Transcripts For CNBC Squawk On The Street 20171219

Housing startswere pretty soli this morning roadmap begins with that record run for the markets. The dow has now closed at a record 70 times this year. Will the rally push through year end amid turmoil in d. C. Speaking of records, the nasdaq breaks through 7,000 for the first time were going to take a look at the names driving that index higher. And downgrade for apple has the stock down slightly and hot holiday item that is sold out. Weve got the latest first up, futures are on the rise after another historic day for stocks, including the dow posting the record close of the year the house is expected to vote on the tax reform bill later on today. Looks like pretty clear sailing and Senate Begins a mandatory debate but pretty much with colins and corker and lee, this thing will get done. I think that people are driven by estimates. And i had United Rentals last night. United rentals immediately gets more cash. What are they going to do . Put more people to work, buy back more stock. When you ask people what are they going to do Ollies Bargain store, the Fastest Growing knockoff retail chain, what are they going to do they are going to build more stores and put more people to work there is this kind of very cynical rap, they return to capital. When you speak to these domestic companies, they are first of all shocked. They didnt see it coming. If youre a retailer youre going to open more stores if you think theres an opportunity to make money from doing so, right . Not necessarily just because great point the Regional National chains, a dollar tree, a dollar general. In retail, i find even that idea hashrd to imagine. That youre going to expand as a retailer. Ollies bargains in 20 states its a job lot remember consolidated stores its one of these placescter h product. This accelerated their buildout. If you already are like home depot everywhere, its going to be interesting to see what they do. I keep coming back to this idea that there has not been an inability to Access Capital for most corporations that those who want to expand with record profits and cash flows certainly had the opportunity to do so amidst record low Interest Rates for a long period of time. Youre only going to do it if you think the Market Opportunity is greater than it had been previously its not going to be about the money because the money has always been there. Youre absolutely right i mean, thats why United Rentals is in a lot of the country and they want to expand. Remember, theyve got to buy stuff. You know what we dont talk about enough, the expensing, the expensing of machinery i mean, that is going to most people looking at this say that is the biggest immediate bang thats what were going to see first. I wonder why the industrials are doing so well and machine stocks, because they are predicting that. David, you are absolutely right, if you dont some anythisomethio do with the money and already been able to borrow overseas, it is probably going to come back in the form of dividends and in the form of buybacks. The president for his part this morning, few hours ago says stocks and the economy have a long way to go after the tax bill is totally understood and appreciated in scope, immediate expensing will have a big impact and then goes on to say create many beautiful xbrobz. The point is it seems to be that were not truly appreciating whats about to happen. I think that a lot of companies didnt know to truly appreciate it. I think that darden report ted a good quarter could they do more Olive Gardens . No, but they have a lot of other concepts that maybe they could build over the country its selective, lets not forget this is indifferent to where the money goes he believes if you buy back stock, thats positive. Right, i mean, thats what others will say, it doesnt really matter at the end of the day, it ends up being in peoples pockets in some fashion and it will be spent i dont know if that is the case and there are certainly plenty of critics who would say otherwise and this will not in any way including all of the economists who weighed in, never had hearings, actually increased gdp anywhere near where they were i think they will increase gdp, i really do i think more money im kind of a reagan backer here and i liked reagan very much reagan said if you get the government off the backs of the people you get that money in the hands of people, they do far more now, do they do far more for the poor do they do far more for the working poor i think the answer is no i never believed in triple down. What they do is they make it in combination with deregulation, easier to do a project now, is the project going to be pipelined out of the permeon maybe. If you ask why do i default to United Rentals, not just because it was their 20th anniversary, thats who you use because you cant is a ford to buy a caterpillar truck. And they are saying its a boom in this country. I think were in nonboom territory. I think were in sullen gloomy territory because weve hit every record every single day . Im saying new york, new jersey, if we were doing this show in louisiana, i tell you what, you know what the comment would be, it would be like hey, what new factors you seeing put up today i think were in some world where were like, are you kidding me 55 . I work until september for what i look around here, all i see is cranes also they dont put up factories. Made a big mistakes. Put up a lot of buildings. That is a mistake supply will overwhelm demand if youre sitting on Investment Property in the area people come on the air the beneficiary of this type, we had howard on squawk box your house is a big benefit no not our house. You dont see it the way politico described it as a bill written by senators, largely from southern states, putting a knife in the side of blue states, blue coastal states, you dont see it that way. No, look, am i going to pay more were going to pay more taxes. Were too focused in our own were too focused in our own book if youre in florida where there are just swaths of land, where you can be able to expand as people come down because of what happened, i mean, i think theres going to be not a mass exodus, i lived in florida when it was a small state. Now you have such an advantage, florida. When you speak david, you probably dont spend a lot of time in u. S. Concrete. No. Probably not his thing. You are probably in with concrete goulashes, when they went back in time i do remember that one. Cement goulashes but u. S. Concrete is building more headquarters in texas than you would ever believe they are just in california, where there is kind of where you have to go for the jobs, again, those cranes, david. They are putting up buildings because they thought that real estate was going to go up in brooklyn that is ridiculous i got a house next to me valued at 5 million. You know whos tgs it is yes, i do manaforts. He lives next door he doesnt live there. But cleaning it up. It was derelict and driving us crazy. It was like a haunted house. I love brooklyn youve been all over the place, youve gone from california to texas to concrete to your nextdoor neighbor and im still i dont know. That was anecdotal. Im saying if we lived in texas and doing the show, it would be like so carl, how much did you save yesterday david, what are you going to do with the new found money instead its like okay, are you going to sell . No, i cant, my property taxes are so high, im going to redo my kitchen because well own the house forever because thats how i feel. Okay. Hopefully some of those households own some stock because the nasdaq jumped to 7,000 about eight months after it passed 6,000. Composite notches at 78th all time interday high and 70th record close, just shy of 7,000, year to date, nasdaq, 29. 94 look, the president the previous president always felt that i felt that this is my view and if the market went up, so the rich get richer. I look at 401 k s and say to people, did you see your 401 k lately people used to put it in the drawer and now you say, how did that happen . It happened because a lot of new policies but also because a lot of business the globe broke out. If you look at the worldwide indexes, were not were kind of in the middle of how weve done but i really align tech, invisiline, what is that doing millennials like their teach perfect for the experiential these are nasdaq stocks doing well maybe we ought to nvidia was up a dollar earlier. Do you think if we get this vote in both houses and goes to the president s dervsk that we sell what people say are overbought conditions and the disconnect between our market and global markets. Yes, i think we should sell off a little because in the end this is a runup where we finally do recognize what happened theres nothing past it other than santa santa weighs in. Love santa. You love santa . Sure. Finally found something i agree with. Other than discovery is an inexpensive stock. You think it is john malone has been buying it i saw your interview. Buying a little bit it went up the last couple of days. Stop being so sardonic. Im going to see hamilton for the second time. Better the second time. He did. Hamilton, we forget, this is a hamiltonian rally. Except that hes the reason the Financial Services business is in new york city. He was a new york guy. I know the Second National bank was second to pop in philadelphia it is a rally based on true mercantile he didnt like the debt and we got a lot more debt. But i do think that this is a rally that is based on Capital Formation ever capital and i think it is positive theres more capital being created. This is true. This is a tax bill for capital holders, no doubt about that. Its a pro capital, not pro labor. Hows that . Still to come this morning, one ceo not pulling punches when talking about the boost his company is going to gets from the bitcoin boom find out what he says is insane. Got big calls on apple, walmart and gm and coors and putting in order for tesla sem, ene m iswhw come back. 