♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. futures are just weaker this morning. dow futures down by 7 points s&p off by 2 the nasdaq down by close to 2. this comes after the dow managed to eke out a gain yesterday but the s&p 500 and nasdaq fell just short of the break even line we will keep an eye on things as we get closer to the opening bell what's happening with tax reform and the potential for that bill being passed is something the market is watching closely >> i didn't understand that music at the top of the show >> i didn't understand what they were saying. >> the band is phoenix like -- >> like a phoenix rising from

the ashes? >> that is what you did in virginia and new jersey. and your guy your guy >> going to politics who is my guy? >> deblasio. >> my guy. >> 60% >> you're a new yorker >> he's your mayor >> he's my mayor he's my mayor. that's my mayor. >> and he -- >> we had him on the show before i've also had commentary that has not always been positive about some of the things he said >> i know. i know you've been critical you have not been positive of deblasio, i'm just yanking your chain. so the prospects for tax reform what do we think >> i think it gets more complicated. is this a picture of the future? is this something they can look at a year from today >> and say election day all over again if we don't have something passed >> potentially >> in all fairness i'm glad you guys got it.

it's nice once in a while. you were off a low base. a lot of state legislatures and governors. >> you are talking about the democrats having a good day for the first time in a long time. >> you're looking at the democrat over there? that democrat? >> it's been a long time since democrats had a win. so it's nice but gillespie, they talked about what an unbelievable upset that would have been since trump lost virginia by five points. >> gillespie was coming from far behind it was hard to figure out whoa was because he's usually associated with more mainstream establishment republicans. >> and then the new jersey republicans didn't have a chance >> chris christie had 19% approval rating. >> yeah. trump lost by five, but this guy lost by ten. so it was even -- the magnitude -- what are you saying what are you trying to say here? >> i'm saying this should at least be a wake-up call for any republicans that are complacent at all about, well, we have a

28% rise in the dow, we have the gdp numbers looking good we have unemployment -- >> how are you feeling this morning then >> the disconnect is evident that by next november, by november of 2020, who knows whether -- what some people think are great economic numbers, great stock market numbers, who knows whether that overcomes the endless beating by the msm on everything. >> oh, not the msm -- i'm sorry, mr. msm. >> that's not part of this where are you -- >> your other president, the guy that you loved, one of them, you're too young, he even said he's never -- jimmy carter said i has never seen anything like that i thought it would have been tough -- maybe some of that was warranted it would have been tougher to be -- >> all right

>> you voted for carter, right >> i did i have a scarlet "c" on my shoulder, it's tattooed listen to so i never forget what i did. >> let's get back to watching the markets. overnight in asia, mixed trade data came out in china exports rose less than expected. imports topped expectations. the trade surplus with the united states garr rowed to just over 26$26.5 billion. you can see the nikkei ended slightly lower, down by 23 points hang seng off by 86. shanghai was up, but just barely in europe, with withe trading action we've seen happening, things are flat to mixed there the bigger loser is the cac in france stocks are weaker in italy and in spain crude oil prices, crude yesterday during the trading

session hit a two-year high. it pulled back and enden down. this morning giving back another 13 cents here's what's going on the big story, shares of snap, they are sinking in a very big way after the company posted a third quarter revenue miss they posted a also of 14 cents per share, better than estimate base penny daily active users came in at 178 million people, falling short of the 182 million that had been forecast. >> the one thing we have heard over the years is that snapchat is difficult to understand or hard to use. our team has been working on responding to this feedback. as a result, we are currently redesigning our application to make it easier to use.

>> that stock is down now in the premarket by over 20%. >> we should talk about this it looks like we're hearing that tencent is going to be taking a 10% stake in snapchat on the open market. >> reporter: spiegel warning this is breaking news. china's tencent taking a 10% stake in snap. i guess they're getting in at 12 bucks a share. >> we'll see whether this stabilizes the stock and whether or not it will shoot up. >> i wonder what they get it far. >> says buying it on the open market >> are they buying it now? i don't know if you can just buy 10%. >> or will they filling it as this was falling >> is it already done? >> it may be done.

that stock moved up and down as we're watching it as this news breaks tencent taking 10% stake also puts tencent into the social -- talking about all the foreign companies, where everybody is we don't do a lot of business in china. china starting to do a lot of business with us >> that's interesting from a question of social media -- >> exactly given all the questions -- >> what you can do in terms of influence. >> saudi arabia has a big stake in twitter, saudi through softbank, they now perhaps will take a big stake in uber, also sorts of other business. it's international -- >> still minority stakes >> a couple other pieces of social media news. twitter officially doubling its character limit for all users. twitter users can rejoice for

those of white house suffer at 10 characters. most tweets will now fit with 280 characters that's up from the original 140. the expansion started back in september and was only available to a select group of users i was not one of those >> i wasn't either i saw some ridiculous things on twitter, including people carrying out pi. >> wendy's reporting results before the bell. after the bell, reports from 21st century fox a lot of eyes watching that. we will hear from monster beverage and square along with hostess brands >> you sound much better i'm glad are you feeling better did you take some stuff yesterday? >> i took some stuff >> and the election. but you got a bounce in your step >> i feel like one more day. >> perfect

>> tiptop shape. we have more information cnbc reporting more information on this breaking news. tencent, as we just mentioned has bought a 10% stake in snap it was bought over the last quarter, 145.8million shares non-voting snap sees this as a vote of confidence they went it to help with their experience in china. >> they had to file once they got the 10%. >> but they were not buying it at $12 a share if it was purchased on the open market. results in from yesterday's election it was a big night for the democrats. ralph northam defeating republican opponent ed gillespie. and democrat phil murray, a tall man, trounced his republican opponent, kim guadagno to become new jersey's next governor in new york city, democratic

mayor bill deblasio won a second term a whole lot swirling around him, but no one cares nationwide. >> wasn't strong competition >> it wasn't what's the total number of votes? >> it's a very throw threshold >> like a million. it wasn't a full sweep in a special congressional election in utah, republican john curtis was voted into office he will fill jason chaffetz's seat i saw him arguing on some cable network. >> chaffetz? with his new job >> does he have a new job? i'm not sure what the channel was. >> broadening your horizons. >> not just leaning forward at all times. >> you should be leaning forward at all times >> i'mtrying to diversify my viewing a bit. >> president trump arriving in china overnight.

kayla tausche is in beijing, she joins us for a look at the president's schedule hello. >> reporter: the chinese are calling this visit a state visit plus, meaning it will have all the state craft of a normal official visit but also more time for a top level strategic meeting because president trump is the first foreign leader that president xi is receiving since consolidating his power in the party congress the two leaders have a nascent friendship, but there are some areas of disagreement, like economic areas, the trade deficit, sanctions on north korea and the u.s. deployment of anti-missile defense systems in south korea. this morning in korea trump called on china and russia to continue tightening the screws >> we call on every nation including china and russia to fully implement u.n. security council resolutions, downgrade

diplomatic relations with the regime and sever all ties of trade and technology it's our responsibility and our duty to confront this danger together >> reporter: severing all ties of trade could be something large on the discussion table here in china. white house officials say that the president will directly ask president xi to de-link any financial activity between china and north korea. and if that touches the state-owned banks, that could have a dramatic effect on the global financial system. we'll see what form that will take the president suggested that if north korea were willing to drop its ballistic missile ambitions, he would come to the table and make a deal. that's unlikely to happen. we'll see where china can step in here. on the corporate front, we expect a series of corporate deals to be announced coming through the pipeline this

evening with secretary wilbur ross signing several issuance letters for deals with china among them a deal for 1$1.2 billion to sell pork and beef on the e-commerce side jd.com the sale of 50 bell helicopters to reignwood, and you can imagine that business will loom large in this visit even if there are more tenuous talks at the highest level. >> thank you very much kayla tausche in beijing we'll hear more from her throughout the day. a presidential milestone this morning the one-year anniversary of president trump's electoral victory. joining us for a look back at last year and what's next for the administration, mike allen is joining us, executive editor and co-founder of axios. good morning >> good morning. i'm staying just a little -- keeping my distance. >> everybody is still a little sick on the set.

>> speak for yourself, please. unless you're talking mentally >> that's my own issue yours as well. >> overshare >> help us understand a year later how you would grade the first year >> i can tell you that people inside had a different feeling about the first year before last night. last night was really sobering for republicans. there was this idea that they could navigate around trump. they could embrace sort of trumpiness without trump himself. you saw last night the depth of the shellacking. you can't do that. so looking ahead, they're worried about tax reform, that a lot of lawmakers will be more shy about it that they don't feel like the president having their back is going to be the insurance policy that they thought. >> so, how do you handicap tax policy at this point tax reform tax cutting? >> harder.

republicans will come out, what the white house will tell you is that now people realize the urgency of it more but this is a member to member, senator to senator decision. like what they told us, the way to be smart about tax reform is that -- the big speeches, the big ideas don't matter as viewers know, the fine print matters. >> it matters to your constituents will they pay higher or lower taxes in. >> and donors. every piece of fine print, it makes such a difference. makes it much harder to handicap and har tore pull o and harder to pull out we talk about healthcare being one-sixth of the economy, tax reform the whole thing >> you weren't saying they didn't realize they can't keep trump at arm's length. by saying that you are not saying that gillespie could have won if he embraced trump i don't know if he could have or not. i don't think in virginia

gillespie would have won no matter what. that's a tough state as a sweng staing state it's a h one. he lost by five, but this guy won by 11. >> the margins were astonishing. the takeaway is any time you run as someone you're not, that catches up to you sooner or later. ed gillespie, a textbook establishment republican i lived in virginia. the ads made it sound like virginia was being overrun by mauer maureders. >> and we didn't know who northam was. >> because the action was on the other side, because, like, all of this was the middle finger to trump. it was northern virginia last night on your air, steve kornacki calling it the revenge

of the suburbs this is northern virginia, like -- >> just gotten bigger and bigger >> that's almost part of the beltway, isn't it? that almost qualifies, doesn't it >> much of it is literally inside the beltway, sure the air is different there that they're breathing, right >> yes outside the beltway in a little place called america you have these worries for republicans. here's the other important thing to remember. because the trump base and trump states are sticking with him, that amazing nbc "wall street journal" number showing if you're a republican, you voted for trump in the primary and you voted for him in the election. 98% of you are still with him. he will point to numbers like that he won't change or listen. but it has donors to the republican party really worried that they're looking ahead to speaker pelosi

>> a separate question, we talked about this being the one-year anniversary since he was elected. the next one-year anniversary is coming up, that's him as president. that's often the time when staffers, the first year group, some of whom leave then there's a change sometimes. do you see a big change happening around him what will happen >> this is a massive problem for the administration as you know, the administration was never properly staffed not even the west wing so many people tell us they don't know who to call at freshry. th treasury or at the stateme department now you're coming up in january, on a jeeyear even in the rosiest administration you have people cycling out. this time people may be more anxious to leave, having a change at secretary of state or the west wing. who wants to come in

it's not only the fact that so many republicans who would want -- who would want don't want to be associated with trump, but now you have this massive legal liability. anybody who goes in faces potential legal bills. now if you're in the west wing, you're wondering if the person you're talking to is wearing a wire there's many former administration campaign officials who could be cooperating. you all wonder it makes it impossible to focus on what you're supposed to be doing. >> i was wondering if we were seeing time dilation in the country's mood it was eight years of bush, then it was, wow, we're sick of republicans. then eight years of democrats, wow, we're fed up. trump may only be two years or four years before people say we need a change. >> volatility is everything. most recent elections have been changed elections. >> we talk all the time about how in business every is faster. the business cycle >> thanks to mike allen.

