Regional bank bb mpdbb t kelly will join us. Toll brothers, shares down 8 , and some provisions in the tax bill that could make it tough going for the housing sector well explain. By the way, tomorrow lululemon reports earnings that stock has been up 25 over the last six months. Big comeback there we have a debate on whether that rally can power higher into year end. But we start with the breaking news out of washington today. Plenty of it, again. Kayla tausche has details fo kayla . Reporter bill, we learned nearly 40 House Republicans signed on to a letter drafted to be sent tomorrow to republican leadership, including the Senate Majority leader Mitch Mcconnell and Speaker Paul Ryan as well as senator orrin hatch and congressman kevin brady that requests the removal of this first in first out provision its a controversial proposal that has remained in the Senate Version of the tax plan that essentially requires investors to sell older stock first. It would raise about 2. 5 billion over ten years, and the criticism is that it doesnt raise as much money as it would potentially place in a burden on ordinary Retail Investors. That is what this letter says in effect, and we have learned that nearly 40 republicans in the house have signed on to it they expect to send it tomorrow to leadership. Of course, none of the signatories on this letter im told are members of the Conference Committee that speaker ryan put together. But you can imagine that over the next couple of weeks, there are going to be a flurry of these letters as various factions in congress try to weigh in on provisions they want to keep in, and provisions that they want to be left on the cutting room floor but this has been one that our viewers have been watching very closely because of the ramifications that it could have on investing and huge costs for those investors. Kelly . Well, i got a question, i was just asking kelly about it, how much will this cost . If they remove this from the tax bill what kind of revenue are they losing, not much i guess, huh . Reporter not much. 2. 5 billion the estimates range from 2. 4 billion to 2. 7 billion. Thats over ten years, bill. The idea this would be a burden that would be shifted to the Retail Investor in order to gain that revenue is something House Republicans are points out in this letter. Well see whether leadership actually makes moves when they receive this letter but it is interesting to see so many, more than three dozen House Republicans have signed on to this asking for it to be removed in conference. Dont know why its prove b so hard to get rid of when 3 billion, 2. 5 billion, is going to make no difference to the outcome here theres bigger fish to fry kayla, thank you, Kayla Tausche for us. Protests, meanwhile, erupted on the tax bill over on capitol hill ylan mui joins us with the latest scene whats going on, ylan . Reporter kelly, democrats have been protesting across capitol hill today to try to stop the gop tax bill as it goes into final negotiations. We saw democratic protesters just outside of representative Barbara Comstocks office, she represents virginia. Seen as a crucial vote they were shouting tax the rich, not the sick and kill this bill, dont kill us. We saw several people getting arrested, one woman was literalry lliteral lying supine as Capitol Police carried her away tried to block people from going in and out of the offices as well as going through the hallways this gives you a sense of how democrats are trying to marshal some energy here to block the tax bill in its final days it seems like republicans will be ability to do this without democratic support, but democrats are hoping that this is going to be a win win for them no matter what. If the bill doesnt pass, thats a win for them, if it does pass, they say, that because this bill is regressive and because it could actually raise taxes on some middle class voters, that will come back to backfire on republicans come 2018, kelly back over to you. Thats a good point all right, quite a scene there, ylan keep us posted thank you. Ylan mui on capitol hill. So as we mentioned, banks could be big beneficiaries of the tax reform plan. Also today, the Senate Banking committee has been working on a regulatory relief bill that could help small and midsized banks. Those that are at least 50 billion in assets. Banks under 10 billion would be excluded from the socalled volcker rule banks with less than 250 billion in assets would no longer need to comply with the capital rules for the too big to fail provision that would take place immediately for banks between 50 billion and 100 billion, and phased in for banks between 100 billion and 250 billion. Got all that . Do i need to repeat that yes, please. Flaeranyway, wilfred frost i the Goldman Sachs conference he has an exclusive interview with bb ts kelly king hi, kelly, bill as you say, kelly king from bb t is with me good afternoon to you. Good afternoon. The senate has been discussing today specifically the threshold as being classed as too big to fail or more precisely systemically important financial institution. You got about 220 billion of assets, so this change to 250 billion is the cutoff, would exempt you Going Forward is that something youd welcome . Its not a big deal, to be honest you know, the too big to fail process was, frankly, cumbersome in the beginning, but now that weve all done it, you know, the recovery resolution process is not that much of a tax Going Forward. So it i mean, that, us being eliminated from having to do that would not be a big deal. Provisions in there for volcker, how would that change whether its that or other areas, do you think smaller banks, mediumsized banks, deserve a bit more relief than theyve had in recent years remtive re relative to the big guys they need something on voke e the smaller banks, even our bank, we dont do the kind of things that skrovolcker is prohibiting, anyway. We have to spend a lot of time and money proving we dont do it so this is a case where, you know, institutions our size and below, you know, we should just be able to have our board pass a resolution saying we dont do that and then not have to spend millions proving that we didnt do it. And then lets touch on tax reform as well theres been so much focus on that bank stocks and small, mediumsized companies, have all risen on positive news days represent to tax reform, of course, you fall doubly into that category. Do you think that is justified that share prices have been reacting so positively on good tax reform news days will it benefit you significantly . Oh, absolutely. This is a big deal i know its not perfect for everybody, but its a really big deal for our economy its certainly good for banks, but its mostly good for the overall economy. So, so from our point of view, there will be a tax reduction that will allow us to invest more in services for our clients. It will allow us to invest more back giving back to our communities. It will allow us to give more back to our associates, so its kind of win win for everybody. But the big payback for the economy is with the lower tax rate for small, mediumsized businesses, for the 100 expensing of equipment, this is a big deal so you and ive talked before, for the last ten years or so, i talked to hundreds and hundreds of small businesspeople who have been not investing in their plant and equipment, rolling stock, you know, the driving trucks for 250,000 miles and using 20yearold computers. Because they were uncertain about the future, regulation, higher taxes now theyre going to have not only just lower absolute taxes, theyre going to be able to expense the new equipment to replace all the old, and i believe they will rush to do it. That will be stimulative to the economy and be robust. Kelly, a question from bill in the studio. Yeah. Kelly, good to see you again i want to go back to something you said earlier you got raised eyebrows from both kelly and i, kelly evans and i, you said it would be no big deal to lose the siefi negotiation. Are there other Regional Bank ceos who feel the same way and if you guys all feel the same why, why are they even bothering to change the regulation in washington yes, so i didnt see your raised eyebrows. I was looking over at wilfred but, so, the stress test i think most bankers would say has, in fact, turned out to be good conceptually i dont think any bankers today if you completery eliminated it would stop doing stress test its a good natural planning process for management and for the board. Now, what we would all say, i would say, is we need to streamline it, make it more transparent. Make it more efficient but dont eliminate it if we would not eliminate it at our company if the law changed and said we didnt have to do it anymore so its about the process. Its about the extreme detail that has been required that has made it cumbersome and too expensive. Not the act, itself. And kelly, its kelly evans here in the studio just one quick last question, im curious about the journal pointed out for all the sacred cows slaughtered for this, Credit Unions are still tax exempt im guessing you think thats a bad idea i want to node know if you thin thats a status that should be revisited at a time like this. Well, ive been in banking for 45 years and for 45 years i thought this was extremely unfair, so i continue to feel that way it makes no sense. In the very beginning, you know, krelgts y Credit Unions not being taxed was reasonable because they were local. You know, we have Credit Unions that are several billion dollars in size today. Theyre competing in every aspect of business they allow members in that are not even remotely attached in some form of a cohesive way. I dont blame them for fighting to try to keep that status, but its irrational and it ought to be eliminated. Kelly, were going to have to leave it there thank you very much for joining us this afternoon. Thanks, good to be with you. Kelly king of bb t. Guys, well send it back to you. Thank you very much, as always very interesting. It was. Zvery interesting. 