Good afternoon, everybody. Welcome to power lunch. Nasdaq hit new highs yerlearlie today. The dow and s p 500 under pressure merck a big reason for the dows decline. Shares down about 6 shaving 20 points off the dow merck is down 13 in the past week the Number One Health care analyst will join us to take part in mercks woes. Whats working check out amazon, apple and facebook all three hitting new highs. Check out some other movers. Amd down downgrade there. The stock down 20 in a week in arising market. Lennar taking a hit on its deal to buy calatlantic soaring by contrast more than 20 , almost 22 ge just keep moving lower down 2 when you have two jets thats what happens investors getting a little nervous. Reports that the Corporate Tax rate changes would be phased in over time rather than implemented all at once. As soon as these headlines crossed the dow turned 60 to 70 points down right now. The corporate rate wouldnt get to 20 until 2022 under this proposal the report does caution this is an idea thats still under discussion nothing is final yet ive heard speculation about this for several weeks i asked how ways and means chairman about it directly, recently, he said he wants to get to the parts of the tax plan that drives growth be market views this as a negative its not immediately clear to me that businesses would all be against this if they can be assured that the rate would be permanent. That could be a trade they be willing to make. Theres debate on a how a phase in would impact economic growth. Some models show a minimal effect on investment you get to save a lot of revenue. Thats why this is so appealing to republicans they are boxed into a 1. 5 trillion tax cut by these procedural rules cutting the corporate rate alone could eat up all of this if republicans cant find enough loopholes to close back over to you thanks very much. Lets get to the New York Stock Exchange with more on the Market Reaction to this news. We saw an Immediate Reaction the markets more particular. We have been saying for months nowthere is a mental premium in the market for the concept of tax cuts. We just saw it take a look at the s p 500 i think we have a circle around where the news came out. That was about 11 15 or so there it is and theres you reaction its been struggling russell 2000 small caps would benefit more from a tax cut. This is the etf around russell 2000 that also dropped. That dropped as well bond yields move to the downside a little bit and all the regional banks were weak we had a break out in oil on the talk that russians and saudi arabians support an extension of their cuts finally, the retailers having a horrible day jc penney down 10 we have breaking news on sprint shares of sprint are halted on a volatility trading curb. They were down about 5. 5 . This is on the heels of some headlines out of nikkei, a japanese News Organization saying that softbank is now calling off talks to merge sprint and tmobile together thats the reason why those particular headlines are moving these stocks sprint still halted. Well bring you more details this is according to a nikkei report well keep an eye on those shares well watch sprint reopen when they do. Verizon and at t moved sharply lower on the back of this news. It was some thinking it was consolidation here were also seeing a huge spike in shares of dish and we could pull that up thats higher by about 3 right now. Directly in the back of this news this is an interesting story that well see play out here absolutely. This Telecom Sector has been lagging overall. As we watch some of these consolidation plays out it will be a key thing to watch. There was already regulatory scrutiny over this we had seen attempts to merge some of these guys in the past its a wonder whether or not investors were handicapping a big move with a consolidation play with tmobile an sprint thank you very much one last quick thing if we could take a full screen here no disrespect to my mug, the drop in the stocks is pretty unbelievable tmobile fell 3 bucks in the matter of seconds. You can see the drop for sprint and tmobile when you have a deal and the buyer selpulls out and the sellr pulls out, this is a sign that the market wanted this deal. Pretty clearly. All right the drops here pretty incredible we had the volatility halt. It would halt the stock for five minutes if it drops 10 or more. It just reopened down 9. 73 these volatility halts dont happen that often because weve had quiet trading. Im sure well hear a lot more about vicinity and tmobile right now lets get back to what was your top story in tax reform which marks only part of what makes this a huge week for your money. You have another big week for earnings we have seen how those results can move markets on wednesday we get the fed Rate Decision on thursday we expect to hear who the president will nominate as his next potential head of the fed. You have your monthly jobs numbers coming out steve, is it hyperbole, is it fake news to say this may be the most important week for the stock market, economy and the political economy . I like to quote tyler, it will be cable history. Its a big week. A lot going on we created a special color coded graphic to highlight all the stuff thats happening as you can see here, if its green, its supposed to be good and go up. If its red, its going down if its purple, it will be unchanged in white day one is tomorrow. The decision comes wednesday vehicle sales will come down job less unchanged you look at it is it working for you . Its bending around big surge is coming in productivity then theres the big weve been able to confirm nbc thursday is the day that the president will announce his nominee for the new fed chair. Heres the details on the payroll numbers that youre looking for. 200,000 expected on adp. Look at the nonfarm payroll number 314 after the minus 33 thats all hurricane distortion. Youll get the story in the jobs market Unemployment Rate unchanged. Average earnings, nobody expected that big number to continue let me show you whats going on with the Fourth Quarter growth what we have q 11. 