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Decline by a less than a percent for the hang seng and shanghai down a quarter percentage point. In early trading in europe, there are red arrows across the board. The dax is down by a tenth of a percent. Same thing with the ftse cac is down by slightly more than that. Declines also in italy and spain. Looking at crude oil prices, you will see that crude oil is up about 18 cents to 57. 74 lets look at the tenyear yesterday the tenyear topping 2. 4 well look at that in a bit. Here it comes. Yep 2. 455 . Slightly lower than yesterday, but still above 2. 4 this is past the point that Rick Santelli told us to watch for a breakout i read that all of the money not spent on its not true, but all the money not spent on taxes is going to Debt Services as rates go up yeah. Some of it will be. As rates go up, yeah. I was thinking about that this morning as they talk about the government funding needed for the projects i think it was the new york city subway i think what happens as Interest Rates go up . Its going to be so much harder to service did you bring my gift in . I did not i ordered mine from amazon. I dont have it for you yet. You did yeah. Art of the deal by donald trump. You already have that . Yes you got me what happened didnt you or what did you get me did bernie write a book . Unconservable truth. Right i have Something Special for you. You do . Youre going to like it its not a joke gift either. Its not a mindless joke im glad i talked about this then because ill have to think about something then trying to think. You have the noise reducing ear plugs already. Cant get you that for the flights. Im good on that. What about a wheelsup card. Oh. Id take that. But just a card with my name on it just the card thats what i was thinking. Maybe i could get you a couple of uber rides in europe. Thats an idea. I dont have the account i dont have one that, i can work on im a five. Thats a segue to this story, breaking news early this morning. The European Unions top court ruled that uber is a Transportation Service and not a digital company. The ruling could have a major implication for how uber is regulated throughout europe. Uber issuing a statement saying this ruling will not change things in most eu countries where we already operate under transportation law. However millions of europeans are still prevented from using apps like ours, so we will continue the dialogue with cities across europe this could impact gig economies, and change a lot about what people talk about, the future of work and the workplace its been a huge point of friction huge point, and then does things that go on in europe move here we had the same debate here about contractors and whatnot. The argument has been, theres been many, but uber has always argued its the taxi unions that have been trying to effectively make this difficult for them but theres also larger context of how we employ people and everyone is a contractor im sure the taxi people would like to say we would like to be free of this regulation. This puts us at a distinct disadvantage the taxi guys want them to be regulated. Or they would like to be unregulated themselves, just make it a level playing field. For most taxi guys, they dont want to be unregulated they have the medallions what are the medallions worth now . A medallion, the high was 3 1. 3 million came down to about 33,000 maybe even lower they came down in the past 18 months its like bitcoin now it seems like its tough for taxis. I would rather get in an uber they seem nicer now its pretty jammed in the back of those taxis. I was looking at one yesterday they have the tv screens in your face your legs are jammed in the back i dont know the passthrough thing, andrew, people are talking about that now the tax reform . If you switch, you get no healthcare right you get no 4 01 k we talked about this. Its tough to switch then theres a lot of reasons going to passthrough for you, i mean for me or anyone who is a w2 player if you have these benefits its tough. You dont need to worry about it so much but the people who will do it, if youre truly what might be considered a highly compensated player, then it makes sense. You have decided you will pay for your own buy your own. Right youre talking less than 0. 1 of people who would do that. Highly compensated more than you. More than me. This is a prelude to the next story, the Senate Passing a landmark tax reform bill early this morning that measure heads back to the house for a final vote President Trump is expected to sign the bill into law later today. Ylan mui has more. We know this is headed back to the house, but its a technical reason yes they were staring at the finish line, but theyre not quite yet. The Senate Passed this tax bill just over five hours ago the final vote was 5148 no democrats voted for it. Every republican did end up voting yes Mitch Mcconnell said the legislation will unlock americas full economic potentia potential. Its worth noticing we had the stock market up, optimism is high, coupled with this tax reform, america is ready to Start Performing as it should have for a number of years President Trump congratulated republicans in this tweet. The United States Senate Just Passed the biggest in history tax cut and reform bill. He also highlighted that legislation repeals the individual mandate which President Trump called terrible. But as you mentioned, there was some lastminute drama when the tax bill hit a technical snag in the Senate Lawmakers had to strike three minor provisions from the bill, it does not affect the bill, so it will have to go to the house again this morning even though they passed the bill yesterday. President trump checked in between meetings in the oval office and dining room, he spoke multiple times with Vice President mike pence who was at the capitol forever the proce ts assuming all this goes smoothly with the second vote for the house, President Trump will hold a News Conference later this afternoon. So hes not signing it until next year . We knows there a News Conference at 1 00 p. M whether he will take the pen and sign the bill, unclear ive been reaching out to the white house for clarification on that the reason is signing the bill would trigger some cuts to social Services Programs that clearly democrats are very worried about. So, theyre looking for a way to waive those cuts from happening, but unclear if they have a plan to do that we have our whining and gnashing of teeth is well documented i want to start paying more as soon as possible i know you do. You always talk about it the quicker we can get this thing signed where i can start paying a lot more, the better for me i feel better about it are you with me on that . Do you want them to sign it today . Im prepared to prepay my state and local this year. Because i desperacembesperately make sure i already set mine up to get paid you are ready youre paying them this year so you can deduct i know. Im trying to get you to be honest to your principles. Quick two points. The passthrough idea, you said you would lose things yeah. So, if you get yourself a step ira, as a company thats a 401 k that replaces that what about the healthcare . You can create a better version of it. Do i have to go do i have to go to obama care . No, but you can buy shares, lets say youre spending 1,000 a month in terms of matching i have obamacare, its like 12,000 a month 12,000 a month. Im kidding my only point is when i say you have to be highly paid, you can make the math work you have looked into this ylan, one more question, the social services, what are the social services that will be cut and whats the fix that is expected to go in . Medicare is among the programs that could face a significant double digit cut it is being debated whether or not they should include that waiver from these cuts happening inside that Government Spending bill that will be needed to be passed before the end of the year also, joe, just so you know, even if the president doesnt sign this until next year, the effective day will be january 1st. What happens to people on medicare if the cuts go through if this is signed and there is no fix in place . It could be devastating this is what democrats had been sort of hammering on for quite awhile now that because this bill adds to the deficit, it would trigger cuts to social services. Congress voted more than a dozen times in the past to waive that trigger from taking effect they still have not done it. So this is the concern, these programs will be cut i would imagine the republicans are concerned about that, too, if it looks like theyre passing tax cuts for corporations at the same time this happens Susan Collins, one of the conditions for her support was an assurance from Mitch Mcconnell and paul ryan that these cuts would not take effect he has given that assurance, but the plans are up in the air. You want to look at a beautiful chart, well have to put one up fedex reported earnings better than expected due to increased volume i checked the historical trading in the stock we will talk more about earnings in a second with an analyst. We know what the transportation average has done the company addressed u. S. Tax reform on the Earnings Call. Heres what the cfo had to say u. S. Gdp would increase materially next year as a result of u. S. Tax reform if this occurs we would likely increase Capital Expenditures and hiring to accommodate additional volume from this incremental gdp growth istill dont believe it wil mean anything good for anybody we have two guests coming up that will tell you it has nothing to do with what the market has done. There is fedex 2. 4 248. There it is, 240, almost 250, a new alltime high. The Company Giving astounding guidance on the boost they expect from tax reform it will add another 4. 40 to 5. 50 to the per share result. So a 40 boost to the current forecast doesnt really factor into the markets at all back to the markets joining us is Jack Cafferty and Andreas Garcia good morning to both you guys. Same question weve been asking for the past week. I remember the last time these guys were on they walked off, i was like whatever go ahead global synchronous growth. Global synchronous growth. That explains it all global synchronous growth translating into earnings, and higher markets we can support global synchronous growth what should we be complaining about. 35 on the dow, global synchronous growth first things first tacks will affect earnings here. Thats not a question. How do you explain the fact that earnings are being revised upwards around the world i dont know. Were a big part of the world. The United States leads the world. If we do well, the rest of the world does better. Were not a vacuum absolutely not. Europe is in the midst of a strong recovery themselves the delta is pretty large. So, yeah, youre right to say tax matters. I dont think that this should be avoided all of this matters, optimism matters, deregulation matters, how corporations are feeling matters. The private sector matters if youre staring at this and unable to acknowledge something is happening, youre held back by political concerns or im not sure where it comes from exactly, right i think ultimately it comes back to earnings are going up. Europe is better, japan is better, Energy Prices have more or less increased from 28 to mid 50s levels telling you the world is in a much better place. Interest rates remain low. We come back to your comments on the tenyear the tenyear telling you something is happening maybe the world is a little messier than what we were thinking how much of this do you attribute to taxes or some issues that joe is not so suddenly eluding to . I would flip it and we frequently want to talk about things like death by paper cuts, so the rules get tighter Interest Rates rise faster Consumer Confidence falls. Here, whats the opposite of a paper cut . Everything has gotten a bit better whether its growth, whether its the employment outlook, whether its wages theyre Getting Better but not so much faster that the Federal Reserve or the global Central Banks have said, sorry, im taking the punch bowl away and you build the story which translates into Earnings Call that corporate or investor, it gets you higher earnings. 2018, what does the market look like . I have no idea. What do you get paid for . To tell people over the next 10, 20 years what they should be planning for that does not include giving you a price that is basically noise. I would Say Something thats interesting fair answer reality completely fair answer. If Interest Rates go up, credit card rates have started to spike you might get a tax cut and you may have to give it right back to credit card for a lot of americans credit card rates spike more quickly than Savings Rates yeah. There is a counterbalance to the tack cuts, its underneath the current as rates rise. But you have to have some kind of sense of where you think lets put it this wraay wall investigation matters a lot, valuation is at high levels here you could say its going higher, but ten years from now it will not be much higher from today. If you have a plan ten years out, you have to start with requiring returns that are a bit lower than the last five, seven years. Once thats out there, they ask millennials and genx what the expectations for returns were, 16 year over year is what theyre expecting. You know why weve had that the last six years. I dont necessarily look at the end of 2018 as a bogey f your expectations are 15 , 16 and prior performance is not guarantee of the future. We have to leave it there thank you. Coming up, the Retail Supply chain is working overtime to get products packaged, shipped and delivered on time. Courtney reagan will join us next from a Fulfillment Center i want to go to a Fulfillment Center why sometimes i dont feel fulfilled. 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. Just five days left until christmas. Retailers are making some lastminute pitches to shoppers to get gifts in time for the holiday. Were all excited about the holiday. Almost giddy yes were getting right into the holidays its the best time of the year the most wonderful time of the year that means its crunch time for workers at Fulfillment Centers. So it wasnt like i thought. They have to pack and ship those gifts. Courtney reagan joins us live from one of those centers. Really you went to walton, kentucky for this, just south of cincinnati i think a trip home might have factored into it im coming all the way back to new york first. We have a lot of work to do before we think about getting to christmas. Were close to cincinnati here and walton, kentucky when you think about it, your shipping times are getting close if you want to order online in time for christmas if you are, and youre not ordering from amazon. Com, chances are you could be getting a gift fulfilled from one of these radial Fulfillment Centers. This is second behind amazon when it comes to the footprint 21 Fulfillment Centers in the country. Yad r radialgistics for hundreds of brands this facility covers 1. 