Transcripts For CNBC Power Lunch 20171221

Year im Brian Sullivan welcome. Power lunch begins right now she works hard for the money so hard for it, honey im Michelle Carusocabrera at the New York Stock Exchange back in rally mode, the markets, highest in three days been all three indices on track for a positive week. Dow jones industrial average higher by triple digits. These days only a gain of half percent. How much of a rally over the last year. Goldman sachs, two names leading the dow higher Goldman Sachs and chevron hitting a threeyear high, by the way. Energy, outperforming, etx, xle on pace for its best in the year and all big winners. Alltime highs, home depot, c t caterpill caterpillar, fedex, and big loser, pg e due to california wildfires. Beginning the hour with breaking news on the fed Steve Liesman joins us with more. Thanks. Cnbc learned from sources familiar with the situation that leary lindsey commit considered fed vice chair job, lindsey interested in exploring the job. We dont know what status the discussions are in we know has he been interested in the job and is talking to the white house about this job the white house we know is looking for monetary expertise more the job and Larry Lindsey has quite a bit, actually. Head of the Lindsay Group and Economic Consulting firm on the National Economic council under president bush fed governor from 198187. Harvard professor and a ph. D. In economics from harvard on the hawkish side. February 2014, piled up a giant bonfire of liquidity in the form of special Balance Sheets and a bit against the quantitative easi easing, though said results were mixed. Breaking news there wow. Steve, thank you. As congress and the president look to get out of town for the holidays, there is still some business that needs to get done. You know funding the government and all that. Kayla tausche is looking at lastminute efforts to keep the government returning and get the president s tax bill, just a little matter, kayla, you know, running the government. Reporter and a habit keeping the can kicked down the road that work is going on behind the scenes publicly republicans from both chambers lingers in the limelight of tax package speaker ryan, senator hatch, signing the 1,100 page bill. The president s ability to sign it actually depends on a provision at the end of this spending bill to keep the government open. Its the part that green lights any spending that increases the deficit and is required for any funding bill for a month or otherwise to actually be passed. The bill on the table would extend funding for the government for one month it would also include shortterm extensions for other critical government programs, like Childrens Health insurance, but there is disagreement within the Republican Party over the Spending Priorities and whether this money should be spent rand paul, for instance, just tweeting moments ago that, he would seek to lengthen the process if that provision i just mentioned were included in the senate bill. So clearly, theres a lot of work to be done behind the scenes to work this out. The house, meanwhile, is beginning debate right now were expecting a vote between 4 30 and 5 00 on their version of this bill but there could be a little game of pingpong the senate could choose to approve whatever the house sends over right now were still in a wait and see mode for the time being. Brian . All right kayla, thank you Kayla Tausche in washington. A number of companies coming out after the passage of the tax bill saying they will pay their employees more looking at the announcement that have come in the past few hours. Actually a lot more yesterday. Several Major Companies immediately announcing employ wage hikes, bonuses, and infrastructure bonuses in the wake of the new taxplan. Give out 1,000 holiday bonuses to hundreds ofemployees. Some critics crying foul because at t is in a dispute with the Justice Department over the acquisition but at t insists no connection and comcast announced 1,000 holiday bonuses in addition to a fiveyear plan to spend over 50 3 billion on infrastructure. And wells fargo, and target 400,000 in philanthropic sd distributions and Pittsburgh Bank raising once legislation is signed into law effecting about 3,000 employees and give out 1,000 holiday bonuses to nearly 14,000 employees about 75 of its workforce. Boeing announcing another 300 Million Investment because of the tax plan corporate giving, Workforce Development and infrastructure enhancements other Smaller Companies announced wage hikes as well like lie well see more firms announce plans approach aring christmas. A lot yesterday. Havent been anybig companies today. Thank you very much heres the question is this announcing bonuses, wage hikes, capital spending, stuff eric just gave you, good optics as a real change as a result of lower taxes . Bring in ben white chief correspondent politico and an Economic Policy analyst at the American Enterprise institute. Two things, jimmy. First off, theres nothing bad about family getting a 1,000 bonus. At t, some get 2,000. Union made a deal. Those krashg contracts, 1,000, settled last week and now 1,000 this week terrible job clarifying the two. That said, are you suspicious . The fact at t is involved in a massive antitrust war over the merger similar to earlier in the trump administration, earlier in the year, when all of these companies were coming to the white house. The ones worried about new Regulatory Environment and announcing this deal or this new involvement, perhaps investments already announced, reannouncing it listen, they want to be on trumps good side. The economics here, this is not how Corporate Tax cuts are supposed to raise wages. Not because of bonuses not because of any kind of onetime pay hike. Its because these company was to use the money, invest it, become more productive, profit arable and some portion reflected in higher wages. To the extent this isnt going into new investments, then that process can begin but not because of oneoff payments. I get the oneoff payments made by comcast as well as wells fargo. Not wells fargo. Excuse me. Comcast and at t, but for wells fargo, increase in minimum wage. The at t front an increase to Capital Expenditures then here toically create or sustain jobs. What does it does it really matter we are seeing the impacts here. I agree with jimmy in that these are good things. Nobody would begrudge people with increases minimum wage increase is a thing that stays. Right. Hes right. Its a longterm play here, its more investment in new equipment, new factories, stuff to make workers more productive, meaning wage increases the kind of increases that dont drive up inflation that the fed wont get in the way of. The biggest question, does comcast 1,000 bonus extend to cnbc contributors . Oh thats the question. No more important question and jimmy, last night the news came out, right people were up in arms never seen are you surprised by how upset some people seem to be that families are getting 1,000 bonus listen, some people are really invested in the idea that cutting taxes for business, even though you can find economists on both sides of the aisle think its a terrible idea, plutocracy, not going to work. Invest ared in the idea. Then to have the next day, you know, later in the day, suddenly to have real money going into peoples pockets, boosting takehome bay, its a littpay,. It doesnt fit their political narrative. Speaking of real