Transcripts For CNBC Power Lunch 20171220

Welcome to power lunch. Stocks are lower at this hour and dow and the s p 500 slightly higher telecomes are the best financials fedex more than 300 and wild trading day for bitcoin plunged 10 earlier and sinking again now. A lot of news. Hackings, bankruptcies and selling from a major player. Well dive deeper into it. Blackberry the company topping expectations and 2018 revenue and stitchfix, however, tanking. The Apparel Company increasing its Customer Base but its bottom line was impacted by higher costs. And chipotle taking a drop the stock is lowered by more than 2. 5 . Brian . Michelle, thank you. We begin today with the latest out of washington, d. C. The tax bill passing, again. All the angles of that bill covered. Abram at the president where the president is expected to hold a tax bill event at 3 00 p. M and kayla is on the next big story. Thats a funding bill to keep the government open. Lets start with elan. Brian, it is Done Congress has now passed the most sweeping rewrite of americas tax code in 31 years lowering the corporate rate to 21 . Lowering individual rates and revamping the International Tax code all that is left now is for President Trump to sign this bill and were not exactly sure when he will do it the problem here is that the white house is stuck in the sausage factory. If President Trump signs the bill in 2017, that could trigger some massive spending cuts 25 billion in medicare cuts alone. And neither republicans or democrats want that to happen. So, one potential work around that theyre talking about is having the president delay signing the bill until 2018. That would mean the spending cuts wouldnt kick in until 2019, essentially kicking the can down the road. So, these are some of the puzzle pieces that lawmakers and the white house are trying to move around here as they try to also negotiate a deal over a government shut down and also a longer term spending deal to fund the government into fiscal year 2018, guys. Back over to you thanks so much. Well, now, lets get to aman at the white house all smiles here at the white house. A real good feeling here at the white house today as they feel like theyve delivered on one of the president s major promises this is december 20th. The president said youll have your tax cut by christmas. He has delivered as promised this has been a tough year legislatively. You can remember the obama wipe out care earlier in the year and frustration with the folks up on the Republican Party during that fight, but today at a Cabinet Meeting the president was full of praise for paul ryan and the Senate Republican leaders signaling them out by name saying they have done a fantastic job and saying we have tremendous talent up on capitol hill clearly the president in a very good mood today as he took the first of what could be several victory laps here at the white house over this tax bill and also went off message. The white house has been suggesting that this is a major middle class tax cut and it certainly has major tax components to it but the president also seemed to suggest that the major component of this bill was, in fact, the corporate rate cut heres what the president said at the white house a couple moments ago. Our plan lowers on the American Business from 35 all the way to 21 that is probably the biggest factor in this plan. We become competitive all over the world. Our Companies Wont be leaving our country. So, the president there suggesting that the corporate rate cut was probably the biggest factor in the tax plan you can expect democrats to jump on that, but, ultimately, the democrats didnt have the votes to stop this tax bill. They are going to have to fight on different legislative fronts. Now a big win at the white house. They have to figure out exactly where and when the president will sign this bill. There is a possible scenario in which he goes down to maralago over christmas break and signs it privately off camera for legal reasons and then comes back here in jp and holds another victory and once the bill has been signed in january, guys. Before that, well see him at 3 00 thanks before they leave for the white house, before they leave for the holidays, Congress Still has more work to do. They still have to pass a bill to keep the government open. Kayla joining us on that angle more work and less time the strategy for keeping the government open has changed significantly in the last 24 hours. Tax reform timing causing republicans to run out the clock on a yearend spending bill that was previously expected to raise caps ondefense spending throug september. Instead, House Republicans will now meet tonight to consider a threepart plan that would require three separate votes and those votes would happen as early as tomorrow. The first would extend all Government Spending and potentially Childrens Health insurance for the short term likely expiring january 19th the second would include a short term reauthorization of surveillance programs known as fisa the third would deliver 81 billion in Disaster Relief and upsizing of the white houses 44 billion request. The reason for the piece meal deal while taken together it will lose votes from house conservatives and Senate Democrats and wouldnt be able to pass. This morning the Top Senate Democrat Chuck Schumer signaled he still wants a larger package that protects children of Illegal Immigrants and restores those insurance subsidies and he will be willing to wait a month to get that more comprehensive deal while pushing all priorities to january is the likely scenario, the list of items coming due then is getting longer brien . Kayla, the next story may be one that is a bigger fight than the one we just had. Thank you very much. Well see you in a bit. The tax overhaul bill the biggest in 31 years and impacting everyone in america drawing from a host of lawmakers in the higher taxed blue states. Heres looking at you, new jersey two representatives who voted no joining us now republican from new york and josh scottheimer, a democrat from new jersey. Congressman, both, welcome here. The bill is passed the discussion were going to have is a bit theoretical. Josh, heres the thing i live in new jersey new jerseys population in the last 20 years is growing 7 . New jerseys budget over the last 20 years has grown 23 adjusted for inflation do you believe the great state of new jersey because of this bill will wake up and cut its taxes to avoid its higher end residents leaving . I think we certainly need to cut taxes in new jersey. We cant afford to raise them. With what were facing now with tax hike bill that just passed, our taxes, of course, will go up and our Property Values are going to go down i think you pointed out this is the first time this has been done in a purely partisan way and i think we see the results as an attack on a few of our states like new york, new jersey, and connecticut. We are paying the bill for all the states and im very concerned about the impact we pointed that out yesterday, congressman, that this is, according to modern history, the first tax overhaul bill done purely on a partisan line you cant do anything about it now. And youre in d. C. , but do you believe believe the new york State Government is going to have to get smarter. Otherwise, guess what is going to happen. Get in the uhaul and ill see you in North Carolina. Two things. One is, yes, they absolutely have to. Whether it is at the state level or if its even local governments like 70 of my property taxes are school taxes. We have 123 School Districts on long island. But we have to understand that the reason why our state and local Tax Deduction is so high is because state and local taxes are so high. I would say this, while i support fully maintaining as i know my colleague does, as well. For me, if you talk about what is better policy, if youre going to make a change, not that youre putting a bill on the president s desk on christmas and dtelling a governor or mayo de blasio you need to fix this by new years. Thats an impossible request you phase it down over two, three, four plus years to a number that fully protects middle itemizers and that is what should have gotten done here this is passed. So, what can we do now we were speaking to the governor elect of your state of new jersey earlier today on cnbc and he said there could be a legal challenge that he could partake in of this tax bill. Do you see a way forward on that on what grounds could you bring a case and could you challenge this once it becomes signed into law . We put some of the best lawyers together and equal protection claims possibly i think we need to explore every single way to make sure he actually cut taxes and deal with this in new jersey so, we dont start to lose businesses and people fleeing our state to other states. You know, this is a huge shift to the states on our backs and what im worried about is what do we do to give relief to people in new jersey youre going to fight it and going after the equal protection issue or youre going to push your state and local governments to lower taxes what is it i think you have to look at everything were certainly now going to deal that tax rates will go up what will we do to give tax relief to everyone and see what we can do from an equal protection standpoint. Are you guys relieved that now there is some reason to force local and State Governments to not keep raising taxes . This is it they already started to wake up. We already heard from local Congress People from across the country from different states saying, holy smokes, that bill we were going to do and that tax hike we were going to do, we cant do it any more just happened here in the city of new york. Finally, something that will stop these people. So, all levels of government need to be on tax relief i tell you in my district, the east end of longile island were not voting for mayor de blasio in my district, Governor Cuomo doesnt win. We didnt vote for Hillary Clinton in the first Congressional District so, these policies that have been enacted adversely impacting my constituents, theyre kind of jammed up in the crosshairs here were not just talking about democratic voters. Im also here fighting for middle income trump voters people who when they were voting in november of 2016, they had an expectation of tax relief that was going to benefit them. And, so, i want all levels of government to be working on tax relief i love the fact that there would be any type of reason to have any pressure to provide additional tax relief. Just really important for us to be fighting for our districts. Fighting for our state understanding that some other congressman in some other state theyre not going to do that for us if were not fighting for our districts and state. You cant have both, right . That is the problem. You cant have both. You cant fight to keep the deduction for your constituents and, at the same time, force an incentive on to the very people who keep raising their taxes, right . I mean, thats it. Theres a tradeoff in life i disagree. Ill say real quickly before i turn it over to my colleague, if you had a 20,000 cap or a 25,000 cap, for example, in my district, youre now fully protecting pretty much every middle income itemizer you still have to reduce taxes because those high earners in new york city and for our state, theyre providing so much of what goes to our state and they are becoming more mobile by the way, this is an exodus that isnt starting on december of 2017. New york state law two seats the last congressional sense last time there was a census because of population loss you would think they would learn, but they dont. The soft states, the top ten tax paying states pay 40 of the bill right now suddenly, their taxes are going to go up people in my state and Property Values are going to go down. Heres what i would also say i introduced legislation to this mississippi get back 4. 