In beijing europe is weak and claims a little higher than expected. The twoyear is at a nineyear high our road map begins with retail movers macys and kohls moving in different direction. Plus, more media m a intrigue the future of at t and time warners deal is in question as the department of justice asks for changes and the two sides may end up in court. And futures are slipping. Markets are awaiting more on tax reform today, as we digest a number of earnings movers. So lets kick it off with jim, who is at west point today, ahead of a big show tonight, jim. And were looking at some early weakness this morning, some attributing it to the increasing difficulty between reconciling what weve gotten from the house, what is being marked up, and what the senate is eventually going to tell us on taxes. Well, im continuing to be very skeptical im looking for a repeal and replace here in other words, i just dont think that theyre going to be able to get it together anytime soon but you know what, were back into a pattern and the pattern is when europe is weaker, were weaker. And ive noticed that europe pulled us down im not all that concerned i think buyers will come in regardless of what happens in congress by the way, its really interesting to see a bifurcated retail thing were going to be going over it. But i thought macys quarter was strong kohls was not andic th i think retail will color the action, because were in that part of the earnings season. Kohls is a miss, a couple of cents. Although comps, jim, down a tenth. A little bit better than the down 0. 7 that we were looking for. True, but i think people are thinking that kohls would be consistently better. I like the call out at macys, where inventory was down thats so important. It was the opposite last year. Sg sk sg a down. I genuinely think that macys will be able to navigate this far better than what the stock seems to indicate. Theres a lot of moving parts in retail today. Elf is going to be interesting down in the premarket lpd has some projections about the Holiday Market they three 36 to 4, which is what we did last year. They also say it will be the best holiday in years for consumer tech. And you can probably guess why right you know, apples going to take a gigantic part of the Holiday Season, as it always does. This one in particular, i think, because of the higher price point of the ten those that have seen the x, carl, i think its pretty breathtaking and the 1,000 price tag is not as bad if you think about it from any if you buy it from one of the big telecos, david will be talking about the telcos and what they mean, but im pretty sanguine about the Holiday Season because of the joblessness. Weve just been having an unprecedented employment rate here i know the claims this morning may not have been terrific, but i think that retail and employment dovetail, always have, which means that the season is going to be strong its just a question of how much amazon captures, because i think that amazon is going to be the star of the show well, to that point, amazon is already getting their marketing plan in line i dont know if youve seen or if we have the holiday ad that amazon is now rolling out. Sort of, a big play, david, on their logistics strength follows a single box all the way through all of the conveyor belts, through the distribution centers, as this girl right here taps on her phone to buy a gift for what looks like her niece or sister this is what its all about. The convenience that amazon uses as its selling point they have, of course, as we know, einveinvested so much int logistics over time. Given that luxury by their Shareholder Base and the willingness of those shareholders over the last 15, 20 years to accept the fact that those investments were being made to secure future clothes. And this is what separates amazon in so many ways this idea, even a couple of years ago that you could get something same day seemed far fetched. And now, of course, its a reality. And that has med them, well, we know it, we talk about it every single day, of course, the most powerful force in retail and the scale of which is simply unrivaled in any way, even in some peoples imagination. Yeah. Jim, it makes you wonder whether its retailers who are nervous by Something Like that, or logistics, whether its i mean, whether fedex and u. P. S. Deserve to be nervous after seeing that. I think that fedex and u. P. S. Have all the business they can handle i think one of the problems is, theyre overwhelmed during this Holiday Season thats really hurt u. P. S i keep comingback to Xpo Logistics as being the last mile provider that no ones talked about. Brad jacobs has got a suburb ecommerce strategy and i think that they will be a dominant player. I also think, look, lets just understand ooemp amazon is making it up so people if you buy it online, you can pick it up all around the clock. None of these companies is doing that particular strategy makes a lot of money on those strategies the fact is is that amazon can make a lot of money because it is so digitized and uses so much artificial intelligence. I dont like the way a lot of retailers are winging it to compete against amazon theres nothing about amazon thats winged. Its process, process, process all the other guys are trying to catch up only walmart, do i see, and thats of course why the stock is up so uch, only walmart seems to be able to develop a strategy that is uniquely Silicon Valley and is very much, very much designed to stop amazon were, obviously, a couple of weeks out from black friday week, and were going to be talking about that in the days ahead. We do want to get to some media news at t says it has no intention of selling cnn as part of its planned 85 billion deal to buy time warner after reports surfaced that the doj wanted to sell cnn to win governmental approval Randall Stephenson putting out a statement, i have never offered to cell cnn and have no intention to doing so. Well hear more from stephenson today on cnbc when he joins our Andrew