9 day 49 days left in the t day. The dow down 90 points in fact, all the major averages are lower at this hour coming up next, were going to talk about tech stocks seeing a bit of a rebound today after a rough stretch over the past week well take a look at which tech stocks are being bought right now. Were going to head to shanghai for a look at the brand new and massive 30,000 square foot starbucks there well tell you why alibabas jack mom made an appearance at the grand opening, after this. Keyboard clacking ] [ mouse clicks, keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Your bbut as you get older,ing. It naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Welcome back those protests are heating up again or capitol hill. Back to ylan mui with the latest ylan reporter bill, i can barely hear you what i can tell you, the protesters are protesting about the gop tax bill to move back or face potential arrest. Now, these protesters have been ploo moving from Office Building to Office Building here to try and stop the bill. Theyre talking only about the gop tax bill but also about health care because the bill does repeal the individual mandate in the Senate Version. Theyre also talking about things like daca because in the agreements, the Senate Leadership made with republican senators to get it passed, that was another issue that was intentionally being addressed. So democrats are really trying to marshal that grassroot the energy here in order to stop the bill in its final moments. Weve already seen several dozen people get arrested. Protests are planned throughout the rest of the afternoon. You can see some of the action here behind me as people, again, shouting, kill this bill. Back over to you guys. Ylan, i know you probably cant hear me. I was thinking about the point you made earlier, if democrats feel this is a win win, why all the protests reporter right, i think what you said, kelly, was that democrats are hoping this a win win either way one of the challenges theyve been facing is to try to get turnout for some of the some of the votes that weve seen they were very encouraged by the results of the virginia elections, and theyre hoping to harness that momentum Going Forward as well. So theyre looking for issues that they believe will motivate voters in 2018 and they can combine the tax bill with health care, with immigration, that ends up possibly being what gets them over the finish line in terms of turnout. Ylan, how many people are we talking about in the hallway there . Reporter bill, i think you guys asked me a question i cant hear you right now there were hundreds of protesters expected here today, about 300. Okay. Very good. Thank you. Well let you stay out of harms way. Get out of harms way there 300 protesters thats a big number. Holy cow. All right. We have a news alert on Googles Youtube in the moeantime. Lets get over to Julia Boorstin whats happening there growing conflict between amazon and google. Google starting to block youtube access on amazons fire tv and echo show. Been trying to Reach Agreement with amazon to give consumers access to each services. Doesnt carry chromecast and google home, doesnt make prime video available for googlecast users and last month stopped selling some of the ratest products given this, were no longer supporting youtube on echo show and fire tv. We hope we can reach an agreement to resolve these issues soon. Very unusual to do this kind of negotiating in public. We reached out am son, well see how they respond back over to you i mean, listen, what else are you what video content are you going to watch other than youtube . Thats one of the first things people probably think about on this kind of device, right they know that. Its a lot of different types of content you can access, whether its streaming Services Like netflix or hulu, youtube as well youtube is obviously also very popular on mobile devices, but its interesting because google really feels like it wants youtube to be available everywhere especially on televisions because that will allow it to put in more premium content and get more premium ad dollars. Thats when people are really paying attention to that that competition for Television Ad dollars so will be interesting to see how this plays out these are Companies Increasingly competing not just in the devices they sell but also their content and that reach to consumers. Indeed. Those eyeballs. Thanks, julia were al where else am i going to watch my cat videos . On your you got alexa. You got to get a google home with a screen. Thats what they want you to do. I see all right. Thank you, julia as we all know, its been a rough stretch for tech stocks over the past few sessions the sector is seeing a bit of a rebound in todays session dom chu stepping in with a look at whats behind the move. Dom . Reporter so, guys, its interesting yu injulia brings u companies. Amazon, not exactly a pure play Technology Stock and alphabet, Parent Company of google, those have been two stocks that have been hit harder over the course of the last week as markets have come down. Now, we did have a pretty solid rally in technology to start the day. We were at one point about a percent higher weve lost some steam here intraday for that Technology Sector up about a quarter of a percent right now. We are seeing that bounce. At leastle at least lessen up a little bit. The tech sector is still the only sector in the green today if we look at some of the at least outperformers weve seen so far, notice the chip stocks have been some of the big outperformers this year. They have been some of the biggest pullbacks weve seen during the course of this, at least last run over the last week semiconductor etf down about 5 just over the past month the bulk of that happening in just about the last week and a half or so thats something to watch. If you take a look at some of the other stocks that we want to focus on, within technology, take a look at some of these names because they are ones we do find important with this particular move. The xlk, which is the spedr tec etf, is an instrument we look at for septembntiment in the marketplace. The average Trading Volume for this etf has been 14 million shares on average for the past 90 days, 9. 1 million shares it speaks to this idea as tech is sold off recently, the accelerationvolume, 50 plus we talk about the faang stocks all the time heres the sentiment at least so far today. Facebook up a half a percent amazon, netflix, alphabet, Parent Company of google, theyre up but off their session highs. Whether the bounce continues, that remains to be seen. We will point out some of the megacap names within technology, not exactly participating in the rally weve seen here. Oracle, ibm, cisco, intel, all down on the day, guys. Bill, kelly, back over to you. All right, dom, thank you very much. Oh, gee, look at the time. Im sorry. We dont im kidding. Lets get to our qclosing bell exchange, by the way, down 104 points lost ground in the last 30 minutes. Jeff from Raymond James is with us at post 9 also with us cnbc contributor peter costa from empire executions who lost 50 dow points in the last 15 minutes. And Rick Santelli checks in from the cme in chicago another giveback time here, peter. I mean, just it happened it happened, what is today, tuesday, it happened friday. Yeah. And we had a giveback again today here whats going on . You know what, i mean, you know, it could be people just taking some profits, taking a little money off the table i dont see anything theres not a pattern developing other than the fact that in the later in the day, people start taking money, you know, taking some back and to me, you know, long term, 3 months, 6 months, 12 months, whatever youre looking at, i see the horizon looking pretty good to me, this is really not that big a deal no volume. How does the horizon look to you . Are you sticking with the peo e people, you know, kind of absent today, the new rotation, the new leadership or are you going with tech if i had to own two sectors, and only two sectors, it would be tech and financials i agree with peter, we had this happen back in june, if youll recall you had the tech swoon they bottomed in early july. The tech sector is up 15 . Since then i think its much adieu about nothing. Ive been attending the Raymond James tech conference in midtown. The tone from the ceos and cfos is pretty darn upbeat. Its interesting you compare that with financials is that because you think on their own they both have good arguments or is one sort of a hedge for the other . I think they have good arguments. I lived in washington, d. C. , and still pretty connected on the hill and the mantra on the lil about regulations and about bills is not as bad as feared, not as good as hoped and that leaves the financials i think the financials, you know, weve been bullish on the financials for a long, long time i think theyve got the wind at their back eventually we think the yield curve is going to steepen. The regulatory environment, i mean, the people i talked to in d. C. , theyre actually ignoring some of the regulations. Theyre not enforcing some of the regulations. I think that puts the wind at the back lets bring in mr. Yield curve, himself, rick, are you guys talking about a steepening any time soon . Reporter no, you know, the only way were going to get a steepening at this point, maybe all the way through 2018, is to see overseas rates start to move higher whether its boones, jgbs. Ive given up hope they have yield curve control. Six basis point range in their tenyear all year. To me, its almost impossible to see a big move to the upside without some overseas competition in that regard i just dont see it on the horizon. As a matter of fact, lets keep it simple. This is going to be the last jobs report for the year so if theres a change for the long end to grab an economic selloff, due to strength in jobs and for a moment to ignore the relative value trade of lower Interest Rates around the globe, creating International Buyers in our markets, this might be the week. So once we get through this week, you know, were ten basis points away from unchange on the year on the tenyear at 2. 35 if something doesnt occur this week to give an economic upside with respect to the strength of the economy, most likely were not going to see unchanged on the year in the long end all right peter, im just getting some early indications of the market on close orders to the sell side here are we seeing tax selling, is that what you think is happening . Normally the tax selling doesnt start until the second week of december, going into the end of the year. They sort of take advantage of this, you know, that santa claus rally. You know, hopefully they catch some of that wind as well. But, you know, over the last few years, i havent really seen a lot of that. You know, i think that that you know, when i started in the business, that was a huge thing. Right. It soften add lot i think people their tax they set up their tax planning well in advance of the end of the year so i dont think youre going to see as much as you normally do you know, its still waiting to be seen. Usually its the second week in december you start. All right well see what hatchehappens. Thank you for your patient, guys jeff, always good to see you rick, see you later. Up next with the markets near their lows, dow down 88 points right now, starbucks is making a grande bet on china it is opening a massive new cafe and roastry in shanghai. Andrew ross sorkin was there to catch up with starbucks executive chairman Howard Schultz about the challenges of doing business in china. Also a little bit later shares of home builder Toll Brothers plummeting today on the back of an earnings miss and the tax bill, perhaps, could also present even more concerns for the whole housing sector well dig into the tax reforms impact on real estate still ahead. What is the power of pacific . Its Life Insurance and Retirement Solutions to help you reach your goals. Its having the confidence to create the future thats most meaningful to you. Its protection for generations of families, and 150 years of strength and stability. And when youre able to harness all of that, thats the power of pacific. Ask a Financial Advisor about pacific life. Hey. Pass please. Im here to fix the elevator. Nothings wrong with the elevator. Right. But you want to fix it. Right. So who sent you . New guy. What new guy . Watson. My analysis of sensor and Maintenance Data indicates elevator 3 will malfunction in 2 days. There you go. You still need a pass. Looking at some of the movers on wall street today. Industrial distribution company, hd supply, jumping by 6. 