38 and we get back 44 cents hold on a second, if youre in new jersey or newark, you should get a tax credit to equal things out here so were not paying the bill for all these moocher states that are taking our money. You have to look at this wholistically. Congressman, i think we all agree on a lot of thing, but i want to make it clear to our audience, taxes are going to go down, but our net payments may go up in these blue states taxes are going to be cut by 2 to 2. 5 across every income spectrum thats an important point to make the concern is for audience that doesnt know what were talking about because they pay low property taxes, the deduction that we get for property and state and local taxes, thats going to be capped at 10,000. Which, as you know, congressman, sounds like a lot of money to most people and it is, but 10 grand in property taxes in new jersey is a quarter acre on a 62yearold house. Doesnt get you at the end of the bill, we owe uncle sam is going to go up because you cant deduct your state income taxes double taxation and capped on your property taxes and you lose key deductions in the whole in the end, our taxes are going up thats the problem in new york and new jersey good aspects of this bill for a business making a decision to increase pay or to create new jobs when your Corporate Tax rate is going from 35 to 21, for example. That is a positive impact on our Business Climate i agree with that i dont believe that it should be paid for on the backs of any of my middle income itemizers. This bill, to your question, which is, you know, many respects just, you know, getting right to the nerve and completely spot on of this entire issue yep its a geographic redistribution of wealth when youre taking extra money from a state like new york and new jersey to pay for a deeper tax cut else where i have a colleague who might be in a district that 82 of their district takes a standard deduction and while they are, you know, paying less than 10,000 on average in federal income taxes, theyre going to be getting several thousand dollar cut i would just say that there is a way to do this we could have improved this bill agree. We would have had more people who were winners, including hardworking middle income workers. Congressman, i apologize. The most bipartisan moment we had from d. C. In months. Well fight later, dont worry. Happy holidays, happy new year happy holidays. The dow basically flatter the past two days. Dont say that when youre in one. Dont say that President Trumps top economic adviser thinks the effects are not priced in. Is he right . All angles covered on real estate, al chethare and even sports. Stay with us on power lunch. The great emperor penguin migration. Trekking a hundred miles inland to their breeding grounds. Except for these two fellows. This time next year, were gonna be sitting on an egg. I think were getting close make a uturn. Uturn . Recalculating. Man, we are never gonna breed. Just give it a second. You will arrive in 92 days. Nah, nuhuh. Nope, nope, nope. You know who im gonna follow . My instincts. As long as gps can still get you lost, you can count on geico saving folks money. Im breeding, man. Fifteen minutes could save you fifteen percent or more on Car Insurance. Has it all been baked into this rally already president top economic adviser gary cohn says no. The stock market is reflecting the reality of whats going on in the Business Environment today. If you look at what the tax plan is going to do, i dont think thats factored in you can take an interesting basket of hightech stocks and lowtech stocks and theyre not doing what you think theyre doing. You would think that the high tax stocks would be outperforming the lowtech stocks its not happening a lot more momentum in the stock market is he right just how far will this rally run in 2018 . Lets bring in jim mcdonald. Jim, let me start with you, do you thinkits priced in . Are we going to get more of a rally here based on what we heard from gary cohn or so baked in maybe we sell on the news i think hes partially right. If you look at a basket of high tax rate stocks. They have actually outperformed by five Percentage Points over the last five months that it has only been the last month that they have outperformed what about when it comes to earnings bob who keeps tabs on these estimates says right now the estimates for 2018 where the s p 500 would see growth of 8 and 11 . When you add in tax reform 13 to 17 is that baked in i think thats the most exciting part of this. And when i look at 2018, i think whats most interesting is that we probably are heading into a very strong stock picking environment. You know, when you look at this year what drove the market was a combination of economic strength, as well as positive revisions and improving Earnings Growth versus the last couple years. You know, i think there is multiple interesting steps that are going to take place in terms of earnings revisions. Well start with the companies with high domestic exposure where they have decreased tax rates and increased cash flows and then i think what gets priced in is the opportunity around the derivative plays. Those stocks that benefit from the cash flows being utilized. And then, also, a large amount of cash on Balance Sheets throughout the country that will be repatriated and used within the country. I think it will be, what i see in terms of estimates, 15 plus Earnings Growth, which will justify where the multiples are in the market. Jim, in terms of sectors when you look at what is priced in. Are there people underappreciating the benefit of what they have with resfeekt the benefits. The first is financials, especially the banks not only will they benefit from a big drop in taxes, but the Regulatory Environment is becoming a lot more favorable. And then, secondly, industrials where they will get a benefit from accelerated capital depreciation that should boost their businesses the one that people worry about are the low tax Rate Companies in tech and in health care but they are the ones that have the most overseas cash and they will benefit from repatriation the last time there was this big repatriation was in 1994 and 94 of the money that came back went into buy backs and dividends that was a holiday. So, thats a shorter amount of time is that comparable to what were going to see now i think it is companies dont hire people and dont buy new equipment just because they have cash they do that when there is a demand for their products. I still think that the vast majority of theki cash will be used for buybacks. As i taukd about this morning on morning joe isnt any comparison kind of silly now we compete globally with a combined europe and an ascending china. We cant make the historical comparisons. Dont we need to get a lot more competiti competitive . Isnt it a net positive for american corporations . Yes, i think it will be when we look at our positioning going into 2018, we remain overweight financials, we remain overweight tech. We have been increasing our industrials. I think theres a lot of companyspecific initiatives that are taking place that can continue to drive earnings upside and, thus, continued stock upside okay. Jim, karen, good to have you on. Thanks so much thank you lets find out how tax reform may or may not be impacting the bond market. Rick santelli, i have to imagine it is all the talk that and the flattening yield curve, my friend well, the flattening yield curve is not necessarily steepening dramatically, but its definitely stopped flattening and it has turned the other way. As far as tax policy, certainly thats had an effect, along with a litany of other probusiness aspects of this administration youre looking at intradays of tens and one week of tens. Were trading at some of the best levels since march. And, of course, october, we had one day that closed above the yield. Now were holding above that 245 level. Boons have moved rather dramatically, as well. I doubt any of it would have occurred were kind of still bound at the hips and just trade to upyields. As far as the lqd. This is an important chart to Pay Attention to the Investment Grade etf, not too long ago just several seconds ago traded the highest level since october of 16 but turned around as rates moved higher that makes sense finally, the dollar index. This is beginning of november and doesnt look very aggressive it seems it is turning a blind eye to the rest of the marketplace. Michelle, back to you. I have a question about the tax bill up until now, you think the tax structure has incentvised companies to issue debt over equity now, there is going to be a cap on how much interest you can expense and theres talk that that means more issuance of equity, rather than debt you buy that i do. But i also know that the area youre referencing is prebaton a and then we take off the a and go ebit and that will, indeed, change the dynamics from private equity using debt on down. I think its a great thing i think turning the barge from a society of business built on debt to one built on equity is a big positive but thats just my opinion rick, thanks. Big drop for bitcoin a lot of news involving bitcoin and other currencies we have it all covered when power lunch continues. Lets begin. Yes or no . Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Wow record time. S. 