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. Apple is moving lower in the premarket. The firm believes gains related to the iphone 10 have been priced into shares of the dow component. Best buy, and target and walmart, apples online source says buyers can expect delivery in the first half of january the nomura call says the super cycles in the late theres nothing to flount the trend of 30 to 40 intercycle downticks. I think any close reading of the previous quarters transcript would directly contradict this. Theres nothing in here that i see as new in the sense of the doubters of the Service Revenue remain steadfast, its not an important thats wrong. The doubters of significant upside next year i think theyll be wrong i think you own apple, dont trade it this kind of research and i have nothing against jeffrey who wrote it this is the kind of research that got you out of apple at 100, 110, 120, need i say more when you read this kind of saying heres the deal, then you get on the Conference Call and saying, why did i sell it . What was that downgrade . What was that about . Theres a notion here that if you get this kind of 15 times multiple 15 multiple equals super cycle highs the iphone peaked at 13 times, this time cant be different you know what . Lets think about that should you have bought apple when the iphone 5 came out was that a mistake was it a mistake if you sold it off the iphone 5 how do we calculate, david do we look at the stock price . Should we think about something more ethereal like the i dont know, emotions to earnings ratio. Once again i find that this is the kind of piece that will drive you nuts and out of the stock. Stock could be sick lickal once again in this cycle i think theres an Service Stream underestimated and i think china is coming back we forget about the power of india. I think theres share take whenever phone komcomes up theya take and i continue to believe you know, this is also a gdp play at this time, gdp play. Look at carnival thats a gdp play. Fantastic numbers, also experiential my daughter rebrands herself on a cruise millennials rebrand constantly i look at this, this is taking into the account that Many Americans just got a break i mean maybe iphone sales will be weaker in new york so i can get one for my wife. I think youll be okay. Im going up to the 75th, do you think they have 10s. I dont know. I hear you cant get them in time for the holiday. I doubt it, at this point too late what do i do, give her a box and say its coming. Its coming thats really a great gift, isnt it ice always works, every kiss begins with kay, jared. Get her hersheys and whatever, put hersheys in amplify. And throw in a ring. Youll be fine. How about cocoa puffs with a ring. How about cocoa puffs in general . I think they took the taste out. For millennials. I was tricked they took the color out. They had to take the taste out because millennials dont like taste. How could they not . Captain crunch. They dont like anything you like i grew up on preservatives and im fine. You are fine. Right i came out okay . Were going to get cramers mad dash and count down to the opening bell in a minute look premarket, look maybe approach new records but we might be just short of the opening bell were back in a minute thats aeps road to the future. And the International Brotherhood of electrical workers helped make that happen. The ibews Outstanding Union professionals have the skills and training to get the job done right. 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We have less than 8 minutes before the opening bell for tuesday. We want to talk a little walmart. Start with a query. Youve been queriless to me. Do you remember the age of walmart . Yes, i did it twice. Youve got to go back to bentonville. This note today, this is a citi upgrade of walmart they do say home depots run and costco run 20 upside get on the channel right theres a sense that walmart has figured out how to do both offline and online doug mcmillan, mark lori, and what i will say, i believe i believe and i think this stock can go higher because i remember the days when you would look at walmart and be in the 90s and then look at it and it would be the 100s we broeke out of this range its been an incredible year for the stock. He cratered the stock by saying listen we have to family endorses me. Amazon had to get public to raise money. He had the waltones saying go ahead and win. I think hes winning when i go to walmart now, i find it exciting. I find the food section electric i find that there is a feel of Treasure Hunt and you can get things for five bucks that i paid 12 bucks for online its not like where i would go to buy a diamond ring. No, but you feel as though theres been a change. I know theres been a change. Not just in the store but were obviously talking about the omnichannel, jet. Com purchase. They went from featuring two for one velveeta, buy one, get one, to being a fresh food aisle that is second to none second to none fabulous fresh food aisle. Second to none. A 40 up year this year given the markets response and the reset that took place over here. But you think they can do it again . I dont want to say 44 but you continue to think theres momentum i think walmart is i think home depot and walmart and costco are they are the threesome that people want to own because the rest of them just seem like, well, you know what, they have upped their trading stocks, they are trading vehicles this is not a trading vehicle. This is an investment vehicle. Ive been to a bunch of walmarts since the last time we talked about walmart. Wow. I have bought a lot of things i didnt want to buy because i love the price thats a dollar sign. Got it. Get those cement gool ashes off and focus on dribbles. Dont go anywhere. 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. 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It makes sense inexpensive stock for those still looking for stock that hasnt had the next leg up that the caterpillars and boeings have had. Target goes from 51 to 52 they do say a new seat at the table in mobility. Right not a new story necessarily. Sometimes you get a piece that basically says hey, look at me im not an expensive stock maybe you should buy me. I thought this piece was like that. Not the only one. Coors gets a initiative buy price at 69 theres its more a middle innings jimny choo, its rather remarkable the new shoes and boots. The selection has gotten david, you should listen up, the selection has gotten much better. Havent noticed, sorry. Ive noticed and there really is and they do have price points thats smart. Lets get to the opening bell with the s p at the bottom of the screen, it is bank of america and Merrill Lynch and ice, and the recent acquisition of the b of a Merrill Lynch business its the Bone Marrow Foundation celebrating a 25th anniversary we mentioned some of the big earnings tonight, already have darden out. I couldnt believe how strong the same store sales are thats a very good example what im talking about, that people are coming out of their homes and they are starting to go and go out at Darden Darden is Middle America i have no pull at olive garden whatsoever it is disconcerting to me but thats all right, i dont need to get in front of other people. Its a miraculous quarter. Theres a lot good to like that stock can go higher from here. People are out of casual restaurant plays that they want to own and by the way, im shocked that quodoba off the books and jack in the box is up. Thats because people felt it would get 300 million. It got a little more than that from private equity. There was a time when people felt when chipotle was on fire that it was going to be worth more some thought more than jack in the box, that didnt happen. Pay close attention to bonds because i think the bonds are giving you people dont realize, suddenly going up in yield. We need that in order to continue the bank rally, which has been the leadership some people pointed to the bonds for the other reason, saying yields not moving up. You need a microscope. Not the expectation. Although we are seeing were up a little bit 2. 6 was the math gic line. Were seeing old style rally, people are excited about it. Dividend boost and people want to buy it. I think that theres still this notion that fang is dead and youve got to rotate back at all times because fang isie yesterya and people say year over year is going to be phenomenal and fang will be just as good as ever or not enough. What do you make of the journal piece that says some of these tech giants may say their tax bill go up i saw that. Thats going to cause some thats going to be disconcerting. I was in a discussion yesterday with scott wapner and we talked about the idea of what still wor works. I think this what still works issue is rotating into things that havent worked out yet. Gill from jp morgan recommending scripps, thats the kind of thing, thats working. And what is not working is a reiteration that alphabet is going to have a big year but alphabet is going to have a big year i dont want to sell that. Csx has come back nicely from the unfortunate mr. Harrisons death. And railroad the transports which we always look to are just doing so well. Thats a great sign. Fedexreports soon. I want to see micron tonight. Thats going to be important i see the market i see new areas go up and it makes me enthusiastic im not going to say excited because that makes people feel ive got to take down some blockchain. Well, you would have been done well to have thought laugh riot blockchain. You would be laughing. Thats the problem. Right now its still ha ha. For bitcoin, im seeing so many people who made money and i always have to tell them the same thing, you havent made anything until you sell bitcoin. But selling bitcoin is kind of like, its like youre defacing the flag. Right . Its unpatriotic. Do you stand for the star spangled banner . Obviously, theres like this patriotic urge to not sell bitcoin, even though youre up big. One of my friends is a late partner at goldman, he sold some you mentioned it in a National Context because many would argue the greatest strength they have is incredible demand from all over the world and that is what differentiates thismania from the dotcom mania. Thats a good point bought by u. S. Investors here. Its the chinese, its the russians its countries that are unstable with rich people. All over the place. Rich people who are which may mean it goes a lot further for true. Before it finally i think it will but i want to go back to what moves things david, in your world, Crown Holdings, employed a lot of people in philadelphia, buy a Company Called cignode from carlisle for 3. 