5 righ now on strong earnings out this morning. Company reported a beat on earnings and revenue and also raised its fullyear guidance due to strong sales growth. On the flip side, though, shares of ford lower today as the company says its sales in china have been weak in recent months the automaker is undergoing a broad review of its chinese only rations and struggling to come up with vehicles that comply with chinese quotas over production and sales for socalled new energy vehicles. Ford today down 1. 5 kelly . And starbucks opening up a massive new megastore in china today. A 30,000 square foot cafe and roastery which will feature small batch exotic coffees in which the Company Hopes will become a destination i guess it already is because Andrew Ross Sorkin was there for the grand opening and asked star buck bustarbucks executive chairman Howard Schultz about the challenges they faced early on in china. Problems and challenges we had early on when we came to china, with e wee were making d for china through a u. S. Lens sitting in seattle 37 once we realized we had to have a chinesecentric team of chinese managers who understood the market and we had to have the confidence to give them auton y autonomy, theres a complete autonomous business here thats completely decentralized and thats why we have been successful. What is your position on the tax plan as proposed by the senate and now the house and well see where it ends up well, you and i have spoken about this before. You know, i look at the reduction in Corporate Tax rate to either 20 or 22 , and i would just i would ask a question to the republican leaders, and that is, what insight, what experience, do they have, or what evidence do they have that their reduction in taxes for all those corporations are going to result in either job creation, higher wages, or an opportunity for their people to grow versus the amount of money thats going to go back to shareholders and corporate profits . So i guess hes not going to run for president as a republican doubt that. You notice what they were drinking there, looked like they had a little brew actually going on there. Like a beer like a beer do they serve beer at starbucks . They might. Theyre doing the nitro press thing that makes it look fizzy. I saw that in San Francisco this summer. Did you try it . I should have tried it. Looks like a guinness. Im sorry now that i didnt do that. Anyway. Anyway. Shall we do this yes, lets do this. Its time now for a cnbc news update, lets get straight over to sue herera. Hello, guys heres whats happening at this hour, everyone President Trump hosting a luncheon for republican senators at the white house he claimed that the tax bill will quickly emerge from a House Senate Conference and provide major benefits for jobs and the middle class 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 as its a tremendous bill for jobs and for the middle class a diagnostic test for early diagnosis of Ovarian Cancer has been developed by a team of american and polish researchers. Its estimated that one1 in 75 women will contract Ovarian Cancer and faster detection of the cancer increases the chances of successful treatment. And football fans were given some encouraging need today. Pittsburgh steeler linebacker ry ry ryan shazier has begun to Show Movement in his legs in monday nights game against the cinci ben jilli bengals. He was diagnosed with a spinal contusion. We wish him all the best in his recovery thats the news update, bill, back downtown to you. We most certainly do, thank withdrew very muc you very much, sue 27 minutes left in the trading session with the dow down 100 points. Steve grasso from Stuart Frankel joins me those who follow the market on a minutebyminute basis, have for a long time, were noticing a change of the to be of the market here. Lately rallies have been faded into the close thats happening again today whats going on no. Weve talked about a handful of stocks that carried this market pretty much the whole way up as far as the bull rally is concerned. Those handful of stocks, everyone calls them faang. There are a host of other names that fit under that category as well now when you look at the tax plan, whats going to amt was thrown out it wasnt supposed to be in there. Now it rears its ugly head again. So if you have an effective tax rate, a blended average, so to speak, right, so if youre an s p 500 company, you have money abroad, you have money here that you make if your blended average is lower than whatever that Corporate Tax rate becomes, you in effect get a tax raise. Exactly. Plenty of people in this country are going to get a tax raise. Plenty of them are in new york plenty of them are in california plenty of them in these blue states, but the problem is theres not anyone who really feels crazy bullish about this tax plan, especially these large Cap Tech Companies that so much of the money has been made and no one wants to lose any incremental performance. So this is why the markets selling off right now . So i yeah, would guess. Are getting around to that . Thats it in a nutshell. Its not about you just said is it tax selling . Its tax cut selling. I see. Right now that you see people saying, you know what, let me lock in my profits because i have no idea what this final bill coming out of conference is going to look like let me see my selling first, and then ill reestablish it going into year end. Got it. Thank you, steve. Sorry if i wasnt abundantly clear on that. I knew, it was like this long joke, i knew the i thought it was right there. The setup was long, the payoff was coming eventually yes, exactly see you later. Thanks kelly . I like that the tax cut selling. Thank you, both. Still ahead, its been a roller coaster year for shares of lululemon and the big catalyst could come tomorrow when the Company Reports earnings after the bell. Weve got a bull bear debate, well discuss whether nike and under armour are leaving lulu in the dust, right after this [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Welcome back were near market lows the s p is down eight. Here are the sectors of the s p. Theres only one in the green right now, its technology up kind of bucking the frietrenf the lack week or so when its been the laggard the tenyear barely budged industrials are down today as well. With this late selloff, i was wondering if tech stocks would remain positive here. Right. They have they have resisted going supine. You just said i got it in there the pending tax reform bill is likely to have a dramatic impact on home prices, and in many states, not for the better. We have details on that coming up. Negotiations for the sale of the 21st Century Fox Studio assets to disney are heating up. Ahead, well talk to the ceo of Amc Entertainment about the marriage of two giant studios would mean to the theater business stay with us cnbc sector sort is sponsored by sector spdr etfs. 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 . 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Breathe better starting within 5 minutes. Get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. So selling in the last hour or so has pushed the major averages into minus territory here the dow down 95. Was down 118 at the low. We were up 59 points for a time today. So some late selling after a higher market today. Shares of Toll Brothers have been down all day, toe th lets get over to diana olick who has the numbers with the shares down 8 and more on how the tax bill could impact it diana . Kelly, the luxury home builder missed estimates on revenue and earnings and had the slowest order growth in six quarters its benefiting from a mix of sing singlefamily homes, socalled cityliving condominiums and luxury rental parentapartments average sale price of homes, theres a lot of questions on todays analyst call about the republican tax plan. The toll ceo did not seem to have a problem with it he noted both pluses and minuses for home buyers, and then called the bill a wash. Hes customers are driven by the taxes they pay when buying a home most interesting, though, he disagreed with several studies claiming home values in states like new york and california would drop if there were no property Tax Deductions or a cut to the mortgage interest deduction. I dont think any changes in this tax code as proposed by either the house or the senate will have an impact on prices in california supply of houses is still very low. Land is very hard to get titled. Our buyers are very affluent and our business has been very good over the past couple of months as theres been a lot of headlines about this tax reform. Yearley added that sales in california continue to be strong, the strongest first week of december ever, he said, and toll is expanding communities in new jersey where the tax hit could be hardest back to you. Yes, were aware. Were aware of that i mean, diana, who else i saw some estimates, like, i dont know where they had come from, but it might have been the realtors, might have been toll, they thought the hit from this bill could be 10 of property values, up to 20 in places like new jersey whats the thinking on that . Look, there are all kinds of studies throwing out all kinds of different numbers at this point because we dont know what the final bill is going to be. The question is really going to be demand, not just demand but also will homeowners want to stay or will they want to sell and how will the financing of housing now play into the inventory problems so if people arent moving, not selling their homes because theyre afraid of being under the new tax plan, then that will slow down inventory as well. If people arent buying because they feel that they cant afford it or feel that its not a good investment, then theyre going to stay in rentals longer and thats not going to contribute to the housing economy so, again, you know, you have to wait and see where this bill ends up, but you cant put a number on it at this point is what im saying. The keyword you said is investment with all due respect to doug yearley, smart guy, knows his business to say the people can afford the higher priced homes hes building dont worry about property taxes and things like that, i mean, it makes it less of a good investment sure, they can afford to pay those property taxes choose not to. Exactly increases the price of the home increases that investment, yeah, it makes them pay more when youre talking about that 800,000 price point, maybe you have a 600,000 mortgage, youre just above that limit, if they do clip it down to a 500,000 cap on the mortgage interest deduction, its still going to cost people extra money. That just adds to the price of the home just simple economics. Yeah. Diana, thank you diana olick. 