit of tax reform in s p earnings next year and csl off anyway and no reason that couldnt happen before. Lets get more views on the market our wilfred frost is here with us speaking today with the ceo of blackstone. Hey, scored, steve, welcome to the show thanks so much for joining us. Glad to be here. The guys in the studio were just discussing tax reform, the potential benefits of t. Earlier today i had Brian Moynihan and he was pretty optimistic about the broad effects its going to have on the economy. Whats your take if it passes broadly as it shapes to do so at the moment i think it will be certainly positive for the economy right now weve been growing around 3 , which is up from the 1. 8 the previous eight years on average, and and i see a lot of stimulus coming from this, and it should be in the 3s. And if the bill does pass before christmas, i mean, you got to know the president fairly well with one of his advisers for of his first year in office, how big a win will it be personally, and will he be personally proud and optimistic of what he can achieve next yore if it does pass this side of christmas . I think its been a gamechanger because theres been enormous frustration in terms of getting legislation passed, and this is a whopper. Theres no doubt about it in terms of its impact scale, and the fact that many people thought that this wouldnt work, and it seems at this point a pretty good shot that this is going to get resolved and signed before christmas. Lets talk about some of the individual lines within the tax bill, first the repeal of the deductibility of leverage expense. Is that negative for blackstone . I would say its slightly negative, because we havent had any restrictions on that it calls a larger question that we may be the only country that has anything of this magnitude and does it force any kind of borrowings offshore if you have assets but it is a change, and its part of a greater package itself is pro growth. One of the other provisions in the Senate Version of the bill at the moment, first in and first out, where shareholders will be forced to sell their older shares first, things that are proper pregnant with Capital Gains, whats your take on that on that it might do to the sentiment of individual investors in the United States that one i dont understand so much. In fact, its buried in that bill this is actually the first time ive even heard about that. Okay. Fair enough. One of the other specific ones again is that private Equity Investors are able to keep the benefit of a lower tax on carried interest were you surprise that had that stayed in the bill given that there were so many attempts to balance the books . Well, thats not exactly how it works i wish it were, but the way its laid out both in the house and the senate is that if you sell something within the first three years, its ordinary income, and its only after three years, so this is a dramatic change of something thats been in place for 100 years, so so in that sense its its certainly not a positive for us. Sure, but its only a very minor negative because the vast majority of your private Equity Investments are longer than three years. Well, were in a variety of businesses we have exposure to hedge funds, and, of course, that doesnt work for hedge funds we have a variety of other products and credit where that hits and private equity, you know, when youre managing money for other people you do the right thing for those limited partners, and some of those will fall in the first threeyear period. Lets talk about the blackstone stock at the moment ive heard you talk in the past that you feel that its undervalued, and you point to the very big dividend yield thats a result of that. Some critics of that view would point broadly to the level of asset values across the u. S. Economy at the moment and clearly blackstone very much relies on asset values more broadly as a private equity company. Whats your view on that is that a fair criticism and justification for a cheaper stock price because asset values are generally very rich for the moment for the last three years weve averaged 2. 50 and we have a stock that i guess is around 32 today, and thats a yield somewhere around 8 . The average stock is 2 , so you you can almost premise anything, and, you know, we have a generous distribution policy, so prices are higher and assets have gone up it affects all Money Management companies, and, you know, they will move accordingly in terms of their Net Asset Value lets talk about your views of some placed around the world and china in particular, the president , of course, just visited asia how did you take his trip to asia and the china leg of it in particular people feared his relationship with china would be very combative and a lot of friction. Perhaps you can frame it as the polar opposite at the moment. Yeah, i would say that. He has a very Good Relationship with president xi, and i think thats viewed mutually, and they had a very good visit from everything that i understand and the relationship between the two countries is is very good. You mentioned to me privately you were going to go to the middle east tomorrow or perhaps even tonight you got a big Infrastructure Fund coming with the saudis. Whats your view on whats happening there with the royal family and what mbs has done to remove some of the other power place across the royal family . Well, saudi is going through a major change, and as the crown prince announced, that they were going back to being a moderate Muslim Country the way they were before 1979 when their mosque was taken over by extremists, and he also wants to diversify the country away from oil and oil and gas and thats about 80 of the revenue, so with with the construct of electric cars and other types of things, its really time to