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Deep knowledge of industries. And, yes. Maybe a little magic. Check out bitcoins wild ride fell 10 earlier to a oneweek low. Thats on the bit Stamp Exchange losing almost a fifth of its value from a peak hit and it got a lot of news today. Sounds like a power run down to me joins us for that. Coin base says it will allow customers to buy and sell bitcoin cash, which is basically an offshoot of bitcoin created earlier when there was a forking of the two coinbase is also investigating possible Insider Trading these two things are related they are related because whenever there is a new asset class on a platform like a coin base, there could be investor or trader demand for it that might bid out the price they are looking into whether or not employees or contractors who worked for the company may have trafficked in those, may have trafficked in some of those currencies in bitcoin cash ahead of the announcement of that particular platform being offered. So, it tells you about the early stages of these things and whether or not people are still developing kind of these policies and procedures. What we call in the business frontrunning yes, it is. Absolutely right thats why theyre posting their Employee Handbooks online as to, you know, how they are governed in terms of trading they want to be more legitimate and more transparent about their policies and procedures topic number two. Filing bankruptcy after getting hacked this is the one in south korea we look at this because a lot of the bitcoin volume in terms of trading comes from japan and south korea. China, japan, south korea, this is ubit they filed for bankruptcy. They got hacked. Second time this year. They got hacked in april and tried to put security measures around it. They lost 17 of their total Bitcoin Holdings traders on their platform are now allowed to withdraw 75 of what they thought they held, but not the full amount, bankruptcy procedures have to go into place before they can figure out how many assets can be distributed if you are looking for another reason to be wary of bitcoin, hacking maybe the top of that list wall street journal is reporting that north korea is susfekted in the robbery of the bitcoin which led to the collapse of the business you hear a lot of talk of north korea being behind bitcoin payments for nefarious activities because theyre getting it and using it as currency to do bad things. Allegedly. Pored through the code and they believe they are mining, as well im sure they are it doesnt take a lot these days except for energy it takes a lot of energy when youre the dictator of the country you can be deemed what your energy will be used for. Third topic here. The founder of lightcoin said he sold all his holdings and said he will continue to working on litecoin as a technology, but his whole networth doesnt have to be tied he is keeping a handful of them as souvenirs and mementos so to speak for him. He has the idea of a potential conflict of interest there because he talks about bitcoin so often and that may be construed as litecoin and it can be construed as pumping the things up. Taking a lot of heat on twitter. He is not saying about the Underlying Technology behind litecoin is bad. In other words, people shouldnt see him selling out that he doesnt believe any more, but he had gotten so much criticism regardless of what he said that he didnt want to be accused of having a conflict of interest people can view him more of a true acolyte of what is going to happen i dont buy that. If you own it, youre more believable right . Yes just get in the game. You can make that argument for sure bonus round. I getting in on the bitcoin craze. This is interesting they made an application they filed an application and interested in offering a bitcoin related etf using the futures as a device this is interesting because theyre not the only ones who want to do this. The fact that there is a futures market means you could have a more legitimate Exchange Fund market but still a lot of issues from the industrial side that need to be ironed out i will tell you, top of that list is Trading Volume over liquidity. I just checked on the website and you can go there right now and type in Bitcoin Futures and show you the cboe and we had about 50 total contracts on th cme traded so far today around 3,700 in the bitcoin ones. If you only got a total of 6,000 bitcoins trading a day in terms of volume on the futures exchange, how can you create that much money in terms of etfs that are backed by the future. Can i pinpoint very quickly the best story of the day, i mean, its sad did you hear about the guy in england who threw away 127 million in bitcoin had it on a removable hard drive and hes trying to get the dump to let him go through the land fill those dump workers beat him to it. I will tell you that much. Four years of trash hes willing to do it. The government wont let him true story 127 million what would you do, dom dumpster diving is the new mining. I would just cry. Needle in a smelly hay stack. I would dive right in thank you tomorrow on power lunch well speak with tom farley Parent Company of i ice to have the attempts of another bitcoin contract well speak to roger ver known as Bitcoin Jesus one of the First Investors in bitcoin itself big believer in bitcoin cash in fact, most of his Currency Exposure is through bitcoin cash he joins us tonight at 5 00. So, why the tax bill is good for your favorite sports team, but bad for your favorite college. Were going to explain that. Were also going to ask the president of las vegass new hockey team about the tax bill and help that city bomece a sports powerhouse. Sports thwerhouse. To help identify potential opportunities. So, you can do it this way. Or get everything you need to help capture investment ideas and make smarter trading decisions with fidelity for just 4. 95 per online u. S. Equity trade. Fidelity. Open an account today. Hello, everyone. Im sue herera heres whats happening at this hour Washington State Officials Say highway i5 remains closed after an amtrak train crash on monday. They say still a lot of work that needs to be done, but they have made quite a bit of progress overnight three people were killed in that derailment air strikes on a syrian village in the rebelheld province killing at least 17 people that is according to activists and rebel leaders. Idlib where Syrian Government forces recently launched an offensive. Pope francis sending his condolences for the death of cardinal law saying he is praying for his soul he made no mention of laws role as the former archbishop of boston where he covered up for sexually abusive priests and in another example of giving this year, somebody dropped a one ounce gold bar into a Salvation Army bucket in idaho on monday. That bar is worth about 1,200 the donation is a huge boost to its Fundraising Efforts and, of course, yesterday, somebody dropped off a 200,000 check. So, lots of giving this season thats the news update this season brian, back to you every time you think there is bad news out there and you hear these stories and your heart grows three times too big. Thats exactly right. Thats why we try to mention it. There is some good news out there. Thank you for bringing it to us as we continue to go through the tax bill, were finding more carve outs that were added and other deductions that are going away a lot of them have to do with sports, believe it or not. Sports salaries. Eric joining us now with more on this a mix of good news and bad news for the Sports Industry depending on your perspectivper. Takes away for College Sports boosters to get a deduction for the socalled donations that get you box suites for games at colleges many schools have quickly pivoted. They are asking donors to accelerate 2017 while money is still deductible starting next year, it isnt going to be. The house ways and Means Committee expects this change to bring 200 million per year. One winner are the major prosports leagues and team owners who will continue to get to use tax exempt Municipal Bonds to Fund Projects like sportsstadiums it looks like that benefit will go away but the president made it a priority to keep it in. New construction and renovation are economic drivers in local communities. But new jersey senator cory booker said it is a tax gift for the most privileged people in nevada, they wanted to preserve because they want to help build the new raiders stadium and the expansion of a Las Vegas Convention center. So, a lot of back and forth depending on what it is. We talked about the agent fees, of course, the other day thanks for the run down, eric we cautalk more now of the impact of the new tax plan Contessa Brewer is standing by with bill foley, the owner of the Golden Knights the newest nhl franchise take it away, contessa yeah, so, michelle. A lot riding on this because not only are the raiders coming to town, but a wnba team that has just been announced an acquisition by mgm and an amazing inaugural season in fact, even though were at the ice, red hot here last night and bill foley with me now its a stunning launch to this team in las vegas. Talk a little bit about, you know, now youre tied for first place in your division youre packing them in standing room only. Did you expect your investment to launch like this . Little above expectations in terms of being in first place, were taking every game one game at a time i now got the gms talk speak and the coaches, were not going to get ahead of ourselves were doing great. And im very proud of las vegas and the way las vegas has embraced our team and the way that the team has embraced the community. Its been a really, symbionic relationship i talked to a lot of people in las vegas about the importance of sports in this town we just heard eric talking about nevada wanting to maintain that tax exempt status so that they could get the raiders stadium built. What is your take on that . Well, we built this stadium with aeg and mgm and we had no taxpayer funded, no taxpayer funded dollars we built our practice facility two sheets of ice, cost about 31 million. No taxpayer dollars. I said before in various interviews that i feel like we could better spend that money on firefighters, teachers and policemen. Establish for those three lines of work and lets have the best, the best of that as opposed to building the big stadium what makes las vegas such an ideal place to launch a major league team. The first one, the First Major League team that las vegas has had. Well, in our case, theres 2. 2 local million residents here theyre all looking for something to identify with other than the strip because when youre living in las vegas people say you live in las vegas, you must go to the strip all the time we never go to the strip we live out in summerland and thats where we hang out so, the locals embrace this team and we did about a 2. 