Ross Sorkin at 1 20 p. M. Eastern time a lot to unpack in this story. There certainly is, carl, and its taken lets say an unexpected turn over the last few days of course, as we reported, as andrew did, and others have a well, that ask from the doj was unexpected it has come in the last few days this for a deal that was very close to the finish line, as i reported yesterday, back in september, they were days away, people close to the situation tell me, from having what they believe would have been a Consent Decree or what we call socalled behavioral remedies for concerns amongst competitors in terms of the bundling that would take place with hbo and direct tv now and the Distribution Network and Everything Else there. They didnt get there. And makehin del rahine was confirmed to his post to run the antitrust division at the doj. And things have changed since then despite the fact that mr. Del rahine said he did not see this deal posing an antitrust threat, well, that was then, this is now. And now were at a point where it appears, at least, if the two sides hold firm to their current positions, theyre going to have to settle this in court. It would seem going into court, if that is, in fact, where we go, that time warner or at t time warner will have the easier case. The government, remember, is the one that needs to bring the case, needs to prove its case. And it would seem to in some ways, at least, according to antitrust experts, need to be relying on a somewhat novel theory, because this is not about jim pushing another competitor out its not a horizontal deal, as they have said, time and again, from the minute they announced it its vertical. We all can see why sprint getting together with tmobile getting together with at at t, or sprint getting together with tmobile would be conceivably an issue for doj four competitors going to three in an incredibly important market thats not whats happening here and so it will be interesting to see what the arguments being made are require them or want them to divest and what at ts rebuttals would be, jim. But it certainly took people unaware. The stock is now 88 bucks. At t was up a bit, but down this morning. David, i think that the big issue here, ive been saying this about facebook and about alphabet, is some sort of jihad against concentration of power concentration of power, with at t and time warner is nowhere near as powerful as the concentration of power that were seeing with facebook and with alphabet. If youre going to go after this merger, do you not, david, have to go after these giant conglomerates that started at small companies, that are now considered to be stiflers of innovation, because theyre so powerful thats, i think, is the key question, jim. Its certainly not clear that were at that point, yet but just think about the events of this week my report on monday of foxs willingness to enter talks with and have talks with disney about selling most of the companys entertainment and distribution assets to disney, as a result of the fact they did not believe that they could compete in terms of the scale required to do so with what they call the big 7 or 678, if you want to call them, the apples, amazons, netflix, googles, facebooks of the world. Jim, then youve got this, where at t would argue, this is what we need to compete and time warner would certainly argue that we no longer want to be alone. We need the scale that will be afforded by being put together into this larger conglomeration of media and telecom assets. So, its a shifting landscape. I think your point is an excellent one. When will that case be brought about simple market power if youre going to go after this one, in terms of sort of the same idea . I mean, you know, yesterday you saw the pathetic parody of profit that we saw from snap i mean, snap is a deeply hubble company, with the incredible arrogance of a team that have taken some sort of permanent intellectual vacation. But i do notice that facebook decided to wipe out snap and they can do it they can do it because they have tremendous power, they have a great vertical now, of course, snap is so busy committing economic suicide, it may not be a good case but it reminds you, do you really want to go up against facebook now its pretty late in the game to go up against a powerhouse like that at t needs this, because its a pitiful its a pitiful, helpless giant without time warner soy totally agree with you i think the Justice Department is trying to create some sort of thesis that this is a colossus give me a break. Its no colossus when it comes to alphabet and facebook no, it isnt. And and again, vertical integration has not been something theyve typically gone after. We say 40 years, maybe a little less than that, but its been a long time since a case was brought to break a deal up or stop a deal that was vertically integrated, carl by the way, when you imagine what the case would be against the facebook or how you would even argue to break that company up, its far from clear to anybody how you would actually do it. What would you break up . And if you believe some of these reports that its truly politically motivated and about cnn, is it clear to anyone what the white house gets, how their concerns are alleviated by having at t have to sell it off . Other than punishment, in some fashion punitive yeah, a punitive no. And that certainly is the concern, if, in fact, it is somehow proven or believed that the white house has truly interfered with and or significantly influenced the antitrust chief to take this action as a result of his being trumps antipathy for cnn, thats a worrisome signal, to say the least as the fcc commissioner, Jessica Rosenworsel tweeted yesterday, are we really going to make the Justice Department use antitrust law to force the sale of a cable channel because the president doesnt like its news coverage. Shes a commissioner, but not the only voice at the fcc. And that concern is being raised of course, at t and time warner are thaep happy to see it out