absolutely safe. and say, you know, our brand, auto nation, is drive pink, drive safe, now we say, ride safe >> that's good for you and it's waymo, so it helps both companies, i think >> it's going to be a great partner. >> i wish we had waymo time, but we don't thanks for being here, mike. >> great to be here with you guys >> hope to see you all back here tomorrow right now it's time for "squawk on the street" congratulations to the houston astros on their first-ever world series title. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and jim cramer on the new york stock exchange. a tax bill rollout, a new fed chair, a bank of england hike, plus, tesla, facebook earnings, apple, starbucks tonight europe's red as the boe hikes

for the first time in ten years. it begins with tax day on capitol hill after an unexpected delay yesterday, house republicans set to officially roll out their tax reform plan this morning >> plus, dead serious about russia facebook's ceo, mark zuckerberg, promising increased efforts to police content on the social media platform >> and trouble for tesla, the automaker missing a model 3 production goal, reporting its largest ever quarterly loss. right now, house republicans and ways and means committee chairman kevin brady meeting on capitol hill as they get ready to reveal their tax plan. it calls for a corporate rate cut to 20. the repatriation would be 5% cash, 12% other assets, 30% of pass-through income subject to a lower rate there would be four tax brackets for individuals, the top rate remaining at 39.6 and a phaseout

of the estate tax. "the journal" saying that corporate will be permanent, with no phaseout although this has literally changed four or five times in the past day or two. >> i think it's going to change the again. i think this is a very fluid situation. i don't think these numbers are necessarily going to be what the numbers will be. those of us who watched lester holt's brilliant interview with tim cook knows that we're not competitive. and i know that there are -- i think something will be done that will make us more competitive. and something that will be done to give the middle class a tax cut. i really believe it. >> you do believe that >> i do believe that brady says there's a good chance it's going to be rewritten again over the weekend, ahead of the markup, next week, of course, we know the president is going to asia, so congress is going to have this to work with on their own. you sound more optimistic, though, than you did earlier in the week >> i just think that at least we're getting some details details make me feel for the but i still don't know how it's going to be paid for and i'm waiting for that >> i think the level of detail, though, will actually bring out the lobbyists, which we haven't

really -- they haven't even begun to fight yet >> and once they know where we stand on interest deductibility, where we stand on capex, where we stand, frankly, on the territorial system that may be implemented, but is going to have differences in terms of how it treats different industries for example, pharmaceuticals versus industry companies. and that is a real possibility i'm telling you, based on at least the conversations i've had, the fighting has only just begun. and so there are -- >> carpenters? >> i'm saying that, you know, u.s.-multinationals, it's not apparently just we're going to a territorial system, there are different ways to treat different businesses there's going to be a lot of lobbying within that >> but you do believe something small will get done? are you with me on that? >> the people i speak to come back to the idea that eventually this effort will fail and we'll end up with a tax cut and some sort of repatriation >> they've been saying the same thing since the spring >> that's right. i'm completely onboard with what you're saying. >> and there is a great deal of

optimism, i think, in the republican party that they can get this thing through and done. but i continue to hear differently from -- >> they will fail, we'll get something small. >> okay. so it willjust be a corporate tax rate reduction and a repatriation deal in the spring. >> bin go that's where i am. i think it will be well received by the market. >> so what happens with -- so basically, personal isn't touched. state and local deductions -- >> they won't get that done. they can't get it done there's just too many that are fighting it's the wrath of god to go after -- >> not to mention the pass-through taxuation and the loopholes that will conceivably open up. >> now they're talking about rules about doctors and lawyers and dentists >> how many rules -- >> it's covered. i mean, really, people who do invisalign, invisalign, are invisalign people covered? this is crazy. >> it's a massive loophole and one thing li will also say - it's going to take a while to read the fine print on this thing. don't expect on day one that we

all have the knowledge of what really is in this bill it's going to take a day or two to really understand it. >> but that's why we'll have something that will make our businesses more competitive and we'll have some sort of repatriati repatriation and i'm predicting that there won't be anything else but i think our president will say it's massive and will get a lot of credit for it >> well, you know who's going to get briefed on this before you or me is our own ylan mui who's outside the gop conference meeting room on capitol hill this morning we'll be relying on her for details, somewhere we think in the 10:00 a.m. hour. ylan, good morning >> good morning to you guys. so house republican lawmakers are just walking into their weekly conference meeting in the ways and means committee room, which is behind me and as you said, the details of this bill have been in flux over the past 24 to 48 hours. axios and "the wall street journal" reporting that the corporate rate cut will be permanent. it will go to 20% and it will stay there but that seems to be very different from what house ways and means committee chairman

kevin brady had indicated to reporters as late as last night, saying that the rate cut would be temporary and expire within the next ten years here's what we think we know about what's in the rest of the bill so far. the 12% rate for repatriation would be for cash assets, and there would be a different 5% repatriation rate for other assets that's according to nbc news there would also a new 15% minimum taxcompanies' foreign earnings on the individual side, the top income rate would stay at 39.6%. but again, exactly what income level is associated with that, still was up for negotiation as of late last night the estate tax would be graduately phased out. and it is still unclear, though, what type of compromise they reached over the state and local tax deduction to win over those republican members who come from high-tax states, such as new york and new jersey.

now, the text of this bill will be made public at 11:15 a.m. so after this conference meeting is over, that's when the bill will be made public. ways and means committee members, as well as house speaker paul ryan and other members of gop leadership will then head over to the white house to deliver their plan to the president. we'll keep you posted on all of it, guys back over to you >> really quick, ylan, a lot of reports indicating 401(k)s remain uh untouched. is that what you've heard? >> reporter: well, what we've heard is that they are no longer looking at lowering the limits of pre-tax contributions to $2,400 it will be higher than that. where, exactly, they settle, still unclear. >> ylan, we'll be talking with you a lot this morning thank you so much for setting us up ylan mui in washington get to some corporate news we've got to touch on facebook, posting better than expected rau results last night ad revenue up 49 the company says it plans to boost spending to police content in the wake of russians using the social network in the attempt to influence the

election on last night's earnings call, mark zuckerberg said he is dead serious about this >> i've directed our teams to invest so much in security on top of the other investments we're making that it will significantly impact our profitability going forward. and i wanted our investors to hear that directly from me i believe this will make our society stronger and in doing so will be good for all of us over the long-term. but i want to be clear about what our priority is protecting our community is more important than maximizing our profits. >> doubling their security staff to 20,000. some people wondering if he's so dead serious about it, why didn't he show up to capitol hill >> i have to tell you, i don't know the answer to that, but i thought this was a masterful conference why? because he's basically heading off any possibility that there'll be a fine, a $1 billion fine, justice department investigation. it's a brilliant narrative because what most people had been afraid of was that he was going to say he was going to

boost security, but it would have no exact on earnings. which would therefore make it absolutely chimeraical, it would make it just a show. but if you remember, this quarter last year, they said that the revenues were going to be impacted by an ad load that's going to go down this time they talk about the bottom line being impacted by this i have to tell you, this is the call that you wanted if someone's in the crosshairs of washington >> they've being talking down numbers for a while. >> that's what they do >> every quarter, they talk down their numbers a little bit as somebody said to me in a previous quarter, it's almost like the business is so profitab profitable, they can't control it >> it is the stock's at 184 and then basically zuckerberg cuts numbers he cuts numbers up-front the stock immediately goes down to 179 to 180. can i say what they -- if you actually pay attention to what they're doing, there's a lot o people who feel that they don't have -- it's mature, that it's

over they are doing personalized tv networks there are going to be 2 billion tv networks that they'll be able to advertise and ultimately, the artificial intelligence will solve what the ads come from. if i were a network executive right now, i would say, oh, unbelievable you create a blog of 500 men who are the age of 22, okay? about where you're going to go to work. and i would -- you know, every company that wants to get employed -- this will happen every company that wants to get employed, employees. you know, they will all advertise now. it's so targeted, it's incredible this is brilliant, this is the way tv was supposed to be. i watch a lot of ads i don't want care about. the oil of olay. do you use oil of olay >> no. >> but that "what would virginia wolf do?