5, 3year project of selling tickts and getting deposits in the town, they say, oh, this is really going to drive tourists to town and gives them another way to spend their money and another entertainment option you say, you dont really care so much about that you care more about the locals than the visitors. Absolutely. We are the local, we are vegas born and we are the local team now, we enjoy having visitors come to the games. Not too many we dont want too many opposing jerseys here this is our house and our people are really behind it if you were here last night, it was go knights, go people were standing up throughout the game. I mean, we have an avid fan base it could also be here, brian, that last night during the game two seconds left, they get the winning goal that put them now tied for first in the division. It was a really stellar end to an exciting game against the Number One Team in the league, by the way so, there was a concierge who said to me this morning, no, that means were number one. If you beat the Number One Team, it means theyre number one. Why are they vegas Golden Knights and not las vegas. Like the francisco 49ers. I think its like p. Diddy the analysis we did people from las vegas say where are you from vegas. They dont say im from las vegas. Im from vegas and we didnt want to have four words. Four words in the name i got it. Why bother with brewer. It should just be contessa. Youll have to put that in the las and found. A big joke for existing home sales last week. Is that going to proved to be a peak coming up, don who made his money in real estate is warning what this tax bill might do to you. Ureaestendisyo rl ta a h industry power lunch back in two. 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. Let out your inner child at the lexus december to remember sales event. Lease the 2018 es 350 for 319 a month for 36 months. Experience amazing at your lexus dealer. Welcome back to power lunch. The two republican senators who had been leading Health Care Legislation efforts that could have been part of the yearend spending bill have just released a statement saying they will not, in fact, attach those provisions dealing with risk pools and insurance subsidies to the yearend spending bill Lamar Alexander and Susan Collins saying in a joint statement it has been clear that congress will pass another short Term Extension to prevent a government shut down and continue a few essential programs this new legislation will not be deemed essential, but that the Republican Leaders in congress are committed to bringing it to the floor at some point in the new year what this does is this makes the effort to keep the government open a little bit cleaner. It doesnt include some of the thornier issues that perhaps house conservatives and Senate Democrats would have voted against. This is a good sign for avoiding a Government Shutdown but it does add to the todo list for january. Make it longer. Thank you. Existing home sales soaring more than 5 in november to the highest level in 11 years. The median home price rising to 248,000 what about the tax bill . Is that going to put a stop to the rally in real estate diana is looking at that impact. Hi rvesh diana hi, michelle. The final tax bill does cut deductions for both mortgage interest and property taxes, but the chief economist for the national of realtors says it will not hit for the mortgage deduction 90 pe of homeowners have it below the new 570,000 cap current homeowners are grandfathered into the current cap of a Million Dollars the deduction on property taxes is still there, but now capped at 10,000 in taxes paid but 95 of homeowners pay less than that. It wouldnt affect them either, according to the realtors. Certain states will be hard hit. Yes, new jersey. 30 of homeowners pay more than 10,000 in taxes 20 in new york and 9 in illinois still, raising the standard deduction would cause fewer people to itemize wiping out the tax incentives for homeownership and worrying potential buyers today. We saw that at an open house this past weekend in a highprice suburb of chicago the realtor there said of the 45 homes listed for sale 41 have property taxes higher than 10,000 a year it is definitely a concern any time you dont get an opportunity to have that extra deduction or at possibly getting that money back during that Spring Season can be a little bit of a little tight squeeze on your budget. Potential buyers are also concerned that home values and hightax areas could fall, but the tight supply and high demand for homes are so strong that they really counter that concern. That they counter that concern diana, from what i understand also, that most stuff is grandfathered in and you own a home and youre fine however, if you have a home equity line of credit. Do i understand correctly . Those are not grandfathered in so the deduction people take from that this year is over. Youre going to owe this year. No. The tax bill wipes out the deduction Going Forward for interest paid on all Home Equity Loans, Home Equity Loans, home loans and lines of credit. Under current tax law you can deduct interest paid on up to 100,000 on Home Equity Loan debt so youre not losing that much and home equity lines is still the most Cost Effective way to borrow money for Home Improvements or sending my kids to college and craig strength of a. P. E. C. Home loans says the loss of the deduction Means Nothing to those taking out Home Equity Loans. Its not grandfathered in you lose the deduction from now, according to cowan and company i dont know shes saying its not that big. Its very little. Its very little. Diana, thank you. Diana olick. Lets get more reaction from a tax mogul. Good to see you. What is the impact . In Residential Housing in highcost states like new york and new jersey, Property Values will go down 10 do you believe that and do you think well see other things similar for other parts of the Real Estate Industry i do. Highend luxury condos in manhattan have begun to pull back and thats going to be a function of fewer people wanting to have a domicile in new york city, for example, because of the loss of the ability to deduct state and local income taxes as well as property taxes, and so i think that is going to have a bigger impact, and so the Housing Market on the high end is going to be more affected than any place else, and i think thats new york city, new jersey, of course, and connecticut i think is going to get hit hard, as well. So i think you will see those hightax states paying a consequence. Could there be a positive effect on . Bill de blasio, for example, the mayor of new york is talking about the millionaires tax and the bacon tax and all of these places on 57th street that will likely be empty most of the year, taxing those people extra and now hes getting pushback and it cant be deducted and theyre concerned it could hurt the number of people in the city and maybe there is a positive effect and some things will happen that wouldnt happen otherwise. You will have fewer people paying taxes. Think of how illogical the de blasio approach is we want people in new york city to come here, own property, pay property taxes and not burden our system they dont burden our School System and they dont burden infrastructure. Theyre the ideal kind of home buyer to some degree especially on the highend side i think the fact that theyre talking about the millionaires tax, and the tier tax that will further erode the value on the luxury end. My question is, though, dont you think this might actually stop that in its tracks . Not necessarily because theres going to be a need for more money 40,000 new yorkers pay 40,000 taxpayers pay nearly 50 of the locally collected taxes in new york city. Imagine that so if you lose 2,000 people which is reasonably to expect, that would create a budget shortfall that would require new revenue and its a perpetual impact i dont think this is good news in any way you look at it for new york and don yes sorry, buddy. Say youre a housing developer and planning a 100home development in new jersey or california would you rethink it right now . Absolutely. I would be looking at the sunbelt. I would be looking at places where people are migrating before the tax policy. Are you doing that now . Oh, absolutely. We obviously are very active in south florida and were looking at other parts of the sunbelt. Were looking at texas, for example, and you know, and weve got a Major Development in North Carolina i think one of the things also is this tax bill is going to destroy or severely impact the restoration of the Historic Buildings. We have one in philadelphia that were restoring and planning to restore the family court building, but because of this tax change it may make the project uneconomical why Historic Buildings in particular well, because historic tax credits are available for restoring properties that are landmark buildings and theres a 20 tax credit on the cost associated with that so if you have 100million renovation cost you get a 20 million tax credit and you get to take the tax credit the year you put the building in service, so its a financing tool for the building now with this new tax bill youll be able to take 20 of that 20 million each year over five years so theyre making you amortize that credit. Sure. So that affects the ability to draw down that money to be used to renovate the building because many times these buildings are functionally obsolete and have some severe economic losses there. Do you think, don, that there could be a change here, that this sort of tilts the balance away from Home Ownership and perhaps to rentals and so therefore it could actually benefit landlords . I think you make a good point, by the way. Theres been a trend, if you notice we have the ebbs and flows of improvement of velocity of home sales, but if you look at where the biggest growth has been, its been on rental housing because millennials and others want mobility, job mobility to move to other places and not be tied down or burdened by their homes. So this will hasten that trend, as well, and then the high cost especially in high tax states don, don, don, don, we have to talk about the stock draft, don. Youre serventh out of eighth, and you picked snap down 8 year to date. Youre not last, youre penultimate out of the eight people. Oh, gosh. I made a bad bet on snap in fact, my son told me to go with facebook, and i went with snap throwing your son under the bus, don no, he pulled his son out from under the bus out, okay no, donny was right he told me to go with facebook, and he kept insisting upon it and i initially went with it and changed my mind and went with snap because my Investment Advisers told me snap was a better choice. All right shows you your son versus your investment adviser, who won there. Lost some money obviously. Thank you, don. Good to have you on. Thank you. Coming up, more on the tack bill will have on you and your money. The president holding a tax reform entve at the white house. Power lunch will be right back siren blaring working as an emt in a small town usually means hospitals arent very close by. 