3 million square feet. Here they are covering air aeroposta aeropostale, world market, Shoe Carnival and others. We know how big cybermonday was for retailers across the country, if you still need to order online, watch the shipping deadlines. In many cases, standard shipping options are in the rearview window, now youre looking at expedited options. Tomorrow is a big cutoff to order in time for christmas. Back to you. Thanks. Well move on and talk fedex we were just talking about it. I have to do the rule of 72, but its up 500 , i think. Shares of fedex getting a pop this morning the Company Posted a rise in profits due to increased shipping volume. Joining us to break down the numbers, scott is here i hope hes been long since 2008 you had a buy on this thing . I have, thank goodness. So we were just talking about it 2008, the low was 40 it was scary to buy all stocks at the lows. Now its 250 thats six times your money, right . It doubles again thats four times the money. Doubled twice, gone up another 50 . You know the compound annual return in that stock since 0 8 its been strong. I would think 20 a year. It has been the Earnings Growth has been there with it. Its deserved that we think theres more to come. Oil prices, they do matter. They only matter in the context of the overall global economy. They do surcharges and things like that. Right if there is if the entire economy has a tax break of lower oil, its better for fedex what else have they done to outperform u. P. S. , to outperform the post office and Everything Else how do they do it . Solid execution going back a few years ago, they had a big major productivity enhancement. That went very well. They achieved 1. 65 billion how do they do productivity enhancement . Is it the Computer System . Is it the technology that they buy and introduce into the company . What happens it was a bit of everything. That a lot of voluntary retirement program. They did fleet modernization of planes a bit of everything but it all added up very successful. Theyre still pursuing the best practices they have taken away from that. And an eightyear economic expansion did not hurt not at all. They make it look easy. Its not, trying to keep up with these things u. P. S. Having struggles. Whats the difference between these two . Its varying from peak season to peak season you know, theres different schools of thought u. P. S. Had a surcharge this Holiday Season and fedex did not. Fedex has been pursuing a mix of smaller and mid size customers that may have something to do with it. U. P. S. Had stumbles. Both have done a lot of volume theyve done amazing amounts of ramping up and getting things there. We were looking at ontime delivery statistics, im stunned by the difference between the two. What leads to that how do you execute like that its interesting. Fedex, a quote from the ceo in the call was we used it as the lead to our note boy, we had it right this year, so far, knock on wood. Not much to worry about with a few days left in the Weather Forecast u. P. S. Stumbled about 1,000 basis points lower on the service metrics. Theyre saying now it should be okay through the end of the season everything in the thanksgiving to Christmas Period should be okay they had the missteps certainly. Not ta tao take anything away from u. P. S. , both companies have been impossible to wrap your head around getting fedex delivering on metrics like that. Well do a look back once the season is over and compare the two, but it probably has something to do with customer outreach, how they manage customers at this time of year we dont know until its all done yeah i think thats a big driver. You talked about uber earlier. Whats the private market value of uber . We were at 70 was the high 70 billion. Yes, except under the softbank deal, it was closer to im just using it as an ill plus trump administrati illustrati illustration uber was worth more than fedex for a while. Does that make sense the softbank bid to buy uber was at a 30 discount to yes. It was a 48 billion valuation. Separately you talked about medallions earlier yes some medallions are going for as low as 350,000 right there at one in a bankruptcy it went for about 170,000. Down from 1 million scott, you said fedex, you think theres more room to run u. P. S. , too . What would you tell people to do looking at this guidance from fedex, you might think its a great time to get into u. P. S we do we look at these two on where they trade, the pe differential. We have a buy on both. We do still prefer fedex, but interestingly, typically theyre u. P. S. Trades at a 2. 5 , 3 multiple premium in pe to fedex right now thats only about one turn so fedex is catching up there. So, its an interesting time to be looking at both clearly with this report last evening fedex is seemingly hitting on all cylinders i think its been touched upon on the show early this morning they have seen a surprise on what theyll get in the tax reform in this first fiscal year, which is very large. So i think thats going to help. It should get a lift on fundamentals that should help this morning as well unless theyre not being honest with us, thats you can see it just its hard to connect dots from tax reform to actual performance of a company. If you believe them, thats concrete evidence there that this is a positive for corporate america, right it absolutely is. They spoke about it. It will be widespread how they spend that cash benefit. The overall gdp does amazon threaten fedex down the road yeah. Down the road perhaps. In the nearterm, know fedex speaks of having no customer larger than 3 . Right now i would say amazon is more dependent on fedex than a threat but, yeah. Certainly down the road they look to be a large player in the logistical supply chain in this country and perhaps internationally. Thats more of a down the road discussion still even though it comes up frequently. Great fshlgt tha. Thank you all right thank you. Some other stocks to watch today. Shares of red hat are lower. The maker of lynex software issued guidance above analysts estimates. Micron technology posting Third Quarter earnings that beat forecasts. Revenue surged 71 the chipmaker is benefiting from Strong Demand from smartphones, pcs and servers. That stock is up by 6. 8 pfrs th 6. 8 this morning. Shares of stitch fix dropping the Company Reported higher sales but earnings missed forecast the online Style Service expects to make less money on clothes it sends to customers due to higher shipping costs and fewer available products for plus size and menswear as a result, that stock is down 12 the ceos of red hat, micron and stitch fix will be on squawk alley today at 11 00 a. M. Eastern time. When we return, the gop tax bill is expected to Pass Congress this afternoon. Up next, well talk to the manager of an etf that contains the 34 stocks that are expected to benefit the most from tax reform later, House Majority leader Kevin Mccarthy hell be our newsmaker of the morning, hell join us at 7 30 a. M. To talk tacks and many other issues lets look at yesterdays s p 500 winners and losers hey yeah . I switched to geico and got more more savings on Car Insurance . They helped with homeowners, too ok plus motorcycle, boat and rv insurance geicos got you covered like a blanket houston . You seeing this . Geico. Expect great savings and a whole lot more. Welcome back youre watching squawk box live from the Nasdaq Market site in times square. Good morning welcome back to squawk box. See how the markets are setting themselves up. U. S. Equity futures at this hour, dow opening higher by 8 it points nasdaq up about 23 s p 500 up by points policybased investors could have something to celebrate when the tax reform bill is expected to Pass Congress txar will see 34 stocks that could see the most changes from the new tax code joining us is ben phillips thanks for being here today. Thanks for having me. When did you put this together this must have been a recent event . Recent event in terms of getting to market. We launched october 17th, the idea has been in the making sense two years ago. But, yeah, we launched the same day as tax reform. I ask because it seems like so many of the details have been almost late breaking trying to figure out which companies will benefit the most. Have you been constantly shuffling the 34 companies in there . Not really. We kept the same portfolio we made some changes in early november with some changes going on the idea being weve always been focused on the tax cut being the biggest item 34 of the portfolio is tax cut. We have the eye towards Interest Deduction going away then the third bucket is u. S. Exporters. U. S. Manufacturers who have a strong domestic presence will have an improved Global Competitive position those key components have not really changed we are still talking about Companies Paying on average 35 plus tax rates can you tell us the companies . We have a number in there, Southwest Airlines has been one that people embrace given that it will benefit from the tax cut and they said they will use proceeds from the tax cut to buy new planes thats a Second Derivative play, looking at Companies Using the tax cut to improve cash flow and earnings did you hear about fedex . When you were listening, did you think, wow, i may be on to something. He said the upside benefit is more than we expected. Did you see that number . Yeah. If you look at our portfolio, 20 eps on average is for our portfolio. That gets us excited 20 upside in the stocks in our portfolio. This is first order effects. Well be looking to the second order effects. Companies that invest are investing in growth. We had some people say some of this has been baked into the markets. Overall market averages have risen substantially as we have seen it look more and more likely that this would be passed do you think thats the case or is there a lot of untapped Growth Potential still here . Our fund is reflecting that there is some getting priced in. Since we launched, its up 7 . Its outperforming the market. What day was that. October 17th. Just over two months the second order effects are really important thats where people will get excited. Also, wall street, they generally dont upgrade earnings estimates until they see the first good print we had some good prints. Its been decent Economic Growth next year well see in a lot of companies and in our portfolio well see this flow through, the eps benefit. Then real earnings revisions will be upwards. Joe mentioned about here is the daily news, this is typical of the daily news trump is a clown after the time. The art of the steal is it possible to go long the trump family because of the thats another big beneficiary of this, can you short the middle class since we know from the democrats and from this how badly theyre going to fair under all these things is it possible in your fund . Is there a proxy for were focused on the Corporate Tax break and the impact on the overall economy. When you see things like that, ben, do you think i think the personal stuff. Thats been the biggest moving component. Hyperbole people will die from this supposed supposedly its apocalyptic and so,000 people will die a year from this paul ryan said yesterday, as people see this flow through the economy and see themselves paying less taxes in 2018, thats when there may be more public support for it. What will you do five years from now the idea is well continue to rotated and invest the portfolio in those Second Derivative plays. Even two, three years from now, well look at improved consumer investments, increased m a activity, u. S. Companies being more attractive targets. U. S. Companies will be more attractive targets in the coming years . Potentially there may be big u. S. Companies looking to consolidate industries as well i think this will fuel banking activity were excited about the multiyear impact. This fund will be outstanding for a long time. You could short the blue states, the legislatures in the blue states. Not an etf to do that but exactly creative ways to do that. Its going to be tough. Andrew is right about that there will be cutbacks thanks. Ill speechless coming up, well get what else is new. Oil price predictions from michael cohen, head of Energy Commodities research at barclays and the house set for a doover vote on the tax bill today. House Majority Leader Kevin Mccarthy will join us. At 8 00, shelly moo moore capit will join us see thats funny, i thought you traded options. Im not really a wall street guy. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade trust 1 doctor recommended dulcolax. Use dulcolax tablets for gentle dependable relief. Suppositories for relief in minutes. And dulcoease for comfortable relief of hard stools. Dulcolax. Designed for dependable relief. Welcome back to squawk box. Saudi arabia announcing its largest ever budget. The kingdom will spend 261 261 billion in 2018 as it looks to diversify its economy away from energy it intends to cut Energy Subsidies freeing up funds for spending and adding a value added tax on soft drinks to combat the slumping oil revenue. They are forecasting a growth rebound of 2. 7 next year. No word on when the prince is getting out of jail. Theres no word on the 3 350 million 4 450 million painting nor did you see over the weekend the 3 300 million house that mb bought for himself in france in versailles way to make it look like youre stamping out corruption so a big disconnect between the corruption 3 300 million doesnt buy versailles it buys a house near versailles . I believe so. You cant buy versailles for 300 million . Not for 300 million did you miss this it was fascinating it was done through the shell companies. When you finally get through the shell companies, you go back and its him interior design goes digital. Well talk to a husband and wife design team about their unique liyle and what it means for hoday retail when this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. I thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. 