14 msinutes to go dow down 111 points. Really tipped lower in the last hour or so here. The s p down nine. The nasdaq only down five points the russell down 13. Lululemon reports earnings tomorrow after the bell. When we come back, were going to debate if the trendy athleisure company established a good enough longterm plan to differentiate themselves from the competition. Theyre all suffering right now. Stay with us fly me to the mn and let me play amon ding bell mnemonic win an uncertain world . K predictable income pgim sees alpha in real assets. Like agriculture to feed the world. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over 120 billion dollars in real assets. Partner with pgim. The Global Investment management businesses of prudential. Feel that . Thats the beat of global markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. All right. The selling has picked up. Heres why art cashin stopped by and said the mashlgrkets show an imbalano the 2. 2 million. Big numbers. Down 127 a moment ago on the dow and major averages continue lower as well. Of course well see what happens in the next 11 minutes. Meantime were looking at lululemon, set to report its earnings after the bell tomorrow its been up 8 over the last three months is the stock a buy for investors . Joining us right now, our bull, siemian siegel, and john morris from bmo Capital Markets is our bear today. Yes. I didnt even see what the stock ee stocks doing right now. Have we hit your price target . Across retail, its been interesting youve had this perfect confluence of events whether its weather and the tax. Just taking the entire retail space through the races into year end weve had a nice lift. So youre our bull here, siemian, so what is the positive case for lululemon we mentioned its up 8 the last three months right now what do you like about it . Athleisure suffered as we know. Interesting, its different than most athletic companies, nike and under armours of the world. Lulu has their own, their own stores and those stores are growing their sales. That puts them a little more in control. Take the brand equity and the fact theyre comping on their own sales, makes for a nice story. John, what about you . More cautious here well, yeah, i mean, im just wondering, you were asking if its going to hit the price target think it i think its fairly soon going to hit my price target in the mid 50s. Mentioned the stores, i think thats also a little bit of a problem. Theyre very well mature and saturated in north america mat means future growth has to come from overseas or the men ice busines business executing well on mens. Its riskier looking for the growth coming overseas and the same time, you have new headwinds coming in now where you got a trend shift away from athleisure going to denim and dressup and more encroaching competition. Gap is gunning for these guys now with its athleta brand all those are really factors that create significant headwinds. So, john, i mean, is that what happened to athleisure, just the customers got tired and went somewhere else, it was a trend, or did they do something wrong here, did they cause their own problems great question. I think its a little bit of a niche within athleisure. If you think about it, theyve done so well in the last five years, you know, the customer size doesnt change when it comes to things like leggings. Theres only so many different ways you can reinvent yoga pants and the quality is really good, so shes got enough he and she both, because they do a good job on mens, they have enough of the stuff and theyre ready to go back to denim were hearing a lot about a return to a new fashion cycle where theres more about dressup, more about maximalism. One thing to throw in there i think is important, were talking about stocks and have this conversation a lot, fundamental sentimental, valuation and what the company is actually doing. You cannot ignore that theyre comping, right, the samestore sales method is the organic the stocks that have run a lot more than lulu has in the past 30 days, its better than feared results, less bad results. What does that mean lulu is actually growing. Were looking for earnings upside tomorrow. We think there will be a nice mid single digits, say 5 . Right. If you dont slow something in or above that range, that puts that thesis into question. Youll start working toward johns price target and bounce back up as people buy the weakness. What are you looking for tomorrow, john well, we think theyll also put up a pretty good quarter, you know, our ears to the rail tell us a lot of it is pretty well expected at this point so i think even if the numbers are actually pretty good, it probably sells off a little bit. Look, longer term, you know, the stocks trading at about a 25 premium to growth. Its got an 18 operating margin its pretty much as good as it gets i think right now but overall, its a good brand you know, its not going away. Its just we think its pretty much priced for perfection near term. Makes for an interesting bull bear, your bulls at his private target and your bear is looking for earnings upside. Yeah. Thanks, guys. Is well find out after the bell tomorrow on lulu. Down 116. Well have the closing countdown in just a moment after the bell today, apple up nearly 50 so far this year, but could the golden days of its reign be coming to an end . Were going to speak to a Portfolio Manager who says you should avoid this stock. Thats still to come on the closing bell. The moment a fish is pulled out from the water, its a race against time. And keeping it in the right conditions is the best way to get that fish to your plate safely. Bacteria can multiply to high enough levels that even cooking it will not destroy all of them. Its definitely the most important thing in my business. How fresh is the fish . Where it comes from . How it gets here. The more i know, the better. Sometimes the product arrives and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. We took our world Class Network and we developed devices to track environmental conditions. This device allows people to understand whats happening not only with the location of that asset, but also if its too hot, if its too cold, if its been dropped. Its completely unique. We ship fish, beef, poultry, vaccines, insulin. This is about monitoring and protecting everything we ship. I catch all this amazing, beautiful fish and then once its out of my hands, i have no control over what happens to it. If you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. Its really all about the network. You are looking at trillions of transactions a year. Not too Many Companies in the world can even scale to that type of volume. Who knew a tiny sensor could help keep the food chain safe . Food has to be fresh. Its that simple. Your new brotherinlaw. You like him. Hes one of those guys who always smells good. His 5 oclock shadow is always at 5 oclock. You like him. Your mom says hes done really well for himself. He has stocks and bonds. Your dad wants to go fishing with him. Your dad doesnt even like fishing. You like your brotherinlaw. But youd like him better if you made more money than he does. Dont get mad at your brotherinlaw. Get e trade. About tree minutes left in the trading session with the dow down 90 points by the way, thank you to those who tweeted us, told us what Andrew Ross Sorkin and Howard Schultz were drinking at the roastery in shanghai, it was beer infused with coffee our intern, it sounded delicious, to kelly and i, not so much. I asked our staff to give us a threeday chart of the dow because youve seen lately that the open, the trend we see in the open, doesnt hold until the close. One day you get a selloff, then we come back, next day you get a rally and a selloff. Today, not so much of a rally, as just a gain we were up about 59 points at the high for the dow today then this late selloff here we are down 95 points we were down 127 at the lows of the session. What we did see early on was a bounce for the nasdaq and the Technology Stocks. They have been suffering quite a bit lately but even that has been eroding here into the close today. The big gainer among stocks today was whats now called delphi technologies. Its the old Delphi Automotive after a spinoff of its active Division Edison International Provides power in Southern California where that horrible fire is raging right now and our thoughts go out to our friends there in ventura and northern los angeles counties where that fire is raging right now. David faber reporting earlier that the fox the talks between fox 21st century fox and disney are heating up. Fox was higher earlier but its succumbed to some of the selling weve seen late today. And disney was the drag on the dow today, bob pisani, down 2. 7 . We have a little bit of a problem. The market has nothing left to rotate into right now. We have failed two days in a row. I want to show you the bank stocks because thats been the market leader. Remember, bank stocks, big beneficiary of the tax cut huge runups, 8 , 9 , 10 . Thats the kbe, big bank index everybody trades down almost 3 from the highs yesterday and we ended positive yesterday, but a big selloff in the middle of the day. Stuff thats been moving rather dramatically last few days, selling off again. Look at telecom. Big moves up again, big beneficiary of the tax cuts if you look at the telecom, s p, there you go selling off. In other words, were reaching the limits of the tax cut trade. Another one you want to take a look at, maybe retail. Thats been another one thats sort of a beaten up group that everybodys been going for is macys worth 10 more than a week or two ago . I dont know but there you see, thats a group thats had a huge runup here so were running out of steam a little bit here and the question is, what do we do now that the tax cut trade is moving on and everybodys stopped buying stuff that had a terrible year definitely a more cautious market right now, that is for sure volume picked up were going out with more than 100 points on the dow after having been up 59 points stay tuned a lot more to come we got some earnings and well find out whats going on in washington on the tax bills on the second hour of the closing bell with kelly evans and company. See you tomorrow, kell thank you, bill, and welcome to the closing bell, everybody, im kelly evans we have a down session across the board on wall street the dow dropping 111 points on the bell just off session lows drop of about half of 1 for the blue chips today that puts them under 24,200. S p 500, broad market index down nearly ten points to 2,629 nasdaq composite holding up relatively much better tech was the only sector in the s p in the green today the nasdaq dropping just about 2 10 of 1 6,762. The russell 2000 the worst performer by a long shot, shed more than 1 today that was a 15 1 2point drop that put it all the way back at 