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. Theres nothing worse than when were responding to the hospital, and the hospital doesnt have the right specialist. Evaluating patients remotely, by an expert, is where i think we have a potential to make a difference. Robots can do a lot in medicine these days, but they cant think. Theyre still machines. For nuanced decision making, we still need humans. 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 that will enable Breakthrough Innovations to take place. As we get faster and faster wireless connections, itll be possible to bring those capabilities to more remote sites, and be able to operate on a patient in a way that was just not possible before. When you think about underserved areas, you tend to think of remote locations. But the reality is, an underserved area is anywhere where the person that you need, who has the expertise for the problem that you have, is nowhere near you. Low latency is crucial for things like surgery, because the Response Time has to be immediate, it has to be real. I could put on vr goggles like these, and 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 . dr. Vasquez its going to be lifechanging, and lifesaving. Heres whats stocking your second hour of power the tax bill passed. What is in and what is out in like it or not, why it matters for everybodys mono pep the president is ending his first year on a high george will is here on what trump may be able to accomplish or not in the new year can you believe this over the past three months, oil has been a better investment than most Technology Stocks, but will the tax bill actually send prices lower im Brian Sullivan power lunch begins right now welcome to power lunch. Im michelle carusocabrera. Stocks are lower, but way off the highs. The dow off nearly 100 points. Staples and Technology Stocks lagging while telecom leads right now. Disney, pfizer, they are dow laggards, chevron and cisco are leading higher chevron higher by more than 1 , leading new highs and the transports, fedex is leading the group from the back, strong earnings some earnings winners, micron earnings the beat and raising forecasts for 2018 blackberry also soaring on the back of a strong beat. On the flipside, redhat is the worst performer on the s p 500 despite an earnings beat on all fronts stitch pix is undfix is lower ba 8 staples under pressure not the company, food is a staple philip morris, hormel and kraft are all down at this hour. Melissa . Michelle, im melissa lee existing home sales jumping to the highest level since 2006 sales jumping 5. 6 in november while the median existing home price rose to 248,000 according to a new survey the percentage of americans who subscribe to cable tv, about 73 is on par with the number who subscribe to netflix the study also showing that streaming tv content from the internet has also jumped and uber is a transport service not a digital company. It will have to comply with european transport laws that govern taxis brian . Melissa, thank you. The gop tax bill is the top story. It has cleared the house and is on the way to the president s desk for a signature make no mistake, this is a major tax overhaul to the tax system it is perhaps the biggest changes to your taxes no matter who you are or where you live in america in more than 30 years. Our team in washington is all over the story eamon j eamon javers reporting from the white house. Whats the latest . When can we expect the president to actually sign the bill into law . Calle thats the 64,000 question, and we dont know when the president will sign it into law. There say sense that theyve hay big win. Well hear from the president in just about an hours time on the south lawn of the white house. We can expect that to be a victory lap and no actual signing of the bill today is what we are told, and i can tell you one of the ways you can tell theyve had a big win here is we just saw Senior Administration officials briefing reporters, standing at the podium each one points out to other Administration Officials in the room and give them credit for their role in all of this. All of them seemingly feel like this is a career capper for them, as well. So real enthusiasm here inside the white house and theyre talking about 5. 5 trillion in total tax cuts in this bill. Theyre saying 60 of that money is going to families as they define families and theyre also minimizing the projection of 1. 5 trillion in deficits to result from this bill. Theyre saying that ultimately that projection is based on a gdp Growth Prediction of just 1. 9 they say theyre doing better than that already. They expect to do much better than that in the years to come, and so they say here at the white house the Deficit Impact of all of this is going to be much less. Now one of the Big Questions is how does all of this impact obamacare . We saw that they repealed the individual mandate in the bill the president talked about that as a big sort of back door win in this bill, as well. Remember, the failure to repeal and replace obamacare earlier this year. Now the president says thats an additional win for his team and heres what he said earlier today. When you add it all up together and then you add two things, the individual mandate is being repealed. When the individual mandate is being repealed that means obamacare is being repealed because they get their money from the individual mandate. So the individual mandate is being repealed so in this bill, not only do we have massive tax cuts and tax reform we have essentially repealed obamacare. So the president saying we have essentially repealed obamacare, but whats left of the Health Care System after the individual mandate goes out will not be known as trumpcare. A senior official said it is not called trumpcare from here on out, guys. Back to you. Eamon javers at the white house. Theyre celebrating this passage for the second time. Elon is here with more a little delayed and not derailed as it makes its way to the president s desk and the republicans final, final tally on this vote was 224 to 201 House Speaker paul ryan brought down the gavel once more to make this official. Most of these big changes will take effect january 1st and kevin brady said he was pushing for a new code for a new year. This new tax code will be simple it will be fair and we focused on the needs of the American People and not on washingtons special interests. This new tax code will be modern it will be competitive, and it will bring more goodpaying jobs here in our communities and not drive them overseas. This is just a reminder of how sweeping and massive this tax bill is, particularly for businesses lowering that corporate rate to 21 , instituting new rules for International Taxation, creating a whole new system for passthroughence of deductions and taxation this bill will be the crowning achievement for republicans in 2017 and perhaps even for 2018 as well, guys. Back over to you thank you very much, ylon President Trump as we talked about getting ready to celebrate this major legislative victory with tax reform. Joining us with joining us now with more as well as his latest article in the National Review on the state of trade and manufacturing in america is syndicated columnist george will good to have you here, george. Glad to be with you Corporate America is very excited. It will go from 25 to 21 is that good for the u. S. Economy . We will find that the democrats with the rosy predictions and the democrats with the less rosy ones have given hostages and they will shoot one set of hostages over the other. Everyone was in favor of lowering the Corporate Tax rate and barack obama was wanting to lower it to 35 i dont know what corporations were paying 35 , those paying that should probably fire their lawyers and accountants. This is a significant lowering of the Corporate Tax, but not all that much different because probably most corporations were paying Something Like an average of 28 it really depended on whether or not you were a Domestic Corporation and had a lot of International Money and bob pis pisani canvasses all of washington we have a full screen if they want to bring it up. Right now the estimate for the s p 500 for the growth next year is between 5 to 7 and he thinks hell add another 3 to 7 on top of that according to wall street analysts so Earnings Growth will be very strong for Corporate America as a result of cutting taxes because some were paying as much as 35 well, its good to hear, and the growth should be helpful its unclear because economics is the science of single instances because youre always on the new circumstance. The question is what does this do when youre already at 4. 1 unemployment with an asterisk over that figure. Maybe it raises wages well, let us hope thats thats not that hasnt occurred so far, but maybe it will. Behind all of this theres something to bear in mind. The current expansion that began in june 2009 is now 102 months old. The expansion since the Second World War is 68 months and were approaching double that length economists argue whether expansions die of old age or bad policy has to kill them. Whatever the case is, unless we repealed the Business Cycle which is unlikely, we are approaching a time when we have to be ready for some kind of economic slowdown. But george, do you believe we will get an infrastructure bill passed early next year, and if so, and if we do if we do even to the haters, cant you acknowledge that President Trump has gotten a lot done that he said he would . I think particularly if we get the infrastructure i think it would have been a good idea for them to have started with infrastructure rather than with health care thats something people can relate to and see new roads, ports and highways, et cetera. Theres going to be a big fight, however, over how you finance the trillion dollar Infrastructure Program thats been promised and it will be interesting to see if, again, well have another piece of legislation that is passed on a party line vote. If we can switch to your most recent column in the National Review, where you take aim at whirlpool. Do i want to call it it was lobbying crony capitalism what is your criticism whirlpool has trapped washington in a spin cycle. Whats your beef with whirlpool . Well, in 2006 when whirlpool spent about 1. 