9 billion and people say, isnt that great Crown Holdings is in the game. They are in the game they are in the game. What did you think of that in your interview any reflections on that . I thought youre referring to rob kindler yesterday, one of key points he brought up which i think is a salient one, all of the cash from overseas will not bring more m and a his point being capital has been available, anybody who could have done a deal it is opportunities. It is a lack of topline growth, all of the things that have been in place. Everything when you hear pundits come on and say cash coming back it would be other things, perhaps more investment, certainly buybacks and certainly dividends, but not going to fuel m and a. Okay, youre closer to it than i am. I spoke with denise yesterday about the campbells deal for snyders i felt great about it. I did not know snyders was number one in pretzels there are no there is no pepsico. Everybody wants to beat pepsico but they are not this was a step forward it takes campbells to 46 in revenues. Campbells soup, the can, down about 25 sfwl other than andy warhol. I dont know who the cover bid was. I believe it was far lower really . Yeah. I didnt know that. Thats interesting, but hillshir brands sometimes you have to do something, you have to pull the trigger and pay the price. Campbells needed to change what people think about campbells if it is, pepperidge farm, very exciting, i remember it. Now im thinking this could be an earnings story out 18 months because they are in different aisles and it makes so much sense. Cape cod and kettle, these are good businesses and they can take them to the next level. So i like that i think that lance may be better than we realize. Im not kidding. Okay. I hear you. They are delicious. Have you had them . Ive had some of their products. They are delicious. Ive had some lance products. Yeah carnival is having a nice morning. They see 2018 four dollars to 430. Among with other discretionary names like harley. Versus the millennial can we praise the management and remember where the cruises go . They go to areas that have been largely unable to come back from storms it doesnt matter. One of the people maybe like one of the best executives since the turn of the century, created a company that we remember as having terrible accidents and now we just think wow, what a great backdrop for pictures. Twitter is giving back some of the gains from yesterday, obviously after five upgrades, jpm, the most recent one. Right. That was a lot of momentum yesterday. Through the day. More than a oneyear high. Once again, i find that if you follow anthony, every time anthony just published has peoplenow the guy is just hes a one man band to be able to move this thing. But i find that its more exciting and i find its less thats always good. Heres a name we dont mention too ofteoften, lucadia, they own jeffries and we focus on them because its been the first of the Financial Services companies to report earnings, which it did and it can be a tell on the trading front or perhaps not as much as in the past because jeffries did report strong numbers, 40 increase in Investment Banking net revenues, this company is the lead are m and a adviser selling companies to sponsors and financing them so financial sponsors, lxts bo, what we would call the lbo guys, private equity and that has become a much larger part of their business which has brought fixed income and equity down to 45 of the overall business if you want to tell from the Capital Markets, strengthen equities underwriting or trading and fixed income trading, jeffries may not be the place to go any longer. Lucadia owns jeffries and that is why it is up over 1 this morning on again very strong numbers, total net revenue, 3. 2 billion. Thats very good. Yeah. Kind of an outliar to some degree. Very impressive. Finally, jim, some discussion about how toys are the weak spot in a good retail season. Toys r us going to shuder more stores. I think thats a good call. When i spoke to Ollies Bargain store last night, its a regional going to national chain, toys are in excess in the system theres inventory in toys. Theres split action on mattel hasbro today. You raise a great point the toy season is not coming together its jst not coming together my father used to sell toys during this period and could never make enough. Its juxst the opposite. A lot has to do with video games which has been very strong really, just what people do. Because when you have that nvidia chip, its very lifelike, you can get lost in it nvidia really fighting to be the n, in fact, yesterday was up six, lets watch that stock. Its been intel by the way is the best of this group these days have you noticed that . Gaming chips . I mean they are doing a lot of different kinds of chips but im impressed what intel is doing. I think mobile eye will turn out to be a good acquisition some people felt they overpaid for that only 550 people there. But you dont believe they did. No. I think hes doing a good job. Talking about brian krkrzanich it hasnt looked so good lately. Well its up its turned again but you can see it im talking about the very end here, obviously year to date its been incredible. Qualcomm is not rallying. Intel is a leader, Texas Instruments up a couple of bucks. Lam research has been an underperformer micron could change the direction. Micron, theres a lot of money micron betting on flash isnt down as much as we think saying be careful western digital. You raise a good point the semis are not on fire. Nice upgrade to cypress semi, a catchall semiconductor company. Hock tan stock hasnt moved. Broadcom could be in sort of a holding pattern. Well see, the pursuit of qualcomm will begin in earnest again next year. But you raise a great point it has not been a Market Leader and you love to see them the banks have been the leaders and the banks benefit from say little more inflection but really benefitting from dere fw g and tax. Were off the initial highs, bo bobis on the floor. Weve had closing highs 70 trading days this year thats got to be some kind of record sectors almost all of them open to the upside. Once again we see strength in Consumer Staples and banks are up, semiconductors up. They havent been that strong in the last couple of weeks but retail very rare day to the downside the good news is every day we hit new highs. The bad news is were getting very, very overstretched here and even simple ways of looking at the market. I look at relative strength indicator and this is the classic way to look at gains versus losses for a stock or index over a very short time period the one i look at is the one most people use, which is the last two weeks when youre over 70, youre overbougt, when over 80, our really over bought i have seen it close to 90 but the s p 100, the biggest 100 stocks in the s p are over 80 right now. That is what that tells you, its going to be very hard to sustain this kind of new records every single day like that its unlikely thats going to continue dow is over 80 s p 500 very, very close weve talked a lot about sectors in the last few weeks, for example, weve been surprised that the retailers had been so strong in the last few weeks, normally they will sell off in the month of december. But given the rather poor performance this year, perhaps not surprising theres still life in them you see the same relative strength indicator applied here really overbought. Thats very, very rare l brands, michael kors, costco, its going to be tough to sustain the kind of rallies weve seen talking about bitcoin, cme launching their futures on sunday i would say just like the cbo, orderly volumes are not titanic, nobody expected them to be but the key thing about them, they are orderly heres whats very important to keep in mind the futures trading the notional dollar volume versus what it traded in bitcoin in the cash is still very, very small to give you an idea. The notion of value of bitcoin in the last 24 hours and im just talking about dollar value, im not talking about what goes on overseas, just u. S. Dollar, not japanese yen or anything else, little over 2 billion you put the cme in, its a little over 100 million were talking about magnitudes of more trading in the cash than in the futures contract. Bear that in mind. I think that will eventually change because i think the most important thing thats going on here is eventually, you are seeing a move to a more order y orderly market it doesnt matter the volume has not been titanic the trading in the cme and cboe futures have been very orderly no weirdness or disruptions, theres been changes of mind thomas was on air yesterday, very worried about the whole introduce of futures in bitcoin. Hes now changed mind on that and talked about listings will make bitcoin more popular. People are noticing that the trading is occurring nothing disastrous is happening and a lot of people are opening up i think the next step, youll see the big guys, jp morgans, for example, start allowing it for trading for their clients and thats going to be very important. Now youre going to see futd youres notjust with hedgers and people who might have bitcoin and want to hedge it, but youll have people who want a directional opinion. I mean, sure, its professional people who want to get in on this and express an opinion. Overall i see it maturing and thats a good sign the dow turned negative, down ten points, back to you. Bob pisani, thank you lets check in with Rick Santelli, good morning. Good morning, carl. About a second ago we were trading at 2. 