1,516. There you have it, the markets going out closing pretty much near their session lows. We simply tipped lower throughout the afternoon well have more on that in just a moment. We also had Regal Entertainment group climbing more than 9 today on news that british Movie Theater owner c e cineworld is buying it coming up the ce o of amc will join us to talk about that and whether there will be more consolidation down the road. Joining me, Michael Santoli at post 9 along with david from jeffries and cnbc contributor Dennis Burman from the wall street journal joins us today welcome, everybody the big leader on the dow was mcdonalds today the laggard was disney, interestingly. Over in the s p, micron led the day. Edison international did lag as bill was pointing out. Edison down 13 , seen as a victim of those wildfires. Making a slight comeback today, lets look at some of the best performing Sectors Technology up about 2 10 of 1 , mike, which isnt a great move on the face of it but simply managed to buck the triend and reassert what wed seen predominantly this year until the last week or so. The sharp rotation took a pause today, i dont know that it really is over. Its a noisy tape right now. I think with the position were in in terms of the tax cut process, a little bit of the challenges and the clkpli compls are more foreground. As a catalyst, thats set aside. A lot of profits in the growth names, what do we do into year end, why is the long end of the Treasury Curve still so compressed a think a lot of these things can filter into traders mind as we get toward year end on a big year. Dave, youre bullish on the narcotic. I am. For how much longer how much do you see this paradigm playing out deregulation and fiscal policy we had to worry a little bit many the beginning o inning ofr about trade policies and other zrags. Th drags they seem to have quieted down those are two big changes in policy that i dont think were done with. The deregulation trade in particular i think is very exciting corpora Corporate Tax reform, we can talk about in a little more detail but theres a lot of misinterpretation about how positive that could really be without generating a lot of inflation. Thats important. I think youre right. We will circle back to its an interesting point dennis, first of all, big picture on the markets today i mean, again, this afternoon, we saw things kind of take a turn for the worst i dmoeont know how much that reflects issues in washington. Theres a lot of people upset about the corporate amt. Right. Being part of this bill were hearing a little bit of movement on that front maybe not a ton. What do you think . Mccarthys remarks were interesting where he said that he was concerned about amt both on the individual and on a corporate level. So, look, if were trying to assign reason to the way algorithms behave today, thats as good as any, kem lly. We have to take the big picture and the big pick clur says the market has an insatiable desire after an incredible 2017 to keep buying stocks and, you know, im probably a little more pessimistic given that most of it, at least from my perspective, seems baked into most of these stock prices but sure. Look, if it would be very interesting to see if they recalibrate based on the 22 Corporate Tax rate versus the 20 tax rate i dont know if theres enough sensitivity for that should it move back down, that would be an important come collation to be made, a 22 rate versus a 20 rate. In case you missed it, lets talk about what Kevin Mccarthy said, the president said hes confident the tax bill will get passed but concerns over the individual and corporate alternative minimum tax are growing. Chair of the House Ways Means Committee kevin brady was on squawk box earlier today heres how he feels about it. I think both the individual and the corporate amt, its costly, its complex, really on the business side, undermines many of the progrowth and proamerican provisions in the tax code that was kevin brady today. Kevin mccarthy spoke to us yesterday. Michael, the rhetoric seems to be we get it, this kind of came about last minute, we understand the impact and yet its very quiet right now on the d. C. Front. Right the committee is just being composed right now in terms of the conference, but i do think it just sort of brings into focus the tradeoffs, right i dont think anyone doubts somethings going to come out of this i also dont think and, you know, talked about it yesterday, i dont think its the story of 2018 in terms of how the market reprices stuff that will happen and i think it will happen relatively soon then its about how the economy responds and all the rest of it so i think that its not unusual to see some weakness in the stock market in early december, by the way, and so i dont think we should necessarily attribute every wiggle in the market to the market as whats happening. Our inclination right now housing, its so dependent on what are the tax rates people are paying right now, property, state and local, and how much of that is going to be saved or not in terms of a deduction through this bill. Do you have a sense of kind of the risks versus the benefits of this plan . I mean, we did get new home sales data last week at its highest level since precrisis, since 2011 we had a heck of a recovery. I cant imagine that housing is going to accelerate significantly under this tax plan this is not a great tax plan for housing. Its a great tax plan for a lot of other sectors to invest in. But thereat said, i dont think housing istended in a lot of areas youre going to get negatives out of it. Places like connecticut, new york, new jersey, these are going to be very problematic changes special lespecially bec the big property taxes and floridas and nevadas are going to go the other way. So, yeah. Kelly no personal comment there yeah, real quickly, dennis one thing to keep in mind, the housing supply particularly for singlefamily homes is pretty compressed right now. So there is a there is a floor underneath this market simply which is demand and thats a positive right now. I think thats a fair point by the way, thats why it was so interesting Toll Brothers took a hit today. The stock was down 7 after the company missed on both the top and bottom lines they also reported the slowest order growth in six quarters mike, what do you make of this look, heres the thing about housing. The publicly traded companies are really small subset of what goes on nationally, and theyre regional and they have certain tiers of the market they focus on im not trying to excuse these numbers. No, have a very good point there were definitely shortfalls but different brands and localities have different dynamics and thats something where youre not getting a great read on whats happening in terms of housing supply demand strictly often toll is the proxy for the higher end of the housing market. Yes. Is there anything to glean from this miss thats the thing. I dont know how much i want to extrapolate out of this. They attributed it to theres demand side, spupply side, too. Cant make the deliveries, there are a tremendous number of homes not finished because they cant get workers or ordered but not started. TheCorporate Tax plan, you have two recent pieces talking about disinflation risk for the u. S. Economy the first one talking about tech and monetary policy. Of those forces we discussed at length but tell us why you think tax reform, this Corporate Tax reform, if it goes through, will actually push inflation lower. Well, i think its really important to distinguish between individual tax reform and Corporate Tax reform traditionally in a macro model, when you learn macroeconomics 101, cut taxes, people get more money, they spend more money, its inflationary. But corporates are different than individuals you think about where a Corporate Tax dollar gets paid from, it either comes from a shareholder, comes from a worker through their wages or it comes through the people who buy the products the consumer its an accounting identity. Theres only three places it comes from so when you get a tax cut, either its going to benefit shareholders, its going to benefit workers, or its going to benefit consumers. Right now, all of the debate has been about how much is it going to benefit shareholders versus workers right, thats the Larry Summers saying its going to go to fat cat shareholders and john kak r cochran, kevin hasset saying its going to wages. Businesses might use this as an opportunity to lower prices especially as competition heats up because of deregulation and grab more land their shareholders will reward them for having more top line, more growth, more customers in the till, and thats been a trend in a lot of businesses so this tax cut could actually get some businesses excited about lowering their prices to get more consumers in the door. Mike, in an amazon world, lower prices in a way has never been more important. Thats engrained in the corporate muscle memory. A lot of the Research Shows that tax cuts on the corporate level do get, quote, competed away, in this way and i do think that if you also look at the sectors that people keep flocking to to say lets buy the stocks because theyre beneficiaries, traditional retailers, transportation, domestic transportation, shippers, things like that obviously, tease ahese are not g dominant platforms that can say we dont have to pass any of that along. Dennis, is it possible the headline, no the that we ever know in the moment is, you know, gop passes Corporate Tax bill, you know, prices fall at the shopping mall. Youre welcome, everybody. Well, thats many steps away. You know, one thing that i was struck by, i believe its dave, his conclusion at the end which is, hey, we truly do not know the consequences of this tax lets call it a tax law at this point. I think we have to have humility about that, kelly. Theres so many things sure. Whether its around capital spending, whether its around consumer spending, housing. You could go up and down, find ten items in each column for individual and corporate and you can were going to be at such a different place a year from now i guarantee you it is nothing what we expect right now in december of 2017 yeah, im not even sure what to expect. That makes me feel better. Lets stick with retail for a moment Restoration Hardware is out with its earnings seema mody has those numbers seema . Hey, kelly, were looking at shares falling now earnings came in line with estimates at 1. 