7 billion to buy maytag, federal regulators worried that it was becoming too dominant in the market whirlpool said dont worry were going to be bring vigorous competition from samsung and lg, Korean Companies that will discipline us and benefit the American Consumer and now theyre looking for protection with the combination of quotas and tariffs to protect themselves against the very competition that they said 11 years ago that they welcomed what is alarming about this is that this is another instance where our attention is called to the vast discretion the president s have, given to them by congress and providently, in my judgment, to impose tariffs theyre taxes collected at the border and paid for by American Consumers. Therefore the president has unilateral power to impose taxes. Whenever anyone comes to washington seeking president s to impose taxes for their it is crony capitalism and attention musting paid to this and political heat should be turned up on Companies Like this. It can certainly look and sound like protectionism what if their competitors are being subsidized by their home governments . Thats not right either, correct . Well, its not, although theres i think the home subsidies for companies manufacturing washing machines is rather different than subsidies for Something Like boeing or airbus it is also the case that samsung and lg are both building plants in the United States in South Carolina with samsung and in tennessee for lg so this will blur interestingly, the problem. I guess when you talk to Corporate America like we do all day long every day, their bigger frustration is this. The lack of reciprocity, for example, in china. Chinese companies can do, until very recently, almost anything they wanted lear and still a u. S. Company goes to china and faces all kinds of rules and restrictions that dont happen in the reverse weve been waiting for china to reduce those barriers to entry ever since they joined the wto, and theyve actually just used the wto to their advantage in a way that has frustrated every Administration Whether republican or democratic what do we do about that well, there are two ways to approach this. One is with bilateral reciprocity and bilateral punitive actions and the other is to try to build a web as we tried to do with the transpacific agreement, a web of multilateral agreements giving everyone a stake in better behavior the Current Administration has decided to pull away from the transpacific agreement well see how that works out china seems to respond by saying well orchestrate our own transpacific agreement, and the United States instead of having leverage or a seat at the table may find itself on the outside looking in. Well have to watch wto negotiations and nafta, as well. George, thank you very much for joining us appreciate it. Glad to be with you meantime, the gop leadership will tell you the real purpose of the tax bill is to stimulate the economy, to get gdp to grow by more than 3 or 4 every year do many economists believe that is likely to happen . Lets bring in a man who talks to the economists, that is steve liesman. Yeah. They dont, brian. The passage of the historic tax legislation has economists reworking their forecasts for next year trying to sus out these growth effects and they do see the legislation increasing growth, but not as much as supporters hoped heres a smattering of the recent forecasts out there, economics, up 3, and pantheon, and High Frequency economics and up 2 not all of it is from the tax cut. Pantheon writes the economy will be expanding by nearly 3 on the back of stronger Business Investment and a modest acceleration in consumption and increased Government Spending. Over at economic, there will be a big wealth effect in 2018, but negotiations and conference led to the pulling forward of tax benefits into the first four years. Morgan stanley on the down side says we dont see this as a sea change for the current Economic Cycle and the fiscal impulse should fade and growth should slow across the second half of 2019 do corporations and investors give it back to shareholder buybacks or dividends . Are the growth effects temporary or permanent do we get a 3 and come down it is the issue of rates rising in response. Take a look at what the tenyear has done in the last couple of days and you can see up the historically insignificant 2 rate and at least come up just a little bit in response to the tax cuts, and here are the tax hike probabilities 64 in march for the first cut 55 , september, and then the third rate hike, guys, just 28 and the concern is that the fed in response to what could be stronger growth and perhaps stronger inflation in the full economy, may have to do a fourth or fifth rate hike a perfect segway. At t is in the news. Perfect segway because this is very much a timing element here at t has Just Announced that they are going to at least spend on Capital Spending projects 1 billion and provide a 100,000 bonus to 200,000 of its employees and the reason they say is because Congress Approved legislation for the First Comprehensive tax reform in a generation at t looking to perhaps capitalize on the headlines we got with regard to tax legislation moving forward in saying that they are going to take some of that money that they could save and invest 1 billion of it in its own Capital Spending plan and also award 1,000 to 200,000 employees that are either union represented, nonrepresented or frontline managers if the president signs this bill before christmas those employees will receive the 1,000 bonus over the holiday season. A very interesting, pr is certainly an element of this, so if youre looking for the tangible reasons why companies would want to get onboard with this there were questions with regard to what companies would do with some of the tax savings. At t has taken at least some of that money saying theyre going to invest it and pay their workers more you also have to wonder whether or not theyre still in a heated battle, of course, with the antitrust regulators over at the justice department. Yes don chu, yes im not connecting dots and there are a lot of moving parts. Lets connect the dots. There are two things here. Number one, a thousand bucks as a bonus to 200,000 people. Thats good. For those 200,000 people it matters, more bill payments, gifts under the tree, savings, whatever they want to do with it good on at t thats good news one wonders the skeptic in me does wonder, this is a company that is engaged in the biggest fight with the Trump Administration in the United States and now theyre saying, hey, thanks to the president do you think trump reacts to this probably. He reacts to everything. I dont doubt theres politics in this, also there is an important provision in the tax bill and i think you hinted at it about drawing investment forward. You can do full expensing, 100 of Capital Expenditures for the next five years that is up from 50 . That is an incentive to do it now. Its huge. In fact, for some industries the expensing will be a bigger impact than the tax rate change. Heres the problem. In five years time they get rid of that and tax rates for those industries will go up in 2023 according to the pen morgan folks. It seems so far away. Not if youre planning building a factory right now thats true at t also in its press release, don, every 1 billion in capital invested in the Telecom Industry creates 7,000 jobs where American Workers research shows, and theyre alluding to the fact that this many jobs was also created as this additional billion dollars. They dont cite the research and they say it was research that shows this. Im sure its Industry Research there. You can intuitively understand that if youre investing capex youre going to lay more cable someones got to make the cable and all of this. More jobs are created. Its like they say in the telecom business, cable dont lay itself this also goes to the debate about whether or not companies will hire more workers this is essentially you know, i dont know how they are creating jobs. How can we plan that at t came out with this release right after my report. These are the swing factors, if we end up having more capex than is estimated out there, down side to prices, inflation, fed can keep hold. If it ends up being a demand push then the fed may have to do more. Can we at least all acknowledge. I know people are trying to find the negative he can rescue a puppy from a river, and theyll say its a pr stunt. Lower Corporate Tax rates are not a bad thing in a globe that competes 20 years ago europe was a disaster, china was a small, almost irrelevant economy the size of italy. Now europe is begger than america combined china is ascending and their economy has grown 900 in 20 years. Dont we have to compete globally where historically we never had to because we obliterated our biggest manufacturers, japan and energy me for 25 years. I tend to say yes because of time reasons. I did it perfectly then we cant fight im a good soldier here for time reasons well be back heres whats coming up on power lunch, Small Business sentiments soared on the progress of tax reform how do Business Owners really feel about the final bill . Why millionaires dont think theyll benefit much on the tax bill and well bring you surprising numbers youre not alone, we have answer your answer to the bgeigst tax questions. All of that and more coming up on power lunch. Lets begin. Yes or no . Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. President trump ready to sign into law a new tax bill that he says makes good on a Campaign Promise to repeal the Affordable Care act, but the bill only eliminates the individual mandate requiring Health Insurance for most americans or pay a penalty what does it all mean for Health Care Costs well get an insiders perspective from susan devore, ceo of premiere, a Health Care Company working with thousands of u. S. Hospitals and 130,000 providers. Good to have you here. Thank you so much just so people understand what your company does, for example, they check in their relative to a hospital like Brigham Womens or dana farber, i believe you provide the interface that they use to interact with their doctors, right . If they want to email their doctor, et cetera, is that correct . So, actually we have relationships with over 75 of the Health Care Systems, and we are daily helping them improve their performance, quality, safety, population and health and we do it with data analytics, technologies and services got it. What do you think of the repealing of the mandate now individuals will not have to buy Health Insurance if they dont get it from their employer. So lets take the repeal of the individual mandate, call it repeal done. Lets get on with the work that we really need to do which is at premiere really figuring out how to get to valuebased care so the view is i dont know how many more our less uninsured there will be, but what we do know is people will end up in Health Care Systems for their health care needs. So we need to get this to a valuebased Business Model and i think that the congress can now move on to get that work done. By doing what exactly what would be their next step in order to shift the incentive structures that happened right now within the Health Care System two big next steps. One is that the murrayalexander bill which should come back in january to stabilize the exchanges. Weve got to do to stop these 30 40 premium hikes. The second thing is and many of these were republican ideas, we have to push forward all of these valuebased alternative payment models meaning Health Care Systems and physicians get paid or get penalized based on their quality, based on their safety, based on their cost, and they had the ability from a regulatory perspective and a legislative perspective to keep moving all of that forward susan, how do you keep drug prices down . That is a major point of friction in the system here. In premieres drug portfolio has held below 4. 