>> thanks for coming on the real morning show >> we should know mike is moderating an axios event in philadelphia this afternoon on the future of cancer care. >> dr. joe biden, sean parkerment. >> nice. >> coming up, happy birthday to the -- peter parker. that's who i wish -- he's here where is mac happy birthday to the trump rally. it's been a year since the 2000 election we'll tell you what change in the last year with the markets and how to prepare your portfolio. and we'll talk to the analyst about the news that just broke that tencent has taken a 10% stake in snapchat. >> stock doing a little bit better >> that filing out we'll be right back. who knew that phones would start doing everything?

entertaining us, getting us back on track, and finding us dates. phones really have changed.

so why hasn't the way we pay for them? introducing xfinity mobile. you only pay for data and can easily switch between pay per gig and unlimited. no one else lets you do that. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit or go to xfinitymobile.com. ♪ the trump rally turns one today. it's been a year since the 2016 election dom chu joins us with more i like the color of that tie i think a red tie would have been better. red, white, blue, 28%. >> you didn't see me yesterday for owe lelection day i wore th, white and blue, i wore the flag

cuff links, i had the sticker that said i voted today. all day on air i did wear the red, white and blue i would like to wear it every day, i don't think the wardrobe people -- what is the dow number >> 26%, 28%. the broader s&p 500 is up 16%, 17% during that time frame happy birthday trump rally if we look at the last year, yes, you would have made some easy money being in the s&p 500 for the past year. if you look at the outperformance there we talk technology massive 24% weighting in the s&p 500, a huge move higher vers telecom, which was still up but nowhere near technology. if you made the right picks, you did well if you look at the individual industry groups doing more fantastic than just broader technology or telecom, two etfs that attract key parts of the

market, two best performing industry groups, the semiconductor stocks have been roaring all year long. then the defense stocks. people call it a pure trump industry, trump administration play those stocks are up big as well. it's also about whether or not you have been able to pick those. fundamental active stock managers, those people who are paid to make sock picks and outperform the market never do we talk about how indexing is the way to go. christopher harvey over at equity strategy at wells fargo put together some numbers. they tracked 50 of the biggest active mutual funds out there. they put them against benchmarks it turns out the large cap fundamental funs they tracked are up about 21% versus the s&p 500 which is up about 16%, 17% even if you factor in growth value composite type benchmarks, you're talking about 3%

outperformance for active managers this year if you were a stock picker, you got it right one of the ones i was looking at, i only mention this because this particular fund, the fidelity contra fund many of us know it, it's a 1$123 bill ron mutual fuion mutual fud that's an active stock management fund. will danuff over there, and he posted a 30% return this year versus the 16%, 17% for the s&p 500. >> why what were his big bets >> the ones would expect, overweights in facebook, berkshire, microsoft, alphabet, amazon, united healthcare, visa, those are among the top holdings if you overweight the right places you have done well. one thing i would say, people talk about technology now as maybe a crowded trade. b of a merrill lynch looked at

the active management universe out there, they said in their studies and research that they found that 30% weighting for active managers goes to technology if it's that much more than the market, is it a time for technology maybe to take a breather that's one of those big questions many traders have. it's certainly something we're focusing on on the one-year anniversary of a massive rally for the stock market >> dom, thanks stick around we'll bring in a couple of gentlemen that may have some opinions here. david joy chief market strategist from ameriprise, and we also have our cnbc contributor. i read about your thoughts on this both of you gentlemen i have to be honest. i didn't get a whole lot out of it you basically say likely to continue, but be ready for a pullback at any time >> we've been saying that for the last two years >> how does that help me

>> does that mean i take anything off the table? am i fully invested? are you raising cash is it overvalued likely to continue >> likely to continue and raise cash from sectors that have -- >> like what >> technology sectors. >> don't leave money there don't add to it. >> don't add to it facebook, amazon, apple, great companies, even microsoft but take some money off. >> invest in the u.s. stock market in what >> global u.s. stock market. today we're putting more money into financials, into the large cap financials, like bank of america, jpmorgan, if you look at their valuation compared to the s&p, trading at 20% discount and with more growth for the next 3 to 5 years compared to elsewhere. value has not done well either if you want to say where is there opportunity? look at airlines, united and

debt t dealt tax alt delta, and look at gm which has had a nice run there's opportunity there. most opportunities have gone for the momentum trade, great companies but when you trade 25, 30 times earnings -- any time a sector gets more than 25%, it pulls back hard that happened in '99, in '07 with the financials. there are other opportunity there's, you have to stay with it, stay invested, but don't try to time this market. people have tried to time this market for a long time and have not succeeded. >> david, you've been saying the market is expensive for a while. it's 26% higher than when you were thinking it was expensive how expensive is it now? >> it's more expensive so we're recommending that investors rebalance their portfolios at this time of the year so you reduce your overexposed position to equities it doesn't mean we're recommending get out of the

market, but make sure portfolios are balanced the trend in the market is still higher the fundamentals are strong. earnings are strong. this is true not only here but globally the market is expensive. you don't want to be over your skis in terms of equity exposure i agree there are better opportunities outside the u.s. than inside. i think you have to be a bit careful about just what your weightings are at this point >> i don't know if i went back historically and looked at investing other places, because of valuation, a lot of times there's a reason valuations are lower, because they don't have their act together in terms of -- >> well, ithink in this case - if you think about the eurozone, which we like. >> why do they have their act together it's still socialism land. >> it's okay they're growing at 2.5%, their earnings are better than ours and valuations are cheaper

they've only been, you know. >> outperforming for the last few quarters and we think they have further upside than the u.s. does. so they're growing faster. you are seeing japan starting to come on strong as well so there's more upside there monetary policy is more accommodative in both of those regions than in the u.s. >> that's true there's a reason for that, too they are later in the -- for 40 years they grew much slower than the -- they grew at 2% we grew at 3 historically i don't think that it's been perhaps quite as -- any way, thank you >> thank you >> david joy, i don't know, you haven't necessarily been a joy today, but fine. you've been good we'll see you again. >> thank you >> dom, red tie next time. >> i'll put the red tie on for

you. >> you can wear it two days in a row if you want. >> three, if you want. when we come back, more on the breaking news that china's tencent is taking a 10% stake in snap that stock had been trading at $12s before this news was reported now the stock is back up to $15 almost we'll talk nor about thmore aboa moment. and president trump arriving in china ornhtveig we'll talk about his objectives with president xi. that's next on "squawk box."

work keeps me busy. so i've asked chase sapphire reserve cardmembers to find my next vacation. rome, show me something. i'm having breakfast at the pantheon. what an amazing view... of your finger. ♪ ♪ look at this view. your finger! isn't that incredible. your finger! and check this one out! oh it's so amazing! move your finger! three times points on travel and restaurants on every continent. sapphire reserve, from chase. make more of what's yours. i thyou never got the brakes looked at?l... oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital.

welcome back you're watching "squawk box"

live from the nasdaq market site in times square. welcome back president trump arriving in china overnight. one of the major issues on the table is income's nuclear program and china's commitment to containing that threat. joining us now to talk more about it is the senior fellow at the federation of american scientists looks like the red carpet is being rolled out for president trump's visit. there's some sticky issues they have to tackle how cordial or not is this going to be? >> well, president xi will try to flatter donald trump while he's in asia you saw shinzo abe run this play, and the south koreans run this play during previous stops. they will aspire to be friendly to give symbolic concessions in terms of, you know, trade negotiations, but there's some real questions about whether the

trump administration hopes to accomplish on this trip. previous administrations had coherent policies and ordered objectives about what they hoped to achieve, environmental terms, environmental property rights, the trump administration has not skrar mu scratched the surface on these issues the overwhelming issue is north korea. >> not surprising given how tense the situation is regarding north korea wh what should our goal be? i know trade has been a huge issue we've been concerned about, but when you have things developing the way they have with north korea, that's a concrete concession where we can win on that front? >> there's very little we can hope for in terms of grand transformation of the issue. you know, xi jinping has encouraged trump to focus on north korea but it's an area where they can bleed out

american interests, american effort xi jinping can do a little more to implement sanctions he can sign and aseccede slighty bet pore signater position thron security council even if they do more, bay yieijg will understand it will not translate to increased volatility it is an area where they can zap off american interests >> is our best hope to reenter negotiations with north korea? a lot of people have come through here saying that's our best option if we're not interested in tens of millions of lives being lost or at risk >> it's the only logical way that north korea could agree to eliminate its nuclear pracogram. they won't do it voluntarily or on their own t would have to be

through the product of coercive diplomacy. you saw in president trump's speech to the south korean national assembly yesterday -- >> offering an idea of a grand and beautiful peace i think the words were does that get us closer to sitting down at negotiations does that negotiation get us closer to eliminating the nuclear ambitions or their nuclear program as it stands >> it's something that the south korean people will be happy to see that he mentioned. in the speech he referred to denuclearization as a beginning to this broader opening process for north korea rather than as an objective that it will take years to accomplish. i think they're still looking for easy solutions they really are not in -- they have not understood that it's going to take significant concessions, and a major protracted process in order to get to negotiations even, but

then to get to denuclearization after that trump, i think, missed an opportunity to make a vereal invitation to the north korean regime to put them on track to reform their policy. he didn't give them a reason to do that in seoul today >> thank you for your time >> thank you coming up, when we return, celebrity chef tom colicchio will join us he's fighting back against the hunger problem at the top of the hour, talking about president trump's electoral anniversary with eric cantor. and at 8:00, richard lefrak will spend some time with us wl lkweilta to him about the last year. stay right here. november is epilepsy awareness month.