money, Michelle Carusocabrera. You said in your notes, a really important data point 80 of americans are going to see a tax cut only 17 think they will get a tax cut. I mean, that sounds like a real winner in terms of this becoming popular, because the expectations must be very low, and when people discover theyre actually going to have more takehome pay, the polling turns around for certain on this thing. Dont you think . Yes listen, you have extraordinarily low expectations, which are really out of sync with the reality. Youll have people maybe getting tax consults they didnt expect and on top of that, look at the economy. Unemployment looks headed under 4 tighter labor markets. Should have wages pick up. Imagine a productivity boost finally for all going on in Silicon Valley could be a lot of good things happening affecting peoples takehome pay they havent calculated. One other point on the question of these investments and whether theyre really telling Something Big about whats happening with the tax reform plan. Paying dividends and buybacks weve heard about, reported, taking a lot of this, Companies Already are, send it back to shareholders its fine. We like them, should get rewarded for their investment. In the longterm goal is higher wages, more important to see that than dividends. Tallied up the announcements made by the companies, way less than announced in dividends and Share Buyback n. Your mind, ben what could they do to make it less politically the same day in industry, banking, optics, net neutrality, comcast, they all want something or just got something. And theres a phrase used often in government circles around prpt and corporate circles. Tweetable, deliverable the president loves tweetable deliverable. Loves to say this company did this, think copy did this when i visited. Thats what the companies are giving them. The at ts, the boeings the others mentioned, can be in a tweet form did tax cuts, look what these companies are doing. Thats what this is. Long term, how do they operate another job component this is a full employment act for journalists. Yeah. Because now all and tracking attorneys and lawyers. Theyre going to track these companies. Tracking their investments pay increases jobs finally in the end we have to see the kind of gains theyre promises, we have to see them. If youre a k street lobbyist, jimmy, youve had a good christmas, i imagine. Very good year. Very good christmas. Im sure. By the way, hope you both have great christmases. You, too. Thank you. Shares of boeing nearly doubled this year. The company in talks to buy Brazilian Aircraft maker Brazilian Air and 300 duty on planes made by rival bombardier. Live at the plant. Hey, phil. Reporter michelle, well talk more about bombardier in a minld. The laters were hearing between the talks, Neither Company responded for a comment. According to the wall street journal, boeing he would takeover talks we say held, apparently those talks are on hold until there is some indication that the brazilian government would approve a deal the brazilian government, by the way, holds golden shares in em braer. They dont think its a good deal, they can shut it down. Concerns what wen it comes to the brazilian government oi meanwhile, why are we here because of the ongoing trade dispute regarding a Bombardier Cseries plane where the plane is assembled delta bought 75 of these planes. Boeing says that plane was sold to delta for way less than the list price in fact, we think dumped in the u. S. Thats why the u. S. Government agrees with boeing it wants to slap a 291 te perct tari tariff why he considers this move ridiculous the ceo. Were doing exactly what everybody in the industry do, which means that when you launch a new program, you have pricing to start with. Boeing does the same thing thats no differ than we did at delta to relaunch the program. Elaine bellamirer points out the cseries has a huge impact in the United States 22,000 jobs. 33 billion is the economic impact, they estimate, over the lifetime of the airplane in the next 20 years. Look at shares, bombardier, keep in mind a final ruling on these tariffs due by february 1st from the International Trade commission they approve, they go into effect shut it down say, we agree with bombardier, the shares did not go into effect quickly look at shares of airbus it brings the story full circle. What youre looking at with airbus, they have taken over majority stakes in the cseries, which is in the lower entry part of the market. The 100 to 150seat part of the market whos the biggest competitor in the Cseries Embraer and now you see why boeing would have an interest in taking over bepembraer. And for decades everybody would have been skeptical saying no way the brazilian government will give up the golden share you mensed, but if ever there was a time, it may be now. This president , much more free market his finance minister, in september, actually urged the ending of golden shares. And theyre going to privatize their Electric Company as well we may finally be at the moment where a deal that would have been unthinkable under any other previous president may actually happen and those are all factors that im sure boeing is looking at and saying, look, we dont want to be boxed the out of that regional jet and that lower end of the market below the a320 or the 737. We need to play in that market now is the time to at least see if we can do a deal with embraer. For sure. Thanks, phil you bet melissa which stocks benefit from tax reform our next guest is naming names legendary ash caceararca y t ch names. And what can we expect for the jobs market next year . Power lunch will be right back now that congress passex reform which Companies Stand to gain the most from the bill . Bring in director of Equity Research with his top picks in four different sectors scott, great to you have with us. Thanks a lot, melissa good to be with you. Ripping through the names i think people want speck stocks this is an interesting one the effective tax rate is high and you think could be additional benefit from consumers having more money in their pockets . Yes i mean, so we looks at a number of different categories, and i should start by saying that essentially what we did is said, hey, were probably going to get tax reform and asked analysts, please name names you think will benefit most these are names that our analysts recommend as strong buy or buy entirely focused on the u. S. And think could benefit from an uplift in more disposable income, more spending and fewer delinquencies as well. In the tech sector, spent a lot of cash overseas and another one, recently a boost when a disclose, 6. 