55 how does that happen i am assuming that the people in the system who you interfaced with, theyre using the same sorts of drugs that everybody else is using. Yeah. So premiere has done a really nice job of trying to reduce the cost of drugs. Its a very big challenge. The only thing that fixes it is creating competitive friction. We have a new fda leader dr. Gottlieb has done a tremendous amount of work getting more generics through the approval process and stopping the delay tactics to getting new suppliers and new drugs into the system because at the end of the day what premiere does is try to create that competitive friction between and among suppliers. When we have enough suppliers we can create that friction when we dont have enough suppliers its hard to create that friction. Competition leads to lower prices thats right. Thank you very much, ms. Devore we appreciate it premiere ceo susan devore. Ie. Weve heard what wall street thinks about the tax bill and now its main streets turn. Well take a look at how Small Businesses are viewing this in the wake of tax reform coming up at 3 00 p. M. Eastern dont ssmi President Trumps event at the white house we will take that for you live power lunch back in two. I think that shes a very nice girl. You never got the brakes looked at . 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. 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. Small Business Optimism spiked after the election last year, Business Owners loving the idea of lower Corporate Taxes and a more businessfriendly administration now the tax reform is upon us, what do they think kay rogers has been talking to a bunch of them and joins us now. Thats right, brian if you take a look at this map weve been everywhere in the past two years from seattle to miami hearing from Small Business owners about key issues theyre hoping to see addressed in washington, d. C. And progress is well under way with the passage of the gop tax plan. Taxes were one of the concerns that Small Business owners referenced most throughout my reporting. This prospective change has sent it soaring on the latest read on sent hitting had the second highest ever the conservative nfib and the national Small Business association do support the bill despite initial criticisms of the plan weve been generally supportive of the bill because it provides tax relief for most small companies. It encourages investment both from individuals and companies in their businesses, and it sort of sets the stage for Economic Growth over the next few years, but we are concerned that it increases the deficit. The plan does include, of course, lower rates at 20 deduction for passthrough businesses on joint income of 315,000 a year and a drop in the corporate rate to 21 . The nsba does say theyd like to see an even simpler tax code to ease for companies and they hope it will encourage investment and new business creation. Its very happy to see its top legislative priority move closer to the finish line today, guys. Yeah. It didnt get simpler in some aspects at all, did it i talked to the fax foundation quite a bit today we all have. All right crude has seen a nice jump in the past fews month, up 15 the rally may have run its course hes going to join us next at tmobile when you holiday twogether, great things come in twos. Like tmobile and netflix. Right now when you get an unlimited family plan, netflix is included. Wow tmobile covers your netflix subscription, so you can catch the hottest new movies and shows all year long on us. Amazing and its your last chance to buy any of these hot new Samsung Galaxy phones and get a 2nd one free. Thats one samsung for you and one to gift. Just in time to finish off your list. Tmobile. Holiday twogether. 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. Im sue herera here is your cnbc news update at this hour. House Minority Leader Nancy Pelosi and democratic congresswomen holding a News Conference to call for the renewal of the Childrens Health Care Insurance program, otherwise known as c. H. I. P it was created in 1997 and due to be renewed in september season of this year. The fiveyear reauthorization of c. H. I. P. Must be paid for it must be paid for, at the same time that the republicans had given a nearly 1. 5 million tax break permanently unpaid for for Corporate America. So where is their value system honda says a faulty takata air bag has killed another person the 20th death worldwide the accident took place in louisiana back in july involving a 2004 honda civic 34 million vehicles are currently under recall for those defective air bags and pokemon go is moving into a different dimension on the iphone thanks to apples software that allows the game to do new tricks. The new approach adds depth to the field and lets pokemon monsters grow or shrink to fit their environment. Well, that should be distracting. Thats the news update at this hour ill send it back to you guys. All right thank you very much, sue herera. Were seeing a nice rally with the recent jump continuing into 2019. Lets bring in the senior Oil Strategist with j. P. Morgan. He raised the forecast to 60 on brent, 54. 90 on wti welcome, abishek to power lunch. Good to have you is there anything to be factored in with tax reform with the Infrastructure Spending . The economists are wrapping their heads around how it will impact Economic Growth will it affect demand . For sure, if you will have demand growth has been spectacular in 17, more than what we expected and going into 18, we are expecting this whole synchronized global, Economic Growth which, of course, has a direct impact on oil demand and the tax reforms were to impact the growth in oil prices on the upside, for sure that will help balance the market even more than what theyre anticipating in 18. What about 100 expensing of Capital Expenditures in the next five years up from 50 that sounds to me like a recipe for put more drills in the crowd. For sure, its going to help u. S. Producers to perhaps increase their drilling activity in 2018 and Going Forward, which for sure, again, will help increase the u. S. Shale Production Growth, but again, this u. S. Shale Production Growth is a very binary creation on one hand. It is so price dependent at the same time. If you were to see price action which weve already seen this year, strong prices have already incentivized for the Oil Production and potentially bring extra Oil Next Year and the incentive will additionally help producers to increase their plans for 18 and this remains a concern. Whats the Tipping Point for u. S. Shale producers because if theyre able to lower their cost of production by having this future in the tax plan that allows them to expense these Capital Expenditures, at what price now do they then see a value valuable to start drilling again tax is just one part of the overall cost structure sure. Its one small proportion of the overall cost structure that the u. S. Producers have. If you look at where they are really comfortable and when we look at the numbers based on their hedging data that they release on a quarterly basis, we look at the cost of around 50, 55 where theyre actively hedging and very happy to bring in Additional Oil and basically out of the ground. With the tax reform, perhaps that number will be slightly lower in the 18 outlook aramco ipo, how does that impact does it keep a bid on the oil markets . I would assume that aramcos ipo for the time being, it is still going ahead in 2018. For sure, it would mean that commitment from saudi arabia in the overall opec cuts remains high and thats why i think the markets will remain well balanced and we are assuming close to 600,000 on average and it will be the third year of withdrawals in the market and that means markets will remain supported in 18. Abishek, thanks for coming by i appreciate it. My pleasure. Coming up, Public Opinion is mixed and one group surprisingly negative on the bill millionaires find out why High Net Worth americans are cautiously pessimistic about the tax bill 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. Please give at cancer. Org. [lagale force winds,s absolute chaos out here accumulations up to 8 inches. Dont know if you can hear me, but [monica] whats he doing . [lance] can we get a shot of this cold front, right here. Winter has arrived. Whooo hahaha [vo] progress is an unstoppable force. Brace yourself for the season of audi sales event. Audi will cover your first months lease payment on select models during the season of audi sales event. Show of hands. Lets get started. Who wants customizable options chains . Ones that make it fast and easy to analyze and take action . 