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 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. Lets not go there. The interior Design Industry is undergoing a Digital Transformation partners are partnering with ecommerce players to create new products joining us now husband and wife design duo robert and courtney novogratz. They have an am zbron storefront they got popups they have had a couple of tv shows, and a guide shop in new york during the Holiday Season because we just cant possibly talk about bitcoin enough, you are mikes brother yeah, i am. And mike is the big you know, he is fortress, and he was on, i think, whop ners show talking about how high it could go my first question to you would be what would you rather have, the bitcoin he has or the hair you have that he does not have ill take the hair. Would i take the bitcoin and buy some hair. Real human hair can you apply hair with bitcoin . Thats the question i immediately thought are both of you guys really have good taste . Do you hire designers to help you, or do you guys know this is what you do, the two of you weve done for 25 years, you know we started buying and building townhouses, and then we started design i designing boutique hotels. We were the couple that if we came over to your apartment, we would redecorate it for you. Come hang out at my place we found each other because, a, we wanted the same things out of life, but we also had similar talents, and then we created a career out of it. Architectural things . Right down to fabrics and pillows yes a to z. We lean on now we have a team, but before, you know, when we were planning our wedding, we built our first condemned building in manhattan, and we learned everything on the job. Zhoo thats amazing. Whats new now its all it wasnt always if its 25 years, it wasnt always we started a brand about four or five years ago. Aspirational designs at affordable prices. We really want mass. Its been four or five years, but we are starting to get a great look together. This is the perfect time to be in a business like this because it seems like everybody is watching these do it yourself shows or the renovation shows or anything that goes on. Its become almost a way of life for so many people and a lot of times couples weve been hired, obviously, to decorate for people, and we let them know they chose each other for a reason they can pick a paint color, and it should be fun we get it. When you talk about home and money, it brings out so much anxiety in everyone. For us when we did one of our tv shows, we were going across the country, and we realized people need affordable pieces we started getting into product, and we use a lot of the stuff in our own homes, and, again, if our five boys can, like, jump on it, wrestle on it, the wear and tear and it holds up, we pretty much believe in it how do you find affordable pieces, though we design them, and we really have leaned on our vendors and our partners to say how can we get it delivered to someones doorstep, how can we get it whether its in a box and still have fabulous legs and still have fabulous fabric thats going to hold up also, when you have, like, amazon fulfilling things, youre not paying for 4,000 brick and mortar stores, right you are kind of cutting out the middle man this is a theme weve talked about yesterday just we mentioned the same theme. All the Success Stories are people who are not having to deal with a lot of those costs all of those headaches and all of that. Amazon has been amazing where, you know, we can partner with them, and we can bring our designs and our ideas and they can take the other piece to it and get it into customers homes. Thats whats most important what about the direct to consumer piece of it we were talking to the ceo of away, and they want this very direct relationship. They want all the data they want to be able to communicate. Yes amazon is the well, how do you build a community . How do you thats one thing robert and i, when we first even started in this, is really trying to make that big Digital World a community, a family. Whats important for us is if you have our pieces in your house, i want to see how you use them i want to see how you decorate with them. Maybe completely different than robert and i chose you may have all your fets on them instead of all your children we try to tap into saying, see, turn your photos back into the novogratz family, and lets see and all learn from each other. Fabulous is a word thats my wife uses it. If you guys didnt thats the word you need to describe the type of stuff that you want in your house the fabric has to be fabulous. The design has to be fabulous. The couch here what would you use if you didnt have it . Is there another word . Amazing comfortable. Chic, casual fabulous is good, though. Fabulous, friendly family something. We also think that everything doesnt have to be fabulous, right . Kids rooms and right that accentuates the things that are fabulous you also said you were not a wrestler mike was and another brother, but you were not because you were a good athlete. I was according to me. According me you know they had to just brute force, but you actually had some talent i wasnt as tough as those guys all right actually, too, the great thing for our popup with amazon thats going on during the holidays is people can come in and touch and feel the product amazon delivers it to you. Thats whats been really important for us is people can say, hey, im looking at these all right the Senate Passes a landmark tax reform bill sending it back to the house for a final vote. Were live in washington this morning with the details were going to be hearing from House Majority leader mccarthy crude prices on the rise will the build up professional sports opening their doors in las vegas, and the fed that story. Plus, corporate headlines. The second hour of squawk box begins right now life from gt beating heart of business, new york city, this is squawk box. Good morning, everybody welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in times square. Im becky quick along with Andrew Ross Sorkin and joe kernan you are looking at a live picture of capitol hill where congress is at the finish line for passing a Major Overhaul of the nations tax code. Pending a second approval by the house today, which mostly is seen as a technicality at that point, that tax reform bill will head to the president s desk well have more on that in just a moment in the meantime, check out the futures this morning things are on a roll right here on wall street too you can see right now the dow futures are indicated up by about 93 points. Earlier were looking up 99. Almost triple digit gain for the futures. S p futures up by 8. 5, and the nasdaq up by 23. Heres whats making headlines this morning eight major banks have had their socalled living wills approved by regulators with no significant issues that is the first time in three years that the fed and the fdic couldnt find issues that needed immediate attention. Four banks, bank of america, Goldman Sachs, morgan stanley, and wells fargo, were told that their plans did have some shortcomings that need to be addressed at some point. The National Association of realtors will be out with its november look of existing homes later this morning economists are looking for a 0. 7 dough cline after a 2 jump back in october. A European Union court has ruled that Ride Hailing Service uber is a Transportation Service and can be regulated just like traditional taxi services. That follows complaints by taxi drivers in spain that uber was engaged in misleading practices and unfair competition however, uber says that the decision wont change the way it operates in most of the e. U. Countries. Senate republicans passing their big tax overhaul bill late yesterday now. The house will have their turn again before it goes to the president for signature. It does matter to us weve had this huge move in the stock market, and im really interested to know about whether the actual when it actually happens whether its one of those buy on the rumors, sell on the news or whether it continues, and i dont even i try to gauge what the consensus is for whether, you know, once you see the results, like fedex just boost the their numbers for the future based on this, i wonder whether you see more or whether weve already gotten everything its just tough to say first, we got to get through today, i guess sfloog thats right, joe you can maybe somewhere some answers to your questions at about snoonoon President Trump is planning a press conference for after that. Despite the technical snafoo even though they had already passed it once yesterday now, republicans did pull together to get this legislation through the senate overnight with no gop defections 51 of 48 was the final tally majority leader Mitch Mcconnell said that this is the key to unlocking americas economic potential. Its worth noticing weve had three two quarters in a row of 3 growth stock market is up optimism is high coupled with this tax reform, america is ready to Start Performing as it should have for a number of years. The reason the house has to vote against it at all is because several minor provisions in this bill violated the very complicated and arcaine rules of the Senate Bernie sanders says thats a prime example of how republicans are rushing to jam a massive rewrite of the tax code through congress with little debate. Maybe, just maybe, before Congress Adjourns for the holidays we should start paying attention to the needs of the working families of this country, to the middle class of this country, and not just the billionaire class. As republicans really want to get this done today and cleared off their plate because theyve still got a government funding bill to deal with before the end of the week. No one, especially not me, wants to be here over christmas. Back to you. We are going to talk to one of the players in all this coming up at 7 30 eastern time House Majority leader Kevin Mccarthy will be our special guest right at 7 30. For some perspective on how the tax vote problems could play out in the markets, lets bring in a couple of more voices mark is chief investment strategist, scott, and right here on set with us is john hurdle, the executive chairman of hurdle, callahan and company. You know, were still looking through these last minute details. A lot of things to try and figure out whats your overall take on it generally positive. There is a lot of details, and the fact is that not just the details, but how does the market react to those things are going to really determine where the earnings come. Its generally positive. Fedex was increasing their guidance today its got to be more of the same. Theres a lot of this in the market already, so we have to really see how it flows through. I mean, i think thats the huge issue trying to figure out how much of it is already in the markets, how much is not. Joe just alluded that. I mean, we hear things like what you heard from fedex that was the first time i thought maybe theres a lot more we dont know about. Theres you know, we were thinking that theres 10 to 12 Earnings Growth next year. If this is more than that, plus at 2 dividend on top of that, thats a much thats still another strong year, especially compared to the tenyear treasury on a relative basis the market looks like it has further to go. Mark, would you agree with that well, i would, becky. Its hard to argue against that. When you look at facts that have consensus earnings estimates of 1 44 over 130 and change this year, expecting Revenue Growth of about 5 to o6 yearoveryear, thats certainly a tail wind to expect equities to move higher just on that, let alone any kind of boost from the windfall from profits from Corporate Tax reform, which on top of that leads us to conclude that its going to be another good year. Not one perhaps without the level of volatility that we had in the last 12 months Going Forward because i think theres a lot of crosscurrents that can help to create some instability in the markets over the next 12 months, but i think yearoveryear youre looking at another year of stellar gains. What are the cross kushts that you are talking about well, its shifting Monetary Policy being one weve gone from uber accommodative policies around the world to hardly called a tightening, but nonetheless, less accommodative collectively, particularly among some of the more important systemically Central Banks the bank of japan may be shifting off the price saving mechanism off the tenyear japanese bopd. Japan undertaking serious structural reforms, and what are the consequences to chinas Economic Growth, and the blow back to emerging market countries. Theres a lot of things out there that can help to undermine the otherwise senguin view, but thats the base case that things look pretty good the key is the relationship between the Interest Rates and the earnings even if earnings go up more and Interest Rates go up, if that relationship stays the same, we still have a positive conditions for the market one thing thats interesting is this normalization of the feds Balance Sheet has been more telegraphed than anything in history, and, yet, the tenyear treasury hasnt moved much thats because you are also looking at around the globe Interest Rates near zero if you are an investor who has to buy bonds, where are you going to go . Just theres more dough manned there seems like theres more demand for credit, for yield than there is for Interest Rates are the price of money supplydemand. Theres a lot of supply of money looking for a home i know its not ever this simple lets break this down to a simple terms as we can if you are saying its what the Interest Rate increases are compared with what the earnings increases are, you just laid out your case for where you think earnings are going if we see Interest Rates of too hikes, three hikes, four hikes next year, how does that match up once again, those are still not historically were coming from such low levels if earnings come in as we expect and as the market expects, well be fine. Even with four rate hikes even with four rate hikes, yes. You agree with that, mark i do. As long as the Economic Growth warrants the rate hikes. If, in fact, though, the fed is making a mistake by way of raising Interest Rates predicated upon strong Labor Conditions but expectations of inflation to follow through and it doesnt necessarily, that could continue to lead to an inversion of the yield curve, which i think would signal to the market a potential problem economically now youre making the case. We had Neel Kashkari on yesterday, the minneapolis fed president , and thats the case that he was making he is a little concerned in fact, he has voted against the last three rate hikes for that reason. Do you think he is right, or do you think that, look, things are going really well . The economy is outperforming weve seen gdp growth of 3 plus the last two quarters. You are likely to see it again for the next quarter it is the right time for rates to be raising. Rising i think that it remains the right time for rates to continue to be hiked. That said, i think the fed is going to be cautious and make sure that the transitory effects of why theyre whifing on the inflation call do start to emerge such that it does give them sort of an emboldened stance on achieving their rate hikes. That remains our base case it would not surprise us if we didnt see the followthrough on the inflation front to neels point that the fed begins to slow down or gradually reduce the plot to reflect the expectation that inflation isnt mounting the charge its expecting. Jonathan, last word i just think its that relationship you have to watch that relationship look for other things in the market that could derail us. Bitcoin, for example one of the things about bitcoin thats just odd is how its seeping into the Public Market were starting to have companies that are calling themselves crypto currencies, things like that can there be a bleedover effect fundamentally its still such a small its such a small portion, and thats what everybody thinks, and thats true. We got to watch it because its not really affecting the broad market right now, but even when we talk about it on a show like squawk box, it almost gives it credibility that it doesnt deserve because its not an investment at all. Its just about speculating. Watch. Funl fundamentals are strong. Always watch jonathan, thanks for being here mark, its good to see you too thanks, becky coming up when we return, the forecast for oil in 2018 prices have been moving higher on a draw down of inventories in the u. S. Were going to talk crude right after the break. Then at 7 30 eastern time, House Majority leader Kevin Mccarthy, he is going to be joining us ahead of todays very big vote in the house on tax reform lots to talk to him about. Stay tuned youre watching squawk box right here on cnbc i think we should do that meeting tomorrow. Well wait. What did you think about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back to squawk box. Do i have triple digits in the dow yet . We are close we do. I didnt know that it is. Thats new. It was at 99 before. 