blog that my wife reads, they care >> estee lauder and apparently some other bad non-state actors are state actors, too. and the targets is -- that's the draw >> the selfie generation you know they're like doubling their sales in china estee lauder >> we're back to estee lauder. let's get back to facebook, though 49% topline growth >> the numbers are amazing and the bottom line on onex, i'm saying, is a sandbag >> but the costs are going up in a significant way. you don't believe it you don't care >> they saidthe ad load was going to go down and the ad load went up huge these guys are the ultimately underpromisers and the ultimate overdelivers the stock gets hit and then the next thing, you look at it, the target prices have to be raised and it's at $200. >> and talking about the importance of in video and live

video. >> sheryl sandberg talks about the small and medium-sized businesses lined up against video. and i'm sitting here thinking, okay, i am going to advertise everybody who is in this zip code and they're going to get it to me and i'm going to kill it and that's how every small to medium-sized businesses read this you want to call sheryl sandberg right now. do you know that they probably have no sales department they just have someone answering the phone. yes, yes, i'll place that ad, yes, i'll place that ad, i mean niet, i'll place that ad >> they've got to get some russian speakers >> absolutely. >> it's a global business. there's no doubt about that. >> what else those are my words >> when we come back, we'll get to alibaba and their earnings beat we'll get to tesla, wider than expected loss, but elon musk is expressing some optimism stocks down in the premarket we'll get to ralph lauren, up 8% blue apron,ium, equ yum, qualcoo

more there's the premarket. we're back after a break ray's 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. that's the power of and.

alibaba's up in the premarket. the company's quarterly results beat estimates monthly active users up 38 to

549 million. the stock is going to open above 191, david >> yeah, will be, the revenue number itself was a very strong number we're talking 61% year over year cloud computing, they're 99% growth their core commerce revenue's up 63% year over year digital media. i mean, across the board, the one area of some concern this morning in talking to a couple of investors were margins, which was a bit weaker than some had anticipated. they did do a brick and mortar acquisition. there you can take a look at those core commerce margins, on the call, as well. maggie woo, the cfo said, regarding your question on the longer term margin level, i think when we set our business goal, we're focusing on value provisions, so we're focusing on the revolutionary reform of the whole supply chain, digitize the offline business, and help the experience for merchants and consumers. so whether it's light, higher

margin or lower margin, as long as we can provide value. i'm not sure that provides a lot of value but that was the one concern that stock up almost 3% this morning on those very strong top-line growth numbers. >> eat company that just has too much business. i mean, the amount of business they have. and this cloud plus 99, although you really didn't get a sense of how big that is, but that does tell you, what is going on at alphabet what is going on with amazon, right? these web services businesses, what's going within microsoft, as the web service business -- if you ask me what the best theme for earnings season, and this cinches it. it's web services business going to the cloud you either go to the cloud or you die. it's a really, really powerful secular theme. >> and who are the losers as a result of that >> who are the losers? you know, it would be on premise, but on premise, oracle is making a shift. >> i know. >> on premise, ibm is making a

shift. >> hp? >> do i believe it >> hp? >> loser loser. good point >> dell, we don't talk about it, because it's a private company >> but vmware is the biggest onborder they onboard to everybody. they're switzerland. and people thought that amazon was going to try to wipe them out. just the opposite. but this secular theme means that you can buy these stocks even up here, because business -- there's enough for everybody. you look at walmart. walmart is cloud the cloud. and that's big business. >> alibaba is going to have its famous singles day coming up very soon. 11/11. >> and now you think i'm obviously a broken record. who is going to kill it on singles day? mentioned in the conference call, estee lauder >> oh. >> people give moisturizer and

cosmetics. why? because the apple x is a story to end all stories by the way, i had allergen last night. lest stop calling with restasis, the drug that's going to go off patent botox is the only solution to the apple x. >> there are some people who don't care there are some that aren't vain and just don't care. we're not going to undergo surgery so we look better in our selfies. >> there are some people who are not vain who's that >> everybody's just going to get botox injections every day >> you're so vain, i bet you think this segment is about you. >> clouds in my coffee >> we'll get cramer's mad dash and count down tthe eno oping bell in a moment more "squawk on the street" from the nyc straight ahead k them highest in investor satisfaction

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♪ you're so vain ♪ you probably think this song is about you ♪ ♪ you're so vain >> warren beatty, right? it was >> that's mick jagger! >> it's beatty >> it's warren beatty. >> okay, it's warren beatty. >> he is really vain >> he -- he had reason to be >> yeah, why not i mean he was -- >> man >> let's just say, let's move to the segment. >> let's move on some people said they would like to come back with hands. that was an old line anyway, let's talk about newell. newell in the mad dash >> newell brands okay >> lacking good. >> worst in show for the quarter. second guy down in a couple of weeks. david, this was -- get your

sharpie out. these guys have been crushed and they've been crushed by the channel, where they sell stuff they've been crushed by -- it's a jobe-like story. you know, plastics, back to school, they said, was bad there really wasn't anything that was -- >> so the company, jim, ended the quarter with inventory up 18% year over year >> that's a sub-optimal situation. >> which obviously means they're probably going to have to cut price and doesn't look good for gross margins. what -- what explains this these are the two that have been obliterated this call -- this quarter. under armour and newell. under armour is firing people and kevin plank has assured me, no more. no more focus away from the group. mike polka was a very good executive, is going to have to trying to figure out how to get newell back on track david -- >> was the rubbermade

acquisition just a disaster? >> martin franklin >> yeah, that's what i meant >> let's just do this. let's say it right now don't buy from martin franklin >> yeah. >> and don't sell there. because you're going to get pantsed. martin pantsed franklin. they got pantsed the products are not what people want david, this is like the worst aisle of walmart i loved this company, because i love sharpies, i like writing, they're moving to china. i always thought their products are the highest quality. i always use their products. i love them -- but the fact is, the dogs won't eat it. that's, like, you put new and improved on dog food, and the dog does not say, oh, i want it. so this is a real problem. and they're going to expand it will share purchase, that's great. but i have to tell you, even the bulls recoil even the bulls recoil. and we've got a lot -- dow and jpmorgan, he believed like i did. but the numbers -- the decline in core business is extraordinary. >> yeah. >> there will be a level to buy this, but it's not yet >> not yet really >> i just moved it down --

>> yeah. we'll be watching newell and it was jardin, of course, the acquisition i was referring to >> yeah. >> we're going to keep an eye on discovery and shares inned me in media. a lot more to cover. >> i want an extra half hour i want to preempt whevater >> we're back right after this

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from brighthouse financial established by metlife. "squawk on the street," live from the financial the opening bell in just about two minutes. busy morning, even as we speak, the house gop is meeting to talk about the rollout of their tax bill which we're now being told according to nbc and some other sources will be called the tax cuts and jobs act. >> tcja. >> tcja. reform not in the title. there was some talk that it might be called the cut, cut, cut act. >> nice. wow. well, they can do whatever they want, but let's hope they get something done and i don't know if they will. it would really help retail. there's very high tax bracket in

retail which brings me to ralph lauren. and an extraordinary quarter and a comeback quarter was there on tuesday. the place looks, you know, to the flagship, the place looks fabulous, but more important, the way forward plan that they've been working -- it's working! and i -- you know, i'm thrilled for them, because they have been struggling and the numbers are making a comeback direct-to-consumer up five but the adjusted gross margin was up 300 basis points. very lean inventories. i like this story very much. >> ralph lauren, back to 96. going to be a nice open. we'll get to a couple other names after the bell we'll do tesla after the bell. apron, with the 47-cent loss, is wider than expected. although, revenue was a beat interesting. >> yeah, they said revenue beat and the firings are going to start having a positive impact if they fire everybody, it could really -- >> there's the opening bell, the s&p at the bottom of your screen this morning the big board, it is water