2. Look, were tracking right now folks about 2. 9 big story there, the good growth from the past two quarters is expected to continue a little bit more from the consumer a little bit less hurricane distortion well be watching whether or not Business Investment along with trade continues in the quarter you didnt include, i suppose intentionally, the release of the details of the tax bill on wednesday. Thats not my department. I would get angry calls. I didnt have room stick around. Joe is a chief economist of the americas hes a cnbc contributor. Maybe you would be willing to do what steve would not do which is wade in to that thursday fed decision do you believe that could be, out of everything he listed, the biggest market mover of all or is it Something Else only if its a surprise if its a surprise, yes the markets move im going to say the tax bill, the isms, the payroll data, those things are more important. Joe, where are you on the Fourth Quarter do you see the numbers weve been having continuing i do. I looked at the last five u. S. Natural disaster not a very friendly topic but what i found so youre looking at katrina and earthquake north ridge back in 94, hurricane andrew and the quarter after the event takes place, growth is up about a point. It does. The fed is moving in december almost regardless of the data. They effectively precommitted to do so. Its priced into the markets it could take some extraordinary event from left field to get the fed not to move in december. The issue will be do you get tax reform where tax cuts, what does it look like who is running the fed and who do they do in response do they let things run hot or preemptively heighten . I want to make an idea in theory the market is reacting in the wrong way to this news that tax cut will be phased in. Exhibit a is the work we did last week that shows the market is not pricing in tax cuts opinion i think its been a nonbeliever if this number were 100, the high tax would be equally the market its been underperforming the market thats exhibit a exhibit b is you say were going to phase this in i think what they had been proposing was as i just showed you was not believed by the market it makes me actually happen. If 20 is the end game. End game. I would agree with you. Keep in mind we lost five handles on the s p 500 its not like we completely rolled over out of bed on these headlin headlines. It was a measured reaction to these headlines. I agree it wasnt all that much priced in do you think its a fore gone conclusion that the fed path will go continued or do you think theres any alteration of the plan because of a potential passenger of aage of tax reform . My guess is it will be a continuum of yelling im not sure hes going to hike anywhere theer as much as markets might think. Numerous times he said the economy could have grown a lot faster if the right policy was in place hell likely accelerate the appreciation and hay nmay not b hawkish as the market believes thank you lets move on to the markets they are lower at this hour. Its been a stellar couple of months this is one of the rougher phases but 5 gains. Is it too late to buy in you both heard the conversation about sort of the forecast im just going to ask simple questions to both you have what should i do with my money now . I think it makes sense to take money off the table weve had a terrific run Technology Stocks are leading this market. I think they can do a bit better because they are taking market share in the cloud and taking revenues given the year weve had no one can criticize anyone for taking money off the table. Michael, what should i do when you see stocks making all time highs its a good time to visit your Asset Allocation and make sure the stock portion of your portfolio hasnt crept up while im always cautious i reminded my father, who is 92 years old today, tell me to stay with the long term focus and stay with the market implicit in what you say is if your assert allocation have crept up in equities above the levels that make you comfortable, implicit would be an agreement with kirk is it wouldnt be a bad idea to pull back a little bit if that has happened no question about it. Certainly the numbers depends and argue for what kirk is saying at times when the market gets expensive like this, its so easy to be emotional when you get emotional is when you make mistakes. Look at the discipline if youre allocation is to be 70 invested this stocks and with stocks up 15 , youre looking at an 80 allocation, yes. Take some off the table. Try to be tax sensitive and deliberate