5 stake in the company what does it pay now and how much could the benefit be, scott . Yes so the way to think about this generally these companies are in one or two companies high effective tax rates or they have a lot of cash overseas and can repatriate at lower rate than before. They generate more than twothirds domestically. Akamai, the news was made before the yuz news of elliott came out charles schwab. Get a benefit from a Corporate Tax rate reduction like many other companies, you think theres going to be a move for people to seek out tax efficient products and schwab should benefit . Yes thats right, brian. Schwab is definitely one of those companies thats very domestically focused with a high effective tax rate relative to many other companies as you points ou out, we believe folks will look for ways to defray costs particularly blue states folks are suddenly more responsible directly for, say, property taxes and schwab could see a bump up as a result of that kind of interest on behalf of consumers. Moving over to the health care sector. Most people realize that a lot of these managed Care Companies derive most if not all revenue domestically what i didnt realize is that the effect of tax breaks for these company is over 40 . Yes so you have obviously a handful of these companies that i think people know whether its United Health care, or cigna, the reality is that these are almost entirely domestically 230focuse companies in terms of revenues and effective tax rates are higher than the statute other rate at a recall, notwithstanding questions and western concerns d to the Affordable Care act and how many will be covered or not. The reality, benefit leadsing to a lower tax break will far outtrip any potential negative there. Scott, thanks the fourth sector, media, the two companies to benefit, sinclairand comcast a Parent Company of us. Happy holidays. Same to you. And avoiding getting hit by the tax bill in other words, could a School District really be considered a charity . Plus, after a brief spall, stocks fiver higher again. Is it rally on next year or is all at gd wsthoone in the economy already priced in . A big question well have answers power lunch will be right back let out your inner child at the lexus december to remember sales event. Lease the 2017 is turbo for 299 a month for 36 months. Experience amazing at your lexus dealer. 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. 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. The National Football league may be seeing ratings clee cline, but the nba, a big rating boost. Julia boorstin with more. Reporter the nba regular season second most watched ever through 30 games those games averaging over 1. 3 million up 18 from the same period last year the only season to have a stronger start was the 20102011 season the start of lebron james fit with the miami heat. This comes days after the espn president john skipper announced his resignation, standing in contrast to the nfl struggling with its Second Season of ratings decline. Back to you. Thanks, julia. The dow industrials up 25 so far this year and a couple more percent from here, the best arnual return in more than 20 yes. Whats ahead for 2018 . Wall street legend art cashin and our market panel share their thoughts when power lunch returns. Ok, so with the awardwinning geico mobile app, our customers have 24 7 access, digital id cards, they can even pay their bill beep bill has joined the call. Hey bill, were just phone hi guys, bill here. Do we have julia on the line too . k, well well just phone hey sorry. I had you muted. Well yea lets just phone so what i was thinking ok well well phone yeah lets just go ahead phone oh alright the awardwinning geico app. Download it today. Hello, everyone. Im sue herera heres nor cnbc news update at this hour. We begin with the United Nations General Assembly voting to d condemn president trumps making the capital of jerusalem for israel. The United States will remember this day for the very act of exercising our right as a sovereign nation we will remember it when we are called upon to once again make the Worlds Largest contribution to the United Nations. California fire officials lifting all remaining evacuation orders and warnings related to the thomas fire in Santa Barbara countys that fire, about 60 contained, is currently the second largest in the history of the state of california. And facebook is changing how it identifies fake stories on its platform what Fact Checkers found to be false it will bring up related articles as it calls it, next to the false stores for context to the storys problems. A little factchecking there. Thats the news update for this hour michelle, back downtown to you. A little more complicated. It does. Yes. Yeah. Thank you. You got it. Stocking moving higher, first time in three days bob pisani is with us. And art ashin, loving it. And bring you uptodate the rate cuts, retailers up on the strong holiday season. Utilities a bit lower. My tenth year chatting at the bar with art cashin. Two key concerns about 2018 the first was china. My concern here is china. I think they crack down a little bit. They want to get things in order. They have some banking problems. They have some loan problems if that comes back to haunt them, they could be the link in the synchronized growth that begins to break. So im going to keep my eye on china, on mainland china, and see what happens arts second concern is the fed. He has a slightly contrarian view barring a surprise jump in inflation, the surprise could, in fact, be fewer rate hikes rather than more and powell, i think, ma foll has followed yellen. A reasonably strong record. Predictions from last year about 2017 first, correctly predict wed wouldnt get tax relief until the very earned nd of 2017 right, and that the market would pause if tax cuts were not imminent correct. Third, predicted worry more about deflation and not inflation. Correct, and finally, one miss on the chance of a populace revolt would slip through europe populists turned back in top leadership wigses throughout europe you got to admit, three out of four isnt bad we talked about how bad the prediction business is in general. But on the market stuff, he was spoton. Its the political stuff he got wrong, which is less relevant to what he does. And very interesting comments on the fed in 2018 and on bitcoin. Comment later on that. Looking forward thanks, bob. The full interview on triggertalk cnbc. Com. And hearing from our panel good to have you here, gentlemen. I want to show you a data point that Steve Liesman came up with today that i think is extraordinary. He dug around to find out what is the new effective corporate rate as a result of the tax bill drop from current 21 we hear so much about to 9 thats an extraordinary drop what does that mean for the markets next year in your opinion . I think its very dramatic, and i think what perhaps is underappreciated about the tax bill is a lot of the lastminute changes really frontloaded both the economic and the corporate profit impact. While some of the impact on the tax bill is in the market, i dont think all of it is were going to see, i think, Earnings Growth stronger than currently anticipated. Even with the tax increase revision, and more importantly, Economic Growth stronger than expected i think we have a very strong tail wind underneath this market at least the next couple of months the early part of 2018. Even after 25 gain this year, you think even more to be had . We think the bull market continues and endures through 2018 i do think that the best of the market returns will be early in the year i think as the year grinds on, i think people will become a little more concerned about how the economys percolating, and an uptick in Inflation Numbers and what the fed may do about that netnet given the growth and what will be a big active year for m a activity, we think the bull market continues through 2018. Brad, is there a tax reform trade and what would you do . What is it two phases. First phase what everyone is talking about right now, which is where are tax rates exactly for different companies. Put together the accounting and Earnings Associated power for those companies. Thats largely priced into the