technologies celebrating their ipo today over at the nasdaq also selling an ipo is funko, a pop culture consumer products company. don't forget, later on today, we'll be getting the fed chair announcement, which we believe to be j-pal. as for jada, claims at 229 really good, productivity at three is better than the 24. >> you see these challengers -- >> the challenger. >> holy cow! job cuts fall to the lowest level since 1997 year-to-total date down since last year. these numbers are electric >> yeah. what are you looking for >> how about yeah. like, how about some enthusiasm? >> i'm very enthusiastic >> tesla is down 6% this morning. a wider than expected loss biggest quarterly loss in their

history. revenue does beat up 30. stock now is going to be down 21% from the september highs >> still up 50 for the -- no, about 45 an out of body conference call, once again, with out of body at one point, someone -- they're trying to ask real questions like tony's like -- like, tony's like a serious guy are you kidding me, tony will you give me a break we're going to make the most cars of any company in history that's what to do. most cars of any company in history. >> they actually is a that >> yes >> when? >> in the conference call. >> over what period of time? >> it doesn't matter it's musk. >> well, in q3, they did make 260, so that's a start the goal was for 1,500 they missed their target for q3. now they pushed the model 3 target back three months to the late end of q1, where they see 5,000 vehicles a week. margins are going to compress,

jim. which sort of -- some of these downgrades we had earlier in the month of ctober, jpm >> i think that, look, you go read the sales, they read very cogently but elon musk is still telling you a story about how unbelievable the car is. and that it will sell itself, and it's like -- someone is trying to pin him down on loehner numbers. someone's like trying to talk about like the battery pack. he's big thing he's up here he's day vinci. and these little that are asking questions. he's mozart -- >> and they're sally ari >> who heard of sally ari? >> well, we have, because of amadeus, the movie but otherwise, we wouldn't have. >> it's like the others player in "hamilton," he's a jefferson. he's a nobody. this is ridiculous he basically said, i did really badly, but i'm the best there is, so you should love me and i mean it a lot.

the only point in this conference call that to me had any bearing, when someone said, nvidia's chips are ten times better than your chips he says that's ridiculous. >> all right, we'll get some headlines from dow jones on the tax plan this is all according to dow jones. seeks a permanent cut on corporate to 20. caps corporate interest deductions at 30% of cash flow sets a new 10% tax on high-profit overseas corporate subsidiaries four brackets, 39.6 for millionaires plans and estate tax repeals in 2024 so that's maybe a little bit later than -- >> pushing that out a bit. >> and curbing state and local deductions, no details on that quite yet. >> that's a key question state and local tax deductibility. carveouts discussed for taxes, but you've got 33 members of congress from the nine top states, in terms of state and local, and what that ads up to, or state taxes

and they need more than that they can't lose 33 not a chance republicans. you know, they can only lose 22. >> this is not workable. i'm not saying it's dead on arrival, i'm saying it's just not workable >> because it won't fit into reconciliation >> there's just not enough revenue being raised what's the matter? >> i'm looking at discovery stock price. this morning, the company reported earnings and, you know, it's funny, because on the advertising metric that a lot of people seem somewhat concerned about, discovery actually came in nicely. advertising revenue up 3%, $407 million. that was above a lot of estimates. but there does seem to be overall concern about subdeclines. keown and company, for its part saying that's discouraging you can see the stock, though, had been down as much as 8%. of course, since they announced that deal to acquire scripps, the stock has had very few days where it has seen a price

increase in its shares very few and it's down yet again from the scrips point of view, i mean, i don't know, with mman. viacom was there with an all-cash deal. they could have gotten to 90 bucks. instead, they went with discovery, cash and stock. some of their shareholders may be wishing they'd chosen door number "b. >> is it the teva of the entertainment business >> no, i don't think so. >> why >> what is the teva? which one are you referring to as the teva. >> teva went from 50 to 11 >> let's talk about teva why do you not like them so much because the stock is down another 16% today? >> if i hold the chart upsidedown, i'd love them. >> you would >> it's terrible >> this is once an enormous company and now it's going to be a 10 million market value. >> well, they paid $40 billion for the worst part of what was

activist, which became aller gen. >> so did they get pants ee eed brett saunders >> they got ralph lauren pantsed, black label and what's interesting, brett said on the show, "mad money" being the show, they're going to be selling -- they own 10% of this company and they can't sell it fast enough they say they're going to try to sell it without impacting the stock, but right now, they're going to be selling it right now. >> they're running out of room it's only $11.57 to go >> i have a pithy maxim about tesla -- >> teva. >> stocks dprgracefully and fabulously stop at zero. they don't go to minus 5 or do that stuff you know when you play fantasy football and you have a couple of interceptions and you have like minus 3 hmm mm, not in this business, there's no minus 3 >> this thing is starting to put up some valiant-like statistics

when it comes to a 12-month decline. down 73% over the last 12 months >> it can't go through >> no, it can't. >> of course, you always think about perrigo and teva and mylan. teva wanted to buy mylan, mylan wanted to buy perrigo. they should have taken every bid they possibly could have and shareholders should have just gone away. it's unfortunate >> there's no -- i mean, it's not like the browns or the giants, they won't have a good draft pick next year, right? there's nothing like that. >> no. but what is the future for this company? >> there's no tank you can't tank and a get a good draft pick >> no. >> what happens to these companies? >> i'm not sure. >> is there any chance that act lan comes in and shorts them >> they could hope for that. >> we have a lot of conference calls. he comes on every show and talks it down. and then it goes like herbalife.

>> maybe you should suggest that >> that's being mean he's doing a very rigorous job on adp, which had a good number. he's doing a great job i was just surprised, this is a reference to, he switched his short position to puts but if it was really going to zero, why did you need to do that well, obviously, you have one option now i know all the reasons i'm being rhetorical it's rhetoric. >> understood. >> thank you >> that ralph lauren number is going to drag up a bunch of names. lb is the best s&p gainer. gap, ross stories, macy's. >> lp, sales were flat that was a big victory for them. i think that macy's hit that -- it was a panic lull that we saw earlier about macy's i think it was a panic lull. i don't think macy's is -- i think that -- we're going to talk about gannet. >> this is the ceo of macy's, as opposed to the company, the media company. >> all i'm saying is give

gannett a chance >> no gannett, "usa today," gannett? >> no, jeff gantnet, who's tryin to transform macy's in a very difficult environment. okay >> go it >> qualcomm is up a little bit bmo takes its target to 57 we talked about it earlier in the week for much different reasons. >> they need to close this xpi, they're talking about not being able to close it until 2018. that's the autonomous driving. i have to tell you, speaking of semis, broadcom just pre-announced a better than expected number and the stock is down my charitable trust owns it. this is a great quandary to me, when he pre-announce up, why is your stock down? >> qualcomm had a decent quarter. earlier in the week, carl referenced it. "the journal" focusing on the dispute with apple and the fact that apple opening with other suppliers, and chips for some of its other products, ipads and the like the nxpi deal, you're not going to hear much from qualcomm until they have to communicate

but at 117.39, it is not clear who's going to tender to a 110 deal >> i would rather tender away from it. >> the question is, what will they raise to? what will be the number they need to get people to commit who can can they get to commit they may have made a blunder, because there were opportunities for them to tie people up, lock people up. but a 115 price i'm told by some of the large holders, and get them saying, okay, we will tender at this price they didn't take that. they may regret that we'll see. we'll see. but they haven't got all the approvals yet. to your point, it's going to be 18, most likely. it takes forever to get a deal closed these days. >> yeah, it does great analysis >> apple, of course, reports tonight. there'll be a lot of questions about iphone x production. piper has some pretty good statistics on upgrade sbepintens going into this cycle. >> i think the upgrade intentions will be

