>> 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 and tax bill the curve continues to flatten,

down to 67 basis points today. road map begins with the year of trump. one year since donald trump historic run, is there still room to run for the stock market rally that followed? >> a snap lifeline tencent posts a 10% stake. a snapchat redesign. a presidential warning to north korea, do not try us we will go live to beijing, the latest stop in the president's tour of asia it was the year ago today that donald trump was elected president, market history has been made with stocks constantly hitting record highs since the trump election, the nasdaq is up 30% and s&p a 21% gain guys, if you look at first years of incoming presidents, it's third behind kennedy who had 26 his first year and bush 41 had 23 we're going to look all morning long at the impact on m and a

and how the tweet moved individual names. >> it's worth talking about. let's get one thing straight, the rest of the world has been good too i don't want people to say if they hadn't been in america -- i do think there's an atmosphere that changed that's so pro stock. when you have a president who grades himself by how stocks do, you know he's not going to hurt the market most of the presidents haven't cared about the market i think jfk did because he lowered capital gains. it's been a great run. great run. >> but summer is out this morning. constant critic saying it's crazy for the president to wrap himself up in the rally when he's going to have to take responsibility for a downturn, if and when it happens. >> you think he would do that? are you kidding me? >> it will be someone else's fault not his. people were expecting that a

year ago now everybody was panicking and here we are with these very, very strong moves on all of the major averages. >> the world turned around in this particular quarter, the dollar has gotten weaker, and the amount of m and a is incredible -- >> it's less than it was in '15 and same as it was last year it's not incredible. >> all right, the trillion dollar figure, proposed trillion dollar -- the number i saw indicated it was good. >> certainly we're in a little bit of an upcycle with the broadcom and qualcomm and fox and disney, at&t time warner we'll get to later there's stuff going on no doubt. >> u.s. m and a, 1.2trillion around election day november 6th of last year to november 2nd of this year. that's the most of any first year of a modern president --

1.2 trillion, 12,000 deals >> right. >> look, i think that the stock market came in under value i really do. it came under under value. >> retrospect we know that but it's mostly earnings, isn't it >> earnings have been great. this earnings period in particular is hard to find the disappoint, i would nominate mallen krot as the worst >> under armour was not particularly good either. >> i saw an upgrade yesterday was mentioned. >> rbc i think. >> rbc >> hope springs eternal. but the oils came back, transports came back industrials terrific, banks very strong left out is retail and i get that. >> yeah. carl, anything on the second year of the presidency in terms of what we can expect? >> we're going to start crunching susquehanna who went neutral on under armour.

>> adobe fully effects it will be an online christmas in the way we've never seen i think brick and mortar, about the numbers that will come out, i mean, you've got to shop, people >> well, target closing some under performing stores. we know -- sears and kmart adding to closures this year. >> macy's not that strong. >> if you look at sector performance since election day, amount erospace defense far and away number one and retail last. >> everybody was in the ship building business then and stocks went big then they kind of leveled then they went up big again as the proposals became into law and boom. that was the group to be in. >> meanwhile, when it comes to this administration and what they've done -- >> deregulation.

>> legislatively, nothing. >> dereg which added to conferen confidence. >> that's the main thing it has done the thing it hasn't done excuse me. last time i do that. the thing it hasn't done has made it so oil and gas went up as deregulation produced more oil and gas, they kind of -- it was self-fulfilling. that industry which should be doing much better is overwhelm by it self-. you can drill pretty much everywhere you're allowed to drill except in new york state. >> they want to drill almost in like national wildlife refuges -- >> i'm not saying big inspections being done when there's an oil spill, you know, easy come, easy go remember when there used to be -- >> we're going to talk more about what happened. inventories are today. it's going to be a busy day for

snap shares in the premarket tencent has bought a 10% stake in the company, acquiring those shares through the open market that information comes after snap posted that quarter loi loss and revenue miss with daily active users below estimates on the call he said the company is working snapchat more user friendly >> we're currently redesigning our application to make it easier to use. there's a strong likelihood the redesign of the application will be disruptive in the short term and don't know how the behavior of the community will change when they begin to use our updated application. we're willing to take that risk for long term benefits to our business. >> rbc goes to hold, you made the point, it used to be confusing in a cool way. now it's confusing in a not cool way. >> this was a horrible call. basically they said, listen, don't worry, all of the things you hear about us that are bad,