market high tax rate stocks outperforming by Something Like 10 . The more interesting trade that we see is phase two, which i think is starting probably right now or should start soon, and thats both an acceleration in the economy. We have had nominal gdp, Something Like 5 next year, highest in a decade. Phenomenal not real, still very high. Right an eyepopping number. Definitely. And secondly, the composition of that growth importantly will change we think business spending is really going to lead the economy forward as opposed to Consumer Spending which led in the past so i think tax reform, strong Profit Growth. Business confidence and easy financial conditions all will come together to really accelerate business spending. And at t saying increasing cap by 1 million, a Panel Discussion earlier before. Was that politics or real . You think its real . Yes. Because of the i think its the expensesing. Its the confidence now that theres center its organic Profit Growth and then this boost from tax reform which is basically adding to Profit Growth. Should be up in the teens next near. Whats the single most important thing for an investor to do next year based on everything said . I think the single most important thing to do is to continue to be invested in equities Pay Attention to valuation, though we entered this phase of symbolerating Economic Growth with a market thats already appreciated 300 off the lows of 2009 paying attention to valuation will be extremely important. Already talked about it being stretched this year bp thank you, guys. Melissa, over to you. Thanks, michelle. The tax bill, will it result in more hires . Can the Unemployment Rate fall below 4 what are the jobs created next year talking to the ceo of Career Builder and what is being done to lessen tax burdens to prevent them from moving to florida. Power lunch will be right back 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. Yes or no . Gin. Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. 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. The economy is up. Unemployment down and 6 million open jobs in america looking for work or looking for a change, what are the best jobs and worst ones, out thereright now . Matt ferguson, ceo of Career Builder and member of and an exclusive cnbc partner but out a list for the best and worst jobs of 2018. Start with the worst jobs to end on a high note. Thanks for a having me on. No worst job next year apparently accurate testing you to see if you were papering attention. Reporters were doomed. A lot going on in that industry youre doing well, nbc is doing well youre doing fantastic changes are going on categories going down. Journalist, like in business, seeing strength. While that may be negative in something areas its positive in others other things on the list looking to be down next year oil and gas still troubled price of oil has gone back up in the last year a little but way down from where it was from 2009 through about 2015 that industry will still be hurt in certain areas for jobs. Farming, agriculture, as you expect its been a longterm trend. When you look at other areas of are manufacturing, you think about you know, theres some drill press and apparel. Some of those move over. Hopeful the tax bill and incentives bring manufacturing back but it may be a tough area and publishing another area under stress newspapers and publications, periodicals, those will probably have fewer people producing that product as well as selling that product. Focus on good news, shall we now . We got the bad news out of the way. Although i bad for you. And you, too. I disagree a little on oil recounts have gone up. See if youre right, matt. Focus on the good news stuff Skilled Trades ceo after ceo after ceo coming on the program saying i cant find workers should we tell more of our a hard conversation to have. Tell more of our kids, hey, maybe if you know what . You dont need to go to college to have a great career and make a good living. Do you we need more really skimmtilled trade people definitely. A high demand, lower supply. Plumbers, pipe fitters skilled specialties. Right. We need to do more to provide that education in high school and trade schools after high school for people to move into that profession naturally. Not everyone should go to a traditional fouryear institution and change education so theyre lower costs and much faster time in get people out into the professions skilled trade is an area well see benefit in and other areas youre talking about not surprising, Technology Software engineers, Computer System managers will be Strong Health care, registered nurses, home health aides. Aging population, health care continues to be strong sales, marketing, companies are focused on growth. Customer service, focused on retention. The Way Companies are going smarter, going to Market Strategy and finance a strong 2018 looks like. Want to talk about the impact of the tax law, now its soon it will be law once the president signs it you say it will have is a positive impact on job growth in 2018 are you hearing from companies perhaps theyll be more inclined with their tax savings to train employs, invest in Training Programs for those companies i am hearing some of that hearing actually before the tax bill was being discussed, and actually before the election i think companies realized there a real skills gap and we have to figure out ways to get mainstream americans jobs that are higher paying. Our site is completely focuses on americans Getting Better skills and better jobs today that are higher paying theres that discussion. I think the tax bill will put more money available for those rescaling and upscaling project. Its an important issue for the country. I hope theyre embraced. And jobs growth should are is a are the intoed because of it is it the notion companies will actually high more or the halo effect, spending more on cap ex, for instance to create jobs . I think the the immediate expense of Capital Expenditures will help in the industries that sell that equipment. Should see a job boost immediately. One of the big things that came out of it. Longer term, the territorial tax structure will help bring manufacturing back here. Talking to a Manufacturing Firm yesterday about this and they said, look, we dont make changes immediately where we place manufacturing facilities and if things are manufactured here youve got to break off the old 35 rate over the long term, definitely changing perspective where we manufacture goods because of the territorial system change. I do think that over the longer term that will bring manufacturing back in higher numbers. Way not see that in the begins part of 2018. Matt ferguson, thanks to you. Michelle over to you. Thanks, melissa everyone is trying to figure out what to to do avoid getting hit by the new tax bill. Not just individuals entire states scrambling to find ways around it we have the story. Reporter millions of americans will actually get a tax hike because of the elimination of state and local deductio deductions hightaxed states, employs armies of tax experts and armies of tax experts and lawyers to find ways another day at the office. 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. 