04 revenue was a miss net revenues increased 8 on top of a 3 increase last year despite an approximate 1 negative impact from Hurricane Irma and harvey. Comps up 6 , which is slightly above expectations, but perhaps not as strong as a beat as some analysts were anticipating q4 revenue guidance is a bit light. That, perhaps, also impacting the stock here but keep in mind, this is a stock that is up over 238 this year its really had a strong run here, kelly. Yeah, its kind of crazy story, seema, thank you. Yeah, down 3 for rh, just like a nonstory. Its been a wild situation. Its been a massive squeeze in part engineered by the company, itself, by buying back a tremendous amount of the stock it was a heavily shorted stock so, yeah, you would say 3 down off a slight guidedown for the next quarter the kind of year they had, if they dropped 50 , it wouldnt even be that extraordinary dave, i dont know if you want to comment on the intricacies of rhs retail policy this is a company thats been trying to figure out what the balance is between getting the consumer in a subscription plan, having prices be what some would say exorbitantly high versus, you know, trying to maintain that part of the market that theyre in its a tricky one. I dont have a lot to say on the individual i do think it is representative of the pressures that all these companies are going to face as competition heats up and going back to our last point, i just think the street has really missed this idea that tax reform could have disinflationary outcomes. Weve been talking about that like its a good thing, in a way it is, but you can also make the case thats problematic right now specialry as the Federal Reserve is already dealing with what they would say is too low inflation. I think its good on the side you dont have the fed meeting to raise rates a lot it may be bad on the side as people see potentially lower profitability or lower competition is going to make profitability a little more difficult to come by one of the things weve seen in this postcrisis period is record high corporate profits as a percentage of gdp. A rot of that is to big barriers by the way, if you right about the effect of this lowering prices, people should be selling the banks, not buying them because it means Interest Rates are not going up because inflation i know im jumping a you also get multiples higher, a lot of we could keep going back and forth. You could hit the tennis ball, ill hit the tennis ball lower Interest Rates, better multiples. Well call it even at this stage. Still be a benefit. Dennis, last word to you. Oh, well, i think a massive jolt here from the tax plan is going to have sort of an appreciable effect on the stock markets perspective, quelly, but, again, comp competing in a way, changes that we cant foresee. Its going to be really interesting next year and mikes got some really good points about the economy. Were going to get a big jolt then its like, okay, can this whole thing perform . Its like drinking a big slushy or slurpee then trying to go out and run a marathon i think ill take your word for it. Thank you, guys. Dennis burman, david, for joining us today interesting stuff. Appreciate it. Apple shares are up nearly 50 this year, but our next guest says investors should avoid the stock right now. Shell explain why and which contrarian plays she likes instead right after this. Plus well talk about consolidation in the Movie Theater industry and whether star wars will help give hollywood a yearend gift when we spoeak excuslusively to the of Amc Entertainment. We want to hear from you, share your thoughts on twitter, facebook, or even over email. Youre watching cnbc, first in business worldwide we know life can be hectic. Thats why at xfinity weve been working hard to simplify your experiences with us. Now with instant text and email updates youll always be up to date. You can easily add premium channels so you dont miss your favorite show. And with just a single word, find all the answers youre looking for. Because getting what you need should be simple, fast, and easy. Download the xfinity my account app or go online today. Welcome back tripledigit drop in the dow today. It was down 109 points on the bell thats pretty much near the session lows a lot of that, as you can see, in the intraday chart, a lot of the selling pressure really came in the last hour or two. Half per certainty rop the russell 2k small caps down is today. Dave and busters reported some earnings. Seema mody has those numbers now. Hey, kelly, despite the negative impact of the learns, dave busters, 29 cents versu the estimate of 24 cents revenue slight lly lower at 250 million. The estimate 256 million. The company saying our team pulled through remarkably well in the face d challenges in the quarter and difficult compare sns to last year the company is cutting its fullyear revenue and Comp Store Sales guidance citing the hurricanes and poor comps as well although i will point out also initial guidance for 2018 is in line with expectations the stock up nearly 5 here. Kelly . Yeah, nice little bump there. Thank you, seema shares of apple up more than 46 this year. But despite the stocks strong run, my next guest says to avoid it joining us now to discuss, Portfolio Manager at Ariel International fund and global fund thank you for coming back to post 9 great to be here. Why no apple . Well, as you know, i tend to be a contrarian. Yes. And an independent thinker. I think that i look for the lonely trade because it tends to be the more profitable trade apple has suddenly become a very crowded trade, very much a stock in favor i think i always weigh risk and reward and a lot of the reward is priced in, but the risks are not priced in. That bothers me a lot. What are the risks you see for apple . Well, quite a number of them. First and foremost, i think its a misnomer to think of apple as a Technology Company its really a consumer electronic company, and in Consumer Electronics as weve seen in many other before, they tend to be product hits or misses and the iphone is a big contributor to the earnings of this company, and its pretty much tapped out. And i think thats a very big risk the market is not focused on. You say, its interesting, part of the skeptical case on apple for a long time has been the company gets Something Like 100 perhaps of Global Smartphone handset earnings. Earnings. Right i mean, nobody else in the industry earns it, yet theyve been able to maintain that, been able to maintain pricing so you dont doubt that perhaps its going to follow the rules of earlier Consumer Electronics leaders . No, i think, in fact, its likely to very much follow the pathway of other consumer election tronic electronics companies, whether nokia in its heyday. Look at the pattern of market cap rallies of the companies during product hit times, they tend to shoot up a lot and to throw out balackberry, which we dont remember anymore, i think the iphone is kind of there at this point i think people fail to see the aftermath, when the shine comes off, youre pretty much the peak of penetration even apple admits to that. Theyre actually looking to upsell their existing customer base, existing instore base tair n theyre not looking to get new customers. Speaking of contrarian calls, you say in a way you like the space, you just like the verizon play on it or china mobile, for example. Why a verizon . Well, quelly, i think that people are so fond of using their Wireless Phone that they tend to favor apple which clearly makes it i think you should look elsewhere. Ju in the telecommunications industry, scale and Network Quality matters a lot. Around the world, actually, in the global ones we own, that i manage, we own a number of companies which gives them the leading market share, the best economics of the business. Verizon happens to be that in the u. S. , so does china mobile in china and Many Companies of that entity, dokomo in japan, we own all of them because telecons in my view are the new consumer staple we can do without shampoo, not a smartpho smartphone are you not concerned the u. S. Carriers want to get into the Media Business very aggressively they seem to think their core business is zbogoing to be toug for a while, therefore, they have to buy at t time warner. A trt t made its move, time warner going in a we choose verizon over the other alternatives youre absolutely right. Im not arguing that theyve got heavy Growth Prospects i am arguing theyve got much more steadier Growth Prospects and thats in the valuation. Its a tradeoff between what are you buying and what are you paying we with have to go, but could i extrapolate out and say overall you think beware of the big tech momentum plays for the year and you like this rotation that people are maybe making into the beaten down parts of the market absolutely. I think that the days of owning heavy growth at heavy valuations are behind us. Now its time for value and in particular, Intrinsic Value which is the kind of investment idea i was giving you. Your chips are placed there rupal, well see what happens. Thanks for joining us. Thanks. Sources telling Cnbcs David Faber that a deal is near for fox to sell assets to disney hes going to join us next with the very latest details on this one. And speaking of disney, were just over a week away from the release of the latest star wars movie. Will the last jedi be as much of a force at the box office as the Previous Star war films . le. Se adam aron to explain how much the box office is betting on another hit from a galaxy far, far away. 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. We have another earnings alert, lets get back to seema mo mo mody. Take a look at this stock, aerovironment. 29 cents the street was expecting a loss of 6 cents revenue at 73. 8 million intervinte, this a company that specializes in Unmanned Aircraft systems. Tactile missile systems. Drones among other products. It has a market cap of about 1 billion and shares here are up over 19 here in extended trade. Kelly, back to you thats a big one. Seema, thank you seema mody. Time for a cnbc news update, lets get over to sue herera sue . Hello, again, kelly, hello, everyone heres whats happening at this hour Senate Republican leader Mitch Mcconnell says he believes roy moore would face an immediate ethics investigation if elected to the senate. This in the wake of multiple allegations that moore engaged in Sexual Misconduct with teenage girls when he was in his 30s. There has been no change of heart. I had hoped earlier he would withdraw as a candidate. That obviously is not going to happen if he were to be elected, he would immediately have an Ethics Committee case, and the committee would take a look at the situation and give us advice Richard Cordray who resigned last month as the director of the Consumer Financial Protection Bureau announcing hes running to be ohios next governor he made the announcement just outside of columbus in his hometown city of grove city. And the International Olympic committee has banned russiasolympic committee from the south korean winter games next year. After the prolonged doping scandal russia was involved in some russian athletes will be allowed to compete under the tag of olympic athlete of russia and day are vowing to appeal that is the news update at this hour kelly, ill send it back to you. A major blow for russia. Absolutely. Sue, thank you. You got it. Sue herera. Lets take a look how we finished on wall street today. As we mentioned a big decline, dow dropped 109. A rot lot happened during the lt hour s p down nine. Russell down 15. The worst performer. Nasdaq, moderate decline of 13 points lets get to the other big stories today in our rapid