they are bad, we're getting to them give us some time. isn't it fun people like snap, you know, you can't have a conference call like that. that's the kind of conference call it's a pitch to silicon valley we could kill it and we had spectacles. >> the changing -- the app and changing the way they deliver advertisements. >> didn't they think that? >> changing a lot. not that many months after coming public. and of course after a quarter that was as we pointed out, very, very disappointing from a revenue standpoint, from pretty much most of the metrics used to measure the progress the company has made. >> use up 4.5 million, last quarter they were up 7 quarter before that they were up 8. last year a quarter up 20. >> they came the right time. i don't care if it's ten cent or fifty cent, nothing to buy here. there's nothing to buy here. >> tencent saw something to buy,

146 million shares practically. >> a lot of people bought at 17. >> marking it down. >> the great thing about tencent they can average down and get a better price. >> they can keep buying yeah. >> if it goes to zero, they own 100%. >> won't have votes though. >> right. >> they won't have any votes evan, clearly i think he felt it i think he felt he disappointed people this is the first quarter after disappointments i think he was sad. >> so jim, what i'm -- in speaking to people, they need to on board a lot more advertisers and facebook has 6 million advertisers. >> you know what they need just they need viewers they need technology, okay they need advertisers. >> and can also use gross margins. >> they are hosting costs and cost of sales for them that does have -- >> diane green, google.

>> does have the effect of compressing the gross margins but they are not good at all. >> do you think it's a company or just kind of a fraternity of people who have a website? >> you know what i think -- >> like delta house. i come back to this idea of scale, which i keep hearing more and more about, the inability of any company to truly challenge facebook or google or amazon and here's another example, how are they going to do it? how can you make out of this sort of small world that they've been left with in some way >> i think -- >> pick at the pieces. >> they have a huge amount of money. so what they really say is we'll figure it out. kind of like a special purpose vehicle. we'll get this thing together. don't worry about it what i didn't know, before i read this was how badly everything is working for snap you know, android, did you know -- did your kids know how bad it had gotten. >> i don't know what my kids are doing. i don't know if they are using snap or not.

>> my daughter switched to insta. finsta and insta -- >> recode has a crazy chart of looking at stories, number and surpri surpassed them like they were standing still. >> now the next phase to go after people who are older than 35, jim. they are going to make -- >> why would i want my stuff to disappear? >> appealing to those -- 18 to 34 was the original focus and now moving towards the older demographic. >> spectacles -- >> i don't know when they'll get to you and me. >> did they wake up one day -- >> remember they brought them up and we all wore them hardware inconvenieventory -- >> they had a big charge they threw everything at you but there's -- >> they have a lot of money, they are losing a lot of money going through it fast. >> the shareholders are going to be in revolt >> okay. no, the shareholders have no

say. >> no say. >> this is really one of the great stories of all time. i mean -- >> of all time >> no no votes, really horrible quarters right out of the chute. told you a lot of stuff, really funny, guys. my daughter says he's handsome there. okay i have a selfie with him but i think i'm going to have to delete it. how do you delete? >> how do you delete on what >> put the little trash can? >> that will get you where you want to go. >> boom. >> sorry. >> you just deleted the selfie you took with evan -- you are so excited that day, you ran over to him and took the selfie rarely have seen you -- >> most sincerely sincere man in north america. how did you not know that? did you really think i'm a tower of sincerity. >> i was calling you out on it. >> we should be fair, you have been spectacle on the share since -- >> you can use it but you have

to sell it evan, did he wear a tie? >> no. >> okay. >> did he on that day? i think he borrowed a tie. >> when we come back, we're going to get a lot more on the trump agenda, the president is in china as he continues his trip through asia. we'll go to beijing for a live report dow is up six days in a row and four streets of six plus days in just - [ keyboard clacking ] [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours.