extraordinary. you have to go see it. i feel like it's a little facebook like. the stock did advance. i expect the stock to get hit. and then buyers come in. it's not expensive a tim cook saying a lot of the right things to lester holt. so commonsensical, you kind of just say, why isn't anyone listening? >> tim did talk to "nightly news" last night, about a bunch of different things. market cap and the effect of fake news on social media. take a listen. >> i don't believe the big issue are ads from foreign governments. i believe that's like 0.1% of the issue. the bigger issue is that some of these tools are used to divide people, to manipulate people, to get fake news to people in broad numbers. and so to influence their thinking and this, to me, is the number one through ten issue. >> by the way, morgan stanley

has a piece out saying that sales for the holiday, traditional retailers, will be negative slightly for the first time since '08, because of budgets going to the iphone cycle, and then typical amazon gas prices, migration. >> i agree i think that apple is the one thing, device is the one thing that people will pay up for. >> $1,100. >> you'll disguisubsidize it >> it's not as much subsidize as a monthly plan over 24 months. >> you'll hardly notice, because it's so great. it's like, do you ever notice that you get charged every month. and it's like, okay. i get charged every month for netflix. okay i get charged every month for spotify. okay these are things you just get charged. and you know, i say, okay, that's a bargain i think the service revenue is going to be the important component. you have to see if that grows. you have to see if it says it's not going to do a fortune 100 company. he's got to go to fortune 75,

which is about $38 billion he's got to raise the service revenue forecast that's what he has to do >> okay. dow's essentially flat, getting some highlights of the tax package, which is worth looking at on twitter, if you get a chance let's get to bob pisani on the floor. hi, bob. >> hi, guys. a mixed open here, but europe has been drifting all ining low. that bank of england stock drop. the s&p 500 for europe, it was just about flat when it opened and you can see drifted down you can see around 8:00 when they announced the panbank of england rate hike. stocks drifting lower there. sectors here in the u.s., stocks are down, a defensive tone to the market energy trying to break through to a two-year high on oil stocks, on oil energy's up fractionally consumer zrediscretionaries are weak russell 2000 again

underperforming today. this has been going on for more than a month now, since the early part of september. so i would hope that this would narrow, once these tax cuts would become a little more clear, because the russell 2000, obviously, they would benefit. that's a noticeable underperformance for the small caps apache came out, i've been watching some of these oil company earnings a gain of four cents they were expecting a loss but people gave up on these oil stocks a long time ago it's going to take a lot for people to get pack in. but most companies have generally been positive, since the earnings came out. so cabot, i think we're having some breaking news here, guys. let's go back to you >> bob, thanks for that. just for some details on this tax package, let's get back to ylan mui in washington ylan >> reporter: carl, we've been able to confirm that the corporate tax rate going down to 20% will be permanent. it will not expire as lawmakers had previously indicated to reporters. in addition, we also have some

additional details about the changes to the individual code it looks like the child tax credit will rise from $1,000 to $1,600 and there will also be a credit of $300 to take care of those who have non-child independents, perhaps elders we also see some details about the write-off for the property tax deduction. remember that the state and local tax deduction was one of the key holdups in releasing this tax plan. now lawmakers are looking at allowing people to write off property taxes, up to $10,000. in addition, the alternative minimum tax would continue to be repealed that's something that lawmakers have said they wanted to do origin originally also the estate tax. that's something that we had heard from multiple sources would be gradually repealed. now according to the documents that we see from house republicans, that would now be

immediately repealed however, the exemption for the estate tax would be doubled. and then it would be repeal after six years. so those are a few of the breaking details that we have of this tax plan. we will be providing you some more information as we have it, guys >> ylan, thank you ways and means has some interesting charts, guys for instance, if you make 191k, your rate will go from 28 to 25, down a touch but if youmake $416k, 33 to 35 pay a little bit more. >> look, i think that that's a winner for democrats i think the democrats will like that and they do need some democrats if this thing has any hope at all. democrats probably like that, the way the direction that's going. and certainly different from what president trump might have talked about in the beginning. i still think, i'm not going back on this this is too hard and you can't get it done. it's just too hard the process is too hard. and i don't trust the process.

there you go there's a lot to go between here and a signed piece of legislation. >> i don't hear you saying a vote by thanksgiving with the way the president -- >> no, i genuinely believe there'll be a small tax deduction for the middle class that will be repatriation and some decline in corporate tax phased in over time. but that's it. because to rewrite the tax code, as anyone is old enough to remember, as i reported it it during the 1990s, whatever pay -- whoever pays you that check, and it was rather remarkable every month, you would look at it and it was glacial every time they wanted to do something, there was five new lobbyists that would come in and say, listen, you can't do that and the money got spread around. finally, you had to have the president go to the hill the hill have a -- >> but you were also talking about what was a bipartisan effort there >> in which corporate went up. corporate rates went up. >> corporate rates went up >> but it was simplification

>> it was simplification here, just the pass-throughs alone -- >> yeah, it's just too much. >> how you're going to truly regulate that and make shoure tt people are not taking advantage of it or that people are not suddenly becoming contractors. >> no. >> as opposed to employees it becomes very, very difficult. it will be interesting to see the language around that and how they'll police that, because it could be a giant loophole. >> it's going to be a replay of repeal and replace >> which means, you'll have to find other avenues to accomplish something -- >> just not getting -- it was too hard this turned out to be harder than people thought. everyone thought that when you cut taxes, everybody loves it. but this is not a cut for -- it's not an understandable cut the numbers you gave, i get. but people who live in iowa would say, are you kidding me? the guy who makes $100,000 plus, we're helping that guy how is that possible and then that guy gets -- that guy tends to be in new york, so

he gets banged again so it's way too complex. and with complexity means ---ion, you've gmeans --yo know, you've gt ot to keep it simple this is way too complex. i studied tax law and my head is spinning by this thing >> market seems largely unphased by some of these details we're getting and we're expecting more later this morning let's get to the bond bits rick santelli at the cme good morning, rick >> i agree, carl largely unchanged. as a matter of fact, down here, we're kind of treading water in front of tomorrow's big jobs report let's look at some charts, shall we one week of twos, you know, tight range, tens very similar, bunds very similar the dollar index, very similar but yet, many things are at very important levels as you look at the dollar yen, you can really see 114's important. in treasuries, that 244, 245 urn chan changed is important we keep bumping against 114.

what's interesting is, if you look at the dollar/yen chart year-to-date and a ten-year chart year-to-date, wow, instead of 114 in dollar/yen, it's basically the 240 area in tens all of these markets could brea. should be an exciting friday and today this morning on productivity was awesome carl, jim, david, back to you. >> rick, we'll see you in a bit. still to come this morning, forms wells ceo, dick kavacevich s&p hasn't been down two straight days in a couple of months up four or five and slightly negative for the moment. zar: one of our investors was in his late 50s right in the heart of the financial crisis, and saw his portfolio drop by double digits.

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this morning as some of the details have been released by house weighs and means they're going to brief reporters around 10:30 around 11:15 a.m. eastern time you'll see brady and ryan and scalise who might give a sense of what the count looks like. >> we got to know. it's fluid they emphasized that it's fluid just like the affordable care act. >> got to get to the senate too. oren hatch has already been very involved but senate finance will be more so. >> it's a pinata >> where they end up there you even may face that same problem on state and local in the senate too you have some republican senators from high tax states. >> call me when you get a little closer in 2018 except for repatriation. >> the market sort of backing you up on that neither up nor down on the details. >> right yeah a couple things. trading -- >> let's get jim.