101 i wondered whether it had moved from 90. Might see things like what fedex said, and you just do the math it seems like. S p up 9. 5 nasdaq up 26 the question we asked every day is has this all been baked in how much of this has been baked in, the idea that the tax cuts were coming . What if its more than what we baked in . Right thats what you are getting this morning. From fedex. Fedex delivering a better than expected quarterly net profit because of increased volumes. The shipping company posting beat on the bottom and the top line fedex addressing u. S. Tax reform on the Earnings Call heres what the cfo alan graf had to say u. S. Gdp could increase materially as a result of u. S. Tax reform if this occurs, we would likely increase Capital Expenditures and hiring to accommodate the additional volumes trigger from this incremental gdp growth. Thats not all they had to say. Fedex also giving some pretty astounding guidance on the boost that they expect from the reform saying that it would add another 4. 40 to 5. 50 a share on an adjusted basis to their outlook. Thats about a 40 boost to their current forecast check that out the stock up 2 . This is the type of thing that people are already saying what other stocks do we have to find this with . Noah blackstein writing in saying he thinks that this is just the beginning that you are going to hear that this will be a theme from a lot of companies over the next three months right this could be another leg instead of a buy on the rumor, sell on the news event price of crude oil has surged 35 since june bringing about this new optimism in the market, but some analysts are remaining skeptical about the year joining us to discuss how u. S. Oil companies pose a threat to prices in 2018, we want to bring in michael cohen, who is barclays director of Energy Market research. Youre a little skeptical. With whats going on here . Look, the reason why we are where we are is because of some temporary issues, right . Weve got unplanned outages in the north sea. Weve heard venezuelan production thats tipping over 100, 150 barrels a day month on month. The market has got a lot to be worried about. Inventories are down, and theyve been down since september and october. You think this is all artificial im not saying its all artificial i think some of it is rationale. It was actually the title of one of our pieces that rationale, albeit temporary exuberance. I think the issue as we go forward in 2018 is a lot of those temporary issues go away on a balance level, you know, supply is going to exceed demand again. Inventories are going to build wti, lets say, by this summer in your mind. So our view by the summer is that wti will go back into the mid 50s. You know, as we move into the end of the year, we think that prices in q4, for example, will be higher, but the issue is that u. S. Production continues to move higher. 300,000 barrels a year higher. Sure, well see a dip in october, but eia and our forecast expect 1 to 1. 2 Million Barrels a day of more liquid supply out of the u. S. Next year we were talking about saudi arabia announced their budget today. Yes part of the calculus of the future of that country has to do with the ipo of iramco, and thats supposed to happen in what they say is the second half of 2018, and they say that oil has to live somewhere between 50 and 60 for that to work whats your expectation . So our economists are continuing to be of the view that that will be delayed, that the ipo will be delayed. Delayed as in not taking place in the year of 2018 . Correct not into 2018 not forever. But this will happen its a key part of their National Transformation plan, part of their vision to 2030 yes, clearly they want price stability. I would argue that they want price stability over a certain price level. You know, whether thats 40 or 70, i think they want prices to be level they want investors to have what ability do you think they have to influence the price of oil right now i mean, clearly, theyre in the drivers seat of this opec and nonopec policy. They have some control, but at the end of the day the markets dont, you know the market looks at the balance, and the market is seeing something thats going to be in surplus. It doesnt happen in 2018 because of what . Well, look, theres a lot of different processes that have to occur as part of the ipo, as you well know. You know, its the issue Going Forward is can they get their act together is the political back drop amenable to this investment . I cant say for certain. Meaning, do investors want to take a minority position in a company in a country with questions about people in prison at the ritz . Is that where you are going with this what are you trying to say here . Theres a burj nch of issues there. Listing the issues between saudi arabia and iran, the political back drop, all of this is something that could preclude them to wait in addition to the budget issues. You know, mohammed bin saloman is a prince in a hurry clearly theres a lot on his plate. What we have to focus on in terms of the oil price for next year is that the saudis are continuing to pledge that theyll do whatever it will take heres the question do they have the sway that they once had it the problem is the Higher Oil Prices get, the more likely you are going to see u. S. Suppliers kind of turn the spigget back on for this coming year and the year afterwards, we calculate there will be Something Like half a Million Barrels a day of new supply from canada and brazil we talk a lot about the United States people forget that theres a lot of other oil out there, and they dont really have as much control over that. Its kind of all along the way thats the other side, and then the third leg of the stool is if we are talking about a very strong global economy, votes being lifted everywhere, additional demand thats going to be out there, can the u. S. Suppliers even do anything about that, or will oil prices automatically push higher because theres so much demand it doesnt matter . Our expectations for next year are pretty robust in terms of oil demand. We expect that to continue were in line with expectations, broadly speaking, for robust Economic Growth. The question that the saudis and other opec members are having to deal with is can they continue to supply incrementally more oil . Can the u. S. Industry supply more oil year after year after year if Economic Growth remains strong opec and other countries that are part of this group are betting that they cant and that, therefore, prices have to go up. Great to see you. Thank you very much. Thank you you too. When we come back, House Majority leader Kevin Mccarthy on todays house vote and beyond then turning sin city into sports city. Las vegas hasnt hosted a Major Professional Sports Team ever. Now they get three what it could mean for the strip . Thats coming up thats coming up squawk box will be right back. How about some of the lowest options fees . Are you raising your hand . Good then its time for power e trade the platform, price and service that gives you the edge you need. Alright one quick game of rock, paper, scissors. 1, 2, 3, go. E trade. The original place to invest online. What we do every night is like something out of a strange dream. Except that the next morning. It all makes sense. Fedex powers Global Commerce with vast, farreaching networks. Deep knowledge of industries. And, yes. Maybe a little magic. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. The e. U. Top Court Dealing a big blow to uber the e. U. Says that the ride hailing app is a Transportation Service and not a digital company. That ruling could have major implications for how uber has regulated throughout europe. This ruling will not change things and most e. U. Countries where we already operate under transportation law however, millions of europeans are still prevented from using apps like ours we will continue the dialogue with cities across europe. While this court case cant be appealed, uber can pursue other legal challenges to courts to defend its business. In facebook rolling out new facial recognition features. Its using the technology to determine when pay photo view has been uploaded even if you werent tagged that should help facebook crack down on fraud lent accounts like when someone else tries to create a profile using your name and photo. Facebook will notify you if somebody uploads a picture of you even if they didnt tag the picture with your name the feature can be turned off if you dont want to get those notifications. I dont know how i feel about this i dont have tagging on right now. I dont allow other people to tag me in their photo. I think i do. I just dont have it turned on whats that i just it was Something Like, you know, i bought something using the phone yesterday. Did you no. I was trying to come up with something where i have moved into this world, and i flintstone. I dont have anything. I dont. Im on twitter. Do you follow james woods yes james woods i know james. He is awesome i know you do. He is awesome, but he is fearless he does things, and im going to retweet it and go, no, no, no. Im not. I dont i will not im he is fearless im just full of fear. Coming up, House Majority leader Kevin Mccarthy joins us after the break to talk taxes and government funding as we head to break, take a look at u. S. Equity futures [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. Us. Its what this country is made of. But right now, our bond is fraying. How do we get back to us . The y fills the gaps. And bridges our divides. Donate to your local y today. Because where theres a y, theres an us. I like it good morning, everybody. Welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in times square. I cant do this. A number of corporate earnings reports are front and center this hour. General mills reporting quarterly profit of 82 cents a share. That matched expectations. Revenue, though, was above forecast, and the Food Producer also raised its 2018 organic Sales Guidance that stock is up by 1. 5 blackberry earning 3 cents a share for the latest quarter compared to an analyst forecast for break even performance revenue beating estimates and blackberry said it sees the revenue at the high end of its prior forecast that stock up 78 cents, which, believe it or not, is a gain of more than 7 recreational vehicle maker winnebago reporting a quarterly profit of 52 cents a share thats better than the street was expecting. Revenue above street forecast, and the company says that the broadening of its portfolio has helped it increase both its sales and its Profit Margins still, at this point it looks like that stock is down by a half a percent blackberry. We do that just for me because i actually have one here thats what i was going to say. Were going back no, i think theres three people in the company. We finished watching when it just came out. They havent seen the previous ones, and now were going back the last season was 2011, so worry going through that everybody still has a blackberry. As recently as 2011 i wasnt i was going to say, who is who still has a i still have an iphone too. You know who else has one . Mary duffy i saw it last night, and jeff garland was on look at that ridiculous blackberry, and then i looked down because i can type so quickly on it. All right to housing now that just shows you i know. Im even more outdated than you are on this one. Bingo more applications out. Dooirna ohlick joins us now with more hi, diana. Hi, joe whats a blackberry . I dont know. A food something spooked home buyers, and it wasnt Interest Rates because they fell. Mortgage bankers saying it could have been the tax plan total Mortgage Application volume dropped 4. 9 compared to the previous week. That according to the Mortgage Bankers association. Now, applications are now 8 lower than the same week one year ago this is, of course, the slowest time of the year for the mortgage market, but the numbers are seasonally adjusted. You have to factor that in as well now, Mortgage Applications to buy a home had their weakest showing since last april volume fell 6 pefrz for the week and was barely 1 higher compared so the same week one year ago buyers might be concerned about the government tax plan. The plan was getting a lot of attention last week with reports of how it could cost home values in higher cost states to drop. Now, applications to refinance a home loan which would not be impacted by the tax bill, they also fell. Down 3 for the week despite lower Interest Rates refinance volume highly rate sensitive. This as the average contract Interest Rate for 30 year fixed mortgages decreased to 4. 16 from 4. 