i am the proud father of a very strong little girl named adelaide who was diagnosed with infantile spasms an incurable and debilitating form of epilepsy. it's been a devastating journey that has robbed my baby girl of normal development. that's why i have launched the my shot at epilepsy campaign and i'm asking you to join me. take your shot at the hamilton pose, donate to help us find a cure, and lastly, share it on social media. this is our shot to take. learn more at: myshotatepilepsy.org . time for the executive edge. snapchat stock is snapping back, we should mention this morning on the news that we brought you, china's tencent acquired 148.5 bill mil million shares of the company through the open market. snap was down 20% in premarket trading when we first reported

the news now we're basically unch after -- just in the past ten minutes now. joining us is james hackmac, equity analyst what do you think? >> i was telling you before my headline today reads don't write off snap but i got one-upped by tencent here >> you're right then >> yeah. >> you liked it. >> we're neutral on the stock, but this was the first quarter that i heard them be fully self aware and acknowledge and appreciate the challenges they're facing the company is in transition there's massive pricing headwinds. the price is down 60, that's compared to facebook where prices are up 35%. you talk to agency advertisers, they want an alternative to the facebook duopoly a lot of problems with snap are self-inflicted

you are not extracting value from users, that's your fault. >> they say they will try to make it easier to use. they had complaints about that for a long time. sounds like they'll be copying facebook, right back at facebook for copying them >> at least they're aware there's an experience hurdle >> does it work? >> if you dismissed all of the naysayers or criticism and everything, the best companies are the ones that can understand the challenges that they're facing, and work to rectify that >> can they make it easier for stupid adults like us to use it without alienating the young, core audience of our kids? >> that's a big tbd, will it turn off the millennials that are engaged with it. i think if they do it in a methodical manner, there's an opportunity there for sure >> thus far they have been unwilling to shift what the user interface looks like in fact, like the new iphone, that takes some -- some of the

snap approach, meaning you have to started learning new gestures and things were they ahead of the time or behind >> no. you have to strike a balance i heard evan spiegel was against ab testing like saying this is the snap way, that's it i don't think you can operate like that. what could this company be worth? >> look, here's the way to look at it. now they're probably now back up to $100 per daily active user, that's around twitter, compared to facebook at $500 plus per active user. there's a middle ground that can be achieved. the market is desperate for them to succeed everyone is rooting for them, they're not capitalizing on the opportunity on hand if they're fully self-aware, that could change the story >> how quickly >> it will take time a couple quarters at least to digest the changing rechanges.

when you look at the next quarter, quarter after, those numbers won't be pretty? >> no, right now you're in the december quarter, the heaviest quarter for advertising. then you're in a lull. the budgets are being set for '18. best case scenario, you're in a fully where you're fully humming along at the end of next year. >> retaining employees, all these employees have a lot of stock in this company. >> yeah. you've seen where the stock is >> i think it's up to the top. evan saying he won't sell the shares until the end of the year bless him for that hopefully he'll continue to -- >> another six, seven weeks? >> he'll continue to set the example. it all starts at the top if there is -- i visited the offices, there is an energy there. they do feel like they're doing important work to a certain extent they are it's advertising, but you know it's change the way we communicate. if it's -- if they start making

some right decisions, they'll keep going along >> james, fair enough. >> tencent if it was 50 cent, would he have bought half the company? >> didn't 50 cent file for bankruptcy >> he did. >> it would not have -- he would have bought 50 cent. that just follows. coming up, hunger is an issue that affects 49 million americans daily. veterans in particular celebrity chef tom colicchio wants to fight back on that. he'll join us to talk about a new initiative to fight hunger in america there he is. before we head to break a quick check on what's happening in the european markets mostly red earlier still is 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. you myour joints...thing for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement

in drug stores nationwide. prevagen. the name to remember. ♪ 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

throughout my career, i've been fortunate enough to travel to many interesting places. i've always wanted to create those experiences for others. with my advisor's help along the way, it's finally my turn to be the host. when you have the right financial advisor, life can be brilliant. ameriprise

>> the department of veterans affairs has worked to improve operations since that scandal over patient wait time broke several years ago, but there's another crucial issue still affecting too many veterans, and that's hunger. joining us now restauranteur and head judge on bravo's "top

chef." he is co-founder of the anti-hunger campaign, a place at the table that will be spearheading a push for government food programs to benefit military families. i don't think it's -- it's not a given that people understand that there's a hunger problem for our vets >> well, i mean, there's a hunger problem in general right now. >> why for vets and -- >> you have a lot of vets returning home from iraq and afghanistan, and they're struggling they're dealing with ptsd's and struggling to find work. you know, used to be that vets returning home, their rate of poverty was half the general population, and now that's changed. it's actually double the general population why don't veterans deserve their own program? why do they get put under the blanket umbrella of needing help from a food center, which they

may or may not actually want to be part of i can't believe the v.a. doesn't have something specific to these guys that will be, you know, even more general. i don't know we need to take care of these guys we need to take care of everyone, obviously, but -- >> exactly >> dls a stigma about receiving food stamps. if it was done through the v.a., maybe that would be more helpful, but i don't think we should weaken the snap program until that happens >> tom, i was surprised that even active duty families can have trouble feeding what is that -- >> again, a really interesting point. more -- large number of active duty children of families that are in military qualify for free, reduced school lunch you see, there's a need there. you know, what's interesting

about active duty when you calculate food stamps, housing is included in there, so it actually reduces the level of benefits that you can receive if you are active duty. >> i was just stunned to hear it's that big of a problem >> right yeah >> how can, know -- what can we do in terms of the programs that -- >> well, a place at the table campaign you go to food is fuel.org we have a setup where most people that want to call to a member of congress, they're afraid toic approximate up the phone. we know that emails work and letters work, but that phone call really, really works. we created a tool where you can go on-line you'll get a script. it will tell you exactly what to say. you can change it and adapt it as much as you like. you click on a button that says call you'll get a phone call back that will put you directly into your member of congress's office, and you can tell them how you feel about snap program or really anything else. there's a script provided for you. it's a great way to just reach out directly to your member of

congress >> the secretary of the navy was on yesterday i asked about whether progress was being made at the v.a. with the new administration she totally punted didn't have any opinion on that. do you if dealing with veterans? are things getting better? >> it sounds like -- again, i'm not that, you know -- i'm not close with the veterans in the administration, but it sounds to me like there's been progress made it sounds like wait times -- >> that was the promise. these are the guys we got to worry about. >> it sounds like things are getting better, but i think it's one of these things, you have to uncover the problem first and then figure out ways to deal with the problem >> the place to go again for the script >> food is fuel.org. you know, we feel that number one, let's not make the problem worse or cut food stamps or cut snap number two, i think we got to look at what we're paying active military perhaps they need a pay raise. number three, we need to look at our food system in general it's not delivering the kind of

food nutritious foods to many people right now in this country, you know, calories are cheap nutrition is expensive >> eric cantor is up next. it's all yours. wow! record time.

at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital.

i am the proud father of aeness very strong little girl named adelaide who was diagnosed with infantile spasms an incurable and debilitating form of epilepsy.

it's been a devastating journey that has robbed my baby girl of normal development. that's why i have launched the my shot at epilepsy campaign and i'm asking you to join me. take your shot at the hamilton pose, donate to help us find a cure, and lastly, share it on social media. this is our shot to take. learn more at: myshotatepilepsy.org stocks pointing to a lower open after six straight days of gains for the dow. we'll walk you through the trading day ahead and where you should be putting your money to work right now president trump's latest warning to north korea as he continues a trip through asia and what you can expect to happen in china and the issues front and center that is moments away breaking news this morning on snap. china's 10 cent taking a 10% stake in the company we've the details. big, big gains in the stocks from this move we'll tell you all about it as the second hour of "squawk box"

begins right now good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square i'm andrew ross sorkin along with becky quick and joe kernan. let's show you what's going on ahead of the open here dow looks like it would open off 16 points. nasdaq looking to open down as well off about three points the s&p 500 looking to open off about three points as well here's what's making headlines at this hour shares of snap are down sharply this morning, but well off their lows after some breaking news that we just brought you china's tencent has bought a roughly 10% stake in snap and acquired the shares through open market purchases the information comes after the news that snapchat's parent posted a quarterly loss and saw revenues missed estimates. we'll have a lot more on snap with the tech analyst mark mahaney in just a couple of minutes. the stock is now off 6%.

it was off about 20% at one point after the news broke, it came back a hunch and moved back down again. we'll try to see what all that means in terms of how investors are thinking about this. also, twitter users can now -- i can rejoice is what i can do -- theycle now send ous double size tweets they've expanded their character limit. you can now do it in 280 characters go wild. they tested it with a limited number of users in september, but now they're opening that up for all users in the u.s. and elsewhere. a couple of different countries where it's not the case. >> japan where you can say much more -- >> in shorter characters >> you don't even tweet every day. >> i do. >> i follow you. you don't really you know who needs more characters >> who is that >> our president >> oh, boy >> think about that. >> double your pleasure, double your fun get ready. >> i hadn't thought about that i hadn't thought about that. among the earnings that are out this morning, we should tell you

about health insurer huma earned $3.39 per share for the third quarter. 12 cents above estimates now i can't get that out of my mind >> you were happy, and now -- >> huma had a strong performance for its medicare advantage plans. however, i will say this there's going to be less excuses for the president and for me and everybody else for saying you don't understand what i meant. i was trying to put it -- squeeze it all in. now if you get 280 characters, i think at that point -- >> a little too much authority >> it's either what you mean or it's what you mean >> there won't be any more -- you see where people do one, two, and then it's usually upside down. >> the tweet storm >> yeah. i try and go back and find the first one. with trump it was the dot-dot-dot's. there were times where he is definitely going to -- then you see -- you had no idea where he was going. >> he is a great communicator as a sort of producer i think he likes the dot-dot-dos's. it's almost like a stay tuned,

hang with me, i'm going to tease you and give you more later. >> he may still do that. >> some people still may do only 140, right >> there are a few times i have wanted 10 or 12 more characters. i've never wanted double the size we'll see. >> right you could use, you know, the ftfu or rot, fmlao >> what do those mean? >> you don't need to put the actual words in. you guys don't know any of those? if you see on twitter, you can see a lot of those >> he is throwing shade. that's all i know. >> i don't know of all the exactly what they mean, but i sort of -- i know the gist >> what's the feeling? >> what was that, the army used to use situation normally all fouled up >> snafu >> it was a big night for the democrats. ralph northrom defeating ed gillespie to win the governor's

race new york city, meantime, democratic mayor bill de blasio won a second term in office, but it was not a full sweep. in a special congressional election in utah, republican john curtis was voted into office he is going to be filling representative jason chavitz's seat >> that might be good that we don't have to say that -- >> yeah. >> there's the no chance in new jersey i voted, and it was like throwing a little thing of water in the ocean when i vote in new jersey right, eric? >> eric cantor is here >> you got to do it. you got to vote. >> absolutely. >> we're going to give eric cantor his proper introduction in just a moment >> i told i walked out, and all the workers were there, and i wave, and i said everybody vote, vote early and vote often. they all said yeah, you yeah, yeah >> i'll be back in an hour some political headlines this morning, the washington post reporting that the senate could delay corporate tax cuts

until not 2018, 2019 it's a full year later than the house proposed in their version of a tax reform bill the delay could reportedly save $100 billion the wash wash post is also reporting that senate republicans are planning to eliminate the state and local tax deduction entirely when they roll out their version of the says tax bill. we'll see where that lands very soon >> our guest host for the hour, let's welcome eric cantor, former house majority leader who is now vice chairman andm the g of virginia. >> absolutely. not a pretty night last night. >> and you know -- not for gillespie and not for -- you made the point what about the state legislature? does that have national implications, what happened? >> look, i think everybody wants to go and take some message out of this election, and i get, it's the natural tendency in an off year, but virginia's republican party, we've got some bigger problems.

we've not won statewide in eight years. number two, trump lost virginia by a significant margin. let's just -- with all the twitter storm last night and about the election, just -- i would bear that in mind that we've got stronger issues. the one long-term warning shot that i take from it, though, is if the exit polls hold and are correct, ralph won over a majority of white colleg college-educated voters. that is a signal that i think republicans will have to think about going into -- >> you mean fiscal conservatives that were willing to go? >> the kind of district that i used to represent, it was probably a real difficult night for republicans, and, again, these are fiscal conservatives these are people who are educated, and they are the sort of independented that

republicans can normally count on in the suburbs of the country. again, i think that's where we ought to focus >> in the general election they were focreplaced by working democrats and work says class people >> if you look at our state and if you look at virginia, there's three large metropolitan areas northern virginia, richmond and hampton rose in most of those areas and especially northern virginia, loudoun county, which is probably the wealthiest county per capita in the country. 20% and even higher with the margin that is typically a republican-leaning county. >> you do need to remember that even -- we talk about pennsylvania, michigan, wisconsin. not to mention, you know, ohio, florida, north carolina. virginia was not in with the groundswell. >> you are talking about big shifts in the parties for both democrats and republicans.