>> let facebook come in. there's no hurry don't leave the stock. that's really important. i don't want people to leave the stock. last night i had tyson foods they're growing mid single digi digits by the way, antibiotic-free chicken. kraft, this is a company that's growing at .3% that's unacceptable in an era where we have companies, transport companies like xpo logistics growing at 20%, plus, plus, plus, high double digit. you cannot have .3 and think that you're going to have a winning stock no matter how much you cut. it's still in the end. it's the inside of the story tyson is on the outside. everything that's in the core of the store is doing poorly. the only thing i like for them is when you go to gino's and ask for whiz whip which is what i'll do on sunday that's cheese whiz. >> you like that >> it's got the yellow/orange

color. >> they took that out of the macaroni and cheese. >> but they added the color back, general mills. >> you can have your bottle upside down, straight up, eat the bottle, doesn't matter in the end, kraft heinz is not what you want. protein, this stuff, this is bad. that quarter's bad they have to buy somebody. >> which is not going to be easy as we've said many times. >> they need to get bigger, bigger. >> who are they going to buy, david? >> story for another day, my friend. >> jim, before we run out of time, what's on "mad money" tonight? >> sorry, my bad we got shopping center sz and they have tom farrell. i don't want the show to end, but it does end. >> i know. it rolls on. >> you got to leave them wanting more. >> that's right. like a good ma shijishen, jim,

we'll see you tonight. when we come back, a lot more on the tax reform bill plus the unveilg tinofhis legislation later. dow is up three points

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♪ good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla markets largely unchanged as we get details now of what is being called the tax cuts and jobs act. that is going to be our focus for the next couple of hours. >> our road map for this hour begins with those details emerging on tax reform house republicans set to hold a news conference on their new proposal in just over an hour. we'll bring you the latest and take you there live. >> several big earnings moving this morning including facebook, the social network with a huge jump but says spending on security will hurt profits finally, the president is expected to nominate jay powell as the next fed chair.

that in just a few hours from now. what will it mean for the markets? a lot to get to on this tax plan let's get to elon muy as we are about an hour away from the gop news conference in which republican leaders will go into detail on this good morning again >> reporter: carl, we've been able to confirm so far that the corporate rate cut down to 20% will be permanent, not temporary, as lawmakers had suggested even as late as last night. want to clarify on the estate tax, here's what lawmakers plan to do. they plan to immediately double the exemption for the estate tax. currently it stands at $5.5 million for individuals. that will double, but after six years the estate tax would be totally repealed so a little bit of a twofer there on the estate tax. on the child tax credit, we're learning that the credit will rise from $1,000 to $1600 and there would be an additional $300 credit for other dependents now, on the state and local

property tax issue, this has been a major point of contention for republican lawmakers who come from high tax states like new york and new jersey. what we're learning is that the deduction for property taxes will remain for amounts up to $10,000. now, on the 401(k) plans, that has been another thorny issue for republicans. all that we're learning that the document that we have reviewed from house republicans says is that the benefit for pre-tax contributions to 401(k)s will be retained but unclear at exactly what level and if it will be different from the current $18,000 level that exists. now, members are still meeting there in the ways and means committee room that is right behind me. chairman kevin brady began briefing members at about 9:30 with his power point presentation the full text of this bill will be made public at 11:15

we'll bring you more details then. >> it's a good day for kevin brady today. thanks for more, let's bring in austin goolsby, former economic advisers chairman and grover norquist president of american tax reform good morning, guys. >> good morning. >> grover, we need a good 30,000-foot view to start. what about this is reconciliation compliant >> the whole thing is structured to be reconciliation compliant that's why it took so long to put it together. this has been negotiated with the senate as well so there's a great deal of agreement already between where the house and senate are, as well as being pre-negotiated with house members. so something very close to this is what will pass the house and the senate the top line news is the republicans just won the house and senate in 2018 this is an amazingly pro-growth set of policies and where we're told you could never see 3%

growth again by the people who brought us 2% growth over the last 8 years, we're already at 3% this will take us up to 4. it's a very strong pro-growth job-creating package >> wait, 4% groewth that's what you're saying? >> we're 3% the last six months. >> that's a quarterly number that's not an annual number. >> annualized the last six months >> so you're talking 4% growth, austin is that realistic to you >> no. did he say 4 it's 40% growth. >> better than 2 which is what we lived through. >> you know what the biggest problem for this tax plan is no one's read it yet, and the worst thing that's about to happen to it is people are going to read what it actually says. what you're going to see is they're going to abolish the estate tax, so billionaires get a huge tax cut and they're ending the deduction

of interest on student loans they're going to end the medical expense deduction, cap the mortgage interest deduction, cap the local and state tax deduction. a whole bunch of things that there are middle class people who get tax credits or breaks now, there are going to be literally hundreds of thousands if not millions of middle class taxpayers whose taxes go up so that we can cut taxes by a lot for the biggest corporations and the highest income people. that's not going to fly, and if you try to shove $5 trillion of cuts into a $1.5 trillion suitcase, it's not going to fit. so that's where the rubber will hit the road >> grover, especially on that point about state and local income tax, capping it at $10,000 for property taxes only, there's sure to be a lot of pushback to that. >> sure. >> and what about all the republicans in the high tax

states, there are at least 50 of them why would they be on board with something like that that would raise taxes on a very important demographic on both coasts >> no, actually take a look at what this does the most important thing it does, it's going to create jobs. you take that cooperate rate down to 20% and allow us to be competitive in the world which we have not been for too many years. we go to full and immediate buzz expensing for the next five years. ask companies what that will do to make it easier for them to invest, for job creation the biggest winners is not whose taxes get cut how much although that's very nice, but the guy who didn't have a job for the last two years who's going to get a job, your brother, mother, sister, all of the family members that can become employed who have been unemployed because the recovery we've been through has been one of the worst job-creating situations over the last 8 years that the country is seeing we need to create more jobs. those are the winners. the jobs that get created, the businesses that get created.

there are 30 million subchapter s pass group corporations. that's 30 million people that are going to see less taxes and yes, corrupt machines will no longer have subsidies from other states to subsidize their very high property and income taxes, but the american people will see significant tax cuts they're doubling the standard deduction up to $24,000. it's a little hard for the left in playing the politics of envy to miss that point >> austin -- >> look, the thing is, grover's argument comes from a place that says if we have this trickle down theory of howme the economy works, let's cut taxes for the richest people and that will grow everyone's pie. i just think something like 28%

of the country thinks that we need to do tax cuts of the form they're proposing, and how are these republican senators going to explain to their constituencies who say, wait a minute, my taxes are going up, i cannot deduct my mortgage interest i can't deduct my state and local tax? i can't deduct the interest on student loans, and you're cutting the estate tax for billionaires that's good for me and grover is going to tell them, yes, it is good for you. i just think they're not going to think that's good for them. >> grover, he's not even mentioning stocks at record highs. we had two quarters of double digit profit growth. claims came in today at 229,000. how do you sell urgency on this? >> there are too many people who don't have jobs, too many people who say that they've gotten out of the labor force because they've given up looking for work we saw the labor force participation drop during the

obama years. people are getting out of the labor force not because they're old. these are people 25 to 55. the reason why hillary clinton and obama lost the election last year was they produced a lousy economy for much of the country. this is a job creation bill. they can play envy all they want, but at the end of the day jobs will trump left wing envy, and this will bring the jobs the democrats are scared because of what this will do in the 2018 election. >> grover, what makes you so sure that -- >> they're not scared, just to be clear, the democrats are not scared >> good. >> grover, for the 4% growth, what makes you so sure that if you cut the corporate rate down to 20% which many big corporations already pay rates in the 20s or even below that and get this one-time repatriation rate that it's actually going to translate into more jobs and higher wages, something that we haven't really seen at a time when corporations have been doing quite well >> we haven't seen it because

among other things the marginal tax rate is 35%. what we're moving to is a 20% marginal tax rate. the european average is about 20%. china is at 25 we're at 35, higher than china, higher than socialist china is not where you want to be you add, it's not a one-time repatriation we're going to a permanent territorial tax system which economists have told us we should have done 50 years ago. that will allow us to be more competitive internationally and we're going to full and immediate business expensing this is what kennedy and reagan moved towards in their bill in taking the long depreciation schedules and going to full business expensing, taking the tax on estates, george mcgovern played that politics of envy and carried one state with it. you can play it if you want but the polls show people don't want to tax other people's lifetime earnings which is what the death tax is, and it's not only bad