diversify, and he views himself as representing the whole country and particularly the 70 of the people who round the age of 30, and so there are large changes afoot. There are also issues regarding corruption in that country as well as a variety of other noneuropean, nonu. S. Countries, and hes trying to address that issue as well. Steve, as ever, we have so many more topics we could discuss, but were out of time pleasure to see you. Thanks very much for joining us. Coming up, the bank of america releasing her view on the markets. Will this release the volatil y volatility thats next. Countries, and hes trying to volatility [alarm beeps] let our your inner child at the lexus december to remember sales event. Lease the 2017 rx 350 for 399 month for 36 months. Experience amazing at your lexus dealer. Ive asked chase sapphire reserve cardmembers to find my next vacation. Uganda, what are you up to . Thats a real silverback gorilla. Im freaking out 3x points on travel and restaurants. Sapphire reserve, from chase. Make more of whats yours. Welcome back to the halftime report. Egel back to the bank of americas Equity Outlook in a moment and we want to talk what you just heard from steve schwarzman. I do. I read comments on the s. A. L. T. Deduction removal. Steve schwarzman doesnt know what the fifo, you know, i mean, do we know whats in the bill . He said it was buried in the bill. And he didnt know. If he doesnt know, i think the problem that we have, full disclosure, okay during the president ial campaign i wrote the president a check. Lets get that out of the way, josh, so thats full disclosure, but were cobbling together something just to get it done, cobbling together something just to get it done and we dont understand the ramifications or whats really in the bill and thats a problem for investors. Weve taken a particular interest on this program in the fifo flow vision because of the potential impact that it could have on regular investors. Watch this program and watch those who are invested in the market and they dont know whats in this tax plan. The regular investor because the investor like steve schwarzman, his effective tax rail is zero if i was him i would own blackstone stock get the deduction and never sell anything and get a stepped up basis and pay no estate tax and my effective tax rate is the what nothing. Just donate stock maybe they dont want you to know what is in this plan. Non thats part of the problem. Thats the a problem for the market weve asked every single republican member of the Senate Finance committee. Because its changing though. No, no, no, let me finish. Asked every Single Member of the finance committee from the republican side to come on this program and tell our viewers about this fifo provision, the one that larry kudlow said was the stupidest thing hes ever seen, called it a back door Capital Gains tax. Not a single representative of the Senate Finance committee has accepted our invitation to discuss this important issue. Whoever somebody put it together. But who has read it . But they dont know its going to stay in and why would somebody come on tv and defend it we made this point when larry was on the show. Who oer who on earth would say we have to have this they are lifting up couch cushions to find a billion here and 3 billion there. Thats how Something Like this gets in and there are sacred cows harder to keep in than this and we dont know if it will be in the final. They know full well about the controversy over it because the mutual fund lobby. Yeah. Dont forget sxwlsh they got themselves exempted. Only individuals are now impacted by fifo. Individuals that work with individuals that work with a Financial Adviser who is a fiduciary have to at at bare minimum do spot tax planning around these types of things and if you ask ten Financial Advisers who are looking at this issue, probably ten of them will say well, i like to do average as opposed to fifo if i cant anymore, ill have to figure Something Else out. People will just take it they will muddle through and deal with it there wont be a march on washington over this issue and they know that which is why they are going to leave it in they had to buy off the lobbies in the Mutual Fund Group and they did and they exempted them. Td ameritrade and the schwabs and everybody else in that universe is sending a letter because it raises 2. 7 3wi8ion at its worst. Is asking whats going on with this. But the most important thing you said was people will muddle through it they will figure it out. They will take it. Ill take it. Thats what we do, right . We have to go through information all the time this. Happens to be on the tax side of the informational side of it, scott, so you have to deal with what you know, and as best as you can and thats how you have to navigate through the markets every single day. We went off on a tangent on this for a moment because we fweel like this is such an important issue you all should know about and well continue to cover it right up until the end of the debate. Welcome back, great to be here. Thanks for having me. You put out your outlook for 2018 within the last couple of hours, and you are expecting what to happen in the stock market coming up next year. Yeah. So our our yearend starting is 2800 on the s p 500 but its more of a question of where we are in the cycle rather than what number do you slap on the s p as of december 31st next year. That number tells me that you think were closer to the end. Closer to the end than the beginning, definitely, but i guess the one thing that keeps us bullish and, you know and this is basically a result of locking hat this year and what we all tend to do at the end of the year is look at what we got right and got wrong every single year and what we got right who is the most bullish