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Fidelity Wealth Management. it  change thhe zmy eh structurally could we start to argue maybe the increaseat could lead to productivity gains. n t ho when the taxiycuts are permane permanent . Probably not. We are going to have this discussion again and of five years expensing and even on the corporate side, there are provisions thats deemed to expire i am a bit skeptical that well be able to change growth in the longterm. To me thats the critical question not where we are going to see the next year or two i dont think that we are seeing legislation that gets us to that point. Interesting the beginning of this year. Interesting like you are wrong, michelle . [ laughter ] no, interesting like i really find that interesting. Before we came onset, we were talking about the fact that we are seeing two consecutive kwurtekwur quarters we could have some lasting power that comes out of the regulatory changes. It is going to be difficult f s First Quarter and first half of the year for policymakers. c9 enormous weleep on havin better than expectedjf economic gdp growth going into the new year is it the tax cut or is it the biggest year for Natural Disaster of all time one way i would like to think about this, lets say it is an mh law order. The case2uis this, who, kis 3 growthp america 3 growthp america what kills 3 d if the republicans have come forward with a solution and they say it is the high Corporate Tax rate if you think that is the perpetrator of why we have 2 growth and not 3 growth, we are going to have a shift in the under lining potential of the economy. I am skeptical and i think the Corporate Tax rate is a piece of whats wrong with it i dont think it is everything i am reading all of the economists like michelle and goldman and everybody in this point, they are in it in part because you got a massive of of you do have this Corporate Tax cut which some of it going to flow to workers i dont think it is everything thats wrong with the economy. A lot of this is though education offsets. If you are looking at the house of Balance Sheet right now we had the large quarter increase of delinquency to go up very low. It has been very low. But 9. 5 is a material raece this is the only game in town if you want to lower payments. Y i got one last quick question for michelle yeah. When we hear Companies Spending additional billion dollars in cap ex, your model of whatever it is, does that include the halo effect of what that cap does in term of hiring for for the people who makes the cable and all that thats a good point you can make the case that these models are not perfect so we are getting that cap ex boost from the little Corporate Tax rate of the five year expensing. How much of that will be passed on and how much will be multipled. Thats a fair question to ask. We got to go. Guys, have a happy new year, we maybe discussing a trillion dollars infrastructure package in january thatll be fun. Lets spend more money i need to close and say thanks to viewers and my colleagues to a wonderful 2017 see you on the other side. Happy new year, i made it, almost see you in 2019, steve. 19 joking. It was the Global Leader again for ipos and global capitals raising tom farley is here to talk about the year ahead, of course, bitcoin as well. They got a new product that they want to try along. We welcome to power lunch. This year has been a lot more fun last year than the New York Stock Exchange i am looking at the stock market at an all times high a lot of that is driven by the promise of tax reform and it came to be what about your bottom line . What was your effective tax right now and where do you think it is going down we are a u. S. Corporation that pays 30 and all in tax rate and it will go down significantly and i can tell you why it is helpful to us and for our shareholders, i spent a lot of time advocating for tax reform this year and spent good time with the president and gary cohn and i have to say i was skeptical that we would get to a Corporate Tax rate of 21 . It is important that we did and it makes us global and competitive. We are competing with other exchanges and regimes where their tax rates are 20 or in some cases even lower. This is going to help you be more competitive absolutely. Tell us about your plan for bitcoin etf. Why do you want to do that i cannot escape an interview without answering some questions with bitcoin we are knowledgeable in cryptocurrency for three years we did it in part because we were humble of our knowledge of crypto currency. We have learned and what we have learned is that there is still not a lot of institutional participation and the utilities is not where it needs to be, to be a fullblown asset class. It is very volatile. As we think of our next move, our priority next move of futures contracts or Different Things we can do we are taking into account of Risk Management process. We are talking to our firms that helps guaranteeing our housing and taking on more crypto currency product let me clarify, there is misinformation out there we are the venue for listing ets and a list of us of asset of management oftentimes issuer comes to us with new or novel products and they say hey, i want to list, ntf New York Stock Exchange, will you help us do that. We have filed for the ability to left  well not let ourselves be the issuer of the bitcoin etf if the fccbaultimatelyf approves it what do you think the likelihood that theyll approve what you bring forward i know the fcc is going to look at it carefully there is not going to be a rubber stamp just as i describe being concerned of the volatility, theyre going to look at those carefully. This also is not just looking to put up roadblocks. It is somebody thats business friendly and friendly to capital formation. It is in the cmes future or both no, i dont know the ins and outs that we filed my understanding or my belief is they maybe based on cash, crypto currency what do you hear of the president lobbying them here in the United States . Boy, what can i say i have spent a lot of time for years. New York Stock Exchange is owned by Intercontinental Exchange i had reasons to spent time with him. It is a great Energy Company wants to list on a listing venue, we are going to go and compete for it you can read between the lines and substantially all the worlds largegEnergy Company on the New York Stock Exchange they have wanted restrictions which you have been reported in the press and they are shocked arn around the world, would you be able to lighten your restriction . Thats not true i am not going to comment further. Mitch farley, thank you very much brian, back to you. Really fast on the interview there. Thank you very much. Here is whats coming up for power lunch. Nike, should you buy it or exercise some caution . Is your older iphone suddenly running a lot slower if so, you are not alone. Apple finally admits there is a reason why how one ceo wants to help taerreil, amazon to improve their business thas possib is that possible you are watching power lunch, stick around 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 to power lunch. We have a new report, now we are finding out why he was pushed out, bob bowman. There were a lot of issues oigon on there and we are just now finding out about it this was bob bowman who had run the mlb advanced media for the last 17 years. He got pushed off last month and we are beginning to learn why that happens back to you guys. Thank you, nike, the stock have been up more than 21 have the sneaker giant gotten their mojo back. Susan, it is great to have you with us. You got a new reading on nike. Yes, we have seen a good run in