dont make an emotional decision but be disciplined about it and take some off. If we reduce the Corporate Tax rate to 20 but eliminate a lot of deductions, most Companies Pay about 20 right now on a Net Effective after deductions that about the Corporate Tax rate in the United States some pay much more some pay much less why do you think the market seems to be so reliant on this Corporate Tax cut. I think the thought is that there could be a lot more money in the system and its clear lly st stimulatory. What will be interesting is if tax cuts go through. Youll have larger deficit i think the fed will continue to raise rates and that will slow things down. It will be interesting how it plays out. Thanks very much. Now we move on to the developing news out of d. C just a few minutes from now President Trumps former Campaign Chairman, however brief he was that, Paul Manafort, will be arraigned on Money Laundering an other charges thats right. Were expecting to see Paul Manafort along with his lobbying partner, rick gates. This judge will read the charges against them they will have the opportunity to issue a plea. Well see where things go from there. Thats expected in about ten minutes time were also learning more details today about another figure who we werent expecting to necessarily be the focus of the headlines today. That a man named George Papadopolous hes a trump advisor who has been indicted. Arrested in july, secretly that indictment just unsealed today revealing to the world that he may have been cooperating for several months time with the special counsel all this while here is what we know about George Papadopolous and his story. He met with the fbi on january 27th and lied to them during the course of that meeting thats why hes facing charges today. He met this london with a professor and russian female, who is not identified in these government documents he was told that russian female was a relative of vladmir putin. That appears to not have been true he told the campaign, papadopolous, did, he could arrange a meeting between putin and trump at the Campaign Headquarters this new york in 2016 in april of 2016 this professor in london told papadopolous that the russians had dirt on Hillary Clinton and had thousands of emails from Hillary Clinton that leave a lot of questions unanswered what did other officials inside the Trump Campaign know, if anything apparently papadopolous has been cooperating with the fbi for some period of time now. He signed this agreement with the fbi on october 5th were just learning about all this today a lot of new news unfolding in this investigation today thanks very much. The stock is down 22 in the past few months. Well talk to number one rated analyst after this break while were comparing, take a look at merck. The dow is up 7 what is wronwig th merck power lunch will be right back [ male announcer ] eligible for medicare . Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. Shares of amd getting crushed today after a bearish call from Morgan Stanley chip stocks in general are having a good year vaneck is up 40 should you be buying into the chip stocks . Joining us on the phone is the number one ranked analyst. Great to have you with us. Good to be here thank you. Are things as bad for amd your note indicates theres good and bad. A big driver of growth had been the belief that amd was going to drive the craze. That seems to be fading at this point. 24 months ago is primary controversy was are they going bankrupt or not. I think its come a long Way Investors are realizing the journey they have in front of them is rough. They need to spend extra money to get where they are going. Because of that they are not showing the real inflection in what investors were looking for with the stock of 15 its been under pressure since the report it was good but not good enough. We oit liut lined some of the stellar performances intel is not in the category is it time to go into intel on the catch up premise its hurting. The report was okay. The Data Center Business should be what people care about is still te pid i think the structural case is still there. I see no reason to back off of it for the longer term im willing to admit it could go higher than lower at the moment. Whats your top pick i like broadcom its unperformed a bit people have gotten just a blow out. At the same time i see a number of attractive catalysts. I think they h raise the d dividends and pick their hamargn topics up. The other happen is going to go and get returned either. Thanks for joining us thank you up next, why one of the worlds Biggest Pharmaceutical Companies has lost over 10 of its value in just six trading days story behind merck, next 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. And using blockchain to help prevent fraud. Rays always been different. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. Taking 20 points off the index today. On pace for its sixth straight down day we have more on mercks big move down thats right. Todays move lower comes after a pretty bad day for merck on friday all this has to do with two announcements the company made about its key oncology drug. The company said a key Clinical Trial in lung cancer, the results would be delayed out until 2019 so they could a measure as overall survivasurvil thats a delay for tha