market that actually put the model at 2,700, give or take and a few points away from where we are today and that model is still very bullish on stocks and ill tell you why. Its basically telling us that were not at that fever pitch euphoria on stocks that typically heralds the end of a bull market, so the number to Pay Attention to is 55 . What does our number mean. Well, 55 is the average allocation that wall street strategists are telling you to put into stocks in your portfolio. The benchmark allocation to stocks has been more like 60 over time so the fact that the allocation is still a little bit lower than the benchmark tells me were not at the level where everyone is pounding the table and saying stocks are the best thing around no other asset class thats going to beat them to me this means were at optimism but were not yet that the euphoric level that typically heralds the end of a bull market. So let me ask you this way. Your colleague michael hartnett, a global strategist whereas you focus exclusively on the United States. Right. Is calling for a sharp. These are his words in the note, sharp midyear correction. Are you guys on the same page, so to speak, or do you differ from his view . Yeah, you know, i think that the likelihood of a pullback, you know, 5 to 10 pullbacks happen on average you know multiple times a year and the fact that we havent had one is a little bit eerie so heres what were watching. Weve got a check lives 19 signals that you typically need to see triggered before you hit the end, and we published this in our research note, and at this point 12 out of 19 of those signals have been checkeded, so as the year progresses, the more signals that are ticked off makes us worry the less, the bert, and i think its not a question of duration of a bull market bull markets dont die of old age, we all know this. Right. But its really a question of where were really seeing the stress in the system. What do you make sorry to interrupt you. Thats okay. What do you make of the rotation weve seen over the last week, the reversal we saw yesterday and the reversal again today and what that is telling us i think a little bit of what were seeing is extended positioning in themes of the market technology, which looks healthy foumtally fou fundamentally is super crowded and the volatility on a daily basis may just be driven by positioning in stocks that you typically see towards year end i mean, this is the time of year where everybody is rebalancing and they are thinking about how they want to stack their portfolios for the beginning of next year and i think this had a little volatility around positioning is expected, and there i would just look at which stocks are really crowded, and, you know, use that as a bigger risk factor at this point in the year thanwe typically do. Yeah. But i do think that from a major rotational perspective probably the biggest driver is tax reform which, you know, weve been talking about on your program quite a bit. Tax reform is really the trigger that could add, you know, a significant chunk of earnings next year. It could really help certain sectors and not help other sectors so i think that that could be the source of rotational pressure that were all, you know, kind of seeing in in the Stock Performance over the last few weeks now. Thanks for coming on. Nice to see you again. Thanks, stock. Mark fisher, you have a mutual fund which launched yesterday called the essential 40 its a stock index and sort of your way to play the market with very bigname stocks that everybody knows, and you did this in conjunction with jeff kylberg, a friend of the network as well. I dont have a mutual fund. I have an index that i license to jeff so i dont want to get myself into trouble. I misspoke. Thanks for clarifying. But you get my point. Yes. Thanks for keeping me honest. Thanks for keeping me honest. We launched the essential 40 which is basically like you said the what i think is the its todays version of the dow jones. Its the 409 most essential names to the way you life, and the common denominator between these names or companies is without these names these are essential to the way you live. Yeah. Depot, costco, gm. Without these names your life is blank, but i wont say that, not on this cable news, and the point being is if you look at thin decks it makes sense, right . Why . Because people people say invest in what you know. This is invest in what you need. People typically, what were trying to create here is something that a, number one, has a better sharp ratio than all the averages than it has in the mast this year i think were up over 20, and interestingly enough i cant wait whenever it comes for the next 5 to 10 down move to see how we outperform on the down side versus all the major averages and all the names you know. Okay. So youve licensed the essential 40 to jeff kilberg who created a mutual fund with his product. Yes you should make the 40 nonowe sections so with short that and go long this and couch that out. Actually i was i was in a Committee Meeting yesterday about that and two people said exactly that, right. Put blue apron in it. And the point being is when the market does run into turbulence, whenever it is, right, usually people sell, okay, what they dont understand or what the brokers tell them to do here the commonality is through the names and the buckets that the model has created, okay, is is invest in what you need invest in what you know. Fish, you have cm ney there thats essential for you and joe. Is that essential for me im asking. Cme blows up today, what happens. Lets go through that exercise. Cant i make that argument about every Public Company that blew up . I think today cm he or youre talking about futures. Waste management, with you, definitely dont want that to go