>> ed zbil ses pi was damned if he did, damned if he didn't. you had to appeal to the more business-minded, independent voter, and then you had sort of the what people say is the trumpian base that are the america first, you know, take our country back but i think, listen, overall i think for the party next year it's going to have to be a message that's optimistic. say what you will about trump, but he had a campaign about making america great again it was an optimistic messmessage the message in this campaign, probably if you look back, is not one of optimism. it was very divisive in fact, just after the results came in, we had our leading candidate for the senate race next year in virginia attack ed gillesp gillespie, and, again, we need

ed gillespie republicans, we need trump republicans, we need cory stewart republicans we need it all >> let's bring it back to tax reform mike allen was on earlier. he said he thinks it makes it more difficult my initial take was that this is like a wake-up call that you better do something or this is going to be 2018 >> i agree with the latter you know, they've got to deliver. there's no question. the fact that health care didn't pass -- >> they needed to deliver on that too >> yeah. >> that didn't help. >> the problem with the tax bill is it's maximum fairness you're taking away elderly deductions, and are you keeping things in like capital gains when you have a package that looks like it's not fair, the tax part for the corporations looks like a really good tax base when you look at the individuals, it gets way more

complicated. particularly when you think about where you live >> what could happen -- my fear is that default to just tax cuts, not reform i mean, because as we know, we need reform in the corporate tax system we need reform on the international system the way that the tax bill rolled out, it was primarily focused on creating economic growth and hope that that translates into wage reduction, and directly targeted at middle class and the wage increases, yeah i'm sorry. the wage increases that's the goal, and a middle class tax cut. >> it's really complicated what they did with the individual piece. >> i think as a lot of voters sit home and try to look at it and look at the analysis, some of which have already been pulled back because they were wrong when they were going through it there's not a lot of time to figure this out. other analysis that suggest by independent things that accident are look, the middle class is going to get a tax cut, but it's going to roll off in six or seven years. a lot of the tax credits will go

away, and you'll be facing a little tax cut or potentially a tax increase >> let's say they did corporate tax cut, and let's say they did across the board tax cuts for individuals. you would say that that is unfair because -- >> no, i wouldn't say any of that i would say they can't pass it >> the lion's share -- the lion's share of the actual benefit is going to be for the people who pay the taxes by definition it's going to be unfair >> no, if you are stripping out all kinds of deductions and you leave in capital gains, i think that is your problem with it that is the problem. >> i don't even view capital gains as something that accrued to the rich. i view that as something that -- >> uber. >> i know that's who the asset owners are obviously, they get the -- but it's an economic -- >> i think you are talking about just -- >> it's a way that you stimulate long-term investment, and it's a positive -- >> sure, but i can make the same argument for the mortgage deduction. it's a way that you stimulate the housing economy. >> i don't know -- >> it goes away after $500,000

what do you tell people on the coast when you can't buy anything for less than that. >> you will see back and forth capping the mortgage interest deduction. >> state and local taxes where. >> state and local taxes you are talking about the same people >> you are talking about the same people, and you are talking about now on the senate bill -- >> it depends where you live >> up here in the suburbs of -- >> i know in general -- i know those are the same people that have assets. >> how do you feel about the cost of the current -- >> $500,000 for a house in new jersey >> how do you feel about the cost of the current package. $1.5 trillion estimated. >> well, there was that agreement that was struck by pat toomey and bob corker on that number, and i believe the thinking behind it was that, you know, there is going to be some economic growth due to the lowering rates, and this is the age-old argument between republicans and democrats about scoring. is it going to be done by -- or static scoring >> it's the rules of the senate of how you get that through. you need 60 votes. >> you need 51 votes if you are

going to stick to that $1.5 trillion cut, but the problem is in the senate year 11 after the first ten years, it's got to balance. that goes to becky's point a lot of these things phase out, and so, again, this is where the box that they're in because, you know, the democrats need to step up and participate you know -- >> they're not going to. >> i agree >> as progressive as the tax system is right now -- and it is because 70% of taxes are paid you about the top 10 -- there's no way anything called a tax cut or tax reform is not going to be demagogued by the democrats. no way it's not -- anything you do that's a cut, not a hike, is going to be demagogued as unfair >> let me say this -- >> no matter what. >> -- i can buy you $1 trillion of that package by changing the estate tax, maybe making the corporate rate maybe go up by 1% or 2%, but most corporations would be fine at 22, and then getting rid of the pass-through situation. that's over ten years. >> i would rather go to 15

estate tax is just unfair. it can detect a threat using ai, and respond 60 times faster. it lets you know where your data lives, down to the very server. it keeps your insights from prying eyes, so they're used by no one else but you. it. is. the cloud. the ibm cloud. the cloud that's designed for your data. ai ready. secure to the core. the ibm cloud is the cloud for business. yours.

witness katy perry. witness katy perry become a legal witness. witness katy perry and left shark. or a card shark. grandma? witness katy perry work. witness katy perry firework. witness katy perry swish. witness katy perry... aaaaaaw look at that dog! katy perry: with music videos and behind the scenes footage, xfinity lets you witness all things me.

jackie deangeles has an energy report card jackie >> good morning, guys. the market expected trump to be a pro-energy president, and he has been fast tracking projects like keystone and the dakota access pipeline, but a year after his election and the energy sector as a whole is doing better, but not great. the s&p energy group is up, but only about 1.5% on the year. xle seeing a gain of only 1.25%. analysts associate the lackluster stock performance with the price of oil rather than the president crude was just trading under $45 when trump was elected it's made its way now to $57 a barrel that's going to help the stocks in the group, but prices have to stay elevated to have a lasting affect pro-energy policies will only do so much. remember, companies are going to

struggle in an over-supply environment, and it's only going to take time to work itself out. u.s. drillers appear to be acting on the conservative side. they haven't overpumped with oil over 50. it's almost as if the industry is self-regulating the goal here for companies to stay cash flow positive. the support we're seeing in crude oil prices can be attributed to some of the tensions overseas. that may hold up it may not remember, supply-demand dynamics are still going to be key. the consensus right now is that the foundation is in place for the u.s. shale industry to boom, and the trump administration has helped, not hindered, that effort, guys for more on the markets -- thank you, jackie -- one year after trump's election, we're joined by chairman of strategic research partners. also -- chief investment strategist at -- where he overseas -- $70 billion. that's a lot of weight >> a lot of responsibility >> it is a lot of responsibility >> look at his hair.

he is, like, 27 years old. >> i wish. by half. >> you look at where we are now, and you look at where we were. nobody thought -- i don't think anybody thought we were going to be here. how do you apportion the responsibility and where does it go >> nen that thought we would be here for the markets >> no, a year later in terms of where the markets are. >> yes >> i'm not so sure i actually saw -- i think president trump or president-elect trump would be very, very good for the markets, and just not making it overly complicated. i do think that the markets are probably higher than people would have expected. there was a reflation trade, and obviously there were many some missteps in the administration, but generally speaking, the thing that i'm focused on isth fact that ceo confidence and small business confidence, more importantly, have improved dramatically, and i think that in many ways as a small business

owner myself, i think that is a lot to do with the idea that even just knowing that taxes and regulation won't get worse, is an community college event in and of itself. >> we have a number of proprietary tax basket that is are leveraged to whether taxes get through or not remarkably, they're outperforming. they're underperforming. there is still a lot of skepticism, believe it or not, in the market, if you look at the market internals, about whether this gets done if this gets done, in my opinion, it gives the economy certainly another boost. the only thing that will be a problem for the market is you'll probably get higher interest rates, so pe's won't be quite as strong >> you agree with that >> i generally do.

i don't think the market or the economy needs it per se. i think it would add modestly to a fiscal boost i think it's a potential game changer depending where the tax rates settle out i'm not so sure it's so advantageous if, in fact, that corporate tax rate is 25%. it will be disproportionately to small and midsize companies. not so the larnl caps where the effective tax rates are at 22% regardless, going back to jason's remarks, i don't think this is all a trump cally. if you look at the economic fundamentals, we've had two consecutive quarters with three gdp, and so far here until q4, both the atlanta fed and now tracker and new york fed now casts are with three handles it's indicative of fundamental supports for the market in terms of what's going to lead to better corporate profitability going forward, and there is a certain inertia in the economy that i think has created some optimism in the ceo suite as well as among consumers that's leading to a spending profile and a cap x up cycle that will support these equity markets to continue to rise

>> so steve mnuchin has said that he thinks that if tax proposal doesn't happen, then the market will come off the question is when would that -- when would that be when would you know one way or the other? do you agree with that assessment at all given that he just said it's the economy it's basically the economy, stupid not everything else. >> i remember the first tarp vote, right and, that was things that, gee, it could never happen, says and it happened >> by the same token, there would be a clear reaction, and you would hear an earful from their constituents certainly, and i would expect this time around that it wouldn't be that

different. most times these things don't pass the first time around it takes an iterative process, and i would expect it will be similar this time around >> we have to leave it there thank you, guys. >> thank you >> appreciate it >> jason, we're always glad to see you, but we're especially glad to see the guest you brought with you today your daughter. >> she gets a little screen time >> that's marie. that's my daughter, marie. she's got picture day today. she came with dad. thank you. >> very sweet. >> kids so much better than we are. coming up, shares of snap trimming their losses on news that china's tencent has taken a 10% stake. of course, it's called tencent the company, we will discuss that with analyst mark mahaney in just a bit. hey steve check out this guys leg. yeah looks like a real nasty moving back in with his parents. what? no. i just broke my leg.

no, this is a full blown move in to the basement, you're gonna be out of work without that money from... aflac! you might miss your rent. aww i just moved out. bummer man. hey i used to have my own place. yeah? no, no i live with my mom, but it's cool. health can change but the life you love doesn't have to, keep your lifestyle healthy with... aflac! that's it. i'm calling kohler about their walk-in bath. nah. not gonna happen. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] mmm. the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets

and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind. ...for a free kohler nightlight toilet seat with consultation or visit kohlerwalkinbath.com for more info.