economics, it kills jobs and destroys capital it's lousy politics. the democrats are free to have that issue. >> go ahead, austin. i see youmaking faces. >> no, i'm not trike to make faces -- >> i'm smiling. >> my point is very simple i'm not talking about envy i'm talking about how do you explain to a middle class person why their taxes are going up while your cutting taxes for someone else >> they're not going up. >> i just think that's not logical. the second is, look at europe. look at the lowest corporate tax rate in the world in uzbekistan. these are not places that are busting out the doors with growth these are magic bean stock beans that have been promised to us before that when george w. bush said let's -- the very same people advocating it, let's cut these taxes for high income people, for corporations, let's allow repatriation of money and that will generate massive

growth, it didn't work we did this and it does not work to do something that's going to be twice the size of the obama stimulus which the people condemned for increasing the deficit, i just think at a moment when the unemployment rate is as low as it is, is just ill-founded and not a good idea. >> finally, grover, when we're trying to draw analogs to the reagan era, bruce bartlett was asked whether or not these cuts are in the fine tradition of ronald reagan, he said that's just a lie, too. i know because i -- [ bells ringing >> no. reagan began to take the corporate rate down in '86 but the democrats insisted on lengthening the appreciation schedule and that hurt the economy. we're doing two things, taking the corporate rate down permanently and going to full and immediate business

expensing. on the individual side, the good news is the democrats can say anything they want but this bill will be passed before christmas and the american people will be able to see their taxes cut. and that's a problem for the democrats politically. >> certainly the calendar that the gop has in mind. austin, grover, thank you, guys, for helping us understand a complex issue on a busy day. the home builders are going to be part of this equation because the mortgage interest deduction is something they have been paying close attention to diana ol ek is watching that. >> good morning, the home builders moving lower on the news that interest deduction will be capped at $500,000 for newly purchased homes. the current cap is $1 million so what's interesting is they preserved it for current homeowners so you're grandfathered in but if you purchase another home, newly built or existing home, the cap on the mortgage interest deduction is $500,000. also if you look at the general framework of what was previously

released and we now know is going to be the standard deduction, that would lower the number of people who would use the mortgage interest deduction. tax policy commission estimated that 4% of households would claim the deduction down from the current 21% if the standard deduction went into effect which it did, so i guess that really lowers the importance of the mortgage and interest deduction anyway of course, the housing industry is not happy about this. this from nar president william e. brown he says, it appears to confirm many of our biggest concerns about the united framework eliminating or nullifying the tax incentives for homeownership, puts homeowners and middle class homeowners at risk and from a cursory examination of this legislation, it appears to do just that back to you guys. >> home builders have having their worst day in several months thank you very much, diana let's get to kayla she has breaking news on the president's ceo dell brags.

>> the president will leave tomorrow for that five-country, 11-day trip and when he goes to china he'll be joined by 29 executives and officials, a list of which we just obtained. i want to show you some of the blue chip names that our viewers will be familiar with who will be joining the president in china when he lands there. names like lloyd blankfein, the ceo of goldman sachs the ceo of qualcomm. also andrew lib bris who has previously served on the now defunct president's council. the ceo of boeing airplanes division this has been a delegation that as its taken shape will announce million billion dollar deals in export it's no surprise that the ceo of sen ear energy is on that list and a ceo of alaska gas line we await the details of exactly what this group is going to

announce but know that the white house and the department of commerce that have been assembling this list and it has just become final, they've been looking for companies who have done deals that are large and ready to announce that when they hit the ground in china. we'll bring you more details as we have them carl >> kayla, thank you. when we come back this morning, big earnings movers to get to they're taking a bit of a back seat this morning as we pay attention to taxes we're going to change that facebook beats, tesla wider than expected loss. we'll get inside their quarters. later, former twitter ceo dick costolo will join us. stay with us y? thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs.

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expectations the stock is actually down though on growing costs. julia is with us to break it down including that conference call everyone is talking about. >> sarah, that's right what's driving down facebook stock is the company is warning that next year total expenses will grow between 45 and 60% and capital expenditures will roughly double that outweighing the fact that facebook beat expectations on every single metric. earnings of $1.59 per share were 21 cents higher than wall street projections while revenue instead of decelerate is as expected accelerated to 49% growth to $10.33 billion

with this 2.07 billion users, two-thirds of them using the service daily, those user numbers were a hair stronger than projected but the big headline, ceo mark zuckerberg saying that the company is prioritizing security over profits >> i've expressed how upset i am that the russians tried to use our tools to sell mistrust we built these tools to help people connect and bring us closer together and they used them to try to mund mine our valu - undermine our values what they did is wrong and we are not going to stand for it. >> zuckerberg as well as sheryl sandberg reiterating the company's investment in technology and people to review ads as well as posts. >> i am dead serious about this. and the reason i'm talking about this on our earnings call is that i've directed our team to invest so much in security on top of the other investments we're making that it will significantly impact our profitability going forward. >> sheryl sandberg saying facebook will continue to accept

ads on issues, that they believe in free speech they want to a lot more transparency about who's buying and who's targeting what guys, back to you. >> facebook shares are down about 2.5% thank you. alibaba out with earnings this morning ahead of street estimates. revenue up 61% the company says it's driven by robust momentum in its core e-commerce business. daily average users up 180% compared to last year. they are also talking about 549 million china retail marketplace mobile monthly average users the only concern among investors and the stock is up let's call it a little less than 1% right now, was on margins which did decrease made some brick and mortar investments over the course of the quarter and generally speaking margins were less than

people had anticipated, what, 62 versus 57 versus 62. overall revenue growth very strong strong enough to sustain a stock price that already was up about 112, 113% during the course of this year. not a disappointment for those who chose to invest here with its 61% top line growth. pretty stunning. i always want to mention by the way when it comes to alibaba it's worth mentioning soft bank -- there's a look at the margins, thank you it owns almost 30% of the company and has benefitted from this enormous rise then there's aaba, remember, some 384 million shares of alibaba as its main asset. this is the old yahoo! remember that? which has also been up 84.5 this year it continues to trade at a ki discount to its underlying value

based on the fact that it would be taxed were it sold but that's another area where tax reform plays a role if you were to get a favorable scheme that would narrow that discount conceivably because if they were to sell it they might not suffer the same consequences. >> it always reminds me of amazon and i know obviously there are very important differences in the businesses but the way that ma is trying to re-imagine retail, invest in brick and mortar and super markets after growing the e-commerce business. >> their cloud business grew 99% year over year to about $447 million. >> that's coming up in november. >> 11-11 >> that stock higher again later this hour, the ceo of the national retail federation joins us with his thoughts on what the gop tax bill will mean for the retailers. ghaf "squawk on the street" rit ter this with the dow down about 70

points

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stocks are down at the moment but bitcoin continues to march higher again this time soaring right past that 7,000 mark for the first time ever. the latest company to be interested, amazon it secured three domain names relating to crypto currency. amazon crypto currency.com is an example of one the company never acknowledged any plans toaccept bitcoin or get into digital currencies but they do appear to be exploring something at least related and the speculation is rising of course with the price. bitcoin also got a boost from the cme group saying it is going to launch a futures market, guys, just adding to the legitimacy and potential liquidity from the overall technology when we return, much more on the republican push for tax proposal the gop news conference under an hour away, we'll of course take it there live.