away. Jpmorgan. Comcast certainly. How often do these names change the indexes we balance only once a year so all the other indices, okay, were antimomentum because were equally weighted and every year were selling the winners and buying the losers, right every year maybe on average unless theres a merger we typically try not to replace names unless we have to. This year well possibly change one or two names, right, burks again, the whole thing is to its an equally weighted basket. I mean, how is the dow jones created. Do you know how that works, the dow jones weighting. The weighting is by price. Right. So youve got Goldman Sachs being what, 13 times weights. Im not had a huge fan but when you look at the dow and s p over 20 years plus they end up in the same place anyway i dont love the weight it or select components, but it kind of works. Our right that the dow and s p almost end up because weve done that study almost in the same place because they have two very, very different sharp ratios. Ess, essix and to read more about the essential 40 index head to cnbc. Com halftime and we said that the mutual fund is licensed by Kkm Financial net run by the cnbc contributor jeff kilberg. We love kilberg. Pete najarian, were tracking bullish activity in one bank stock up nearly 20 in three months thats up next and snap shares are on an upgrade and well debate that that coming up and well get mark fishers energy outlook. Somewhere oil going next year . Hell tell us next see thats funny, i thought you traded options. Im not really a wall street guy. 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 were back on halftime. That means Pete Najarian is at the telestrator for unusual activity in the Financial Sector what do you say . Financials almost consistently over the last three or four stop trading days for you, the bac paper and the Credit Suisse paper and the xlf has been absolutely huge how about wells fargo. A stock everybody wanted to give up on. A lot of folks were saying how can you possibly buy this stock in the ceo addressed this today in terms of some of the commercial loan growth that he sees for qh. Thats given this stock a little bit of lift but you can see, stock, it was around 54 and here it is starting to react and moving to the upside and in the options world maybe that move is not done when these options were done 10,000 of the february 60 calls, looking out a couple of months, i like to see that and gives you plenty of time to get through 60 stock at 59 already. These are only 1. 45 in premium so its not an expensive option either in terms of where the stock could go over the next couple of weeks. Already own the stock and calls. I think this thing is going to go up and through 60 in the very short term. All right come on back this way. You got it. Changing gears snap, lets go to the white house. Here is the president who is meeting with republican senators today. Well, thank you very much i appreciate everybody coming in we had some very late nights getting the tax cut bill to conference, and last night was very smooth, and i think were going to make it so that it comes out very beautifully i call it the mixer. Its a conference where everyone gets together and they pick all the good things and get rid of the things they dont like, but its a fantastic bill for the middle class its a fantastic bill for jobs and for companies wanting to bring back massive amounts of money into our country its really i view it more than anything else, its a tremendous bill for jobs and the middle class and i think people see that, and they are seeing it more and more and the more they learn about it and the more popular it becomes and i think the end result will be even better we had a choice. We could have gone directly for a vote and we decided to put it in the conference and lets come out with something where everything is perfecto, and thats what were going to do. This group of wonderful republican senators is here to group the tax bill very importantly well also be talking about trade and nafta, whats going on with the nafta negotiations we have tremendous losses with mexico and losses with canada covered by nafta we last last year we lost approximately 71 billion in trade deficit. We had a trade deficit with mexico of 71 billion. With canada it was about 17 billion. We have trade deficits with everybody, virtually every country in the world we have trade deficits with, and thats going to be changing its already changing, but its going to be changing fast. We went to china we brought back over 300 billion worth of contracts from asia it was a very successful trip, but now were going to look at nafta very seriously we have bob leit houser here and gary cohn and not easy to have an election come up but well see how that places, but it will be very successful well be talking about trade well be talking about healthcare and other subjects. The taxes, were so thrilled about, so popular, and i think something will be coming out of conference pretty quickly as opposed to longs term. I think its going to go pretty quickly. Were all on the same page theres a great spirit in the Republican Party, like ive never seen before, like a lot of people have said they have never seen before. They have never seen anything like this, the unity, so i think a lot of very good things are going to happen. Its going to happen very fast i want to thank you all for being here and lets have a great lunch, and lets talk about trade and lets make trade deals instead of the horrible trade deals we all got stuck with thank you, everybody. Mr. President , has mueller crossed a line with Deutsche Bank thank you very much. Thats President Trump there talking about trade and taxes saying that he is confident that the tax bill conference will go well eamon javers, were you