t. Perhaps the idea that if enough of this goes on, it will back the doj up to a certain extent in terms of their ask. Well see. But it will be novel theory and well have to see if and what they actually bring to bear. It will take, what, six months, jim, most likely, for this thing to even see the inside of a courtroom. And that, of course, on the investment front and the uncertainty that comes with that is what concerns investors and why time warner has sold off so dramatically over the past couple of days and this has to be one of the more arbitrary and capricious that ive seen it was when jfk told Bobby Kennedy to get hoffa they set up a special hoffa unit of course, hoffa had not been indicted, not accused, nothing they just said, were going to stop hoffa i guess they want to stop zucker but to carls point a different magnitude to carls point, cnn is going to be owned by somebody. And its going to want to make money and its going to follow a programming strategy, conceivably, that would allow it to do so so who knows what you end up with does he want manafort to run cnn . Its an interesting idea manafor manafort no bannon maybe he wants a change at the top. Maybe its as ridiculous as the prosecution bezos could buy it theres also the added wrinkle that some say bellarine is not favorable of preferred remedies structural meaning you need to divest something. But behavioral is a dissent decree its whats comcast, our parent, had to enter into when it bought control of Nbc Universal its what, way back when time warner bought turner, they had to enter into as well. They owned a Cable Company back then, time warner cable. But that doesnt appear what they want. Its unclear what theyre going to get and how theyre going to argue it is something that the law supports yes and precedent supports. Well be looking for developments david, i just got to ask quickly, david, is it really true that they maybe have to give up direct tv otherwise . That seems like a complete canard what is that, the nfl package . Wheres the antitrust there . One guy has nfl and the other guy has Something Else it is one of the asks, direct or turner, was apparently the ask from doj, jim and youre talking about direct tv now, which many would say is a competitive product in an increasingly competitive market, ben official for consumers and so, certainly some question marks as to why that would be an ask. Guys, when we come back, taxes topping the docket on capitol hill, as the senate now gets ready to unveil its version of the tax bill. Were going to get to fox earnings, square, roku is way up in the premarket. Downgrade for snap and of course, nvidia and disney, tonight. Were back in a minute whether its connecting one of the worlds most innovative campuses. Or bringing wifi to 65,000 fans. Businesses count on communication, and communication counts on centurylink. Futures are in the red this morning. Dow looks to open down triple digits jobless claims up more than expected and taxes top the agenda on capitol hill the Senate Version of the gop tax reform bill is expected to be unveiled today. More squawk on the street continues in just a moment throughout my career, ive been fortunate enough to travel to many interesting places. Ive always wanted to create those experiences for others. With my advisors help along the way, its finally my turn to be the host. When you have the right financial advisor, life can be brilliant. Ameriprise [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Got eight minutes before we get started with another day of exciting trading in the markets. Lets get to a mad dash here send it over to you. The hudson river over your shoulder there, jim, looks beautiful this morning want to talk a little square thank you all right, look. The Payments Processing business, the sector, whether it be paypal, visa, master card, its been red hot. But the hottest stock in the whole group is square. And squares jack dorsey and sarah fire, who our own deidra will be interviewing later today. David, this is ato story about e company that started helping the little guy its now going after the big guy. Everybody uses square that i know, say in the little Restaurant Business that im in. This is a remarkable technology. And because they actually know how youre doing, they can make sure shortterm Business Loans to you, because they are at your register its a remarkable model. A lot of people felt it was going to be an afterthought. Something dorsey had come up with and really didnt matter. Instead, its become the next Big Powerhouse that everybody has to confront. Because theyre doing so well. What that great quarter. Yeah. You know, its funny, my coffee card outside the nyse, he uses square now theyre kind of advanced cash still a little bit quicker than using your credit card. Well, yeah, and fastest is paypal, which eliminated the credit card and the cash dan shulman the other day on mad money, really remarkable story that they have but sarah fryer is driving the bus here of square shes from Goldman Sachs this has a very heavy Goldman Sachs overtone david vineyard is on the board hes the guy that makes me feel very confident about the debt that they are taking on. Yeah, and as you pointed out, squares market cap is very close to that of twitter and he continues to run both companies, mr. Dorsey. Not sure how much longer he can keep doing that. You know, it is interesting that if you look at the valuation of twitter and snap, snaps valuation is higher im thats just wrong i mean, snap really has no no game whatsoever. Twitter has got still a lot of room for its total Addressable Market square is almost tapped out. I focus i mean, snaps almost tapped out i focus on snap, because at 15 billion, its almost impossible to fathom. If this company were to become public now, it would have a blue apron feel, not a canada goose feel yeah, i sense this morning canada goose you feel snap is a suboptimal situation, jim i think youve made that clear i think the whole i think the ipo was ill adv