20 for loans with 20 down payments. All the numbers online cnbc. Com back to you, guys. Okay. Thank you, diana today the house is going back to vote again on the republican tax bill leadership hoping it arrives at the white house ahead much the holida holidays joining us now House Majority leader kechbl mccarthy were hearing some conflicting im just i just want to know when the president actually signs it later because theres some question as to whether that is there thats going to be a big deal, big ceremony biggest piece of legislation you know, its still the end of the first year after all the machinations and handwringing and not getting anything done and all that, this would be a very big piece of legislation to tap off a first year that already has a stock market up 35 and a couple of back to back 3 gdp quarters already. I dont know what everybody feels so crappy about . You have some of the lowest unemployments. You have market and new high you have the regulatory we did things no one has done before from the congressional more than 15 times rolled back regulations. We want to vote on it twice we love it so much. God, its crazy the divisive that is you know, taylor swift said, wow, i got everything i wanted in 2017. She is getting killed on twitter because people are, you know, charlotte people are it just seems such a divide. It is if you sit back and look, this is going to help all americans. Where is the president going to sign it later . We will vote on it. We have to enroll it and send it to him, and then he has ten days in that time frame i think the president will be very kpied excited to sign it after youll see the house and senate go down to the white house. Do a little ceremony i think the president will pick the time and place he has a short time frame, but i think he should celebrate the signature because for three decades people have been trying to do this and have not been able to accomplish this. This is not only changing this country, but look around the world. Its going to make america competitive again. Theyll change the scope of where everybody else is as well. Later, mccarthy we see the futures up this morning. Optimism in the stock market about this we also spend time this morning talking about the potential cuts to medicare if the signature goes into play right away. Is there a fix in place for that is there something that will make sure the cuts dont go through . That is more of a fear of what the democrats are trying to spread out remember what pelosi said. This is armageddon this is the end of time, and if you look at what some of the senators said, they put a lot of different pinocchios out there they got the most that you can give for some of the talks about the bill this bill is simply going to double the standard deduction. An average family of four who makes 73,000 is going to save more than 2,000 in tax everybody starting in february is going to see an increase in their paycheck because of the deductions and where they are. Just check your check. More importantly, look at where Small Businesses will be there will be more entrepreneurs. Look where the corporate rate is going to go to 21. How many times do you talk every day on the air where you talk about a Company Leaving america because of our tax code. Youre going to start reporting people coming back to america, and thats the difference were going to find. Were not even talking about the trillions of dollars sitting overseas with repatriation youre going to have the market up a lot of people in the 401ks not just the price going up, but the dividends. This is separate than the tax bill, though this is the cuts that would be kicked into place by the tax bill because of the issues to the budget, what that might mean or to the deficit. The cuts would then kick in, and it looks like a fix might not just placed until next year. They just want some clarity on that the clarity you will find here is the republicans have been want doing have this fixed for quite some time. When medicare when obama care went in, it cut medicare it is not sustainable of medicare of where they put it through. We have been trying to make our entitlements sustainable into the future you cannot ignore the problem. We can continue to ignore the problem. You wont have the solutions to solve it i think this is a place that youll find republicans ideas already put out there. We got to find a compromise where both people can come together so the next generation will be protected. But this fix will be voted on from the earliest of january 4th or 5th when we come back in in january. We still have to do government funding before we depart this week unfortunately, you would think that would be an easy thing. If you just funded government the exact same way it is right now for another two weeks, but all the democrats voted no they sit back and say, well, its just the republicans that are in charge. It takes 60 votes in the senate. Thats the problem we have, people playing games majority leader, what do you think of the possibility and a couple of people have raised it, that given that there are no democrats on board with this, that were actually creating a new sense of uncertainty this was similar to what happened with some of the bush tax cuts where they were in place and then people started trying to game some of them, and that uncertainty unto itself created its own problems i think were finding too much of that in almost anything you do if a republican brings it up and democrats oppose it, a democrat has an idea or republicans oppose to it our whole system of government it devised to find compliments, and i will tell you this personally, i had a number of democrats cool to me throughout this process and said they wanted to vote for it. I had one even the night before with me that said im getting whipped to vote no theres some that have never voted no on it before. I dont know if we have this. Are you going are you done with tv today after this interview . Are you going to do some more . Why is there a problem no. I was going to give you are you up to speed on fedex and what fedex said today when they reported earnings today . Did you hear the cfo no, i was in the gym. What did they say . Give me a couple of seconds im going to play it for you, but just in terms of their earnings per share for next year, theyre attributing there are volumes arising. Theyre talking about if gdp, if growth does increase, if they increase their earnings per share estimate by 440 to 550, which is 40 more, you have the cfo now yet . Heres what the cfo said if you lisk p to this because you can use this later all right u. S. Gdp could it if this occurs we would likely increase Capital Expenditures and hiring to accommodate the additional volumes triggered from this incremental gdp growth this is all the stuff you talk about theoretically and hypothetically, and there are other people that think youre going to see other companies see the same type of stuff people will faint if it actually does increase hiring railroad wage gains or gdp or any of these things because you hear the stuff. We gofrom 10,000 people dying year and actual armageddon to where this company likes to say were going to hire people were going to make a lot more money for shareholders look, this is a start of americas comeback this is an opportunity for so many others to start Small Business, but you are seeing real life examples just with that you saw broadcom announce theyre come back to america because they left because of the taxes. Were going to see example of example throughout the rest of the year, but we have more to do you know, i wanted to make sure to come on this show on this day for all those times you doubted whether we could get what . Oh, youre talking to him. Im talking to him. I will say i am skeptical, and you have gotten to the finish line. I have two questions broadcom, one of the reasons they came may have been for the taxes or the expectation of taxes, but another major piece was their ambition to do more acquisitions in the u. S. And how difficult that would have otherwise been, including their hostile bid for qualcomm because its going to be a better place to buy stuff. I listened to him say he came to this country because he got a scholarship and became an american he left because of tax, and he brought it back because of tax i heard you at the press conference, and then they made a hostile bid for qualcomm, and we could debate what he would have done otherwise separate question for you, how do you think the public should think or feel over the next six or eight months if we hear a lot about either people moving from either blue states or salt states, if you will, to other states i imagine were going to see headlines about that secondarily, about a new spate of what might be described as startups, and some of which may be pass throughs and others trying to game the system and what we should what is sort of as citizens we should think about that we want to make sure we protect that someone doesnt game the system, they dont have some professional athlete trying to just do a pass through to create and get a lower rate. We try to protect that well continue to look at this tax code for any corrections we have to come back and look at. I happen to come from a blue state, california. You look at the latest statistics people have already started moving out we lost toyota we lost my neighbors down the street that had a Small Business with just 20 employees because you had a 13 state tax. That is already happening. What i hope happens in this because even if you are in a salt state, you are getting a tax cut, but i have talked to our governor in california you know what he did this year he now has california paying the highest gas tax in the nation. Our gasoline costs 1 more a gallon than the state right next to us. They continue to raise the taxes instead of creating a new way of lowering the taxes like the federal government is doing and create an incentive. How many people do you know have moved out of new york . Not for any other reason than the tax itself hey, leader, you know, President Trump against all odds on a populous message got into the white house, and poart of that populous message was not cutting entitlements, but we know that someday they got to be addressed, whether its mean testing or however you want to do it, and were playing around with this what were doing now, and were not even addressing the lions share of Government Spending, which we cant even touch. You think that from once this is done, then you can tack to that. Can you get him to look at that . It was pop lichl thulism that gm there, and medicare staying as it is, social security, but sooner or later we got to figure that out, dont we will he be on board with that . I believe so. If you do nothing, entitlements will not be there for the next generation is it easier to solve this entitlement problem for a future generation in a growing economy where our growth is over 3 . I think you have more options and more solutions to the problems i believe, yes, youll find it this is a big problem, and it makes up 66 of the entire budget when Ronald Reagan was president , it was just 25 youve got to do something about it if you want to make the next generation have an opportunity what did we decide about paul ryan is he really leaving he is not leaving im the closest to paul ryan as you can get. He is doing a tremendous job the only reason people Start Talking about it is because how hard he has worked to try to make tax happen. If i was hem or you, i wouldnt stay. Im watching cantor, you know, doing all these big deals, raking it in best thing that happened to him. You know, theres more to life than money, and i think it is an unbelievable honor to walk in here every single day okay. And look at what we were able to do today. To be able to have a vote like this and be a part of this congress to be able to make it happen, it hasnt happened in three decades. So many people have tried before us how much opportunity were going to give to other people. Because you guys are young guns i saw that book. You and ryan are young guns. Young guns dont retire. We didnt even youre a young gun. We didnt even get any money from that book either. We gave it all away. A young gun you look good on the cover of that, you two. Leader mccarthy, thank you you can use that soundbyte, but i prefer if you didnt go anywhere else. All right this show is most important you said to come on. Thats right. Okay. Good thanks coming up thank you, leader coming up, the latest cnbc millionaires survey is out find out how the richest are feeling about the stock market, the state of the economy, and tax reform rht aerigft the break. Squawk returns after this. They came out of nowhere, sir how many of em . We dont know. Dozens. All right lets teach these freaks some manners good luck out there, captain thanks but i dont need luck, i have skills. I dont have my keys. on intercom all hands. We are looking for the captains keys again. They are on a silver carabiner. Oh, this is bad. As long as people misplace their keys, you can count on geico saving folks money. Fifteen minutes could save you fifteen percent or more on Car Insurance. Wow record time. S. 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. 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. Cnbc millionaires survey is out, and guess who is here robert frank joins us. He has the results robert good morning, andrew. Americas millionaires own about 85 of the nations stocks, so their outlook can really shape markets. Right now theyre growing a little more skeptical about the stock market with the most downbeat forecast in about three years. More than onethird of million airs surveyed say the market will be flat to down next year thats according to the cnbc millionaires survey. 41 said it will be up between 5 and 10 , and 23 said its going to be up double digits yeah, thats still positive, but its below the levels of the past three years their favorite sector for putting new money into the market next year is tech and then financials. It all Falls Along Party Lines the rich arent that different republican millionaires say the economy will be stronger next year dems say it will be the same or worse. Republican millionaires say the market will be up at least 5 next year. Democrats are more likely to say its going to be flat or down. Now, one thing both agree on is that the biggest risk to Financial Markets and their wealth is government dysfunction. This is at the highest level since we started our survey. 