listen g listening you were listening to this and the president talking about unity in the Republican Party and in terms of optics who is sitting right next to the president in fact, to his left, jeff flake. Senator jeff flake. Thats right. We saw jeff flake who gave a famous speech in the president denouncing president in effect and his effect on american politics saying our children are watching as a generation, and if we dont stand up who will to the president of the United States jeff flake has been a very outspoken critic of President Trump and nonetheless he was seated right next to the president in that event. You heard the president predicting that the tax bill will fly through the Conference Committee, explaining what that Conference Committee is and what its expected to do, but you also heard the president ignoring a question seen by many reporters which is the question of the day, this question of mueller, the special counsel, having issued a subpoena to Deutsche Bank presumably for the president s financial records. Deutsche bank well known for financing a number of Trump Organization deals over the years. Trump, the president , had said earlier in the year that ultimately it would be a red line for mueller to go after his own personal finances or personal finances in general of people hes investigating. The president there not answering the question though of whether or not he felt that mueller had crossed that red line in subpoenaing Deutsche Bank, a subpoena that we understand happened several weeks ago. Deutsche bank issuing a statement saying that it will cooperate with any investigations, not offering any details about what exactly it was that mueller subpoenaed or that the Deutsche Bank folks turned over to the special counsels office so theres been some speculation that that could trigger a reaction from President Trump. We didnt get it right there. Eamon javers on the north lawn now to seema mody with futures now for us. Scott, copper is tumbling 4 and pacing for its worse day in over two years lets bring in scott nations whats behind the move, scott . Well, we got a surprise increase in supply in futureses warehouses also, theres now an expectation that chinese demand is going to fall, particularly in infrastructure i mean, copper is still up nearly 20 for the year, but as you can see from this chart were now below the support thats been really important for the last three months, and below that level its look out below. China seems to be part of the story as well. Brian, what levels are you watching here . Well, i dont think its unusual to see gap moves when we see moves out of china that. Has happened before in copper and the year to date up 24 . The longer term chart, bring that up and look further 280 level down there i think theres a ton of support and breaking the 3. 05 range and now the range is 3. 05 on the upside and 2. 80 and 2. 85 on the downside and id become a buyer at that level when i would look to enter the copper position. Gentlemen, well leave it there. Today on the live show were joined by bank of americas stephen suttmeire and tom kloza joining us to discuss the recent move in oil. All of that at top of the hour on futures now on cnbc. Com well be back soon. In fact, we will be back right after this with more from mark fisher. Speaking of oil, well get his outlook for the remainder of the year more importantly into 2018 and atoes n. Wh dmark fisher think of bitcoin . Found out next this is where i trade andrs. Manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. That was just aight for me. Yo, checi mean,t dawg. You got the walk. You got the stance. But i wasnt really feeling it. You know what, im not buying this. You gotta come a little harder dawg. You gotta figure it out. Eh, i dont know. Shaky on the walk, carriage was off. Randy jackson judging a dog show. I dont know dawg. Surprising. Whats not surprising . How much money lisa saved by switching to geico. Wow performance of the night. Fifteen minutes could save you fifteen percent or more. 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. We are the driven. The dedicated. The overachievers. We know our best investment is in ourselves. We dont take no for an answer. We fight for what we want. Even for the things that were once a given. Going to college. Buying a home. And not being in debt for it for the rest of our lives. But were only as strong as our community. Who inspires and pushes us to go further than we could ever go alone. Sofi. Get there sooner. We are back with famed Energy Trader mark fisher. Lets go into your wheelhouse here whats your outlook for oil . Its interesting because all the major houses now think theres a bias the risk is to the upside im usually the biggest bull in oil. I think we will still get trapped. I think the upside is limited to 62, 63 i think the downside is capped some place in the high 40s what i do every month is, you know, i sell, put spreads, call spreads and hope we sell in the middle all the noise in between is just why do you have this counterintuitive view, then . Because, you know, i think that if we go up much more, i think what will happen is you will see a lot more rigs come online i think opec, russia at least is comfortable with where we are. A lot of people inside opec dont want the price to go much higher than this i wish there was an opec on natural gas. I think really, if there was a nonu. S. Based opec in that gas with whats going on, the price of natural gas would be about 50 higher in about six minutes. But there isnt as of yet. At 57 you think crudes gotten ahead of itself no, i just think its trapped. I think anything can sell thats above 60 to sell, anything a derivative below 50, you sell and play the middle. Try to just be in between. Unless something happens, the