the president continues his asia trip with a visit to china. kayla is in beijing this morning with the latest. good morning, kayla. >> reporter: good morning, carl. the chinese are calling this a state visit plus, all of the normal state and extra flourishes like a double date at the peking opera and private dinner at the for gbidden city n factories being idled to see the sunset in beijing at all but the hospitality today belies the hostile conversations that will take place tomorrow during an expanded bilateral meeting and several high level meetings set to take place topics to be considered, north korea, how do you thwart that threat how much more involved will the u.s. be able to get china to be

and what do you do about the $347 billion trade deficit made even more difficult by the fact the last time they had high level financial talks in july they broke down without any deal reached. there is some common ground this time around, roughly $9 billion worth of deals are set to be announced as part of a delegation that commerce secretary wilbur ross assembled. he made some comments about those deals during a signing ceremony tonight one of them, for instance, a $2 billion import deal by jd.com for american beef and pork but $9 billion worth of deals mean you still have $336 billion worth of that deficit to chip away clearly there's a lot of ground for these two leerleaders to map they have a good rappaport but there are moveable objects and we'll see what those turn out to be this time around. they are expected to make a statement in the hall of the people tomorrow midday they'll have to reach some sort

of conclusion, carl? >> kayla, we'll watch for that during the day your time, night our time been with the president throughout his trip. year ago his language on china and trade was harsh. >> yes, and you thought he would crack down on steel and use 232, base he cically saying steel isa national treasure, we're going to shut down he did not do that at all. some of the steel people told me he sold us out he turned out to be a president that is helping the same companies that have done well in china before but he is trying -- he is pitchman in chief. so you may not like that he ended up going with the same wealthy companies always done well, opposed to trying to stop them from flooding our country, but i've never seen a president go out and try to sell like this these are countries like korea, we have terrible trade deficit going to china, you've got to buy more, that's an unusual

stance it explains why we've had a trump rally. >> he's out there literally drumming up business. >> yes, let's go raise earnings per share to take the stock market up because it's the barometer of what i do and does put people to work it is surprising he's got old line companies and new line companies but i think people are scared of him over there you know what, just go do some business go do some business. we want this guy off our back. that will work. >> at the same time, he's trying to ask china to cut financial ties to north korea and this interesting late stage diplomatic outreach, make a deal, he says. >> i think a lot of people felt that was in some ways a cave in. the state department has been adam antethis not hant rex tiller son is doing the same fabulous job as he did ats exxon, he reads the tweets when we do.

>> it sure feels that way. >> do you think he likes the new limit of characters? >> the president has been active at a 140 plus count on characters. >> there you go. >> it is interesting to think about twitter versus snap, how much better twitter is in terms of where it can go i think the president is not going to be on snap any time soon. >> unlikely. >> right no, he's not a snap guy. >> when we come back this morning, we'll get cramer's mad dash and count down to the opening bell a lot we haven't gotten to, including the election races last night and tax bill which we are expecting a marketed up bill in the house by the weekend. although big questions being asked this morning about the timing of that corporate tax cut. back in a moment

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he's back and we're back here together for a mad dash in person on this wednesday. >> and it's wednesday. >> thank you, hump day you want to talk about zelnick. >> we got a quarter and david, this company would issue a gain and go this and this no, this is now the great sector of the groewth story in the industry, grand theft auto and mba 2k and red dead number two, which my nephew, head writer and everything else, tells me it's going to be unbelievable it needs nvidia chips, they report later this week the most amazing thing about this, he'sdy verged from activism and blizzard, grand

theft auto is the greatest entertainment engine of all time for gaining and because of the stay at home economy that's what they are doing that was the lesson of red robin gourmet. i don't know if you got that fully. >> i didn't get that fully people are not leaving their homes? >> they are not, calling door dash or grub hub, bring me a burger they got the six at the supermarket and sit there and just -- and xbox has got to catch up by the way to switch. >> that's nintendo, microsoft. >> satya has to get more competitive. he's competitive with adobe with sales force. it's like a war between the states there. >> that's an incredible chart. >> look, we've got great recurring revenue and this is where time warner should have bought them but grand theft auto doesn't really have that same bugs bunny feel to it. >> no, it doesn't. it's a little more challenged --

>> could have worked it in with the grinch for disney. >> grinch and grand theft auto. >> congratulations on the david faber brokerage out. the house of david faber broke the story. >> we've got other m and a to get to we're going to revisit broadcom and qualcomm not revisit. >> are you going hock? >> a little hock opening bell rig aerhi htft ts.