43, now its down to 2. 42. Stocks have rocked and rolled and the dollar thats just rolled, Interest Rates, specifically defined by a 10year close, are unched on the year, thats a pretty good bet a lot of Technical Analysis in 10s has been very good take the high and lows in the year, low 2. 30s and good home base for a lot of home trades and 2. 47 where we held 2016 thats held, big wood under the 2. 32 area. The high yield, 2. 63, ill tell you something, 2. 44 is a good bet. Unchanged on the year. If the equity markets keep rocking and rolling as we go into year end, i sense theres a whole lot more eyeballs on the fixed income market watching equities and you never know, things could happen quickly. Now, bunds, were not going to go up unless bunds go up in yield and bunds have been too low. Took at the twoday bund the housing data was pretty good this was 15 or 20 minutes before it was out at 8 30 eastern the markets are moving higher. Theres definitely going to be a bias towards year end. Even the shots, this starts on september 1st, we have not had a shots yield smaller on a closing basis than minus 67. Its getting really close and thats one you want to Pay Attention to if we cross that toll bridge, think the whole curve moves higher there to june of 16 charts, the pound dollar certainly hasnt gotten it all back but its higher on the year i think thats a victory for the pound. If you look at the pound euro, maybe a more sensitive currency relationship given brexit talks. That has not traded higher on year than 2016 and has a long way to go. Carl, jim, david, back to you. Rick, thank you very much still to come this morning, bob peck will join us. Well talk tech and see what he sees ahead for the fang stocks, which are down this morning. Its a downgrade of apple not helping and dow quickly goes negative, down 39 points back in a moment lets begin. Yes or no . Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. The great emperor trekking a hundred miles inland to their breeding grounds. Except for these two fellows. This time next year, were gonna be sitting on an egg. I think were getting close make a uturn. Uturn . Recalculating. Man, we are never gonna breed. Just give it a second. You will arrive in 92 days. Nah, nuhuh. Nope, nope, nope. You know who im gonna follow . My instincts. As long as gps can still get you lost, you can count on geico saving folks money. Im breeding, man. Fifteen minutes could save you fifteen percent or more on car insurance. S p goes negative this morning, but gainers include high profile consumer names lcluding darden and carnival. Wel get stop trading with jim after a short break. 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. Getting some breaking news regarding the s. E. C. And the Crypto Company what we have right now is the s. E. C. Saying theyre going to temporarily suspend the trading of the Crypto Company, this ticker, crcw this is one of those companies thats engaged in the quote unquote business of blockchain or crypto currencies. A lot of these companies have come to light because they have skyrocketing value on what seems like no news whatsoever. Theyre going to continue to suspend trading starting at 9 30 a. M. Eastern time, december 19th, and it will go through 11 59 p. M. Eastern time on january 3rd. They have suspended tradingin the company because of concerns regarding the accuracy and adequacy of information in the marketplace about among other things the compensation for the promotion of the company and other stuff involving it, so a very big deal, and it calls to memory the big interview from last night on fast money with regard to long fin and how their ceo said his companys valuation wasnt exactly worth what it was. Something to keep an eye on. Back over to you stocks gone from 10 to 5. 75 in a couple months you know crypto abistics . You should look it up. Good company whats on mad tonight, jim . Stunning. Market access, which is a company that trades bonds, and i think brings a lot of transparency to bonds. I really like the company, and i cant wait to talk to the guy. And well ask him about the various companies that are maybe laughable. Well see you tonight still doesnt know what it is have you figured it out . Its the one tony soprano was involved in. Maybe next time, david. Proving too fast for me when we come back, douglas holtzeakin onhe t vote, and senator corkers switch to yes dont go away. 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. Welcome back to squawk on the street. Im Carl Quintanilla with melissa lee and david faber at post 9 of the Stock Exchange sara is off today. Dow started off with a nice bang, but quickly went negative a touch. Down about 16 points s p roughly flat thats where the road map begins a lot going on with the record run for the markets. All three indices in the red well discuss what could derail the rally next nearing the finish line voting is expected to begin on the big tax reform bill. Well take you live to washington and Financial Technology firm longfin stock making news. Why the ceo told me his companys market cap is, quote, insane markets down following yesterdays massive rally with the dow posting its 70th record close of the year. The house votes this afternoon on the final gop tax bill. For more on all this, lets bring in michael, chief u. S. Economist at jp morgan, and larry mcdonald, from acg analytics. Good to see you both so lets start putting together some final verdicts as the legislation as we know it, impact, lets just say on 2018 what do you think . I think something between a quarter and a half percent on gdp growth with some of that coming through higher Consumer Spending so in the aggregate, household disposal incomes will be lifted by over 100 billion next year, and some coming through higher corporate spending the tax code will get sweetened up that should support next year and on into 2019 as well is it an inflationary bill . Only a little bit were not talking about a huge delta on growth. Were at full employment, so any push to growth we see here should tighten labor markets further, put upward prerth on inflation. It is supportive of inflation. Wereinate looking for run away inflation. Bond markets are not seeing that either, right right one of the tell tales we think this is supportive of further fed rate hikes. We will be, as i said, were operating at full employment any added push to aggregate demand is something the fed probably wants to lean against a little bit in terms of the policy setting larry, the takeaway for equities after what michael just said well, really, you know, wall street loves to do these 2018 forward forecasts. But its really most important, the First Quarter. The year forecast is helpful, but lets focus on something thats really helpful. And this is really going to be a cash for clunkers january. Youve got thousands if not millions of investors that are holding on to gains, theyre holding on to gains. They want to sell their stocks in january and push that gain out to the next tax year. And so if you remember cash for clunkers 2019, it created really massive dislocations in the auto market and i think right now, you just have too many people that are waiting for that new tax here to take some gains. And i think thats why were setting up for an ugly january so how ugly is that going to be, larry, and how about the promise that companies will actually see better growth, the price targets will be coming up on the part of wall street because a lot of wall street has not factored in a 21 Corporate Tax rate for earnings. You take a look at the notes out there, and theyre ratcheting these things higher as the tax bill looks like its going to kraungs the finish line. You know, you look at a yield curve. You have two tens have flattened almost 100 basis points in the last five, six months. And wall street is very crowded. One of the things we do is look around the street at all the forward year records, and the entire street, the entire street is calling for more flattening and i think the big surprise for the first, Second Quarter of next year, is youre going to get probably steepening because the growth is there, as you pointed out. The Global Growth cycle is very impressive, the most impressive in seven years so the entire street is telling us the curve is going to flatten. And once again, theyre going to be caught on the wrong side of the bed, and were going to steepen in the first half. Are you in the flattening yeah, we are. Part of it is because we think the fed hikes four times next year at the same time, the ecb will be continuing qe for the first nine months of the year, and well get into the ninth year of the expansion. Its pretty rare to have a steep curve nine years into expansion. Rare to have nine years of an expansion, but you wouldnt expect a steep curve what you said earlier, you could see the tax bill adding between a quarter and a half a percent. Half a percent off a 2 economy is a big percentage increase in growth right yet im looking at your research here, you see Consumer Spending actually coming down a bit next year. Yeah, Consumer Spending this year did get a big support from the saving rate. We do expect maybe some of this windfall from the tax package will be used to replenish savings. That said, Consumer Spending was very good this year. For it to come down next year isnt a bearish outlook. Its just right, expanding at 2. 