44 said government dysfunction is the biggest risk. It ranked first among both dems and republicans. Millionaires give trump a score of 32 out of 100 congress got 18. Millionaires are dead even in who they voted for in 2016, but a quarter of millionaires who voted for trump say they would vote for someone else in 2020. Of course, it depends on who that someone else is the economy will be the same next year or the depending on party. We asked them both democrats said the economy will be the same and the market is more likely to be the same kro thank you, guys. The new hotbed for professional sports, las vegas the gold en knights have shown that sin city isnt just for betters anymore. Its the most successful new franchise. I think they were in first place. I dont know whether they still are. Contessa brewer will join us with a lock at how sin city is turning into sports city that story is next in the meantime, check out the futures at this hour we were up a couple of digits on the dow. Now were just under 9up9. You cant predict the market. But through good times and bad. At t. Rowe price. Weve helped our investors stay confident for over 75 years. Call us or your advisor. T. Rowe price. Invest with confidence. Las vegas, which hasnt hosted a Major League Sports team is getting three, and its turning sin city into sports city cnbcs Contessa Brewer joins us right now. She is life from las vegas with more, and contessa, good early morning. Always something happening out there. Consider it tuesday night in las vegas in december this is the slow season. Last night this crowd was filled to the brim in t mobile arena for the Golden Knights game. What a game it was the winning shot in the last two seconds of the game, the Golden Knights ended tampas sevengame winning streak, and theyve had just a phenomenal season now they are fourth in their division the Merchandise Sales second in their division. Merchandise sales for their ticket prices are above the nhls average. What you are seeing here is that its an inaugural season that has drawn out so many fans in las vegas. In fact, a market study for the knights showed them that they had 200,000 avid hockey fans living in las vegas. Mostly from cold weather hot hockey places like canada and minnesota. Mgm owns a stake in this team, and the ceo, jim burns, sat down with me to talk about why he is doubling down on an investment in sports. Go to rally behind after the tragic events of october 1st, guys im glad jim is in a better mood real setback during that election i wonder how much his stock is up too in the last year yeah he got very political. Welbeig bk. L rhtac e. Why do you put up with it . Believe it or not you actually like what you do. Even love it. And today, you can do things you never could before. Youre working in millions of places at once with iot sensors. Analyzing social data on the cloud to create new designs. And using blockchain to help prevent fraud. So get back to it and do the best work of your life. And using blockchain were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. What we do every night is like something out of a strange dream. Except that the next morning. It all makes sense. Fedex powers Global Commerce with vast, farreaching networks. Deep knowledge of industries. And, yes. Maybe a little magic. Sflo the tax cuts, the jobs act is passed. Our special guest this hour, Shelly Moore Capito. Squawk box news maker former barclays ceo bob dimen on deal making, tax reform and the deregulation the crypto currency craze hits home. A look inside the breeding ground for overnight bitcoin millionaires the final hour of squawk box begins right now if i had a Million Dollars . Yeah. Well play that later. Bare naked ladies that work in this environment . Does the name even i thought about that we need to be specific that were talking about a band. Yes band. Band from the 19 t90s really they may be still cooking i dont know enough about the yeah. For millionaires maybe it is a good morning i dont know thats what we hear. Welcome back to squawk box. Not for all of them. On cnbc live from the Nasdaq Market site in times square. Im joe kernan along with becky quick and Andrew Ross Sorkin futures right now indicated up about 90 to 100 all morning long now were at 100 again the s p indicated up nine, and the nasdaq up 27 robert frank just talked about millionaires i said its not what it used to be he said there are 12 million in the country. Wow out of how many its an actual number. Still small but check out the tenyear that were watching today its 247 now he did finally get above that 244 resistance, but remember that well back in what were we thinking about back in march when we got up to 260 . Remember that . Yeah. At that point we thought we were on track to head towards 3 . Yeah didnt happen maybe this is the time maybe were going to need a new chart. Need a new vote. You said that was your favorite quote. Were going to need a bigger boat need a bigger boat. We need a bigger y axis. Maybe. Lets get you caught up to speed at what else is happening at this hour the e. U. s highest court rulds that uber is not a technology company. It says it is a Transportation Service, and it should be regulated as such. As a technology company, uber would have been protected by e. U. Law from certain restrictions by individual countries. Transportation companies are regulated more strictly, and this means uber could have to start paying licensing fees and Employee Benefits some some of the countries it operates in in response to that ruling the ridesharing startup said it will continue dialogue with cities across europe also, few earnings reports out this morning General Mills matches estimates, but the adjust the quarterly profit of 82 cents a share revenue coming above forecast. The food company also saying it is raising its 2018 organic Sales Guidance, and that stock is up by more than 1 . Also, check out shares of blackberry beating on both the top and the bottom line. The Software Maker says it sees fiscal 2018 are he have new you at the high end of its forecast, and that stock is up by 8 its only 87 cents winnebago coming in 5 cents better than expectations with quarterly profit of 57 cents a share wrash. Revenue also the recreational vehicle maker pointing to the broadening of its Product Portfolio that says it helped increase both sales and Profit Margins. Late last night, early this morning. Joining us now Shelly Moore Capito senator, its good to see you. What do you know about the timeline today coming on squawk is everybody else up and ready to go . Do you know . Everybody else is up and ready to go. We really got momentum here. I think the house this will breeze through the house we knew this was a possibility on some technicalities, and i heard from some house friends at about 1 30 or 2 00 last night, and theyre ready to make that vote do you know how its going to work after the the house put the checkmarks shouldnt be different than yesterday, right thats correct. When do you think theres going to be some a ceremony when it s that 1 00 at the white house . Right i think the president is probably anxious to get going. In terms of hiring and capital expansion, they change their guidance for what theyre going to earn next year. It may be more than just flowing to the bottom line you might actually see the macro improve if all these Companies Start doing the things that if they all do what fedex did, you would see that, and some of the stuff that republicans have said might actually come true, which would be shocking for everybody, i think. It would certainly be welcome. Weve always believed that what fedex announced this morning was going to be the result of making our tax code more competitive globally, and im excited to hear other companies doing that, but hiring more people to me is the critical thing because that will have some wage impacts as well i ask leader mccarthy about what comes next. There are many that would like to see the issue settled along with Border Security we hope we could get that done towards the beginning of the year its important to a lot of people certainly a lot of families across the country Pretty Amazing that the mandate goes too, which means you might youre going to have to address health care next year somehow again, and when do you expect that . Do you have any ideas on how to make that work where people arent paying just way too much in premiums and deductibles . We had two bills. The alexander bill and Susan Collins bill that we were thinking may go on a continuing resolution that looks like that has fallen through, and i think were going to have to address this at the beginning of the year in terms of the individual mandate, then you have to look at 80 of the people 50,000 and under who paid a penalty because they couldnt afford insurance that penalty is going to go away hopefully what we need to work on is the affordability along with other things, and i think well do that in the next several months because were going to, again, start looking at insurance Companies Starting to reprice weve got to really get some stabilization there. Right its going to be going to be work. Its going to be destabilized, though already this enrollment season was the lowest in recent years, was it not well, you know, i saw mixed reports on that. You know, there was criticism that we that the president had narrowed the window that you could enroll, and then i saw reports that the signups were morrow bust. In my state they were fairly even maybe a little bit lower you know, so i think people want to buy insurance, but it has to be affordable. I think youll see us working on that as soon as we come back in january. With the mandate gone, though, that is going to force rates up with fewer people in the pool, people who dont want to be in the pool. That certainly means Price Inflation is going to be there what do you think the best plan is for addressing that you know, i would vote for the Alexander Murray bill, which is a temporary stabilization with some flexibilities to the state, which would help the Insurance Companies keep their rates down this is the csrs, as theyre called, and so imauto hoping that that does move forward. It did hit a hitch here last week, and so its not going to be able to be addressed here in december, but hopefully in january. Then the big overarching thing that we all, you know, at some point have to think about is entitlements and i cant believe all this is about the discretionary part versus the nondiscretionary spending i mean, were doing all this, says and weve already spent 80 of the budget when we on january 1st its already gone, right . When do you look at that you are frustrated. I chair a subcommittee we havent even gotern the bill up on the floor. Weve got to do weve got to start functioning better here, and it has to be bipartisan, and we havent been able to get there. That will be predictability. One of the interesting things you might find interesting on my subcommitt subcommittee, im going to do the oversight on the irs were going to be on them from the very beginning to maerks today is a good day for tax relief we want to make sure it moves forward for every tax and business taxpayer, and thats going to be a challenge. Remember kbh the house did something with yeah as a former house member, i can say that was the house you were the ones that screwed it up, though. In the senate. Okay. Okay senator, thank you. Thank you all very much all right well be watching later today. Sounds good thanks okay. Coming up, a major player will be back in the hedge fund arena in just a few weeks. All the details about this man, steve cohens comeback were going to talk about it next later, a breeding ground for overnight bitcoin millionaires were going to take you to the crypto castle. Its going to happen at 8 20 a. M. Eastern te. Quawk box returns in a moment stay tuned you are watching squawk here on cnbc nobodys putting their money into equities. Theyre not investing in commodities or fixed income. What people are really putting their money into is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. Because when you approach investing with a tireless desire to beat the status quo, Something Wonderful can happen. Those people might just get what they wanted out of life. Or maybe even more. I thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back to squawk box. Futures right now indicated up last i saw was exactly 100 now it is 106. 25 s p indicated up just under ten. Nasdaq strong, up 27 a lot of these would be new highs. Again, shares up that would be 71 new highs on the dow wendys is higher. Wedbush upgraded citing prospects for continued growth in Free Cash Flow the stock broke out to new highs. 2018 could be a very big year for a guy we havent talked about in a while steve coern, Hedge Fund Legend leslie joins us with that story. Lesl leslie thats right, andrew. Less than two weeks steve cohen will be able to accept entry to outside capital. Snoot latest speculation is that cohen will seek fees that are higher than average. Around 2. 75 of assets as a management fee, and up to 30 of the profits. Now, representative for cohen declined to comment on his plans, but the Hedge Fund Industry has changed a lot in the four years since his prior hedge fund sac capital pleaded guilty to Insider Trading four years ago and paid a 1. 8 billion yon dollar fine. Each year hedge funds have lacked the s p 500 and lps are demanding lower fees with more favorable structures and a large part of the industry is actually ceding to those wishes cohen is known for generating alpha and maybe the anomaly in the market able to command those higher fees fees and other restrictions that other gps have been unable to accomplish what do you think if you are a betting person . If im a betting person, oh, thats why i do this job and not dont hang out at the tables in vegas. I think given that theyve taken all of these efforts to go out and test the waters and speak with perspective investors, theyve gotten a decent response theyre looking to get Sovereign Wealth Funds on board and some of these thats the question longer term investors to say would a lets call it a Public Pension Fund get involved with mr. Cohen a Public Pension Fund meaning, you are you work for a state. Do the past issues preclude you from getting involved preclude you from getting involved does the Sovereign Wealth Fund that represents a country, theres a values piece to this is there a values piece that somehow im not making judgment im just i think it depends on the pension fund and what their exact bilaws show. Steve cohen himself was not as much in hot water. The reason he was came under fire was more because he was supervising those who had wrong doing and pled guilty to wrong doing. I think it depends on the pension fund i think Pension Funds these days are looking for that outperformance they see that they can get that with steve cohen they will be more inclined to invest with him. I think where Pension Funds are more skittish these days are things like crypto currency and the more risky speculative areas. In terms of, you know, their specific bilaws, i dont know if steve cohen himself precrudes them from investing in that. Does this fall into that category where we cant invest in this because were all about esg these days i dont know i havent heard that from anyone that i have been speaking with, but i think its a good question to raise thank you appreciate it. When we come back, a live look inside San Franciscos crypto currency castle deirdre, what do you have for us coming up . Well, becky, we are here in the crypto castle, and all o the bitcoin or crypto entrepreneurs, theyre still sleeping its still very early here, but they let us in for a firsthand look at where they live, eat, sleep, party and plot the future of money well give you a look when we return 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. Will big tech be the big loser when it comes to the tax bill lets take a look at the price of bitcoin at this hour yesterday it fell by more than 1,000 in less than an hour at one point the crypto currency slipping after coin base started supporting bitcoin cash. Bitcoin cash is a spinoff of bitcoin that launched earlier this year. This morning you see its up by 35 for bitcoin. 