>> now the answer to today's aflac trivia question. what was the first deal ever featured on groupon? the answer -- two pizzas for the price of one amot tel bar in chicago.

...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence. and the wolf huffed like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day. symbicort contains formoterol.

medicines like formoterol increase the risk of death from asthma problems. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. you should tell your doctor if you have a heart condition or high blood pressure before taking it. symbicort could mean a day with better breathing. watch out, piggies! (child giggles) symbicort. breathe better starting within 5 minutes. get symbicort free for up to one year. visit saveonsymbicort.com today to learn more.

good morning, everybody. we are live from the nasdaq market site in times square. among the stories that are front and center today, mortgage applications were flat last week that is according to the latest weekly data from the mortgage bankers association. new purchase applications rose, but that was offset by a corresponding drop in refinancing activity the average 30-year mortgage rate fell four basis points to 4.18%. check out shares of video game publisher take two interactive they are on the rise this morning. up by, wow, almost 10% after the company gave an upbeat holiday forecast for that season that comes in contrast to what we heard from some of the rivals, activism blizzard and electronic arts. take two is seeing strong sales in its latest nba game, and it's got a lot of strength in in a grand theft auto franchise that's been helping it out as well another stock on the move this morning, dating website operator match group the parent much tinder, cupid

and other dating sites fell 3 cents smohort of forecast the revenue number exceeded forecasts and paying members also came in above expectations. that stock is up by 7.8% want to get back to our guest host this morning, eric cantor, former house majority leader who is now vice chairman and managing director of molis and company. we can talk about the banking business, but i don't want to do that just yet. >> when you speak to your former fellows privately, what is the hardest thing they say they show a brave face when they come on, and they say we're doing this and that, but what do they actually tell you >> i think that they're dealing in a world where you have this outsider in donald trump who came in and governs by disruption we talk about twitter. it's like overloading the circuits every day, right, and

you have to deal with that politically. i think where i would say, if i could put my words in their mouths, the difficulty is when you have a united government, you ought to be able to full throttle get some things done. you know, the -- what came with the disruptor was the fact that there are a lot of people on team trump that aren't creatures of that town, but there is something about that process which requires experience in being successful and navigating, getting a piece of legislation through. you have united government,

government control, ought to get something done there's that tension >> we're going to talk more about this with eric throughout the rest of the hour in the meantime, president trump meeting with china's president xi today during his first official trip to asia. he toured the for bbidden city earlier. joining us now to talk about trump's high stakes asia trip is michael o'hanlan senior fellow at the brookings institution. this trip to asia, we know that it has been one that some of the asian leaders have already said some very complimentary things about the president and about the united states. where does the rubber really meet the road here >> good morning, becky i'm listening to the conversation with congressman cantor and others. really it's striking how in northeast asia everyone seems to be competing to be donald trump's best friend. it's, are aable.

>> even in south korea where there's expected divergent views between president trump and their new president, who is on the left side. nonetheless, i think partly because president moon understands that he has to be careful here and understands a little bit about donald trump that they seem to be working towards a motis operendi as well even as they disagree, at least slightly, over how much to try to negotiate with north korea at the same time. so overall it's going pretty well >> is it really -- is there really some difference on what he is doing over there, or if we

were all to leave the echo chamber that we have here in this country, whether it's the left or the enablers in the -- if we were to leave there, i mean, over there if we transplant all of our print and the press corps from the white house, we can transplant them over there to china. i'm sure the chinese would suddenly not like trump either they haven't been -- they got -- they might actually have a better chance of looking at the facts the way they are than being inundated every day with this incredible one-sided criticism. >> yeah. it's a good point. i would be curious if the congressman agrees with us, but i think there are two differences. first of all, in this part of the world, people focus ultimately on results, on policy even though president trump is still struggling with how to handle north korea and he could make a huge mistake, so i'm not trying to suggest everything is rosy, but nonetheless, he usually is working his way towards fairly decent outcomes

in his policy even if the tweeting and all the communication makes things messy along the way. then, secondly, i just think president trump has, frankly, a stronger national security team than he does a domestic policy team that's partly perhaps my judgment and my bias given that i know a number of these people and have respected them for many years. i think that they really bring together a fairly thoughtful and somewhat mainstream view of american foreign policy. secretary mattis, national security advisor mcmaster, and others that's the other key difference i think so far i would give some credit to abe, xi, and moon as well i think they're working hard at the relationships and trying to see beyond the tweets. >> i tend to agree with you. having been in the region over the last couple of months both in china and japan, i believe that having a strong american leader with rhetoric to match is somewhat comforting to those nations, at least our allies -- let's separate china, but our allies in the region, whether it

be in asean or northeast asia in japan and south korea, because they are facing what is a threat again, as you say, the caliber of the foreign policy team, the defense team, and advisors is very, very strong. it's welcome to have, i think, an american presence and american president there for them to know that we're going to have their back. i would fully agree. i think what will be interesting to see is how far the japanese will go in terms of active -- actually upping their game as an ally of ours and not just always counting on us >> right right. the other question, i think, is also as we get into hopefully china putting more of a squeeze on north korea economically, at what point do the united states and south korea forge a neknow,p wrestling with this question right now. he told rex tillerson afew weeks ago it was a fool's errand to try to negotiate with north

korea. now he is suggesting maybe it's okay i think the essence is going to be -- >> is there a method to the madness? oh, rex, don't even bother then he goes over there and puts this huge olive branch out it's all a negotiating game. >> there's a method to the madness. it could be he is just crazy and, you know, just going off on, i don't know maybe it works good cop -- kind of cool when you can be a good cop and a bad cop yourself you don't even need two people >> i would be fascinated to hear your take as well on the saudi a aramco deal.

>> there are obviously a lot of issues my colleague bruce ridell has a great new book out on saudi arabia on the civil war in yemen i think the number one realization is this war is not going to be won by either side, and as much as it hurts the saudis to have to deal with what they see as an iranian proxy, there's going to have to be a compromise and negotiated settlement, either a power sharing government of nationalunity or two autonomou regions loosely tied together. we have to help them realize there's going to be no military victory. >> is that less attractive after what took place over the weekend with the arrests that we've seen >> well, my take is that people are still trying to figure out what's going on with the crowned prince, who is amassed so much power, and people are going to be uncertain, but they still probably sense that on balance, there's a certain stability in

saudi arabia despite all the volatility i would be curious if the congressman agree on that one. >> well, listen, i think -- i was at the conference, and being in the region and the week that those pronouncements were going on, it was a pretty heady experience i really admire the crowned prince and being so bold to talk about sort of normalization, moderation, going back to prior to 1979 and that's how he envisions the country to be much more open economically diverse, and more opportunity for the 70% of the population that's under 25 i really do -- i agree with the stability factor there you know, i think the facts will come out about what happened over the weekend >> all in all people are looking to saudisy as an opportunity now. >> eric cantor is our guest host he will be with us for the rest of the hour. michael, thank you for joining us this morning. >> i want to thank you all i wanted to mention this earlier, but this is "the

journal. the saudis are targeting $800 billion in confiscating cash >> yeah. >> i immediately thought, well, alwalid has how much that's just a fraction >> $19 billion or something he has. >> do they take his stock? >> they've also said that they want to keep the holding company stable, so the question is how do you do that >> he owns 95% >> how do you do that? >> when you confiscate it, do you sell all the stuff he owns do we need to watch the stocks that he owns to see if they get sold >> this is going to become the question >> does he own stock >> he does not he does not own snap he had a meeting with evan over there, but he does not own it. >> it's not the saudis shares of snap bounce back, but now they're down again down almost 9% that's following news that tencent took a stake in the company. it was down 20% on a big revenue miss, but bounced back a little. at the top of the hour richard

lefrak will join us to talk about the state of the economy "squawk box" will be right back. o help you reach your goals. it's having the confidence to create the future that's most meaningful to you. it's protection for generations of families, and 150 years of strength and stability. and when you're able to harness all of that, that's the power of pacific. ask a financial advisor about pacific life. and i'm the founder of ugmonk. before shipstation it was crazy, like...

it's great when you see a hundred orders come in, but then you realize i've got a hundred orders i have to ship out. shipstation streamlined that whole process. the order data, the weights of the items, everything is seamlessly put into shipstation, so when we print the shipping label everything's pretty much done. it's so much easier so now we're ready, bring on the orders. shipstation. the number one choice of online sellers. go to shipstation.com/tv and get two months free. on the only bed that adjusts on both sides to your ideal comfort,

your sleep number setting. does your bed do that? right now our queen c4 mattress is only $1499. save $300. ends soon. visit sleepnumber.com for a store near you. the amazing new iphone 8 is at at&t... and we know you'll love it. because we know you want more. more great camera features and more power. and more than just unlimited data, we give you unlimited plans with hbo included for life. because you deserve more entertainment. and more spokespeople. talking like this, saying the word more. at&t. it's time for more. am i too close? i feel like i'm too close. get the iphone 8 and with all at&t unlimited plans, get hbo for life. only from at&t.