5 annual rate the last three quarters it has been a good year savings rate hasnt collapsed by any means, has it two years ago, it was at 6 now its at 3 its down a fair bit for a twoyear span. Right, and so households, you argue, will shelter some of that, keep it inhouse. Historically, consumers when you have these type of tax windfalls tend to spend about two thirds of it and save about one third. That was the case with the 01, 03, and 08 tax cuts. Maybe its a little different this time around, but generally speaking, we think more will be spent than saved look beyond the First Quarter. Lets say people do take profits. What is the trajectory for the markets in the back half of the year, and if michael says that the consumers are going to spend, most of that tax cut, wont that have an impact on stocks i think you could have a rough First Quarter adjustment, and then sure, okay. Then a nice midyear bounce, i think would be very impressive heres the thing right now, the republicans are plus 47 in the house thats very important. In the blue states, as you guys have been pointing out the last week, theres a lot of damage here in the blue states. So those are states that republicans have some house seats. Republicans lose the house, the marks going to start to factor in disruption in say the third, fourth quarter, because that sets up the democrats will then hold the committee heads, and then they can really make things pretty miserable for the white house. So i think thats the big wild card, the midterms and the republicans losing the house and thats the key to really the end of the year performance. Larry, bespoke hadidaty on what happens when all 11 s p sectors trade above the 200 day, which happened earlier in the month. Three months out, six months out, a year out. Theyre up in the limited sample, 100 of the time any reason to think that might be different heres a better stat. In years where the s p and say the nasdaq are up 20 plus, you want to look at the tax loss sellings we have a tax loss basket. Chipotle, under armour, advanced devieshs, oil names. These sectors right now have been oversold toward the fourth quarter, because people are thirsting, reaching for losses to sell against their gains. So in the first half, i think the key is youre going to have dramatic outperformance from some of these beaten down sectors, and thats where i would overweigh. Sounds like january could be interesting. Well find out in just a couple weeks. Michael, larry, thanks good to see you both the s. E. C. Is suspending the Crypto Company we want to get back to dominic chu for more on that obviously, no trading because the shares have been suspended from trading by regulators at the s. E. C. A little bit of context with regard to the headlines you are seeing, and by the way, its one of the top stories on cnbc. Com the Crypto Company is a company that went public in its current form in the end of september of this year. At the time, it was worth less than 100 million, with an m dollars. It is now at the time of suspension of trading estimated in the market of 11. 3 billion with a b. This has caught the eye of regulators a lot of these companies have come public in recent weeks, putting some description of bitcoin or cryptocurrency or blockchain in their descriptions, and they have given them free reign in terms of evaluation. In this company, crcw will be suspended from trading until just about midnight on january 3rd, 2008. The reason the s. E. C. Is giving this order to not give quotes or trade in this stock is they question the accuracy and adequacy of the information that the company has and the statements theyre filing. Also questions with regard to potentially what they call manipulative transactions in the companys stock in november of 2017 so a lot of interesting context with regard to these crypto companies, but remember, as you mentioned on fast money last night, its very much a buyer beware scenario for many of these companies and i know well talk about a lot more of these in the coming weeks. A lot of companies out there hoping that adding blockchain to their name will give them market caps of millions and billions of dollars, which we have actually seen well get more into that later on on squawk on the street. Thank you for that crcw, again, halted here when we come back, voting on the gop tax overhaul set to begin today. Well speak to the man who may have flipped senator bob corker on the tax bill, douglas holtzeakin is with us later and later on, the Holiday Season is upon us. Well tell you which retailer is surpassing all the rest. Squawk on the street will be right back accumulations up to 8 inches. Dont know if you can hear me, but [monica] whats he doing . [lance] can we get a shot of this cold front, right here. Winter has arrived. Whooo hahaha [vo] progress is an unstoppable force. Brace yourself for the season of audi sales event. Audi will cover your first months lease payment on select models during the season of audi sales event. Breaking news out of senate bapging. Kayla joins us with more good morning. The Senate Banking committee has officially blocked president trumps nominee to lead the Export Import Bank the vote was 10tlaesh with two republicans voting against that nomination a rare move considering that scott garrett, the nominee for the president and chairman role, is a former congressional colleague, having representative new jersey in the house of representatives and as a Founding Member of the House Freedom caucus until earlier this year. Garretts position on the bank had come under recent criticism because he called it an example of crony capitalism, and one of those republican senators, mike rounds, of south dakota, where 12 Companies Benefit from xm financing, described garrett as an abolitionist. Two other senators, senator shelby of alabama and toomey of pennsylvania, now voting against the four members of the board and the Inspector General nominees so effectively, you are having this stalemate at the Committee Level for all of the nominees at the Export Import Bank toomey and shelby said garrett is the guy and that if it were anyone other than garrett or if his nomination didnt proceed, they would vote against everyone else the two leaders on the committee noted there are no Senate Confirmed positions filled at the Export Import Bank well see how long it takes the administration to come forward with a new nominee and new personnel for the rest of the board. A stunning move at the Senate Banking committee this morning it is thank you. Kayla tausche in washington. Also in washington, the final push for tax reform is happening at the house is expected to begin voting on the gop bill today. Mitch mcconnell also expecting to hold a vote later this evening. Joining us is douglas holtzeakin. Former director of the congressional budget office. Great to have you with us. Thank you so one of the key senators here, senator bob corker and apparently, according to politico, you were summoned to his office he grilled you with questions, you gave him answers, he flipped. What did you say a lot of other americans out there might need to be flipped too. Well, i think its flattering to think i somehow made the difference in senator corkers vote he talked to dozens and dozens of people. I really respect the Due Diligence he did in thinking about the bill obviously, hes deeply concerned about the deficit. I applaud him for that the last administration left behind 10 trillion in deficits over the next ten years and you have to make a judgment as to whether the growth consequences of this bill are sufficiently large to make it worth incurring additional deficits, which we will he came to the judgment that the answer is yes. I think thats a considered judgment and i applaud him thinking hard about it you know, making that sort of decision whether or not its worth it sort of the crux of that is deciding what that growth is going to be. And economists on the street are out with very varied opinions. So what was that threshold and what is the threshold for you, for that matter . I dont know what his threshold is i think we know the status quo is a dangerous position for the United States. Every company when they look at the tax consequences of their operations puts their intellectual property offshore some put their production offshore if they make any money around the world, they leave the earnings off shore, and in m a activity, the headquarters end up elsewhere leaving our tax rules unchanged is not a particularly attractive proposition. Everything in this bill changes the dynamics in business taxation to give better incentives to innovate and invest in the United States, to hire people here, and hopefully raise productivity and real wages. That is the crux of the important growth proposition real wages have not been rising because productivity growth has been so weak this bill changes the tax dynamics on that front and i think thats what makes it worthwhile doug, some of these are more recent assessments of the bill i know you have surely seen the Tax Policy Center this week, 2018, middleincome cut, 900. Top 1 , 51,000. Are these still flawed they got knocked around the first time around, but knowing what they know now, is it still wrong . So you cant do everything with a tax bill. You know that. There are always tradeoffs, whether