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so you can head into retirement with confidence. brighthouse financial established by metlife. >> you're watching cnbc "squawk on the street. busy wednesday, the anniversary of election day last year, more races last night nice wins for the democrats. the president is in china and snap chat earnings and tax bill. "washington post" reports that corporate tax might go a year late to save $100 billion. richard lefrak said that's splitting hairs. >> i don't think it's going to happen at all. maybe a little the differences are very sizable of what they are talking about and there are republicans who

everybody kind of figures just lose their job immediately and in the states that must have some say i don't think there's anything that makes me feel like that they've sorted out various rates for different deductions, the 500,000 mortgage, obviously the people will fight that you're alienating lobbyists who had so much power, i don't believe they won't be able to say, whoa, let's hold this up. >> there's big questions about some republicans want the medical expense deduction preserved. there's still the question of whether or not it repeals the individual mandate >> i can't figure it out. >> 48 hours before we're expecting a marked up bill. >> i'm looking through -- how many times can you call your accountant to ask how bad or bad. >> to become a pass through, whatever you need to do. >> this is the back bone of the economy. >> i've heard that >> john oliver.

>> he's very funny, he thought i would hate him after that. i loved it. >> let's get to the opening bell, s&p at the bottom of the screen at the big board it is celebrating its ipo, four seasons education for elementary school students in shanghai and nasdaq at the ulta, celebrating its tenth listing anniversary and manhattan store opening. >> ulta has been in the cross hairs of a lot of shorts from elf, there's a sense that cosmetics slowed down but when you talk to fabrizio, it's not they do stuff with mac in ulta beauty it settled in the low 20s area of the surviving retailers costco gets the low 20s and walmart is too low i keep hearing when i was out in silicon valley, walmart is spending a fortune to beat

amazon and i've got to tell you, i think we're going to be impressed with walmart and jet.com. >> yeah, you think so? and the guy who runs now dot com who was brought over >> you kept hearing that walmart is not going to be -- royaling the market, also diane green talked about the notion of trying to -- the amount of business she's the ceo of google web services they've got this analytic thing now that makes it so they are definitely equal to amazon because mark does the amazon one. i keep waiting to hear what satya has at microsoft and what he'll do with azure. they have more business than they can handle. if i work there as a sales person, i would would be like 100,000, 500,000, a million, yeah, done then when you listen to the snap call, by the waythey pay googl a lot of money, you get the sense that nobody is calling hey, $3,000?

wow, biggest of the year okay, i'll go tell evan and he have ven, we just did 3,000 and evan goes -- we own the company -- >> a lot of marketing analysts looking at the shift in ad prices down as they went to problematic. >> why didn't say say programattic has no margins whatsoever the street, my other job, i remember when they first explained it, i said, i get it, i mean we'll just make much less money. yeah okay i didn't want to put it that way because i didn't want to make it so you were upset, jim. >> meanwhile -- >> welcome to the show. >> i'm trying to do other things, listening to you -- >> all i have is a new tie. >> i love that tie. >> beautiful. >> i got it in milan milan -- >> that's beautiful. that's a beautiful tie i want this tie -- >> wow. >> jim stewart -- >> carl, you've got to feel that

tie. that is so soft. >> like a 500 count. >> i've got to have that >> let's talk about at&t and time warner. we can read minds at this point. shares ever time warner are down this on comments from the company cfo john stevens and i was trying to find it in my mailbox here specifically. i know we have it. let's put it up. wells fargo conference and base he canal ically mr. stevens changing the time line for approval of the deal here's what he said. all approvals have been received back from doj. we're in active discussions with doj and continuing i can't comment on those discussions but with those discussions i can now say the time in closing the deal is uncertain. they've been talking year end now they are not listen, if you're in their position -- let's go through this a bit. >> we've got time. >> you've been negotiating this for quite some time, the consent decree would have appeared at one point, then you get dell ra