recap. Cineworld, not agreed to buy Regal Entertainment. At the starbucks shanghai, the largest starbucks roastery in the world theyre opening day. Took us 18 years to get to 10,000 stores there the u. S. I think in half that time, well have 10,000 stores in china. Theyve been here for almost 15, 20 years you do not see them here anywhere. Because because i dont think they can populate here. Its the market maybe ten years, become big again. I mean, china, but you should have a patience, great people, good services. About one month after we first reported on those talks between disney and fox, time for disney to buy largely all the entertainment assets of 21st century fox. We can tell you now they are closing in on a deal that could be announced as soon as next week both the individual and corporate amt, its costly, its complex. Really on the business side, undermines many of the progrowth and proamerican provisions in the tax code america need a couple things, one is a more competitive Corporate Tax rate thats in the bill secondly, a territorial system so people can operate in a Global Economy and not have the different american systems versus all the other systems operate. Thats in the bill and good for corporate america. I dont know, is it just me or does it feel like theres a little bit of a log of momentum here with the bill all of a sudden that day better get this conference thing up and running pretty quickly. Theres definitely loss of momentum, a lot of things in play still i mean, you had this sense that, you know, in the wee hours over the weekend, that hay hthey had kind of closure on it. Par from the case. By the way, theyre operating on their own selfimposed deadlines. Nothing says this has to happen at any given moment. It makes it seem like theyre late because its not done yet. Probably lep helps speed it along. Selfimposed deadline. Same with the shutdown well hear about that in the next couple days. Time for the takeaway today. We begin with news that dish ceo Charlie Ergen is stepping down as ceo, anyway, but hell remain chairman of dish and be focusing his time specifically on the companys wireless business. Dish has a good amount of spectrum but hasnt done much with it yet. Theres been plenty of deal speculation lately, though what kind of entry into wireless can we expect from dish now . I guess this is what we has to figure out. I think whats changed relatively recently, of course, it was supposed to be some deals in the industry, sprint tmobile, not going to happen also theres a use it or lose it provision when it comes to spectrum by 2020, they need to have a substantial buildout of Service Using this spectrum, or they might have to surrender it its a matter of get a plan together, figure out who might otherwise want to buy it or partner or Something Like that. He stepped down as ceo in the past for a few years. Thats right. Stepped back up. I dont think the market said, oh, no they probably said oh, good. Next, if you cant beat them, well, news corp. Is launching its own platform ad network that will allow advertisers to reach audiences across its Online Properties that includes the journal, and the tnew york post, for example. Its pitch, advertiser can trust news corp. s content so is news i. Q. , what theyre calling this platform, michael, a facebookintended to be its a Walled Garden for their own brands, govern where it goes making a utility, Digital Utility like youre used to using as opposed to salespeople from the flonew york post. Is every advertiser convinced by their argument that they can trust the might be thinking twi thats the question, whether, in fact, the content, itself, is going to be withheld from the ecosystems of facebook and google i think thats early to say. The problem is everyone would like to be able to do this, but its just so impossible to forego the volume of eyeball s n facebook and google. Mcdonalds dollar menu is back, sort of, theyre technically calling it the 1, 2, 3 dollar menu. 2 will get you sting like a twopiece tenders. 3 will buy you a happy meal mcdonalds axed the actual dollar menu several years ago to see wendys win customers over with its popular four for 4 offering shares of the fast food chain up more than 1 today, it was the best performer in the dow. Now, listen, if youre going to do a dollar menu, just do a dollar menu. Do you think this makes sense for mcdonalds i think these are table stakes in terms of how you have to operate right now my window on this is mostly kind of seeing the ads while you watch a game or Something Like that kfcs got its own 5 thing, talking about giving them as gifts for christmas. Obviously, you have to i still am trying to get my calories per dollar index. For fast food. Because i think especially if never been higher. You want the most bang for your buck. Im not saying i want it, im saying this im saying i want it. The way the industry is set up, it keeps delivering you more. I think thats a great point. Up next, Amc Entertainment ceo adam arotes n llus how important next weeks release of star wars the last jedi will be to the box office stay with us is the monolithic view of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Talk to one today and see why were bullish on the future. When trying to save for the big things in life. We tend to start small. Less of this. Cut back on that. But if it feels like a lot of effort for a little gain. Change that. Start with something that makes a big difference. Your student loans. Refinancing with sofi saves over 22,000 on average. Its an easier way to reach your life goals sooner. Weve helped over 195,000 people. We want to help you too. Find out how much you can save in just two minutes at sofi. Com save our david faber reporting disney is near a deal to buy some of 21st century foxs assets see the shares of disney actually down nearly 3 . One of the worst performers in the dow today. David joins us now with the latest on this potential deal. David . Thanks, kelly interesting Performance Today on disneys part. You know, yesterday of course the stock as you well know was up sharply the deal under consideration would involve them issuing an awful lot of shares, perhaps the prospect of that is somewhat worrisome to investors out there given the supply that would be coming on to the market. The deal, itself, though, as we reported this morning, is getting closer both sides as i said closing in on that transaction under which fox would sell four disney stock and the assumption of debt assets that include the 21st Century Fox Studio the fx and natgeo Cable Networks the Star Distribution platform in india its 39 ownership of bskyb, or sky. 30 ownership of hulu and very importantly, the Regional Sports networks fox would be keeping, as we report eed when we first broke this story on november 6th, its news channel, its fox business channel, its overall broadcast network, and its foxsports network. But all those other assets add up to a big number, in fact, people familiar with the situation tell me it would be more than 60 billion in enterprise value in other words, the debt that would be assumed by disney and the stock it would exchange for those assets would equate to more than 60 what the actual price will be, hard to know, though, it does appear theyve made great progress in the last couple of weeks toward a deal. Again, there is no certainty that they will announce the deal could be as soon as next week as i reported earlier but you never know until you actually see that press release announcing it. How would it all work . What would the structure be . Again, weve been reporting this for some time. Namely, you would get a share of the remaining fox assets, and then remainco would be everything being sold to disney for a fixed ratio of disney shares so if you were 21st century fox holder, youd get one share of this new company that is actually fox business, foxsports, fox broadcast, and the fox network. And you get a proportionate share of disney for all those assets being sold. It would be a taxable transaction, but the price simply may be high enough that it is in the murdochs interest, kelly, to move ahead with the deal regardless. They do continue to have at least intermittent talks as well with our Parent Company, comcast, though that deal is seen add less likely in part due to antitrust concerns. Back to you. And i looked at those comcast shares, david, they were down about 2 today i know they wanted more of the International Assets how much of this also is about hulu and the importance of maybe doubling and having a majority stake in that platform Going Forward . You know, there is no doubt that that would be an important element of a continued strategy that disney is now embracing to go direct to consumer. How we would play to that is unclear. They would own time warner on 10 , they would own 60 although there may be accretion rights. They would potentially have control of hulu. When we reported previously when we first reported on these talks roughly a month ago, the direct to consumer offering, the entertainment offering that disney is rolling out in 2019 would certainly be bolstered by all of the projects in the content, the ip as they like to say, that they have at the fox studio not to mention the allsports direct to consumer offering would potentially be bolstered by these Regional Sports networks which could garner a price tag of roughly 20 billion at least based on 1. 8 billion in ebeda we believe they tributed overall, kelly. So the numbers get pretty big pretty quick it could be as we said a fairly monumental deal both in size, scope and Strategic Directions for both companies yeah, id love to hear the companies, themselves, lay out, you know, sort of their next steps after this if it does happen, but well wait for that. David, thank you great stuff. Great reporting in the meantime. Thanks, kelly. David faber. The marriage of the disney and fox studios could have a big impact on the movie business joining us now in an exclusive sboer vi interview, adam aron, ceo of Amc Entertainment. Hello again. Kelly, nice to be back with you. Good to see you lets start with this news if you all of a sudden have the number one, number three studios combining, disney is already trying to yank a bigger share of the star wars profits from you guys than normal are you worried theyre going to shake you down together . Oh, no the in the leat in tht fox studios and disney, were the closest of partners, highest respect for executives of fox, executives of disney our partnership has been great they provide us with great product and talking about the acquirer, disney, our relationship could not be closer as they have turned out hit after hit after hit, amc has made a lot of money partnering with disney studios. Yeah, disney for sure seems pretty wedded to this theatrical window for its big ones, adam. I wonder if you can turn maybe to the other big story today, the acquisition of regal, and in particular, a lot of folks doing the math and say the valuation that regal sold for implies really significant upside if you look at your cash flow