the stocks. I think we are having to see much better growth particularly in north america and while we are expecting improvement from not minus 3 last quarter to minus 1. It is going to take a couple of quarters to flush through. While we have seen inventories and improved it is not that excitement from the products what we are hearing from a finish line and foot locker, you know even sales have gotten better and all promotional driven we have to see more products out there before we see real changes in north american product. Whats the pipeline looks like to you susan . Do you think theyll talk about the call over what could happen after that inventory clears and the promotional activity dies down thats why people got so excited. They really did have some great looking products, new stuff coming out it is still a way off. The problem is, it is still just not a big percent of the shoes out there thats available for sales. We just need a much bigger pertinent trags a penetration and it is going to take time. Vapor max is increasing. It will take time to build a larger presence and thats what we need to happen. I dont expect things to change dramatically until we get to the fall of next year. You are talking about having the improvement of north america but international have been a problem, too yes, we have seen slowness in air national one area where we could see a little more weakness, typically does lag the u. S. Market well see where it reports this evening. Susan anderson, b reilly fbr thank you melissa, have you noticed that your iphone is slower apple explains what they have done to your phone, that story, straight ahead 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 the moment a fish is pulled out from the water, its a race against time. And keeping it in the right conditions is the best way to get that fish to your plate safely. Bacteria can multiply to high enough levels that even cooking it will not destroy all of them. Its definitely the most important thing in my business. How fresh is the fish . Where it comes from . How it gets here. The more i know, the better. Sometimes the product arrives and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. We took our world Class Network and we developed devices to track environmental conditions. This device allows people to understand whats happening not only with the location of that asset, but also if its too hot, if its too cold, if its been dropped. Its completely unique. We ship fish, beef, poultry, vaccines, insulin. This is about monitoring and protecting everything we ship. I catch all this amazing, beautiful fish and then once its out of my hands, i have no control over what happens to it. If you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. Its really all about the network. You are looking at trillions of transactions a year. Not too Many Companies in the world can even scale to that type of volume. Who knew a tiny sensor could help keep the food chain safe . Food has to be fresh. Its that simple. Are you one of the iphone apple users out there, the older the phone gets, the slower it is well, you are right did your old iphone feels like it is slower . It might and not your imagination. Apple acknowledging that it made changes to the software. The issue had to do with battery technology, lithium ion is kind of like people and they decline overtime apple now says it did add a new feature to ios last year our goal is to deliver the best experience for customers which includes overall performance and prolong the life of their devices. Apple says noting that it recently extended the feature to iphone 70 devices which is the software update. Ben Thompson Says apples action degrading battery performance. Apple should have been transparent. If ios are slowing down iphones, there is a potential of fixed issue thats going to cost you about 79 and free under apple care guys, back to you a lot of people think they do this purpose for economic reasons to make you buy a new iphone thats the headline of an argument apple is trying to get you to buy a new phone by crippling an old one. Apple is saying thats harder to believe. It would come in from a lot of criticism and regulators and lawmakers if thats true app with the new feature we are adding, we are trying to extend the life of the phone. The lithium battery is going to decline. Apple takes steps to mediate that apple should have been transparent here with that feature, guys. We were certain that tyler was not crazy and now we know. Thank you, josh over to you, melissa. You heard the news earlier that boeing is still in talks. That was halted . Less. It is trading now again and that stock is a 40 . Again, just to report no deal is done the market is buying into this just a bit with embraer literally flying, three days before christmas. If you are getting your Holiday Shopping done,e wll show you how retailers and shippers are handling the rush quickly. S 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. Jack and jill went up the hill to fetch a pail of water. All because of a burst water pipe in their house that ruined the Hardwood Floors in their kitchen. Luckily the Geico Insurance agency had helped them with Homeowners Insurance and the inside of their house was repaired and floors replaced. Jack and jill no longer have to fetch water. They now fetch sugarfree vanilla lattes with almond milk. Call geico and see how affordable Homeowners Insurance can be. Hello everybody, i am sue herrera. 11 people were killed when a speed passenger bus collided more than two thithirds of catt catalonian are tus are turning o vote baby milk recall. Recalled millions of more products thats because there is fears of salmonella contamination the company have recalled several billion products earlier this year. Researchers say women are vulnerable to stress, they looked at the effect of mental stress of men and women with heart disease. Women had a reduced of heart supply when theyre under the pressure and that increases the risk of a heart attack of course, there is no pressure this holiday season. Everybody relax and have an eggnog thats the news update you are watching all the panic dads and husbands out there. That would not be you the market is closing for the day. Jackie deangelis, joining us good afternoon brian, the news at the north resuming operations in early january not having a negative impact on prices as one would think. Traders telling me that the move in the stock market and the excitement all impacting oil prices as well the notion allocating would boost the economy and demand it ships away from the supply dynamic to the demand side of the equation which is in focus less this year the range is 57 to 53 . Thank you, deangelis. Now we are taking a look at which investment stand a gain. Joining us now is ken wisenburg welcome to the show. Thank you this had to do with dividends, most people like to pay out dividends. Dividends used to be 39. 6 which is the top bracket for individuals, it is now 20 deduction against Dividend Income so the effective rate with a drop to 37 as the top bracket is 29. 