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. It is time for trading nation, let us trade the banks, the etf pacing for its sixth Straight Year of gains a number of years setting games, Michael Pappas with us today michael, its not just lower taxes, is it there is a watering down of dodd frank which could benefit the banks big time do you think now is a good time to buy banks yeah, look, everybodys talking about it and while its easy to be skeptical of the banks at these levels and theyve gone up for six Straight Years, everything is getting positive with the tax overhaul system we believe theres still room for them to grow look, there are many banks trading between 12 and 15 times earnings which is a very reasonable valuation for them and if you look, they are still 20 off as an index. Theyre still 20 off of 2007 levels where they, you know, hit their alltime high. So they did take a pounding. The regulation came down on them and they were paying pfizer and trying to figure it all out and any dips were buyers of the banks at this point. Is there a point at which you would say a little too rich . This is not exactly the Fastest Growing companies in the world. I dont think were there yet and theres still Global Growth to happen and the tax overhaul system will benefit them and the Global Growth is going to continue will benefit them so i dont think its any time soon if there is a mild correction in them wed be buyers and well wait to see what happens mid18 towards the end of 18. Michael bapis, thank you. For more on trading nation go to tradingnation. Cnbc. Com. If you are worried how the overhaul will affect your personal return. One group surprisingly bearish on the plan, americas millionaires robert frank joins us with that story. Michelle, lets start by saying the nonpartisan estimates show the top earners will do best in the tax plan with nearly half of the gains going to the top 5 of earns areers, and the millionaires, theyre still skeptical. The Cnbc Millionaire survey found half of millionaires expect their taxes will stay the same and on thursday theyll actually go up, only 17 say theyre going to get a tax cut, and they already feel like theyre paying up. Half of our millionaires say they pay too much in taxes and another 46 say they pay their fair share and only 5 say they pay too little its amazing that theyre even 5 they dont think companies should get such a big break as theyre getting in this bill and asked about the ideal tax rate for companies and more than half said it should be over 25 only one in five said it should be 20 they do, however, agree that cutting Corporate Taxes by some amount will be good for the economy and jobs the majority said that cutting Corporate Taxes stimulates Economic Growth and its split by party more than 80 of republican millionaires say cutting Corporate Taxes will generate growth, twothirds of democrats disagree, and if they do get a cut most plan to invest the extra cash 18 , only 18 say theyre going to spend their winfall if they do get a tax cut so thats the sound of the ferrari dealers and yacht brokes out there saying, darn it do you think theyre saying darn it . Yes theyre familyfriendly companies. What does this tax bill mean for you and is there anything you can do right now to save money before the bill goes into effect well ask a top Financial Planner next and now the latest from tradingnation. Cnbc. Com and a word from our sponsor. A double top is a chart formation suggesting an uptrend may be ending and ready to reverse, sometimes called an m formation because the pattern looks like an m. A double top consists of two welldefined peaks at adproximately the same price trers often view a break in the formation as a bearish signal we are just minute away from President Trumps big tax bill victory lap with senate and House Republicans at the white house. Youre looking at ted cruz this bill will be signed into law. Whatlaw. What will this mean for the you and the tax you might be paying next year . No doubt a lot of questions everywhere around this country here to hopefully answer some of them, Blueprint Wealth Alliance ceo. Do you have a couple of spare days so we can go through all the questions . It was a long weekend what are the one or two biggest questions that your clients are asking well, the number one question, of course, is how does this impact my right, and theres no simple answer there are so many changes in this bill, this is as we all know one of the biggest rewrites actually the biggest rewrite of the tax code in the last three decades people have no idea how this is going to impact them some people think theyre going to pay more tax. Some people they theyll pay a lot less tax and not all of them are right. Specifically, are they saying should i move . Should i buy heavier dividend stocks sure. How can i minimize my state and local property tax what specific questions . The most specific question people have asked is should i pay my state income tax now for next year . And unfortunately, thats one of the things that was crafted very adeptly into the bill that if you prepay those state and local income taxes early this year, you wont get a tax break in 2017 when they drafted the law, they kind of forsaw that so dont bother the other part of the of this bill or the soon to be law is about alimony which could affect folks out there as well. Thats huge thats huge. Thats one of the few things thats permanent this change says theres no more alimony deductions after 2018. The good news is that at least this is one of the few areas where there is a grace period, right . There is one year to finish this but as im sure you know, we all have friends or family that have been through the divorce process and it can be brutal you might start that process now, and it might take the entire balance of 2018, and you still might not have an agreement. And if that agreement isnt in place by the end of next year, the person paying that alimony will not be able to deduct that expense. You have until the end of next year in order to deduct that alimony expense, is that correct . Well that agreement has to be in place right, in place theres one thing i didnt know, and that is the mortgage Interest Deduction we know its capped for mortgages up to 750,000, other mortgages are grandfathered in, but this could exist on two homes, right you know, any time you have a change to the mortgage Interest Rates or the deductibility of mortgage interests or the deductibility of property taxes, all of these things homeowners deciding whether or not they want to buy a house, afford a house, how big a house they can afford of course thats absolutely going to have an impact in some way, shape, or form on the Housing Market to clarify, i was under the impression that you could deduct up to 750,000 on one house now with it reads in the notes that it could be more than one house, as long as it maxes out at 750,000 thats correct. You still get the first and second house that was left in there thats really a break for obviously the very wealthy because most people dont have two homes. But yes, that is true. You can still get those two homes with the mortgage Interest Deduction, but they are eliminating the Home Equity Loan deduction with no grandfathering should i buy dividend stocks . Good question, you know, i dont really think this is going to materially move that discussion one way or the other. At the end of the day i think by good companies, Good Investments and you hold on to them. That tax, of course theres a tax equivalent deal that plays in here. I dont see this really making dividend stocks anymore or less attractable. Is there a different treatment for taxes or will there be a different but under the new law, theyll be treated as past, itll be a lower rate effectively. You know, thats one of the areas where that was a last minute throwin, theres a few different deductions there on business income and pass through income so one of them is a test on wages for lower income individuals, theres no rule on wages or on the depreciable property, but for individuals with much higher income, that can be phased out, however, there are two provisions in the law. Onesays that if you pay a certain amount of wages, you can still take that 20 pass through deduction. The other one says if you pay a lower percentage of wages but you have that significant amount of depreciable assets, then may be able to take some or all of that 20 deduction its one of the more complicated provisions in the law without a doubt. It certainly didnt simplify anything if i have the choice between making a charitable deduction in december or in january, what should i do . Theres no precise answer to that one of the questions youd have to ask yourself is what is the likely impact of the change on you . For instance, classic example, lets say you are a married couple today and youve got about 15,000 of itemized deductions, today, you would actually claim an itemized deduction because you are itemized deductions exceed the standard deduction today however, next year, if we go this 24,000 standard deduction for a married couple, that 15,000 are meaningless because its less. So if that was you, if that was the case today, absolutely you want to make that charitable contribution this year because you wont get any benefit for it next year. Jeff, i want to be the first one to say happy new year, i suspect youre going to have a great 2018 youre going to be so busy right . I mean, this simplify kags is going to be good for you, i think. So congratulations i appreciate it im not old enough to remember the changes that occurred in 1986, but many of my colleagues around tell me that 1987 was their best year on record because they spent it all explaining the simplify kags that occurred in 1986. That is classic. Bunch of 500 sl mercedes rolling around manhattan with cigars thanks very much 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. Hey yeah . 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Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Just reminder in a few minutes, speak on the passing live to the white house as it happens. So thats going to reduce their taxes dramatically by investing in infrastructure. And thats the part of this whole plan which may be underestimated by the economists out that the spending on cap x is basically and directly creating jobs. They may not be hiring directly, but more people laying the cable, making the cable, et cetera. Its one of the most powerful parts of the tax bill i think in terms of Corporate America if you hear people say kor S Corporations are getting a tax cut, remember, tax revenues from corporations havent flux chew waited with code changes they fluctuate with the economy. The economys good, they send more money to d. C. , if its bad, they dont 11 yeah, its very small we fight over this little tiny pile of money when will its actually income taxes on individuals in a really pays most of the bills. Thanks for watching power closing bell starts right now. Hi everybody, the breaking news today, the historic tax reform bill passed and the president about to hold an event with members of the gop celebrating its passage there you can see everybody gathering and getting ready for that, welcome to the closing bell, im kelly evans here at the new york stock exchange. We will take you back to the white house as soon as that event gets under way and then were going to look at what the bill means for your investments, for various companies, what you can do before the end of the year to minimize your tax bill, something we talked a lot about here on the program, but eam