. >> china's tencent has taken a share in the company they announced a big revenue miss last night after the bell on the conference call ceo evan spiegel announced that the company was redesigning its app to make it easier to use the stock was down by as much as 20% this morning before the tenclent nete tencent news it's since bounced back. it had gone to -- now people are evaluating this more, and it's still off close to 10% joining us right now to break it all down and make some sense of what's going on, mark mahaney, lead internet analyst at rbc capital markets. good morning >> so there's two ways to break this down. one is to talk about the earnings and sort of what you thought of that, and then how a

tencent investment changes your thinking if it does at all >> we already made up our minds. we downgraded the stock to a hold last night. we've had a buy on it since $24. we've had the wrong call on the stock. we had three things happen last night. this company showed less visibility into its revenue than we thought was possible. halfway through the quarter last quarter when they gave their earnings outlook, they said thelktd grow revenue $60 million see controversially. they came in one-third lower than that. that concerned us. the dau's, the daily average users, that's the key metric that investors are -- there weren't positive engagement metrics that they had given the quarter before brsh the average user spending x percent more they didn't give that. it was kind of three strikes for us we downgraded to a hold. then we see the news about tencent. this asset has a strategic value. it has a strong lock on millennials. >> that's a passive state. >> yes, it is a passive stake. the company -- there is interesting strategic value

here just like happened with the debate over twitter. twitter, you know, there was one interesting strategic bidder for -- it would be tencent, and they picked the least worse asset. zhoo here's the question you know, wear now -- i don't know what the time frame is since the ipo. is this where -- you look at this and say this is still on the way to being a facebook, or is this on the way to being a twitter? i know that that's probably a question you hate getting asked, but that is the question >> well, it's already bigger than twitter in terms of the number of daily average users. just in the u.s. market there are 50% larger than twitter. they've done something there's a communications element to it, which twitter doesn't really have. it's real-time news, which is an interesting market it's not nearly as big as a communications tool/entertainments tool this does have -- the largest demographic out there are millennials, and snapchat is the communications -- one of the two or three communication tools of choes for them twitter is -- >> that's the biggest group? it. >> you know, talk with your

teenagers. they'll use snapchat more than they'll use anything else. then they'll use instagram >> does snap risk messing up snapchat by trying to make it more easy for the rest of us to figure it out and understand it? >> i'm going to give you a different point of view on this. twitter, i think, the problem with twitter is that they didn't i innovate on the product. they've finally announced they're going to 280 characters five years of 140 characters there's always an arbitrary limit. they finally have expanded to 280 characters >> another arbitrary limit >> why do we have a limit anyway on twitter snapchat, after a year of futzing around and having mistakes and seeing that the product innovation isn't working, they're redrafting. they're going back to the labs i like that. i want to see companies that, you know, are willing to experiment and take big risks.

>> it won't work if it's not quick to look at >> there are ways to work the user interface such that you still get the brevity of the hit, but then lock -- >> you want to dig deeper. >> there are a number of people who -- oh, my god, i'm running out of space here. this is not working. >> you said at the top that you were meaning you downgraded. what piece of it do you think that you got >> i thought they had more visibility into their business at least, you know, 90 days out. i know it's tough to forecast out even internally, but i thought they could do that better than they did that's one thing the other one i think there has been a fair amount of product innovati innovation if you have ever tried the snapchat -- >> that old reulet thing -- not russian reulet there was a website where you could do this roulette thing where you would land and you would be on something. you can go anywhere and say i want to be in times square right now. someone has the thing open, you can watch whatever is happening. >> you are right. >> you are doing this, and -- >> you can go to a certain you mean like roulette

>> wasn't there this -- you remember that? there was this -- >> anyway, it was a great way to track real-teime events like hurricanes and, you know, floods i mean, it was a great way to follow those events. >> thank you, sir. >> thank you, andrew when we come back, politics in the markets from our guest host former house majority leader eric cantor check out the futures this morning. a little bit of pressure dow futures down by 25 the s&p off by 4.5 the nasdaq down by 6.5 stick around we'll be right back. me. ambitions live everywhere. synchrony financial gives people the buying power and financial toolsthat help make them happen. synchrony financial. what are you working forward to?

i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss when you have the right financial advisor, life can be brilliant. ameriprise

>> ooirk, thank you for being with us today. if we are trying to figure out what to make of the markets and what to make of expectations of tax reform being passed, how do you kind of add those two things up >> well, you know, listen, i think people, you know, definitely would say one of the things holding back on the larnl cap side -- i know that, you know, at molis we're seeing an awful lot of conversations going on, and it's on the over $10 billion kind of deals that, you know, have sort of dragged down the numbers because volume-wise numbers are down on m&a, but the number of transactions actually is holding steady. i think that certainly in the large cap side and i think repat reation -- >> there are companies holding that cash trying to figure out what the tax bill is going to be or will it pass before they decide what to do next >> right absolutely i would also say this in terms of the relationship between what's going on in washington

and the tax prospects. you know, jason was saying, you know,some of this is sort of baked in this notion that directionally you have a government in washington that is trying to be of some partner with business and investment not being hostile to it, and i think it's a huge impact when for the last eight years you really did have a government that was severely involved in aiming at business >> so with or without a tax bill, you don't think the market would necessarily be impacted to directionally? >> i think that there's probably if -- if it doesn't get done, there will be some reaction, but i think as we were speaking earlier, the political imperative of something getting done at the very minimum, cuts, you are going to see that. >> you think that happens this year, or is it more likely that they could stretch it into next year >> the leaders in washington are saying, hey, we're going to get it done by the end of the year my hunch is it bleeds over into

q1 it's just complicated stuff. they're going to have to at some point either resolve all that and get everyone on board or -- and many i fear is, again, that reform goes by the wayside, and then it's just cuts because it would be a wasted opportunity. >> leader cantor, thank you for being with us today. pleasure to see you. >> pleasure. >> thank you when we return, we will welcome long-time friend of president trump and one-time advisor on infrastructure, richard lefrak he will spend the next hour with us so much to talk to him about then, later, senator evan bayh will talk tax reform check out shares of the future check out the futures right now. shares of the future as well dow looks like it will open off by 22 points s&p 50000 off by four. nasdaq off by five we'll talk more ap tsnoo squawk returns in a moment, or in a snap, i should say. whoo! ( ♪ ) woman: class, let's turn to page 136,

recessive traits skip generations. ( ♪ ) molly: i reprogrammed the robots to do the inspection. it's running much faster now. see? it's amazing, molly. thank you. ( ♪ )

breaking news. china's tencent takes a stake in snap the stock reaction coming up is the corporate tax rate in limbo? the senate reportedly considering a big change one day before the release of their bell we have a live report from washington coming up plus, a presidential milestone. donald trump elected one year ago today. >> our work on this movement is now really just beginning.

i'm happy that -- nobody likes that i'm joe kernan along with becky quick and andrew ross sorkin today marks one year since president trump was elected. here to talk about that we'll get into it with our guest host richard lefrak we're going to -- what does this mean more from him -- yeah, it says we're going to get right in on that and then more from him in i bit. we're here, and richard is here, and that's what we wanted to say.

>> i did see the president a few weeks ago. we chatted about it for about five minutes i think that the politics have pushed it back until the tax matters are a little more crystallized, but it's very much on his mind. i will say that. and his ambitions are far greater than what congress so far seems to be interested in. >> and you are working on satisfying those ambitions are you working -- >> i'm thinking mainly about my own business, but to the extent that he is interested in having some, you know, unofficial advice on some -- from somebody who spent a little time studying the problem, i'm certainly there

to assist him if he needs it >> the paradise papers maybe there was something good i think we make a point of observing our tax code >> i could go rent one >> i run a domestic business actually, it's very interesting because tax bill that's been proposed now actually in a certain way makes renting more advantageous than owning >> mostly red as far as the futures this morning you can see, the dow is indicated, i think, down 15

points s&p down a little under four nasdaq down by 3.5 >> let's bring in breaking news right now. or at least share what's going on china's tencent acquired a 10% stake in snapchat's parent company snap it happened on the 6:00 a.m. hour this morning. it acquired the shares through open market purchases, and it took place right after the company had announced some tough earnings let's show you what's going on right now. that stock originally was down 20% in the premarket after the tencent news hit, it actually went back to punch, reversing course, but now as people are continuing to evaluate both the earnings yesterday and perhaps the impact of this tencent investment you're looking at the stock now down close to 11% this morning >> and humana is out with earnings the health insurer posted $3.39 a share. these were third quarter results, and that was 12 cents above estimates. the company also raising its full year forecast in part

because of the strong performance for its medicare advantage plans, and that stock indicated up almost 2% this morning. now to politics. want to get you caught up on the election night results in virginia ralph nordham defeating ed gillespie to win the race. president trump supported gillespie and responded to that loss he said ed gillespie worked hard but did not embrace me or what i stand for. don't forget, republicans won four out of four house seats with the economy doing record numbers, we will continue to win even bigger than before. we should note that the four house seats that the president is referring to appear to be the four special elections held to replace members of congress who were appointed to positions in his administration democrat phil murphy trounced his republican opponent to become new jersey's next governor, and then right here in new york city democratic mayor bill de blasio won a second term in office, but it wasn't a full sweep. in a special congressional election in utah republican john curtis was voted into office

he is going to fill jason chavitz's seat the senate is going to be releasing its tax reform bill tomorrow, but a change might be coming to corporate tax reform at least in the senate's version. >> i caution that we have heard this story before. the house had considered phasing in and phasing out the corporate rate consult in its bill, but eventually the house made an immediate and permanent after an uproar from conservatives.

>> the optics for republicans are tough. several studies have thrown that a big tax cut for businesses would be had in this plan while at least some middle class households would face a tax hike down the road. today the top democrats on the house and senate tax committees will propose linking the corporate rate cut to worker wages. if the average household doesn't get that $4,000 pay increase that republicans have been talking about, the corporate rate would snap back to 35%. guys, that connection between lower corporate rates and household income is really the centerpiece of the gop tax plan, and democrats say they just want republicans to put their money with their mouth is. back to you, guys. >> okay. i guess we need to listen to what they say, although they're not -- they don't have the majority they can talk all they want. anyway, let's get back to our guest host, richard lefrak of the lefrak organization. he is chairman and ceo

2019 what is -- i thought they wanted to go retroactive in 2017. do you think that would -- >> well, i think that's all splitting hairs, frankly when are you going to start? i think more interesting is that they're going to do something. what is it that they're going to do, and my own issue with the current proposal is that. >> if you want wage hikes, that's when you are able to do it, when workers are -- when things are tight, and you need more, and you want a higher skilled worker, then you have to

pay more >> but -- if the economy grows, you're going to see finally -- >> you'll see wage hikes the one element of the economy growing is having adequate work force that's trained for what has to be implemented, and if you don't have an immigration plan and you don't have a comprehensive worker retraining plan as part of this tax cut, then i'm not sure exactly how you are going to get to the objective, which is higher wages and higher growth rate in the economy. i applaud what they're trying to do to make our tax code more competitive. i do but i just think that they should maybe add those elements into it in order to in any case -- make it dpor everything that they're trying to accomplish here >> if the top rate actually goes up, you think that -- is that -- that's not a reagan -- >> the top rate did go up.

everybody sitting in this room got a tax increase even what they proposed -- >> 39 cents -- >> rur loophole is my deduction. >> i would like to see them close more of them >> hard core -- but it's certainly -- it's kind of let's say interesting that a lot of the tax loophole closings occurs in blue states i mean, so -- i mean, are they making political statements here are they making philosophical statement. >> the statement has already been made that all of the other states are subsidyizing all the spending in blue states that are out of control for years and years and years. >> i have to push back on that every time the blue states in america --

>> lots of people like to live near water >> that's the case >> the arg you want auto somehow -- this argument somehow is that somehow red states are subsidyizing blue states is crazy town >> it's -- no, it's not. it's a disconnect to say that government is allowed to spend a lot of money because there's successful people that live in their states they can go crazy and, you know, totally overspend and have a 9% income tax to their poor esidents then all of a sudden we should -- red states should subsidyize i live in new jersey. >> i kind of -- i have dubbed this proposal in 2017 tax reform act and full employment act for real estate brokers in florida, nevada, texas because, you know, obviously there is going to be some change in behavior here