only wild card in this is what happens in saudi arabia. If the 32yearold, 34yearold, how old is he . Low 30s good answer its a wild card. Safe answer its not my cousin. What happens there . I agree hes a millenial cant rely on those guys what are you . Millenial what are you poster child. Outside of that, i think are you trading any stocks within that universe yeah. You know, i keep buying because i keep buying all these natural gas stocks figuring that their longterm call options and i keep losing money. Keep buying and keep losing money. They can only go to zero at some point. Good support. Southwest range resources, chesapeake the same trade everyone else is making so i know im going to be wrong. I keep doing it because i cant help myself. What turns it, then i think what turns it is when see, basically, my guys say that all the l g we can export, we can export. When we have extra capacity, i think again, i really think theres going to be something done they are going to mimic what opec did in oil if you get some supply constraint in nat gas, i think nat gas has the most upside. Every day the weather gets better, the markets off ten cents again today in nat gas in the long term, i think that oil is stuck in this range i think nat gas gives you the most upside at some point. Especially if we keep displacing enough coal. I dont really see im not really so excited about oil this year more excited about nat gas is there an oil stock that you would buy in this environment . No. There is but i wouldnt really want to mention it because i dont feel its in my wheel house to mention an individual oil stock that im not 100 comfortable. Told you, i gave you natural gas names. Gave you those names thats true better than last time. Last time i didnt give you anything i got yelled at by him what do you think of his view i think that his view is a patient one and thats usually the right one to have. You just sit and wait. Think its range bound, too i do. We have talked pete has done a good job talking about this every time you think oils going to break out it doesnt. It disappoints its been a frustrating year investing in Energy Equities i know that firsthand the play in 2018 there are so many other is not to sit on your hands, is it for energy . Yeah. No. You wouldnt buy any nat gas stocks or oil stocks . Maybe Diamondback Energy is a name Something Like that. There are so many other things out there right now that offer far more opportunities and the weighting of energy, keeps getting smaller and smaller so the Portfolio Manager requirement to be there is less. I promised we were going to talk about bitcoin what is your view . Bitcoin to me, when i was 11 years old, i started on the floor in the silver pit. Bitcoin is what silver was in the early 70s and 80s for sure no rhyme or reason limit up, limit down, limit up, limit down, limit up, limit down on the way to 50, the Hunt Brothers thought im not rehashing the whole story. The reason why people are so attracted to bitcoin is because people want something thats moved dramatically, that theres no wall street to it every cab driver is talking about it all day long. I really think when the two exchanges launch, this weeks cmoe, initially, the professionals will sell it im not sure they will sell it or not but it will still be the wild west. Until theres enough volume that the tail be the futures wag the dog and i dont even know if thats going to happen as long as bitcoin is just a cash settled product, i think its going to be great volatility for someone like me, who cares what it is long as it moves thats going to be the best opening range trade to do because all you need is volatility right you will be a trader of bitcoin . All my idiots will be for sure im one of the idiots cancel all my plans both ways what a trader wants at heart is volatility, right . Right . Im going to get everyone on the desk trading bitcoin i dont know how to say it. Do you think the current iteration of it ends badly i think the next current iteration, theres something going on for instance in western australia. A friend of mine is launching this fund, this bitcoin phenomenon is spilling over to western australia, to so many things i do think at some point i will be back here, there will be a Second Derivative of bitcoin that will be such a big advantage. It exists now its called icos but in a different way. Thats a topic not for now interesting well have you back and talk about it see how you do in those trades final trades joe . Walmart since earnings has kind of held on to the gains that its had. Im still playing for a break above 100 position that way as well Stephanie Philip morris international, down 13 , best in class Revenue Growth of 7 gaining market share thats one i buy on the weakness josh . I dont think the banks are done im still on jpmorgan, still long mastercard. I like financials. Totally agree with everything on the financial side, absolutely i bought jpmorgan calls just yesterday. Carmax carmax is an interesting stock its pulled back a couple bucks today, saw huge buying the last couple weeks is mcdonalds 200 price target light no. Not a fan. I have the stock. Go ahead. Ten seconds. The market hates gold golds up 9 i buy. Thanks for being here power lunch starts now heres whats on the power lunch menu. Stock market thats been on fire this year. Tax reform, the feds plan to raise rates and talks of an overdue correction what do investors do next and where are the opportunities to make money in 2018 defanged the big tech names that have been taking it on the chin the past week or so are bouncing back a bit today, but what does this all mean . Is this a buy the dip moment and bitcoin sobering again some investors are marking their line in the sand a speculative bit waiting to explode or the investment of a