we'll also talk about the impact the bill could have on big retailers. stay with us usaa to me means peace of mind. we had a power outage for five days total. we lost a lot of food. we actually filed a claim with usaa to replace that spoiled food. and we really appreciated that. we're the webber family and we are usaa members for life. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

good morning, everyone here's your cnbc news update at this hour. at least 15 people were killed when two fuel tankers exploded in a town southwest of the afghan capital, destroying a nearby bus 27 people were wounded a security official says a sticky bomb destroyed the two tankers and that set off the explosion which engulfed the bus. prime minister benjamin netanyahu greeted by british prime minister may, netanyahu is in london to attend a dinner marking the 100-year anniversary of the ball four decoration. police z arrested a man of killing three people at a walmart in colorado last night this is surveillance video of

the suspect. according to witnesses, we walked into the store and opened fire on a group of people near the cash registers. houston defeating the los angeles dodgers 5-1 in game seven. that led to a wild post-game celebration in the astros clubhouse. houston came into the league as an expansion team back in 1962 congratulations to them. that's the news update this hour sarah, back downtown to you. >> houston strong. thank you. >> my poor dodgers though. but that's okay. >> sorry david's poor mets didn't make it neither did my poor reds. gop lawmakers getting ready to make their tax reform bill public the retail market is a significant sector of the equation, saying a strong tax reform proposal could provide a major boost to the sector and

the economy. let's bring in the president of the national federation. >> good morning, nice to be back with you we're very optimistic, pleased in what we've seen so far. lowering the corporate rate to 20%, simplifying the code, lowering the rate for passthroughs to 25%, those are big positives in our view. retailers employ 42 million americans in this economy and generate one in four jobs across the country. anything that we do that's good for businesses and consumers in the middle class we think is going to be good for the economy over all so we're very optimistic with what we've seen. >> they're also closing stores and facing a wave of bankruptcies and slower traffic and the threat from online how does that play into the fact that you're saying this lower corporate tax rate will result in more jobs and higher wages? >> a couple observations i was at the white house earlier this week with the president and a small group of industry ceos

the president asked me this very question, said what's happening with retail. it was an opportunity to talk about the transformation that's taking place across the industry, the way in which technology is being deployed, the jobs that are being created, and the fact that while there is an enormous amount of change happens as there is across the country and other industries, we're still creating jobs, we're going to drive 3.5, 4% growth. i guess the other observation we would make, we've heard the global commerce ceo of walmart say this and you mentioned alibaba, i was in hong kong a few weeks ago, they were talking about the fact that there can be no e-commerce without stores and no stores without e-commerce i think the world is starting to recognize there's a role for both channels but it's going to look differently than it does today. but stores won't go away it's going to look differently but still plenty of opportunity for retail to grow. >> matthew, some analysts are suggesting that soft line comps

will be negative this year at traditional retailers for the first time since '08 because we're going to spend our money on a new cell phone or buy it on amazon or we're going to spend it on gas. does that sound right to you >> well, carl, lots of change is happening and we know since the recession we have a different kind of a consumer we know people are spending money in different ways on experiences and on hospitality, travel, lodging. we know that the share of the dollar in terms of discretionary spending has been distributed differently in the last decade that's one of the reasons that retailers of all shapes and sizes, whether it's apparel and soft goods or others are trying to find a way to bring that experience and technology into the store, into the way in which they engage with consumers i think there's this competition and a shifting of the way in which costs gets distributed across the economy, and retailers are going to get their share for sure they just got to continue to be creative and find new ways to make that happen. >> what about consumers,

matthew? based on what we know so far, it does look like they are slashing the state and local tax deduction, limiting it to $10,000 for property taxes only. aren't those important consumer bases on both coasts of the united states, high spenders, and is this going to lead to a boost in consumption is there enough of a tax cut here for ordinary people >> listen, we've been intimately involved in the conversation about tax reform since the beginning of this year we've talked aboutit with you on a number of occasions the retail industry pays the highest corporate tax of any industry, 35%. but of those 2.5 million businesses out there, those retailers, 95% of them are small businesses with one location half of them have only five or fewer employees. i think our objective all along has been let's keep our eyes on the prize here the objective is let's make this a more competitive economy, simplify the code, let's lower the rates. let's have some faith and some confidence and some trust that

when we get those things accomplished everyone is going to benefit ultimately. if we get hung up on the details of who are the winners and losers on a very discreet parochial basis, we're never going to get anything accomplished the objective should be what's in the best interest of this country, in the best interest of the middle class taxpayers, working families, consumers, voters what works for everyone. i think the emphasis on lowering the rates, simplifying the code, a number of other changes. chairman brady has the toughest job in town. he's done a magnificent job of getting us this far. we want to help make that a rerealr reality. rather than get sucked into the debates of who's the winner and loser, let's focus on the overall objective which is let's get tax reform done. >> when the home builders says all the resources we were going to put into supporting we'll put into opposing, you think that's a one off? >> well, i'm not going to get into commenting on other

industries i know jerry, jerry is a great advocate for his industry. we're trying to focus on the big picture here we were very involved in the conversation, as i referenced a minute ago up to this point on tax reform we continue to be. we've got enormous resources set aside and being deployed now to support this plan. i think ultimately this becomes about what's good for the country and what's good for americans, what's good for small businesses, the middle class i think at every turn here chairman brady and the committee, when they've looked for sortheir north star, guidin light, over all philosophy on how to do this is what's pro-growth and pro-middle class. if you think about, that a lot of these skirmishes on the side are going to fall away because they're going to look very parochial, very narrow, and that's not what we need right now. what we need is a big picture and really reach for the stars and try to get done the most we can get done because if we do that, everyone will benefit in the long run

short-term there's going to be disruption, but if we do it the right way we should have confidence and faith that we're all going to be better off if the economy grows at 4%, 3.5% quarter after quarter and gdp growth we're going to have more jobs, wages are going to increase, people are going to build more stores, people are going to build more of everything and do more of everything maybe not more stores. >> not more stores you heard me, yeah >> economic growth more warehouses, more distribution. >> all right no more stores >> i hear my favorite jesuit skeptic over there i know what you're saying. >> thanks, matthew. >> definitely happy that you do dodged the biggest bullet, the border adjustment tax. thank you very much. >> thank you talking about retailers under pressure, underarmour continues to sink, the stock finding itself at the bottom of the s&p 500 again today. the news, they lost two key

execs, andrew duncan, the chief marketing officer, and pamela catlet, the scp and general manager of the women's and youth division both departing, mutual division from the company guys, investors don't like it because these were celebrated big hires, especially andy duncan the stock rose when he came from act zon, was considered a big hire for underarmour clearly this is a company in the middle of a transformation and restructuring and they're making tough decisions around that. they've got this new coo and president that's taking control of the business. investors don't see a light at the end of the tunnel just yet. when we come back, the president is said to make his decision on the next fed chair in a few hours former wells fargo ceo dick kovacevich is going to join us on ""squawk alley" on his

prediction and what it means for the markets. the dow is down 22 ♪ ♪ what we do every night is like something out of a strange dream. except that the next morning it all makes sense. to power global e-commerce fedex networks are massive, far-reaching and, yes... a little magical. fedex.com slash dream stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker.

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how will the nomination of the next chair of the federal reserve impact the mke aartsnd your money good question. find out on trading nation or squawk on the street coming up

getting some headlines from dow jones related to the department of justice's continued investigation of the plan by at&t to buy time warner. let me share those with you right now. the justice department, according to dow jones is considering an anti-trust lawsuit against the acquisition. they are also in settlement talks and that typically does happen you'll have the talks. what's important here perhaps is the idea that they've met in recent weeks with the doj. they haven't made a final decision but they are not, again according to dow jones, close to an agreement or settlement this is unexpected the timing is pushed out

here we are in early november. expectations had been this might have closed as long ago as a couple of months in fact you did have finally an anti-trust competition chief put in at the doj. but what the grounds for a lawsuit trying to block the deal would be remains somewhat unclear and, frankly, would be unexpected by many of the participants given this was not seen as a potentially anti-competitive deal horizontal in nature, not what we're talking about here of course, the president's opposition in the form of at least his various threats on twitter about cnn's coverage and earlier this year pomore pointed references, always a question in terms of what the review would be like but frankly many of the legal experts certainly that i've been speaking to through the months would have maintained