its distribution versus growth but in the end, i think those kinds of arguments are basically de facto arguments for the status quo as i just said, we have an underperforming economy. In 2016, households that worked full time for the full year saw zero increase in their real income thats just not acceptable and i dont think voting for that as the status quo is a good idea doug, specific to Technology Companies that have moved their ip overseas to low Tax Jurisdictions and therefore generate so much of their cash there, which is why its offshore how is this bill going to change their behavior i mean, it would seem to me theyll continue to do more or less that. Well, there are some specific provisions aimed at i. P. De facto patent box which would give you incentives to locate that i. P. In the United States if you generate global earnings. Get a tax treatment thats more attractive than ordinary so thats a specific target that allows us to compete on the i. P. Front. More generally, were going to a territorial system for the first time in u. S. History that puts us in line with other competitive companies. Were getting the tax rate down to something closer to the average of the oecd. There will be strong expensing insentives all of that makes the tax consequences shift from what they used to be. Taxes dont drive every decision, we know that, but at the margins where they used to push things offshore, theyre now not going to do that what if this doesnt change corporate behavior, doug, and some studies have found with the 2004 repatriation tax holiday, 79 cents for every dollar brought back is actually spent on Share Repurchases or buybacks or dividends does that matter does a dollar in Share Repurchases matter less to the economy than a duollar in wage increases . I think there are three things to think about. First, its not just corporates. We have comparable changes in the noncorporate business tax incentives these are economy wide improvements and incentives. Second is the repatriation here is not like those holidays this is a patriation, as of a date certain, every dollar overseas will be deemed to have come back to the u. S. , and at that point, firms have a genuine economic decision to make. Do we bring the money back or not . I think a litmus test of whether we have gotten this right is whether the money comes back if after everything is said and done they leave the money in belgium, that would be a bad sign for the incentives in the bill when the money comes back and a corporation does a dividend or a stock buyback or reduces its debt, thats deemed as a failure, i dont think thats right. If that firm doesnt have good investment opportunities, i dont want them using that capital. I want it put back into Capital Markets so some other entity can pick it up and make a valuable incentive using the incentives in the tax code. Finally, obviously, its an historic bill. Very hard to get this kind of thing done and signed. If you had your druthers, would you have timed it differently in the Business Cycle than the way it finally came about . I wouldnt. And i think the reason is i dont think the case should be made that this is a stimulus bill thats the wrong way to think about it what we need are genuine changes in the longterm trend growth rate of the economy and in productivity thats not a Business Cycle thing. You want better incentives in slumps better incentives when youre on trend, better incentives in boons. Thats how you should think about a permanent tax reform it shouldnt be tailored to the moment it should be something you want at any point in the cycle. All right, doug, great to hear from you. Douglas holtzeakin. When we come back, its amazon and everyone else new data shows the staggering difference between the retailer and its competition. We have details on that after a short break. Take a check on stocks at this hour wn8 ind,l moderately in the re do 1pots well be right back. Directv has been rated number one in Customer Satisfaction over cable for 17 years running. But some people still like cable. Just like some people like preshaken sodas. Having their seat kicked on an airplane. Being rammed by a shopping cart. Sitting in gum. And walking into a glass door. But for everyone else, theres directv. For 1 rated Customer Satisfaction over cable, switch to directv and for a limited time get a 100 reward card. Call 1800directv. Yes or no . Gin. Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. I just finished months of chemo. But i dont want to talk about months. I want to talk about years. Treatments have gotten better, so. Im hoping for good years ahead. Thats thanks to Research Funded by the american cancer society. The same folks giving me free rides to treatment, insurance advice,and a place to stay during chemo. I need that stuff like you dont know. And now that you do, please give at cancer. Org when it comes to Online Shopping, theres amazon and everyone else. If you think retail giants like walmart have a chance to catch up, some numbers may prove you wrong. Courtney reagan joins us with exclusive results from our cnbc all America Survey cnbc all America Economic survey has tracked dramatic shifts in Consumer Spending, both over the course of our survey and year over year. This year, it crowns one retailer king. When it comes to how americans are doing, most of all of their holiday shopping, online is the preferred method again far over here at 45 , far above the second favorite category, Big Box Stores thats like walmart or best buy. And 2016, online was the top choice for the first time in our survey but its grown by 5 this year, and look at the pattern since we first asked this or since we asked it rather a decade ago its doubled since then. Pretty remarkable. When it comes to which websites americans shop online, even when you let them give you two choices, there is one far and away winner. Look at this 76 of americans say they do most or all of their shopping on amazon. Com number two isnt even close with just 8 of americans choosing walmart. Com for that option. And whats more, over the last three years, americans are both searching more and buying more from amazon. 65 of adults who shop Online Search amazon always or most of the time thats 16 Percentage Points higher than when we asked that question in 2015 42 of all shoppers buy from amazon always or most of the time thats up 14 Percentage Points from 2015. After Holding Steady last year so then when we asked whats most important when youre shopping online, Free Shipping wins by a landslide here then ability to compare prices comes in second. Which is interesting when you consider that amazons dominance keeps reappearing because it does cost 99 a year for a prime membership to get Free Shipping on many items, thats not free its 99 a year. Unless you hit that threshold and then you get Free Shipping too. Its an interesting thing to consider carl courtney, you know, the breakdown between walmart and amazon in terms of Online Shopping, does that reflect the market share they have its almost not surprising that amazon has such a huge share of the Online Shopping this season. Thats a really good point. We talk a lot about walmarts Online Retail business right now because its growing so strongly, because it started off a very, very small base. Walmart doesnt tell us exactly but most analysts estimate its only about 5 of their total business walmart is still the Worlds Largest retailer all in, but amazon definitely dominates online with the vast majority of their revenues comes from that source, and walmarts just trying to grow that vertical of the business all right, courtney, thank you. Good stuff when we come back, as the house get set to vote on the gop tax bill, worries for Property Owners are mounting as they could face a bigger bill well break down the tax impact on real estate and shares of carnival getting a boost. Ceo Arnold Donald will be on closing bell on a cnbc exclusive. Ghonhetrtilbe wl rit back gs come in twos. Like tmobile and netflix. Right now when you get an unlimited family plan, netflix is included. Wow tmobile covers your netflix subscription, so you can catch the hottest new movies and shows all year long on us. Amazing and its your last chance to buy any of these hot new Samsung Galaxy phones and get a 2nd one free. Thats one samsung for you and one to gift. Just in time to finish off your list. Tmobile. Holiday twogether. A wealth of information. A wealth of perspective. A wealth of opportunities. Thats the clarity you get from fidelity wealth management. Straightforward advice, tailored recommendations, taxefficient investing strategies, and a dedicated advisor to help you grow and protect your wealth. Fidelity wealth management. Good morning, everyone im sue herera heres your cnbc news update at this hour. The crews are working this morning to clear the washington highway blocked by that derailed train car. Federal officials confirming the amtrak train was going 80 Miles Per Hour in a 30mileperhour zone when it careened off an overpass on monday, killing at least three people British Police have arrested four men on suspicion of plotting terrorist attacks the men were arrested at their homes in sheffield and chesterfield in northern england. They ranged in age from 22 to 41 years old and have not been formally charged Palestinian Protesters continue to clash with israeli troops in the west bank. Part of the ongoing unrest in the wake of the u. S. Recognizing jerusalem as the capital of israel palestinian Officials Say they dont trust the u. S. To broker any future peace deal with israel and a mystery donor dropped off this check for 200,000 in a Salvation Army red kettle in minnesota on saturday. The donor, who wants to remain anonymous, gave the organization a headsup that the hefty check was coming and that its legitimate renewed your faith, doesnt it thats the news update at this hour ill send it back downtown to you. Sue, thank you very much. Black rock releasing a record that says etf industry assets soared beyond 4. 