6 so you are also saying that they should do their shareholders a favor by waiting, right . If they declare the dividend before december 31st and pay it january, the share hold everies g getting the benefit and it counts as a 2017 dividend deduction services so Everybody Wins it is not an Everybody Wins scenario the last few years. We have the old retailer thing hanging over us. Whats the balance . The positive that you just laid out and the over hangs that we got it dependins on the2lreal 9y retail is taking a big beating ears it is goingathrough an if you look at what retail was, 20 years ago and today it is more of an Entertainment Complex and you have really good stra T Restaurants and pilate classes you noticed that there is an etf thats created thats an in verse to retail thats designed to mom and pops to buy an etf that would short retailers we gave the guy started of a hard time. You are not that worried of the retail side. Real estate have valleys for retails, it is a valley. It is going come out and coming up with creative use of that space. In a modified retail environment or a showroom type environment with additional features and residents and Entertainment Complexes and restaurants. Could a tax change like this get Company Start thinking of e reorganizing themselves. Many companies should be thinking about that and one of the main reasons that interests limited or non Real Estate Company is a 30 of income limits for interest Production Companies that leverage heavy assets like real estate if they spin out the real estate to a separate company or do a sale lease back a Real Estate Company coul could that enables them to deduct the full amount of interests. Instead of 39 years depreciation, it is 40 years and instead of 20 years on residential property, it is 30 years. So at the small price to pay for a large benefit. Last question here of the investors standpoint. You will get a favorable treatments good to know. Ken, thank you very much for your time, good tip. Michelle. Retailers are in a rush of last minute Holiday Shopping speaking of retailers. Are they losing more customers ever to amazon a company thats helping retailers through amazon of the revenue, i am going to tell you how it works, straight ahead 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. 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. The market. Redict 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. Two million shoppers shop at the store. For more, watch weekend morning on msnbc 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. We are guessing many of you have not finished your Christmas Shopping yet busiest shiest shopping day of, year kw courtney is live with ale people thats procrastinating out there. There are options, dont worry3yn even6z if you are runng zs expedited. I am at amazon hub in new york delivery for one5or two hoursi new york city thats done by foot or train or bike most commonly it is available to you if you live in 30 or more densely populated city in the United States the top category for prime is grocery and personal essentials so maybe not your top gifting category but there are some gifts here google expressed also delivering the same day they are the next day. Thats nationwide and you dont need a membership as long as you hit the minimum threshold for each of the retailer 2 u we got other retailers thatl start up the oedelivery goodse1m the location. will cost you 9 to 14 for 14 cities. Now what happens with amazon prime when you get closer to christmas of one or two hours, they found it so far this season, orders are up to 2 compares to last year. If you look at the data last year of 2016 from place intelligence it was the biggest spike of the season just a couple of days before christmas back over to you guys. Thh9 u very much, courtney,umeeyt. Talk more about retailing or any size trying to out run5 amazonwmassive shipping do co operation is tough it iswjnot impossible and especially during the holiday crunch the stock is up 45 over the past year. The ceo Frankford Ford is jg now thank you for having me make it possible to9tdo this by connecting them to a network of thousands of the inventories and ship the product to mustomers i can gomdonto any companies that you help with their website and order stuff and it will be in their inventory and you help them know whether or not it is in their inventory or whether or not they could be ship out they got their own they have an endless isle and expand their assortment. When they carry this virtual t inventory. It is available for you to consumers. It comes to you and you would have no knowledge that it would came from assupplier drirect. It sounds sof simple and over x over again when you order what they do they have verses what they4actually senmg you and less is like from amazon or fresh direct, you dont know if you are going to get the product. Change in management is really, really hard for some Companies Supply chain these days and supply chain in shipping is the yu quickly so there is really two lever at lnretailers can pull most retailers, amazon hasd hundreds of millions ofa3 skews available for sale and they got hundreds of sophisticated warehouses other retailers dont have the Balance Sheet to be able to out lay it for warehouses. Make thistmproduct available ie virtual pnay walmart. We do wx with walmart. How does that work with jets with acquired and one of the reasons why their stocks are higher this year because of their improvements and online sales. They have done a great job and expanded the assortment. I believe they are up to around 70 millions. They are learning what amazon learned a long time ago and what other retailers learned now. More skews mean more sales you cannot afford to have a small selection online expectations are too high. Theyre creating more foot traffic into their stores which is a big boom for retailers. How do you interphase with jets . Jets is a retailer and a marketplace. We connect them with our suppliers and sellers and fulfilling to the consumere dow get paid by retailers or Distribution Centers there are companies that do just exactly that large Scale Distribution for retailers. We connect retailers to brand and distributors and other sources. Fee to retailers andr suppliero situation. What can you tellq us ofj retail moment at htn moment . Pressure on÷8everyone of not oy skew assortments but shipping. We are seeing it is adopting inventory model and carrying the products a lot of sales start out on google so if you dont have products available for sales, you are not going to get the traffic. We are starting to see n retais adopting the inventory of a strategy forvw growt good luck frank thank you. Appreciate it thank you, melissa, back to you. Recreational commercial sale of marijuana will be legal in california in a little lesths an a week yes, you heard thats right, 25 thats looking to be a cannabis resort. Power lunch is back in two lets get started. Show of hands. 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. 