multiples. What do you think you might have to do to try to bridge that gap . I mean, theres been some talk of an ipo for europe business and things like that well, you know, we started this trend in 2016 being a global acquirer, becoming the largest Movie Theater chain in europe now were seeing it come home the other direction. Cineworld of the uk is acquiring regal. One in belgium is acquiring l d landmark of canada there must be something in the water because weve been approached on six different occasions in the last 90 days for people to make Major Investments in amc or to buy a significant chunk of our Theater Network from us. I think thats because what you just said, i believe our stock is terrifically undervalued. Weve been saying that since the summer and i think youll see when people realize what regals value is, theyll also see what amcs value is we are the largest Movie Theater chain in the world by far. Were bigger than regal in the united states. Were bigger than cineworld in europe combined, we are bigger than regal and cineworld combined. Yeah. We are talking about an ipo in europe on the london Stock Exchange for our European Assets but i think this is a good news story for amc. Were showing the shares down about 42 the last six months. We talked about some of the weak box offices this year, adam. Im wondering if its your chinese ownership, does that create a hurdle for anybody whether its a potential acquirer or investor, to mikes point, who kind of would like to realize a better value for their investment well, lets go back to the share price first. Yes, our stock is down this year and that is of great concern to us we think thats because the bear case that was made over the summer, when hollywood admittedly had a fourmonth slump when they werent turning out hits, our shares were hurt actually the shares of all exhibit ters were hurt. He said back in july and august, wait until november and december and youll all be talking about the miraculous recovery of the Movie Theater business well november and december have come november was a big increase year over year. It looks like december, thanks to star wars, is going to be the biggest december in the history of movies. Our stock has risen by 33 just in the last month. And specifically with respect to our chinese shareholder. No, i dont think thats a concern for our share price in the u. S. I think the Industry Box Office is a much larger issue amc is perfectly poised to take advantage of a growing Industry Box Office and thats where we are now. Thats not where we were in july, august that is where were going to be in 2018. The movie slate for 18 is fabulous. Quickly, cineworld cinemark, im getting them confused, cinemark announced a plan thats modeled an moviepass. 8. 99 a month, get a break on concessions, the tickets are cumulative, if you dont use them one month, carry them forward and so on. Is amc going to respond . Obviously were aware of the nounsment and are watching and will be watching our quick initial take, its not as compelling an offer for the consumer as you might think. When you put it up against our amc Stubs Program which has quadrupled in membership over the last year, we think we already have a great offering. But we have no immediate plans to match the cinemark offer today. All right adam, thank you for joining us today. Always good star wars, everybody. Star wars. December 15th. In a theater near you. Yeah. Yeah we all know, trust me. Adam, thank you very much. My pleasure. Adam aron we have a news alert on the cvs aetna deal lets get mody. Representative requesting a hearing to be held on cvs acquisition of aetna for 69 billion. Pallone, a democrat, says the deal could create a new frontier in American Health care delivery with significant potential for benefit or harm to consumers across the country aetna and cvs are not moving on this report, but, again, interesting to see washingtons response following that deal being announced yesterday. Back to you. Yeah, they want to see if theres more pushback to what is frankly a vertical merger. Seema, thank you. Millennials are leaving their desk jobs to grow organic food whats getting young people out of the office and on to the farm were going to find out coming up es so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from Td Ameritrade. I used to have more hair. I used to have more color. And. I used to have cancer. I beat it. I did. Not alone. I used to have no idea what the American Cancer Society did. Research . Yeah. But also free rides to chemo and free lodging near hospitals. I used to maybe give a little. Then i got so much back. I used to have cancer. Call 18004944357 today. Your contributions to the American Cancer Society fund valuable research. But thats just the beginning. A cancer diagnosis can kick off years of challenge. And thats where your donation truly shines. You help us fund free rides to treatment. A live 24 7 help line, free lodging near treatment centers. And even efforts to expand access to insurance. So, please donate today at cancer. Org and help attack cancer from every angle. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley from fox to netflix to the weinstein company, the Sexual Harassment claims have massive costs. Were going to break down the dollar numbers and millions at risk next. Coming up fast money the former ceo of meho depot says theres one retailer than can hold up to amazon. Bob nardelli will reveal the names. Welcome back shares of Amc Entertainment are moving higher. Just after hours here, we spoke to Ceo Adam Aron and he told us the company has received six approaches for investment. Investors like what they heard and shares are moving higher, 3. 8 former 70s show star Danny Masterson was fired from his show the ranch. Hes the latest media figure to be put at risk because of sexual behavior Julia Boorstin is here to break down how much their actions can cost their companies reporter kelly, every company in the media has been hit by Sexual Harassment claims. The costs are adding up. Masterson is just the latest in the streaming video space. Netflix announced it would make a shorter season of house of cards without kevin spacey, the show that put netflix on the map. Netflix has pulled the gore vidal biopic starring kevin spacey Amazon Studios fired its Top Entertainment executive roy price and three of his top lieutenants have been fired or left, forcing a total overhaul of that streaming Video Division nbcs today show and cbss this morning were hurt by the scandals fox has paid 90 million in settlements so far that doesnt include the cost of losing bill oreilly advertiser boycotts are 40 million in severance to roger ail ailes. The loss of onair and executive talent has raised investor concerns about the networks ability to maintain momentum the stream of accusations and the fallout doesnt seem to be slowing down, kelly. Back over to you maybe the least nbc can say is its not paying matt lauer out. Reporter thats true, theres a lot of attention to how much people are getting paid to leave, that was a question over at fox. But nbc has been clear that theyre not with matt lauer. 30 million, added all up julia, thank you very much Julia Boorstin millenials are being put out to pasture its about time. No, its about farming how 20somethings are disrupting the agriculture industry, next ronoh really . Gs going on at schwab. Thank you clients . Well jd power did just rank them highest in Investor Satisfaction with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to Wealth Management. Right in the heart of the was in his financial crisis, and saw his portfolio drop by double digits. It really scared him out of the markets. His advisor ran the numbers and showed that he wouldnt be able to retire until he was 68. The client realized, i need to get back into the markets i need to get back on track with my plan. The Financial Advisor was able to work with this client. Hes now on track to retire when hes 65. Having someone coach you through it is really the value of a Financial Advisor. The face of farming is changing, as an increasing number of millenials are becoming farmers theyre interested in organic food and Sustainable Practices their choices are making a big impact on Food Companies aditi roy is live from california thats a lovely image, with more hi, aditi. Reporter hi there, kelly were here at a farm in california this farm is owned by chris hay, hes 34 years old. He went from a desk job to becoming a farmer. I enjoyed being outside, i enjoyed working hard i enjoyed working with food. All of those things just kind of meshed into, why not try farming . Reporter and thats what he did. Hes not alone the National Young Farmer Coalition recently did a survey. They found unlike their older counterparts, millenial farmers are more likely to be college educated, use Sustainable Practices, produce organic food, and many didnt even grow up on farms. Organic food sales are hitting record highs, a lot of that fueled by the people who consume that the most, that segment is millenial parents. A new note came out from Goldman Sachs, they found that millenial consumers should drive the entirety of the industrys growth in the next decade. Among those stoking that trend is kimball musk, elons brother, who has been disrupting farming through an urban farm accelerator. I think the interest thing for me is the demand for millenials to be a farmer. Thats really quite profound reporter and his farm accelerator is called square root, based in your neck of the woods, kelly, in brooklyn. Theyve received 1100 applications from mostly millenials to work on tent farms. Back to you. A friend i grew up with is now running an organic farm. But not in brooklyn no, in virginia aditi, thank you its true, the funny thing is only millenials could make this seem so precious, the way its being described, its like, okay then this musk angle it has to be part of a movement, it cant just be i like to get dirt under my finger fail nails. Exactly, although thats part of it. Musk is funding an incubator for farms, this is blowing my mind the generalization that came of age when we thought that civilization was threatened by the world financial crisis, we were going to have to grow our own food as a new homeowner who releases i have no skills, this is not the worst thing maybe it helps to do a few things around the house. Maybe it helps in the garden in the winter when the ground is frozen ask your friend in virginia i live from the Nasdaq Market site overlooking new york citys times square im melissa lee. Im scott walker in tonight for melissa lee. Our traders on desk. Tonight on fast, Retail Stocks are in the midst of a major come back can it last . The former ceo of home depot, bob nardelli, says something has changed for retailers. Hes here to explain plus disney and fox could be very close to a media deal which media stocks will be next . The traders have one name in mind later, one of the biggest bitcoin bears on wall street, dennis gartman, is here. Hes got a big warning for re
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