5 trillion for the first time ever, with two weeks left of 2017, what is 2018 looking like . Joining us, martin small, black rock head of u. S. Shares good to have you back. Good morning good morning. Good to see you. We talk about this a lot, but maybe put in perspective what the industry did in 2017 2017 has been an absolutely phenomenal year for etf growth we have crossed 620 billion in new assets coming in to global etfs this year for some context, thats a lift of 75 plus percent over the three year average of 350 billion. This is really etfs as lubricating agents for fundamental Business Model change and how Asset Managers are trading, and how Wealth Managers are building portfolios is there any way to top those numbers next year . Im pretty bullish on next year again, i think the changes are structural its how people are doing business Wealth Managers are lowering the cost of their investments by using etfs as Asset Allocation tools and global institutions that previously trade in securities and derivatives are using them as more efficient way of changes theyre not just market and cyclical change. Its going to benefit the etfs and our clients. Pivoting around what thematic narratives where do you see the growth coming if in fact were going to see disruption in various areas of the global economy. Absolutely, i think you continue to see an economic expansion that has real legs and i think thats really brought a lot of new money back to the marketplace we have seen strong growth pretty much across the board it was a perfect year for risk assets you had acwe up 20 plus percent. You had emerging markets up 30 . But even high yields, Investment Grade oil all up high single digits, double digits. I think people are getting back into the marketplace and using etfs as a very efficient way to do it. You stated perfectly why etfs should work in that environment, based on you could throw a dart on any class and it would go higher theyre winning and looking terrific, in an environment in which stock picking might make more sense, what happens to etfs theres this incredible transition thats happening in the world of index investing its not like god handed down the s p 500 on the tablets of sinai. Indexing doesnt have to just mean the market cap outcome anymore. They can be more than the market we have value oriented etfs, quality oriented etfs, low volatility etfs. And thats where were seeing the growth, not just in big broad market indexes but also really in more granular precise outcomes that allow people to control the risk return profiles theyre taking i really dont think youre going to see a world where theres necessarily market go down etf bad i see a world where people are using etfs in more precise ways to get risk return allocations iptheir portfolios those who might argue that sector correlation coming down from 90 a few years ago to close to 50 now is not a bearish picture for the industry no, i really dont think it is i think if you look at average correlations across all sorts of asset classes, even before the advent of etfss and indexing, a lot of the average correlations were higher. The reason you see a lot of that is because of Central Bank Activity in market forces. Its not because of etfs in terms of cost for the consumer when it comes to active management, is there a call from black rock to say perhaps active managers will have to charge more next year, which may raise costs actually to just run the fund does that help etfs . I think overall the cost of investing period is coming down across the board if you look at even the categories in active management, traditional open end funds that are doing well, theyre lower cost investments really, everybody wants graut quality at great value i think youll see active management flourish, just not at 80 assets points its particularly doing it in places that arent indexed very well super down in credit, secure ties to assets, or more less efficient areas of the global markets, for example martin, some amazing numbers. Well see what 2018 brings thanks for your time martin small is blackrock head of shares. The gop Weekly Press Conference wrapping up ylan mui is there with more. This is a monumental day for republicans, and House Speaker paul ryan just addressed this issue at his News Conference he also addressed speculation that he might step down now that it appears tax reform is in the bag and not run for reelection in 2018. Ryan pushed back saying, im not going anywhere anytime soon. He has literally been working on this issue for more than two decades. And with the house scheduled to take a vote on this in just a few hours, he said he is very much looking forward to the culmination of all of that work. He also doubled down on the question of economic growth, saying tax reform can get us a 3 economy, and that will do a lot to sort of dilute the criticism that the republican tax bill primarily benefits the wealthy and corporations versus the middle class you also heard leadership talk about pulling together as a team in what republicans can achieve when they do that, with the failure of the health care bill, which was their first legislative initiative, he talked about growing pains in the Republican Party now, theyre trying to show that they can not only govern but also score some major legislative wins guys all right, historic day ylan, thank you very much. Watching the speaker and the Leadership Meeting today the Trump White House pushing some policies aiming to benefit drillers and Infrastructure Projects like pipelines as the new facilities come online, though, question remains, is the worst behind the oil industry . Our Jackie Deangelis is live at a new plant in bay city, texas, thats supplying pipelines for the booming shale industry hey, jackie. Hey, good morning to you, carl thats exactly right the two big themes that were watching in the industry are Trump Administration policies that are supportive to the drillers and the pipeline makers the Infrastructure Projects. But also at the same time, were watching oil prices. They have been ramping up a little bit over 50 a barrel, and drillers are drilling, tapping into that u. S. Shale supply that we found just a few years ago. The constructor of this plant in bay city, texas, it thinks its poised to take advantage of both look at the facility here behind me this is where they produce seamless steel pipes 1. 25 million square feet and a nearly 2 billion investment the Seamless Technology makes the pipes stronger and safer they say all of this is going to serve the shale industry, part of it right here in texas. And that demand is certainly going to be strong enough. The project started in 2013, before the Trump Administration policies, to be fair it employed 20,000 people during construction its going to have 600 permanent employees. Its believed that more projects like this are going to pop up as well because of whats happening in the backdrop that i mentioned. That shale boom and the supportive administration. The only question now is what will oil prices do when theyre over 50 a barrel, it certainly makes sense to pump and build those Infrastructure Projects but just two years ago, they were closer to 25 a barrel. The ceo told me this is a longterm project. He believes the demand is going to be there. Thats why they took the time and made the investment to set up this facility, and they believe long term its going to be profitable. Guys Jackie Deangelis, big story for the complex. Thank you very much. Bay city, texas. When we come back, the house preparing to vote on the sweeping tax overhaul. We expect a vote to begin around 1 30 or 2 00 this afternoon. What it could mean specifically for your property taxes. And some big swings for Financial Technology firm longfin, why the ceo told melissa its companys market cap is, quote, iannse. When squawk on the street comes back dow down 32. Ing . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. What is one strategist calling the contra technology play for next year find out at tradingnation. Cnbc. Com more squawk on the street coming up. A report from rudys estimates the tax bill will reduce Property Values in manhattan by 10 and the suburbs will be hit harder robert sat down with the chairman of the largest Brokerage Firm in both new york and florida. And he joins us now with more on what is still a developing story, robert. Developing, david, and a lot of eyes on whats going to happen to all real estate in the high tax staets baize its the most valuable real estate in the country. Saying the tax bill is going to hurt some segments of the Real Estate Market in new york and hightax states, but he said predictions of a mass exodus of rich people to florida, theyre overstated the city will not have a mass exodus it will not really hurt prices in the city. In fact, we effectively have the bill we know what it is already we know there was going to be happening. We knew s. A. L. T. Was happening for a while. Meanwhile, the stock market is still going up doing huge sales we have done some of the biggest sales in the city over the last month. Just a word of caution. Saying that the midmarket in new york city, hard to believe its the midmarket, but thats between 4 million and 10 million, that could take a hit with prices down 10 or more but he said real estate prices in new york are already down about 10 since that peak in 2015 so this could actually get sellers to be more realistic he said that the tristate area suburbs, they will get hit harder since theyre further removed from those big jobs in new york city. As