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. A former gold mining outpost hoping to cash in on californias legalization of Recreational Marijuana by reinventing itself as a cannabis resort jane wells has that story from los angeles. Hi, jane. Reporter hey, melissa, a week from today, socalled adult a week from monday, i should say, socalled adultuse marijuana will be for sale legalry herlega ry l only from licensed facilities. The state handed out 28 licenses so star in a state of 39 Million People many entrepreneurs are counting on this being a multibillion dollar cannabis market. That was the old jail right there, and i reckon well make it back into a jail. Reporter Steven Sharon is show me about nipton, populatiad mining town after the nevada border sharons green bought nifton for 12 million bucks, plans to turn it into a pot paradise nipton is in a county where theyre still banning them he hopes people buy their pot there, legally bring it there and enjoy it a lot of confusion as to whats actually going to happen once january rolls around. I think my biggest thing would be that this is more like a christmas wish, during this time of uncertainty, we err on the side of understanding and forgiveness, and dont make an example of certain people, they were 50 yards inside, that just doesnt move commerce forward, it doesnt move humanity forward. Reporter okay. The state admits its going to take a light touch on enforcement for a while because its still taken so long for it to get its act together and realizes there will be problems. People just have to be patient guys so, jane, we were billing this as a cannabis resort. It looks like its i dont know, like a scene out of a wild west film. Reporter exactly exactly. Well, you know, it claire labeau used to stay out there. Its a few miles from the nevada border if youre on your way to las vegas, take a little detour and day there. I will admit they have their work cut out for them. I know where you are, thats gods country. The land of 110degree days and 35degree nights you think its going to be successful given the effort it will take to get to nipton reporter i think it may be successful for a specific type of cannabis user, the. The challenge they face is at the moment the county theyre in, San Bernardino county, the largest county geographically, in the state is banning all sales. This is one of the issues with Legal Marijuana in california. Its sort of bottomup regulating the state can say what it wants. Local counties can ban it. Youre talking about an entrenched illegal industry that may not want to move into the light. Seems like a pretty big issue. Jane, thank you. Take the i15, route 420 as they may say jane wells, thank you very much. Time your trading nation, lets talk mining, no, not Bitcoin Mining actual mining. The miners have been red hot latery could metals be a better bet next year, he said than cryptokpucurrencies mark teppe ar. Craig johnson with piper jaffray. Mark, do you own or are you buying mining stocks for your funds or clients we own and continue to buy, so these are typically latecycle stocks which is obviously exactly where were at given the fact fat this bull market has been going strong since march of 2009. Right now, specifically, this happens to be a direct play on the expectation of increased Infrastructure Spending, and capx, as a result of the tax reform so the aggressive expensing of capital equipment, combined with a lower Corporate Tax rate, cash repatriation, should be a boost to Infrastructure Spending so wed still be buyers of the etf, despite the run the bottom line is theres still massive pentup demand to increase Capital Investment and this will be a big beneficiary of that. All right, craig, chart the biggest miner etf for us, xme, threeyear highs tripled off its lows still well below where it was about five or six years ago. What does the chart show you right twha thanks, brian. If you look at the breakdown of the xme, 40 comes from steel stocks when you look at the chart, a big low was made in early 2016 right now, over the last 24 months, youve been putting in a series of higher lows. Making that kind of big consolidation. So i think from here, a breakout above 35, youre going to set yourself up for a move up to 44. So, we would be a buyer of the stock. We are actually recommending an overweight in the basic materials sector right now, brian. All right overweight in the basic materials sector the xme looking attract if mark and craig, thank you both very much. For more trading nation go to tradingnation. Cnbc. Com the latest from tradingnation. Krns and word from our sponsor. Using limit orders is generally a good idea. In low volatility markets, consider setting your buy limit orders much closer to the market price. Low volatility is generally associated with rising markets and trying to buy on a dip can often cause you to miss the trade all together so if you really want to buy a stock during market hours, just use a market order shes nationally recognized for her compassion and care. He spent decades fighting to give families a second chance. But to help others, they first had to protect themselves. 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It may increase your risk of bleeding if you take certain medicines. Xarelto® can cause serious, and in rare cases, fatal bleeding. Get help right away for unexpected bleeding, unusual bruising, or tingling. If youve had spinal anesthesia, watch for back pain or any nerve or musclerelated signs or symptoms. Do not take xarelto® if you have an artificial heart valve or abnormal bleeding. Tell your doctor before all planned medical or dental procedures. And before starting xarelto®about any conditions, such as kidney, liver, or bleeding problems. Its important to learn all you can. To help protect yourself from a stroke. Talk to your doctor about xarelto®. Theres more to know™. Check please. Okay. Time for check please. Brian, melissa, if the brazilian government allows boeing to buy emb embraer, it would be a water shed moment in their history every Brazilian Company you know of is default controlled by the brazilian government even though reportedly it trades on a market somewhere, have something called the golden share historically, theyve been incredibly protectionist they got a new government, in the last year, michael temer the finance minister wanted to end the practice of golden shares im not saying this is going it happen, but for the first time it is possible politically, at least, and that would be a dramatic change. And this would follow on the heels, of course, michelle, as you know, a lot of defense mergers in the past few months, right, we had northrop grumman, Rockwell Collins this could be the latest in a string i want to talk about the conversation we had earlier with Danielle Demartino booth economists in their models, direct inputs, not necessarily the derivative effects on the economy, the impact of capx saw at t invest an additional 1 billion. What that could bring in terms of job creation associated with the capx. Thats not in the models we could see a bigger boost of gdp than we think. Yeah, good point there. Might mine is a lot less important. Very fluffy, actually. In an interview, jimmy page, guitarist for led zeppelin, said next year, the 50th anniversary of the band, probably the best band ever, they will release some previously unreleased material he said this kind of stuff in the past, but guys, well see, will led zeppelin not do new stuff but release old stuff we have never heard i, for one, hope so. Why not . Led zeppelin. Why not thanks for watching power lunch. Closing bell starts closing bell starts right now. Hi, everybody, welcome to the closing bell, im kelly evans a the New York Stock Exchange. We feel like we should be opening with cashmere or something right now. That would be my preference both led zeppelin fans. We love to hear that, the in u material for next year im bill griffeth. We new deal talks to talk about. Probably heard cnbc confirming boeing is, in fact, holding takeover talks with Brazilian Aircraft Company Embraer details and what it could mean for the Aerospace Industry which is seeing consolidation right now. 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