17,669. A threestory house in San Francisco could be good luck for the next potential crypto currency millionaire deirdre bosa is standing by, and i will bite. What is the crypto castle . Well, becky, this what is around me may look a little bit more like a frat house or a commune, but, yes, this is a crypto castle, and its actually been home to half a dozen millionaires that have gone on to make their fortunes in bitcoin or crypto currency startups. Before bitcoin entered the mainstream, this house in San Francisco was attracting early adopters and enthusiastenthusia. Some came for the cheap rent others came for the likeminded community. Now, though, this is where the next generation of bitcoin entrepreneurs eats, sleep, party, plot the future of money and Block Chain Technology at any given time, guys, there are between four and ten People Living here. Sometimes in closets theres even a required reading like why bitcoin or disrupted. These are crypto industry magazines, by the way. Now, this, guys, 2017, this year, becky was just outlining has obviously been a huge year for this crop of castle residents. A record amount of vc investment a billion dollars into crypto startups. Im told that no one expects that kind of growth to be sustainable. Continued boom or overdue bust things will certainly stay interesting for this crop of residents and into next year for the crypto castle. Back to you. Deirdre, it looks shockingly like hbos Silicon Valley place. It is, and theres been a lot of comparisons to erlickman from Silicon Valley well show you around later, but theres a liquor cabinet over here theres a frig covered in bitcoin stickers and other crypto currency stickers it really does feel that way is there an erlickman who actually owns the place . There is. There is its a guy named jeremy garde r gardener, and he has his own crypto currency startup called auger, and, you know, people come and its a revolving door if they go on to make money, they dont need to live here where the rent is cheap. Were talking San Francisco, of course he, you know, determines who comes in and who comes out and also theres a revolving cast of guests here as well. I cant wait to see this guy later today. You have baited me thank you. All right. Well watch deirdre throughout the day as she brings more of that to us in the meantime, when we come back, the trump economy and social tension in america. We will talk to National Urban league ceo marcq morial about what he sees in the year ahead that comes right of after the break. First, though, lets take a look at the u. S. Equity futures sharply higher this morning. Dow futures now up by 114 points above fair value this comes as the tax bill is expected to be approved once again by the house today s p futures up by close to ten the nasdaq up by 28. Squawk box will be right back. When you have a really traumatic injury, we have a short amount of time to get our patient to the hospital with good results. We call that, the golden hour. Evaluating patients remotely, is where i think we have a potential to make a difference. We would save a lot of lives if we could bring the doctor to the patient. Verizon is racing to build the first and most powerful 5g network, with ultra lowlatency that will enable things like precision robotic surgery from thousands of miles away. As we get faster wireless connections, itll be possible to be able to operate on a patient in a way that was just not possible before. When i move my hand, the robot on the other side will mimic the movement, with almost no delay. Who knew a scalpel could work thousands of miles away . Good morning. Welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square among the stories front and center, e. U. Officials want the brexit transition period to end no later than december 31st, 2020 that view had been expected, but today marked the first formal declaration of the goal. That would be 21 months after britain officially leaves the e. U. Slightly shorter than the two years sought by british Prime Minister theresa may elsewhere, Mortgage Applications fell 4. 9 last week according to the latest figures from the Mortgage Bankers association both new purchase applications and refinancing activity fell despite a four basis point drop in the average 30year Mortgage Rate that now stands at 4. 16 . Another housing number is due at 10 00 eastern. Its the National Associations of realtors issuing november existing home sales Consensus Forecast calls for a. 7 decline following a 2 jump in october tax reform at the finish line this morning. Steve liesman is here with the potential impact on gdp. Youre talking fedex this morning. Thats the kind of thing thats a big variable for how this tax cut will impact two corporations invest . Do they give it back a lot of things in motion. General agreement, tax cuts will boost growth by how much and by for how long are really the variables out there . Lets take a look at some of the forecasts im seeing for 2018. Some of the them updated just la night and the day before in part, because they finally got the final bill there were some changes in it that were meaningful mike england just emailed me and said his number is actually 3 he is a tick higher because of some i things but half a point of that is from the tax cuts pantheon is at 2. 7 High Frequency at 2. 5. Morgan stanley, maybe less optimistic at 2. 4 all of these numbers are believed to be current potential, and you see some guys in 2018. Theyre up 2019, though, they have a little bit of giveback in there i dont want to give you a lot because Ian Shepherdson said the economy will be expanding by nearly 3 on the back of stronger business investment, a modest acceleration in consumption, and increased Government Spending along with perhaps better net exports as well there will be a big wealth effect in 2018 both from the higher stock market as well as the tax cuts he says negotiations led to a pulling forward of tax cut benefits into the first four years out of the last six. Morgan stanley says we dont see this as a sea change for the current Economic Cycle the fiscal impulse should fade and grow slow across the second half of 2019, though they say corporate spending is a big variable in that josh fineman over at deutsche says all told, which we would welcome supply side. Wee reluctant to expect a miracle. Thats the dna of economists being reluctant to expect any miracles here are some of the unknowns. Do consumers save or spend the tax cuts that theyre given . Do corporations envest or give it back . The key to all this, how much do rates rise in response to either higher growth or prance higher inflation . Let me show you the fed rate hike probabilities right now march for that next hike were at 68 that will be jay powells first meeting. September now, where now they got the second hike baked in we did just before it came on theres the fed rate hike probabilities. If we could go to the tenyear, we pass the psychologically insignificant 2. 5 tenyear yield. 2. 49. Now its it was 2. 5 when you sat down on the you verify that thank you, becky you know, its basically not responded all that much to the better growth figures, to the tax cut figures, to fed rate hike plans well see if yesterday and today is the day when the bond market woke up to the 2018 economic realities that seem to be coming our way. Thank you, steve. Sure. Market rallies, trumps reforms and social activism dominating the headlines in 2017 joining us right now with a year in review on how social tensions, particularly race relations, played out on wall street is mark he is the president and ceo of the national urkan league. He is also an entrepreneur, a former state senator, and former mayor of new orleans mark, thanks for good morning. Happy holidays great to see you. Lets run back this is a review of last year, but im sure well do looking forward to next year too whats happened . Well, lets talk about the tax cut bill you know, if you are in the 1 , you are spiking the ball and popping the dom, but i think congress could have done better. What would have been better . Instead of 83 of the benefits going marcq, lets just talk about that though. The idea that those in the 1ers approximate are popping champagne corks. Theres a lot of people in the 1 that are paying higher taxes, particularly in some of the high state and local stacks like new york, new jersey, california like illinois you could run through those states there are people who are in the 1 who are going to be paying a lot more where a lot of the benefits will go to the middle class and theyll phase out by the year 2025. I mean, again, its a long debate the way i always looked at this is the middle class may get something, but theyre not going to get what they were promised they were promised a giant, a big, a huge, a historic tax cut. This is not the reagan tip oneil deal, which was bipartisan and revenue neutral this is piling 1. 5 trillion on the credit card of america youre right. We can go through this look we can sit here and argue for a long time about what happens yes, the majority of the tax breaks are going to go to corporations the hope from the people who put this in place is that that will eventually spread through the rest of the economy. Where the trickle down economics will work and whether that theory will take, and i think when you are talking about working people, you are talking about people of color, we could have done better now that the tax cuts have added, steve, 1. 5 trillion to the deficit, now theres going to be an effort to try to pay for that with cuts to domestic spending i looked at the projections for growth, and many of the economists are suggesting, well, were going to have strong Government Spending. Paul ryan gave a big signal yesterday that cutbacks to entitlements and thats the second part thats the second leg of this plan second leg of this plan, and that plan would have a recessionary impact, and its going to be vigorously opposed, but there was not a lot since there were no hearings and really not a lot of public discussion, since this was done really in close smokefilled rooms in washington, that part of the conversation was really not elevated it greatly concerns me that that is next. Social activism this year, this was a year where hate crimes, racial engs tensions really flowed out into the open in american life. It was a difficult year. What was troubling to me most greatly was when charlottesville happened, frankly, to see the president , to see the president , in effect, give comfort to those that showed up with tiki torches to disrupt activities there. This has been a difficult year, and what we need i hope 18 can be a year of more healing, more tolerance, more togetherness, but it has to start with the leadership of the nation and setting a tone. Lets talk about some of the numbers and what this means for wall street. Were a business show, so we look at some of those things, and you do have some statistics on what the buying power is for black americans. Also, the difference between wealth and salaries and how you figure out the middle class. So, you know, we know that africanamerican and latino buying power is increasing significantly. I think my figures show its about 1. 5 trillion to 1. 