>> they're all likely to not vote on this royce walters, isa roarbach, they're going to have i hard time with it >> i think personally i would accept -- if i felt that at the end of the day that they would be having an intelligent worker retraining program as part of it, and a comprehensive immigration reform program as part of it in which the shortabshortage of qualified and skilled workers would be supplemented under a

mare merit system of good people from outside that's how -- that's my own sense of it. >> somebody just wrote in -- >> that make me a democrat or a republican >> you are like an enigma. someone just rote wrote in in the country 260 million to 300 million people live in houses for less than 500,000. it's 90%, 10%. 90% live in houses less than 500,000. i don't know does that matter do you care if they cap mortgage at 500,000 >> no. if i was a homebuilder, i would be damn upset about it okay i do like -- in other words, i'm accepting of the fact that -- i'm accepting of the fact that as a successful person, if i have to pay a little more and make the country run better, okay, that's all right >> he said that there's -- he could name 15 different interest groups or regions or whatever, and he has to spread the pain over all 15, but then you got to be strong about it you got to be --

>> then you have to truly spread the pain when you can still find looph e loopholes and deductions, i'm of two minds. you're going to ask people to give up medical dough deductions, if you are going to ask people to give up adoption deductions and ask people to give up all these deductions, you should do this at the highest end. the idea that carried interest stands through that, and, if it's not a lot of money, fine. make it a symbolic move that you are going to do that so that you're not going to allow people to be paying 23.8% instead of 39.6% on what is actually -- >> if i don't have any -- i want to just announce i have no carried interest i don't. >> so you would be fine with that too >> well, even if i had them, i may be fine with it, but, you know, there was some obviously -- >> a lot of people -- the real estate news is that a lot of people in the real estate business do. >> they do have carried interest >> how -- what do you think the right answer is there? >> my own thought is that a substantial part of it comes from the labor applied to the

asset, then it should be treated that way >> as income >> as income >> now, that's a statement against my industry because a lot of the financing in my industry comes that way, and a lot of the values are created by the capital that flows in through those parties. i you know, hey, such is life. >> you're not going to be saving any sacred cows, don't save any sacred cows. >> yes >> richard lefrak will be with us for the rest of the program the dow, s&p, and nasdaq are all up more than 20% since president trump was elected one year ago today. we'll take a look at the trump trade after this break stay tuned you are watching "ua b" ren bcsqwkox

>> the so-called trump rally officially one year old.

mike san tolly joins us now with a look back at the trump trade hey, mike. >> hey, joe. actually looking at maybe the most surprising aspect of the trump market in the last year, which is not just that the market is up as much as it is. it was going to be a good market response you probably thought it might be choppier we -- you look at the volatility right before the election it's obviously crashed down trading off in single digits for the last couple of months. looking at what's behind that, obviously you have this macroback drop globally. everyone comes on. it's very calm you had nice steady coordinated almost expansion in the major world economies. central banks are still generous all that stuff

>> you can bet on a continued -- traded notes that basically trade on a declining vix that would be like the xiv index. it's become a very popular trade. i'm hesitant to say it's a crowded trade or it's causing the low volatility, but all this stuff is coming together it seems to be what you need is not really policy change, but inflation has to pick up a lot, or recession has to come into view, or you have to have a financial accident, where the market does not price in dc drama. whether it's good or bad i think that's the lesson bev had in the last year >> with -- while we had zero and -- zero rates and qe1, 2, 3, and infinity we had all of that, and i would have understood the volatility what's surprising for me is we

pass the infliction point where we went from easing to neutral to actually starting the tightening, and the volatility got even less. >> on the service that is surprising you have some people that say the yueuropean central bank is anchoring stuff below zero >> even though we don't -- i don't think we were talking about people not wanting -- not wanting to miss the train. i think people that were in the smart money obviously didn't want to miss the train >> i think this market has really pulled people and almost by default because their balances are higher. everybody is exposed to stocks even if they're not in a

loving -- >> in the mid 2000s and mid 1990s, things lasted like this for quite a while. and the 60s people tell me >> people tell me. >> coming up, when we return, mark the day twitter 280 is here. what we mean by that and everyone has an opinion about that is 280 characters you can now use it on twitter for the first time one guy has got an opinion on it is goldman sachs ceo lloyd blankfiblan blankfein. we'll show you his tweet after the break. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses.

go to flexshares.com for a prospectus containing this information. read it carefully.

>> you may be seeing even longer tweets twitter expanding its limit to 280 characters from 140. it had tested that expanded count with a limited number of users back in september. everyone seems to be weighing in, including lloyd blankfiin. he tweeted new at this, but like the discipline of 140.

>> nasa will help uber develop -- it will take off and land vertically. uber hopes to start tetsing the flying taxi in 2020. i like being alive >> he love getting up -- >> you could argue that there's actually less risk because -- you do create a lot more road. there's a lot less crashing. >> anything goes wrong -- >> i know. i understand >> i would like an anti-gravity -- >> either the -- >> anti-gravity would be good.

if you don't get rid of gravity, i really -- >> there is an argument, by the way, about multiple -- right now most helicopters have -- >> two pilots in and two engines. >> right, but a lot of these types of aircraft that they're talking about have eight rotors so that if one goes down -- just -- >> you are more nervous than joe or i about getting in one of these things somehow you're defending this. >> it's interesting. >> you're not taking an uber helicopter any time soon >> i wouldn't expect you would be seeing it -- >> i would be focussing on that. there's no gravity, i'm fine up there. >> when we come back, trump arriving in china this morning another of the five countries that he plans to visit on his asian tour we have a live report coming from seoul next. plus, senate republicans set to release their tax plan tomorrow. we will talk to former senator evan bayh about what he thinks on everything he has heard so far. "squk x"ilbeig bk.awbo wl rhtac e alpa in the trends, driving specific sectors of out performance.

where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.

>> good morning. welcome back to "squawk box. we'll get back to that debate in a moment, but we do have breaking news to bring you at&t's cfo, john stevens, says the timing of the time warner deal is now "uncertain." he made that remark at a wells fargo investment conference. previously, we should note, that the company had said they expected the transaction to close by the end of 2017 that stock down 3% in the premarket as a function of that. at stock up 1% that's a little bit of the arp spread >> it's not a commentary on the value of the deal. people don't want it not to happen >> among the other stories front and center at this hour, went to tell you about shares of wendy's. wendy's missed estimates on the top and bottom lines with same-store restaurant sales falling more than expected

wendy's latest company, we should say, to note the negative impact on the hurricanes on its results, and then there's regeneron. stocks on the rise this morning. reported better than expected profit thanks so improved sales for its eye treatment. also, another batch of corporate earnings is on the way this afternoon after the closing bell at that time we'll get the latest numbers from twenty-first century fox. that company in the news on the news that they are in talks with disney three ucla basketball players are under arrest in china suspected of shoplifting the team is in shanghai to play its season opener against georgia tech the goshlg george tech players were released. among the ucla players arrested is leangelo bell he is the younger brother of lonzo ball of the says lakers. ball's father released a video

about that incident saying he will be fine, everyone is making it a big deal. it ain't that big of a deal. lot police say they could hold the players and then charge and release them >> probably fake louis vuitton's yea way. >> like the ones from chinatown here >> don't you think >> you don't have to go to china to shop lift louis vuitton. you can get it right in los angeles. >> you really don't want to steal a poster from north korea. >> yeah. while the president is in asia, senate is preparing to release its tax plan that is due to hit tomorrow. joining us right now is former u.s. senator evan bayh and, senator, it's great to see you here this morning. >> becky, good to see you. >> we've been having a bit of a raging tax battle debate on the set today. why don't you just tell us where you think things stand both with what you are expecting to hear from the senate and how that will mesh up with the house bill that's already out >> i think the chances are 90%

that the house will pass something, and then it will go over to the senate, and it will slow things down if the final analysis if in the first quarter next year, a 60% chance that finally the president will have something to sign the senate's main concerns will be with the size of the deficit. there's some deficit hawks there, including some members who are retiring they're a little more liberated to vote their conscience and just some iconoclasts that will go they air own way they'll have to massage to get the size of the bill down. >> not starting until 2019 assist we've heard with some of the issues instead of starting in 2018, and then -- >> possibly. >> then raising the corporate rates slightly >> the reason they're having to go through all these eyeragss and get twisted into knots is they promised $5 trillion in tax cuts but have only allowed

themselves $1.5 trillion in increased deficits they have to come up with $3.5 trillion that's why they're looking at things like the state and local income tax deduction and a variety of others things that have had people up in arms wrrn. >> the house bill moderate says on the state and local tax issues, which is a big issue for people on the coast. >> senator cruz from texas said he thought this was unfair because in many of the higher tax states, you might have hundreds of thousands of people if not millions actually having their taxes go up. you look at the results in the election yesterday in virginia, i think that's going to get the attention of a lot of the moderate republicans in places like new york, new jersey, and california because they're going to have a lot of upset constituents who will remember this next year if they go forward with the complete repeal of that deductibility. >> if the house puts in $10,000 limit like that, the senate strips it out, what then happens

when it goes back to conference? do the individual house members lose their chance to vote on that again once it goes into conference >> they don't if it goes to conference i'll tell you what is likely to happen here. there's going to be all this -- it's going to be difficult to get it passed into the house it's going to be in the senate it will get bogged down. there will be all this pressure. just like in the aca replace and repeal all the pressure on the senate on christmas eve literally they'll be voting on something the senate 50-50 will get it out. if they do, becky, there's a real chance it will never go to conference because the president and everyone else will be leaning on the house saying it's just accepted. just accept it they have the option of just taking what the senate passed and calling it a day >> you mean leadership can, and not -- >> they eventually -- they eventually have to put it to a vote that would avoid the whole conference process if it goes to conference, then it gets bogged down and slowed down even further, and the thing can get nit-picked the president will be using all 280 of the new characters on twitter to pressure those house members. just get it done just get it to my desk

let me sign this by new year's day. >> just like you mentioned there are some republicans that are emboldened by retiring they don't have to worry i look at you like that. you're a democrat that is now no longer -- so you're emboldened to say true things now, which is different than a lot of politicians, obviously you would vote for this bill what would cause you to not support this bill at this point? what would the republicans have to do where you would have to say, you know, i'm not going to vote for this? >> if they just wildly infreigl the growth estimate. >> a lot of democrats won't vote for it just by definition. >> it's easy to sit in this chair like i am today and second guess what's going on down there