and i think continued to that it would be a hard case for the government to win if they were to make it again, dow jones not saying that they will but they are considering an anti-trust lawsuit. the stocks are halted. i want to make sure i understand why, whether it's for an imbalance or anything else at&t is not halted so time warner is just halted. it's got to be an imbalance, guys. >> indication 89 to 93 as you can see from your screens. >> could this be because the president hates cnn? >> that was always the concern it was it was the concern that would the executive try to reach down or would the doj in some way respond to perhaps what they felt was his desire to see this deal blocked, but that really has receded a great deal as a concern. frankly, you go to court and so the government's got to prove its case if it feels it's anti-competitive, we'll see whether they choose to do that my expectation would be, at least based on what i heard, that at&t would be happy to meet them in court and try to prove

its case we'll see. we're not there yet according to dow jones certainly. >> the expectation was this is going to get done by year end? >> without a doubt and continue to be what they say at at&t. frankly, carl, i have people close to this who believed it would have been done already six weeks ago. so the delay has been concerning people >> because we're past one year since they actually announced -- >> oh yeah we're past a year. >> randall stevenson for his part has been confident on conference calls that it's going to get done, right >> yes. >> minor delay. >> yes, they have. they felt very confident on the anti-trust fund for sure let's get over to rick santelli at the cme for the santelli exchange. rick >> thanks, david i'd like to welcome my very special guest today, dr. judy shelton, an advocate of sound money. dr. judy, thank you for taking the time today. >> a pleasure, thank you, rick >> well listen, when it comes to the central bankers of the

world, sometimes it's all about foul language, not f-o-u-l, f-o-w-l. we know about hawks and doves. dr. judy, you added a third category maybe you can tell our viewers. >> i think you're referring to my piece in the "wall street journal" recently. i think we no longer have that same dichotomy of wanting a hawk or a dove because a hawk these days might be looked upon as someone trying to sabotage the pro-growth program and a dove could be a good republican like jerome powell, the next chairman. what i think we need is a woodpecker i mean someone who hammers away on the importance of a sound doll dollar it means it should be a stable,

reliable, dependable value that's the most important of our legal tender. >> in the past you've written extensively obviously on this topic and you bring up things like many of the policies at the united states might take in the future can be negatied by foreig exchan exchange so how do we get to an area where we can create a more dependable, less volatile environment for the reserve currency of the world in the form of the green bank >> i'm happy you're emphasizing that because just to point out how a volatile currency can undermine what you're trying to accomplish, if for instance you're trying to lure back companies who have headquartered overseas and you offer a better corporate tax environment, they may also have to consider whether the currency aspect will cause them to lose more by returning to the united states you could also see what you're trying to accomplish in your

trade reform policies equally undermined if suddenly the dollar gets stronger or weaker relative to other currencies because there's no question that trade and capital flows are very much affected by shifting currencies i think we need to get back to thinking about our money as a unit of account and since the dollar is the world's dominant currency, we have to think whether we can come up with a common reference point so that we have a stable monetary foundation that would support global trade based on everyone following the same rules, a level monetary playing field you might say. >> well, it all sounds good. i'm not sure how we're going to get there but i do know one thing. there's three governor vacancies at the fed i know somebody who would be a good choice for one of those i think i'm speaking to herat this moment. thank you so much, dr. judy shelton. and now we're going to go back to "squawk on the street." >> very kind, thank you.

>>sentelly time warner shares have re-opened. there was an imbalance little time ago, frankly, casting doubt on the ability of at&t to complete the time warner acquisition because ofpotentia opposition from the department of justice, which might come in the form of a lawsuit to try to block the deal dow jones saying it's not definite that that will be the case, but they do refer to talks about a settlement that have not advanced or not at least close to an agreement, you can see, of course, that stock trading down sharply. certainly, when you consider what the value of at&t's acquisition is to time warner shareholders >> memories of 2011 and t-mobile, right? at&t has been down this road before >> they have, they have. now that one most people day one said how are they ever going to get this done, going in 4 to 3

and the largest player buying number four, but this one, that's not been the case and there's many people who would be a tough case to be made by the department of justice. >> we'll watch that. mane while tech executives from facebook, google, and twitter facing tough questions on the hill their companies played in the election how did those impact the bottom line joining us this morning, ceo of chorus, of course, former ceo of twitter. good to have you back, dick. good morning to you. >> good morning, thanks for having me. >> i got to get your take on just the tone that zuckerberg said when he says protecting our community is more important than maximizing our profits this will significantly impact our profitability going forward. is the cost of fixing this that material >> well, i'd start off by saying they've done a pretty good job of nailing down maximizing profits. so they can move on to some of the other issues they are facing i thought that was a smart thing

to say a good thing to say, especially on the heels of jack dorsey announcing they were going to get aggressive about some of these things so i think it's, obviously, an important thing to be doing. >> in terms of the steps they are taking, twitter ruled out some solutions zuckerberg talked about doubling their security staff do you expect more, and do you expect more estimates of how many americans were exposed to some of this content >> as we've seen over the course of the past few weeks, the numbers keep changing. i think that's not due to any onification, i think they are learning more. i don't know whether the numbers will go up or down, but they seem to be learning more about how broad this was and i would expect that to continue for quite some time as they uncover more and more of what happened these things are always an arms race not like spam, where you have spammers trying new attack

vectors and you figure those things out and go after them i, frankly, don't believe -- there's already an extraordinary amount of money spent on security abuse and spam inside these companies. i doubt that it will impact profitability that dramatically. i think that's just something that was important to say for optics, but they are already on top of these things and getting after them more aggressively, and i think they'll continue to do that. >> you don't expect any sort of broader soul searching from some of these companies about how they handle fake news, how they handle hate speech and harassment and terrorism and so many of these bad consequences that have come with the proliferation of social media, more than 2 billion users on facebook around the globe. you don't think it will be material >> don't get me wrong, i'm not saying there's not a lot of soul searching inside these companies about what's happened and their role in what's happened and what

they need to do going forward. i'm just saying there's already an extraordinary amount of money and time and effort spent on this kind of issue, abuse, spam, fake accounts and i expect they'll redirect a lot of those existing efforts towards this, and add more resources to those existing teams there's an extraordinary amount of soul searching going on inside these companies about what's happened. a lot of internal debate inside all these companies. and, you know, a lot of discourse about where they should be focusing their efforts and how they should be focusing those efforts. >> dick, we always like to check in with you on tesla after the loss last night, their largest ever, pushing back the model three target now there's some word as we parse the tax bill that some of these electric vehicle credits might be at risk, and with that the stock is taking another leg down this morning, down 8% where does the myth of tesla and

musk himself stand today >> it's important to distinguish between the important work a company and a person like elon are trying to do and the stock price. back in may i mentioned we thought the stock was way out over its skis. that's no, you know, that's no comment about what i think about the work elon is trying to do and how important it is. i own a model s, it's like, you know, the best car i've ever owned. i just think the stock can get, and the story can get way out ahead of the company's ability to deliver on the promise, and i think what we're seeing now is those two things startingto come back together >> so, is a 20% drawdown that we've had since september enough >> you know, look, i'm no prognosticator about these things, but it still seems just

personally expensive to me the company's got a long life ahead of it. it's an important company, but i think the story got way out ahead of its ability to deliver. >> do you think any of the blame goes to elon musk himself for overpromising and underdelivering? >> to be frank, no i think your job as a ceo is to paint a vision for your employees and tell a story to your employees and your investors about where you want to be and where you want to go and to, frankly, set aggressive goals, you know, and try to get your team to execute against those goals. and he's doing that. and elon is always going to push the envelope you don't build a company like spacex by saying we're going to make small, incremental changes. so i think elon is doing what he's always done, he's pushing the envelope and being aggressive, and i think he'll continue to do that. and i would expect him to continue to do that.

>> we expect you to keep coming on the show, dick, that's all we care about good seeing you. see you soon when we return, an all-star lineup of coverage as we get ready now for the gop news conference on tax reform we'll have former labor secretary tom perez, his reaction to that and more, voeduding all of the big players inlv dow's down 6 points. don't go away.

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