7 trillion a year. If you take africanamerican and latino buying power together, its over 3 trillion a year what et cetera significant is that its growing faster than white spending power on a yearoveryear basis, and that reflects changes in the demographics of the country. Those consumers are going to have a big impact on the housing market, on consumer markets, on spending on an overall basis is their money is their spending power going upper capita too its going upper capita it is a positive story. The Unemployment Rate was positive too the lowest in 17 years its positive, and as ive said and ill have to say because i think its true, the obama recovery continues you know, we are one year in respond to what fedex said this morning they said theyre going to go out and spend more on Capital Spending that aus ensibly and hiring the Capital Spending part is for economic reasons among the most interesting in the sense that you put better tools in the hands of workers you make them more productive. You make them eligible essentially for better pay raises if the Corporate Tax cut does that, do you applaud that aspect of a Corporate Tax cut if the Corporate Tax cut increases wages to a greater extent than the rate at which theyve been increasing over the last two and a half years, then it could be a positive for the American Economy it remains to be seen. Business leaders have not jumped on a stable and said now with the additional money were going to invest more in wanlges. Whether those Capital Expenditures are going to flow down to workers remains to be seen there is a possibility of that sort of scenario, but i come back to what i said earlier. Tip oneil and Ronald Reagan did a deal in 1986 there were two components of that deal that were not present in this. Number one, they agreed that they would come up with a plan that was revenue neutral they would not add to the deficit. They took that off the table number two, they agreed that they were going to work in a bipartisan basis this bill did not meet either of those tests. Thats why notwithstanding where we are today, its going to continue to raise friction its going to continue to engender opposition becausei think even today even the best if you best those knowledgeable legislative experts dont know exactly every provision of the bill because it wasnt going to be done in a transpatient fashion if this does increase wages now, wages have been increasing. Right it increases it at a greater rate over a long five to seven year period. Then well be able to look back and say this has a positive effect it remains to be seen. Yeah. Well certainly be watching very closely to see where this all comes down mark, we want to thank you thank you coming up next, former barclays ceo bomb diamond is here he just sealed a 2 billion deal he will join us on set to talk about it when squawk box returns right after this ive been thinking. Think of all the things that think these days. Businesses are thinking. Factories are thinking. Even your toaster is thinking. Honey, clive owens in our kitchen. Im leaving. Oh never mind, hes leaving. But what if a business could turn all that thinking. Thinking. Endless thinking into doing . To make better decisions. Make a difference. Make the future. Not next week while you think about it a little more. But right now. Is there a company that can help you do all that . I can think of one. I6r7b8g9s i6r7b8g9sd. 105 points higher ahead of the signing of the tax bill. The vote on the tax bill, i should say nasdaq up about 27 points in the s p 500 up about nine points shares of fedex are higher in premarket trading and Delivery Service beating on the top and bottom line. Daily average package volume rising 7 compared to a yoer ago. We mentioned this a few minutes ago. Fedex addressed u. S. Tax reform in that Earnings Call, and heres what the cfo had to say u. S. Gdp could increase material this year as a result of u. S. Tax reform if this occurs we will increase expenditure and hiring to accommodate the additional volumes triggered from this incremental gdp growth shares of fedex right now lets show you whats going on they are up about 2 in the meantime, atlas merchant taking a 2 billion acquisition of the Hartford Life insurance Annuity Business talcott resolution here to talk about the deal and more bob diamond we saw him the other day, but we didnt really see him. He was over there in the background the founder, of course, and ceo of atlas merchant capital. Former ceo, of course, of Barclays David shamous is here. He is the chief Investment Officer the atlas merchant capital. I have to can my partner who did all the heavy lifting on this, and you are just the pretty face . Thats whats happening. Heavy lifting was david when you do heavy lifting at a Company Called atlas, i mean, think about you got it. You got it am i right . Absolutely. The entire globe. Oh, atlas shrub too got to love that yeah. You know, everyone always talks about what happened to the banks. You dont hear as much talk about life Insurance Companies the one big area where they had a big affect on variable annuities. Variable annuities are basically where an Insurance Company ranks a put to the customer on the equity markets the markets go up, then things work out great when the markets dont go up or the markets go down, you can have problems. Thats a lot of what happened postfinancial crisis, and weve seen this opportunity where you have a number of big life insurers, big Insurance Companies that arent writing this business anymore and decided to get out, and now its in runoff its going to be in runoff for many years these things take 20 or 30 years to runoff to be in the business of running these things off makes good sense. So this is its a runoff, and theres going to be no new clients necessarily. Were looking at lots of things the current plan is to be in the business of runoff. We might look to buy additional runoff blocks and run those off. Sometimes runoff could be a higher return business than writing new policies you guys have made a specialty of trying to buy Financial Services businesses postfinancial crisis. Yep when you look at whats going on in this new tax environment, when you look at what people say about whats going to happen to Financial Service companies, are you bullish . Do you think prices are about to go on the move and that would help you too i think its it depends on the sector if you look at any sector of the economy, since the beginning of the financial crisis, the one sector that has, you know, still infinite still in crisis is Financial Services if you look at banks in europe, saz an example you and i have talked about the bank we acquired in greece the valuation has not recovered at all times since the crisis. Is there a reason for that, though sure. Is it risky well, is there a reason you know, the u. S. Banks with tarp, you know, step one was all the banks got equity step two is you cant give the equity back to the government until you clean up your Balance Sheet and pass the fed stress test three, until you pay the money back to the government, you cant pay bonuses, and you cant pay dividends. What happened . The u. S. Banks recovered quite nicely they fixed the problems. Across most of continental europe, you still have very, very high nonperforming loans and Balance Sheets that have real legacy issues as those legacy issues come off, the opportunity to put talent and technology and drive lending, which is exactly what were doing in greece, we have the only bank with no nonperforming loans we can begin making loans the small, Medium Enterprise companies. Most of the businesses you have acquired thus far have been traditional Financial Services do you imagine yourself getting into fin tech, and do you think that these fin tech players are going to ultimately disrupt or upend these traditional players . I would generally say were much more attracted to the capital intensive businesses banks, Insurance Companies regulated businesses. Yeah. The reason is not that we dont like fin tech or we dont like Asset Management, but the number of competitors of ours out there looking to buy those things, theres a long list. Everyone i know is an Asset Management expert. The number of people who wanted to buy a complicated Insurance Company or a complicated bank or whatever, the list gets very small very quickly and where do you guys stand on bitcoin heres my opinion on bitcoin. Ive been looking at it for years. I bought a little bit a couple of years ago im an owner you didnt sell i bought a little i didnt sell. Why didnt you sell we were talking earlier during i think it was during a break. If i had been smart enough to buy, i also would have been dumb enough to have already sold. Heres my opinion people talk about this all the time its very binary discuss either you love it and you think its going to a million or you hate it and you think its a fraud and its tulips and all that to me it might not be so binary, and its not crazy to have 1 of your net worth in bitcoin. Thats how much you bought . 1 of your net worth no, but its getting there every day. Its getting closer. If you have 1 of your net worth in bitcoin or half a percent in bitco bitcoin, if it goes to a million, youll be happy. How much of your net worth did you put in at that time . Much less like ten bucks. More than that, but whats the Intrinsic Value of bitcoin today recognizing, by the way, that you can mine a bitcoin, the actual cost of mining a bitcoin today can be done for somewhere between 1,200 and 1,600. Theres a couple of points. One, you have to build that up you have to create that, and that could could change any day. You dont invest a bunch of money, and you have to pay for electricity, and you have to take some chances that you may not get your bitcoin, and the cost might change. Thats problem number one. Problem number two is in the end theres only going to be 21 million of these once theres 21 million, there wont be any left. Im not like some big probitcoin guy. Im not saying its not necessarily a fraud. You guys have also invetsed in africa. You want to bank the unbanked in africa you talked a lot about that, and people talked about bitcoin being a currency for a lot of countries where people might have questions about a sovereign currency thats why i think the bitcoin conversation, as david said, gets a little narrower if the conversation were are we headed towards a Cashless Society . Absolutely is it going to happen more quickly in areas like africa where they dont have a lot of most people dont have Branch Banking as we know it in developed economies . Absolutely is the technology real, and can we have a Cashless Society yeah, i think thats where were headed for us once we invest in Financial Services, i think thats when we get really focused on fin tech. Just investing in it is difficult, and as david said, prices tend to get run up because its kind of a hot sector right now theres no capital you can measure the ebida. You can put leverage on it applying that Financial Technology once we made it an investment in a more traditional brokerdealer, Insurance Company, or bank makes a lot of sense. Hard question for you you guys both invest in private companies, and i know you are spending a lot of time in europe for the most part and africa and other places this is a u. S. Deal. In the Public Markets, what are the who is the who is managing the best bank in america right now . Youre friends with all of them. Thats why i said its complicated. I think theres been a a ver recovery of the uk banks post the financial crisis and without picking out one, what i would say is relative to the banks in europe, youre seeing real leadership from the u. S. Banks how is that for a political answer very political. Ill take the bait though its very hard to argue that the two best managed banks in the United States right now arent Goldman Sachs and jp morgan. You look at the history and ability to manage through cri s crises, doesnt mean we have the jp morgan whale or whatever problems goldman had in the past theres a real history and real tradition of Quality Management in these places. Thank you for coming in happy holidays and congratulations on the deal. Thank you. Jim cramer is live from the new york stock exchange. Well get his take on the days top stories. Futures are up sharply again this morning when this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. I mwell, what are youe to take care odoing tomorrow 10am . Staff meeting. Noon . Eating. 3 45 . Uh, compliance training. 6 30 . Sams baseball practice. 8 30 . Tai chi. Yeah, so sounds relaxing. Alright, 9 53 . I usually make their lunches then, and i have a little vegan so wow, you are busy. Wouldnt it be great if you had investments that worked as hard as you do . Yeah. Introducing essential portfolios. The automated investing solution that lets you focus on your life. Lets get down to the new york stock exchange. Jim cramer joins us now. Cramer, i havent asked anyone this question yet because im interested in your take. I heard the stuff from fedex and using this and been using it as sort of a, you know, actual possibly real info about what might happen from this where they said were going to hire more people and spend more money. You know what, they said if the economy does improve and if gdp does go up, this is likely what were going to do. Are we back to not knowing whether are we back to assuming that the tax cut tax reform plan does stimulate growth or do we know they are going to do it and fedex is going to add jobs and spend money . I think they are pretty clear throughout the theme of the Conference Call and the q and a that theres absolutely going to be a lot more growth than we thought or else they wouldnt have raised their numbers so much i feel very confident after reading and listening to the Conference Call that this is not the market yet, that the tax changes are not in the market. There will be people who say thats why the stocks ran up theres plenty of reasons why the stocks ran up but its not because of the tax code. I think theres much more to run for stock like fedex which benefits from almost every single line, including the expensing, instant expensing is fabulous for Capital Equipment because it was how much flows to the bottom line based purely on the way you calculate the taxes but some of the stuff they said is also contingent upon gdp hitting some of these numbers that people are forecasting from the benefits of the tax plans. Its still sort of contingent skeptics will say it hasnt happened yet, you dont know, 2018 is going to be a 3 year. Maybe it doesnt come through. The skeptics would do that but i think when you move your numbers 440 to 550 the top of that range is because they expect business to be better they give you the range, you could assume 550 is going to be right. Theyve got more business they have more business than they can handle. Its like its too cheap. The stock is too cheap too cheap. The multiple at that was 16. 5 if you put the new numbers in the multiple for fedex drops to 12 youre not talking about multiple expansion on any of these things or big runs with multiple exactly right, becky. Theres just literally no way this company isnt going to make far more money than people preel li realize just from the gdp growth i would love if he would say our share of the gdp is going to grow and by the way, amazon, less than not even 3 or maybe 3 most and were worried about amazon this was a great Conference Call felt good about it. I think mad money will have a great year. Thank you pionguys too and that ge will have a great year well be right back with the end of the show. Trust 1 doctor recommended dulcolax. Use dulcolax tablets for gentle dependable relief. Suppositories for relief in minutes. And dulcoease for comfortable relief of hard stools. Dulcolax. Designed for dependable relief. The markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. I thwell wait. What did you meetthink about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading companies see it and see it throughwith digital. 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. Lets get a final check on the markets. 26 seconds, not anymore. 22 seconds up 106 on the dow jones, the nasdaq indicated up almost 28 and s p up 9. 5 or so the 10year was over 2. 50, its 2. 486 at this point. You can watch cnbc and see the billing celebration, taking a victory lap down there when the house repasses this bill make sure you join us tomorrow squawk on the street is next good wednesday morning, welcome to squawk on the street. Dow needs 121 points for a new record today and futures indicate well get awfully close. The tax bill on the verge of becoming law the house votes again today. Gary cohn spoke about it moments ago. 10year yield is at least a ninemonth high getting above

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