for florida, he said this could prove a lift to the upper end of the market, but florida has already been strengthening in recent months because of all the demand from retirees one big impact of the bill will be a construction boon he said the tax bills generous rules for expensing the full fit out cost of construction, a little complicated , but basically, its going to lead to a huge surge in hotel and Office Construction other brokers are not as optimistics. New yorkers deduct 54,000 in income, state and local every year 14,000 in property taxes. Those are now capped at 10,000. Broker donna olson said this bill is, quote, a dagger in the heart of the Real Estate Industry in new york and shes already had buyers cancel. For now, though, the big sales in new york remain strong. Three apartments just sold at 432 park, one of those big new towers, for a combined 120 million. Thats one buyer buying 3 apartments hes going to put together for 120 million so at least at the very top of the top, it remains strong well have to see in the coming months what happens after the bill passes. My guess is thats not a new yorker buying those apartments, robert youre right. That 120 million was an overseas buyer im sure. But overall, the question is, the economy, you know, 37,000 people pay half the income tax in new york. How many people will move here, what kind of businesses will think twice about ever moving here or expanding given the disparity in taxes i would assume that plays out over time, and then if the budget comes in light and services are cut and quality of life gets hurt, it could go on for a long time with the ultimate effect being an impact on all sorts of asset values absolutely. And to your point on the tax roles, we probably will see an impact and i think there are those people that already have a house in florida, theyre already semiretired and this will maybe push them to do it a little faster, so i think thats the group thats going to move the quickest its going to take time before we see whether it leads to fewer jobs, highpaying jobs in new york, or whether highly paid, highly skilled workers say, look, i would prefer to lichb and work in a state that doesnt have such high taxes that i cant deduct its going to be a long time before we figure out what the impact is. But for right now, new York Real Estate is very, very strong. And a lot of that could be tied to the stock market. Okay. Thanks, robert ill be in austin, texas, starting next year, but ill see you from there youll be an scorp, too. Thank you lets get to the cme group in chicago Rick Santelli with the Santelli Exchange i would like to welcome my special guest, the tax man, grover norquist. Thanks for taking the time good to be with you all right you know, i tried to discuss this with everybody. With regard to tax reform, what they see, how they feel about it and the one Common Thread i hear is, yeah, i think its going to be good, but its all going to end up in buybacks real quickly, i understand the nervousness about buybacks eight years of easy money and more than that with regard to sorry, a little less than that with regard to the fed paying interest on reserves so people are conditioned to think only the rich benefitted the way they did for the last eight or nine years. Because buybacks, with all that money put aside, Companies May invest in themselves through buybacks, but they dont seem to be ceding anything else. Are all buybacks created equal and is that a negative with the money ending up in that channel . No, theres one, maybe 2 trillion of money repatriated. I want to be invested in a company that gets 3 billion back and says the best way, the highest return we can possibly get is to invest in our own firm and buy our own firm the company that wants to invest in somebody elses firm is not a vote of confidence in their own product and their own capacities and if a company buys back shares, that money goes to a new investor, and they reinvest. The money doesnt disappear. I never understood this argument against buybacks its great idea that money goes to a new investor. Many people see this and of experience, many middle class have experienced, they havent done well in the last eight years. Thats what they see as a channel that isnt affecting them so i understand it i guess the question i should ask you is, would it be better instead of buybacks, all these companies tried to invest in something different, something new, an additional business, maybe, build new factories whats your answer to that well, its not a question of who does it. The company themselves can invest in themselves and then the money they buy stock with goes somewhere else. But the world is changing. We have full business expensing for most business investment, and thats going to reduce the cost of new investment in any sort of opportunity. And were taking the aftertax income that all companies get, including subchapter ss and passthroughs, and reducing the tax and therefore reducing the tax and increasing your after cash tax flow the value of every one of these firms is going to go up, and the interest people have in putting money in there because they could invest less expensively and the payback is greater, youre going to see a lot of new investment from overseas not just repatriated stuff guys in brazil who live in brazil will be investing in the United States. All right another issue. Everybodys talking about pass through shenanigans. Wall street journal had an oped, should have lowered the breakest 28 i get that, but theres a lot of issues reconciliation at 51 votes, but is it pass through shenanigans or pass through and tax planning shenanigans, tax planning, tomato, tomato, finish us up is the aspect of this going to be gained . It will be, but their efforts to make sure its gamed, the way to solve is to take the rate for 28 for individuals, that solves the pass throughs. Half americans work for a pass through, little less than half of americans work for a ccorp the pass through needs to be lower. Do it by taking the individual rate down or doing the more complicated effort congress is doing to exempt certain income that makes sure how much you invest in the pass through we are approximating taking that rate down and that will help with more investment and more jobs grover, thank you as always always interesting to hear your view on anything related to taxes. David faber, back to you thank you, rick Rick Santelli. Lets go over now to john forth, get a look at whats coming up on squawk alley. John bob peck, head of internet Investment Banking at credit sweeps is going to join us to talk about the outlook for 2018 in tech. When you think about whats happening in media, whats happening with m a, no better time to dig in thats coming up on squawk alley mary had a little lamb whose fleece was white as snow. But after an electrical fire from faulty wiring, marys vintage clothing and designer shoe collection were ruined. Luckily, the Geico Insurance agency had recently helped mary with renters insurance, and she got a totally fab replacement wardrobe at bloomingdales. Mary was inspired to start her own fashion line, exclusively for little lambs. Visit geico. Com and see how affordable renters insurance can be. Welcome back to squawk on the street, im dominic chu markets are starting to lose momentum here after setting record highs across the major indexes yesterday. Tech and telecoms among the sectors leading stocks to the downside, but check out utilities. That group has been down as much as a full percent in early trading, declining more than a percent in yesterdays session take a look at shares of ppl, aes, exelon. As we talk about the sector overall, Interest Rates play a part in this guys, melissa, the tenyear Interest Rate for government bonds, 2. 45 we see a rise in yields and the utilities taking a hit thank you. Thank you, dom chu. Shares of longfin plunge after comments made by the chairman and ceo last night on fast money. Heres a story behind longfin. Two days after going public last week, longfin bought a company that offers a block Chain Solution to importers and exporters, sent his Company Stock surging over 1,000 in just a couple of days, even though zidu has yet to make money. Heres what longfins ceo told me about the boost to his company. Im a profitable and good company. Their people are dragging this, not justified. If you look at my revenues, i value my pricing look at it i value my pricing at 5 300 million in a volatile 20 hours, shares down as much as a third, 33 last night on the back of the interview, now down about 5 containing the losses, but this morning were hearing the s. E. C. Is halting shares of crcw, the Crypto Company there is this notion you attach block chain to the companys name and, bam. Crcw may be a fraud, though, fair to say. But still up 1,000 , melissa, for the week from 5 to 142 in a matter of days volatile addition to your show, as well. My gosh. Crazy. Good to have you, melissa. When we come back, a look at tech in 2018 bob peck is going to join us squawk alley is up next, so dont go away. Their experience is coveted. Their leadership is instinctive. Theyre experts in things you havent heard of researchers of technologies that one day, you will. Some call them the best of the best. Some call them veterans. We call them our team. It can detect a threat using ai, and respond 60 times faster. It lets you know where your data lives, down to the very server. It keeps your insights from prying eyes, so theyre used by no one else but you. It. Is. The cloud. The ibm cloud. The cloud thats designed for your data. Ai ready. Secure to the core. The ibm cloud is the cloud for business. Yours. At facebook headquarters in menlo park, california, 11 00 a. M. On wall street, and squawk alley is live good tuesday morning, we