because they're subject to a lot of pressures i'll tell you what i think could have happened and should have happened there was a bipartisan deal here to be done the democrats would have supported lowering the corporate rate to 20%. a one-time only fee on that repatriated money coming back, and then employing a chupg of that money for infrastructure investments. there was a deal there to be done >> even at 20. >> the mistake they made was saying this was a once in a lifetime opportunity let's go really big. let's include, you know, the alternative minimum tax. let's include all these other things in there which have now really -- >> you think even -- do you get in terms of growth with the tax cuts for individuals, does that help with the overall growth of the economy, or is that just a give-away to make it saleable for certain people to constituents i mean, is that -- is this the time they should have been doing the personal rates that costs a lot, and i don't know -- >> it costs a lot, joe any time you increase people's disposable income, they spend some of it, it helps the economy. there's a real question as to

whether something like 100% expense, and those sorts of things is necessary at this point after two quarters of 3% gdp. maybe you want to keep some of those stimulative things in your hip pocket for a time when the economy looks like it's softening. >> just do the carpet. >> my point is there would have been a group of democrats there, and i would have been one of them >> an infrastructure guy ready to do the infrastructure he is right here >> that was -- that's kind of my point, which is if you are giving the corporations this big gift or whatever you want to call it or induction in their rate, why don't you make some of the money go back into infrastructure and then to worker retraining because we need retrained workers and more workers, and we need more infrastructure which in the end will help the efficienty of the economy and help them again anyway >> this would have solved the inversion problem of companies redomesticating abroad to lower their tax rate, and it would have gotten that money home, and some of the argument is, well, they're going to use it for -- it would be great if they invested in infrastructure

even if they're only using it for share buy-backs and things like that, it's better to have it here in the united states in our economy than it is strapped in europe or asia. >> such an enigma. i can't believe you're a democrat every time you come on andrew are -- >> from indiana. >> becky hit the nail on the head a lot of commonsense in the midwest. >> go >> god, there is >> helps having been a governor too. he had to balance budgets, track investments and to work with your businesses. >> so there's not a lot of commonsense on the coast, is there? >> well, i was interested in the commentary before i came on about how the market volatility is at an all-time low, and, yet, you look at the polls, and people are incredibly unhappy with the state of our politics they think the economy is moving in the right direction they think our politics is heading completely in the wrong direction. there's in real disconnect between what's going on in washington and what people see in their daily lives that's something we need to get to for the health of our country. >> how trump over there is

viewed differently than he is domestically too i mean, there's a reason why -- we're inundated and hammer odd a daily basis about how horrible this guy is, right, and it doesn't matter if it's 28% on the dow. over in china they're, like, wow, he is powerful, he is wealthy, he is tall. you know, there's all these things over there that you don't hear well, here it can't get through the -- can't get through the filter >> well, what concerns me is that five of the last six elections national elections have been change elections people weren't happy they voted for a change. they were fed up with washington, and they look and see so little changing where do they go next? this is something we need to deal with, and i was mentioning before i came on the set the problem we have today is that we obsess over our differences and we have politicians who prey on those differences to drive us apart rather than emphasizing those things we have in common as americans >> i -- >> you are so right about that you are so right >> you are, like, 50 years old

come back. come back. >> you have to talk to my wife, joe. i'm happily married. i'm not sure that would be the case >> that's obvious with all of us that's where the power lies. anyw anyway, it's mutual power. we talk things over. i wouldn't -- >> no, you don't >> no. >> all right thank you. >> great to be with you, joe >> good to have you on the set richard will be here for another 19 minutes president trump is in beijing. we're talking about that where he had dinner with chinese president xi jing ping let's get to kayla she's live in beijing. that's pretty cool, kayla. very smart when you took that washington thing you know very smart >> you've mepgntioned that a few times, joe the mo is to go where the news is, and the news is in washington for now, and today it is in beijing where the president is the chinese started this state visit with quite a bit of hospitality. touring officials around various

cultural sites, the forbidden city, an artifacts museum in town maybe they turned off some of the factories because the air is so much clearer than it was just a couple of days ago so they could see the sunset the two am cans, the presidents and the first ladies, had a double date at the opera tonight, but that belies the tense negotiations that are going to have to happen starting tomorrow morning between the two leaders before they make this joint statement in the great hall of the people of course, that's going to concern the $347 billion trade deficit that president trump has honed in on as well as what to do about north korea and the increasing displeasure that the administration hads over what china is doing they acknowledge that they're doing a lot, but that they could still do more and need to do more, and this morning in south korea president trump warned north korea that his is not like the previous administration. >> today i hope i speak not only for our countries, but for all

civilized nations when i say to the north do not underestimate us and do not try us >> he is set to issue a start rebuke to china over north korea as well. according to white house officials who say that he is going to be targeting some financial links that still exist between china and north korea. previous sanctions have targeted individuals and smaller financial institutions, but that could change they also say that president trump is likely to make a decision by the end of the trip on whether to designate north korea a state sponsor of terrorism. it's hard to understand how china would accept any of these overtures without getting something in return. in the past these talks have resulted in quid pro quos for the two countries. a bunk of the things that they've asked for, being recognized as a market economy, getting easier deal access in the u.s., those have been rejected, so we'll see what they ask for and whether the trump administration this time is willing to grant it. guys, back to you.

>> okay. coming up -- thank you for that, kayla. we will be watching and seeing you throughout the day in the meantime, we've been talking about it all morning today marks one year since president trump was elected, and since then amazon and boeing have one thing in common we'll tell you what that is when "squawk box" returns in just a moment

your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory.

the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

>> we have a look at the companies that have been in the crosshairs aman >> good morning, andrew. we've never had a president in so many aspects of the presidency particularly in his willingness to go after and criticize american companies and foreign companies, specifically and by name for things they're doing that he didn't like. take a look at the companies that have been in donald trump's twitter crosshairs over the course of the past year, and you see a bunch of american and foreign big brands the president has also favored companies on twitter. about 15 companies have been specifically mepgsed by the president over the course of the past year. there you see some of the big american brands that have been favored for the most part by the president of the united states does all this twitter activity have an impact

we set cnbc's data team on this question ranking whether they were positive or negative positive tweets do seem to have about a 1.1% immediate stock price impact on the companies in question negative tweets down 1.2%. the conclusion here, guys, is that the trump tweet effect does appear to be real. at least in the very short-term. you can actually measure that in dollars and cents in terms of the fuel impact on the company's market cap in the very short-term in the moment that the tweet happens. take a look at the dollar conclusion we have here. positive tweets worth about $1 billion for the companies that are mentioned in those positive tweets negative tweets down about 1.3 billion dollars in market cap. that is an astounding there are

a lot of things that move the prices of these stocks particularly all the things that are going on in that sector at that time. also, the effect seems to wash out over time. whatever that has been going on with that sector with that company tends to continue to happen the trend line reverts after a short while. also, the president has tweeted both positively and negatively about some companies leak boeing, for example. he blasted for the cost of the f-35 and then later a couple of months have gone by, and he is tweeting favorably about going down to visit the workers at boeing some companies are on both sides of this, guys. a fascinating impact here that we've never seen before from the president. >> what you didn't include was when he says something about cnn and then how that affects time warner or.

>> you seem people sending out their own tweets you get in these sort of wars, corporate wars of words. i'm not sure it has the same impact on the media companies te impact on media as it does publicly traded businesses -- >> made talk about them for ten minutes -- anyway. >> we've never seen it before, fascinating. >> thanks, eamon when we return, a 10% stake in snapch snapchat, still down almost 11% today. we'll have the street's response next plus get back to our guest host, richard la frack

shield annuities from brighthouse financial, allow you to take advantage of growth opportunities. with a level of protection in down markets. so you can head into retirement with confidence. brighthouse financial established by metlife. why did you take credit card debt on? second kid. private school. medical bills. moving costs. solid ground. a personal loan from sofi is a smart way to consolidate credit card debt. certain borrowers cut their credit card interest rates 42% and increased credit scores 17 points on average. borrow up to $100,000 with low rates and no hidden fees. find your rate in just two minutes,

and take on your debt at sofi.com. i am a first responder tor and i'emergencies 24 hours a day, everyday of the year. my children and my family are on my mind when i'm working all the time. my neighbors are here, my friends and family live here, so it's important for me to respond as quickly as possible and get the power back on. it's an amazing feeling turning those lights back on. be informed about outages in your area. sign up for outage alerts at pge.com/outagealerts. together, we're building a better california. >> welcome back, cnbc first reporting that a 10% stake was acquired in snap this comes after the news that snapchat parent posted a quarterly loss and saw revenue miss estimates and reported 178

million daily active user numbers, that was below what the analysts had been expecting when that news from all of the first hit -- you see that's when the stock fell from 15.12 down to about 12 dollars it's moderated a bit and come back down. we did speak to an analyst earlier this morning. >> a lot of the problems we're seeing from snap are self-inflicted because they are a company with a178 million engage the value and not extracting value, by did he have nil in addition, that's your fault. >> talking about how he initiated a hold on the stock before he had even heard of this and upgraded to a hold we'll see how this mays o plays today. shares down 10%. >> our parting sts fhorom our guest host right after the break.

opportunities aren't always obvious.

sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. welcome back to squawk box the big question i had, how you're thinking about real estate prices here in the united states in large part as a function of international money either coming or not coming.

i suspect not coming to the u.s. and i'm thinking about china and saudi and all of the stuff going on. >> there's no question that that spigot has been shut or reduced a bit and that's reflecting in the capital transactions especially with the big office properties and residential complexes and luxury hotels. a lot of interest in that came from chinese buyers buyers from the middle east. russian buyers and that kind of dried up now so there's been a definition -- you can see it in the volume of transactions that occurred. >> do you expect that to change? >> well, that's really a political question it's not really -- an economic question if the chinese don't want money sent out of the country, if the middle east is a little chaotic and if russia is out of favor, it's not going to change. >> to the degree they were propping up the market to some degree, what percent do i think

it's come off or may come off? >> i would rather say look at it and not say that the markets come off, that the size of the market has come off, meaning that the number of transactions has been reduced and i think it probably, 20, 25%. not insignificant. >> we were talking about retail and how we talked about the massive disruption there your point is the dollars are still there just coming from different places >> yesterday's department stores, today logistic center, instead of getting your socks from macy's or kohl's, it's coming from a warehouse somewhere and somebody is buying the sock, it's a different distribution channel i read something very interesting, if you look at amazon, it's really sears reincre i reinkarn ate d from 100 years ago and they had a catalog and ship to your house next thing bezos will be sending a house in the mail.

>> it's reshuffling the deck a little bit what's pretty interesting, if you have a big multifamily apartment house, you become the last 100 yards of delivery service for amazon so you have like your doorman now has became a mailman for amazon. >> richard, we want to thank you for being here always a pleasure to see you. >> thank you for having me good to see you all. >> that does it for us today make sure you join us tomorrow right now it's time for "squawk on the street. sthet ♪ ♪ . >> good wednesday morning, i'm carl quintanilla and jim cramer and david faber. futures largely unchanged on the one year of the election to office we'll look at how the markets responded since that time along with a focus on last night's races and snap's earnings an