him put in as the antitrust guy. and he suddenly begins talking about the lack of we hair ybehal remedies, lack of consent decrees and having to do something structural that's where we are. we don't know how long this is going to take but if you're at&t you're not going toput a time line on it, are you? >> because there's no antitrust file -- >> jim, it's a dream up. i love the way you say that. 40 years there has not been a vertical integration has been blocked. 40 years so the idea -- >> what do you have to go back to >> i don't even know the idea this is blocked from the very beginning seems highly unlikely, however, politics seems to at least be something people want to talk about when it comes to the perceived opposition from the department

of justice. >> the president has made no secret of his disdain for cnn and coverage of its administration, of the most recent reports from robert mueller when they were reporting on pending indictments and ended up being manafort and gates, that was the other guy's name. the question continues to be raised, is he somehow trying or being perceived to apply pressure to gain leverage on cnn through delaying this? we don't know. there's no proof of that it comes up in the dialogue all the time around this deal. on the investment front, there are still plenty of people who think timeline delayed perhaps but if they go to court which conceivably if they want to try to block it, they have to. at&t would meet them there and everybody thinks at&t has an incredible strong case to win would delay it even more. >> i caught off baker hughes halliburton, technology. there's nothing they can do to remedy because there's no real

violation. >> the question is if you allege a structural defect and they need to sell something -- >> what are they going to sell >> by the way, the justice department has been a little apolitical nixon's wasn't and jimmy hoffa, jfk, when they set up to get hoffa, otherwise, justice is supposed to be like guys, hey, listen -- let me figure this out. >> the president -- >> there's like a body of law, david. >> the president most recently said in a radio interview, i'm not supposed to be involved in the justice department and not supposed to be involved with the fbi and doing the kinds of things i would love to be doing and i'm very frustrated by it. well, i'd like to know what the great american thinks about this. >> i think he thinks -- i don't know what he thinks. >> i think he's probably staggered. it's hard when you have -- there's no -- what are they going to do? what are they going to divest? the first few games of march madness? >> they have been working

towards and those comments from mr. stevens indicated they had an agreement on a so-called consent decree which would have behavioral remedies for a period of time around the deal and then they've been delayed i think a lot of people are wondering, well, why quickly elevation partners antitrust reaction is that this is overdone, deal trading now only 60% probability of closure, we think that market implied probability is too low. >> arbitrary ka preeshs ruling, i really think so. >> we haven't had a ruling. >> intervention. delay. >> delay, you're really -- you're a diplomat all of a sudden >> just like the facts, okay >> time warner is in the bottom five of s&p laggards. >> i'm shocked by this i remember when they proposed it, antitrust, you can check off the boxes. and no, there was -- well,

it's -- >> it's taken longer than people anticipated. >> david faber when he breaks the news then the companies have to do the deal the pressure they feel when you break that news. david, people are buying colgate, furiously betting there's going to be some sort of deal and i regard that as a bgl is it a bgl? >> bgl >> you bag the people by talking about colgate. you get it up and then you liquidate it bgl. >> it may be i don't know i've heard nothing i don't even know where the news source is for that. >> they no kraft heinz has to do something. >> there's a belief they have to do something separately. we talk so often about the limited ability of kraft hines heinz to do anything in a less than friendly way which they hurt themselves with the failure to execute at all on the

unilever bid. >> there's a reason colgate is independent, they have fiercely guarded their independence for years and years but you see kraft heinz' stock going up and people think there has to be something going on. >> i don't know. >> do you think ackman will get involved with kraft heinz? is he still going to come on -- >> after yesterday i thought you asked very nice questions, actually. >> i was sweet. >> you were. >> i was very sweet. >> we might go a couple of days without ackman on the air. >> you think so? >> i saw richard gel fond was on. >> and spencer was on -- >> no, come on, spencer was not on >> he was >> he's on today >> thank heaven's. >> and we were talking about food i want to get to wendy's, down 4% back to april levels it was a miss, revenue was light and they see labor costs going up four. >> what's incredible, that was a really big miss. mcdonald's, which is the labor

king and burger king, which is quick serve restaurant are not seeing this. when i went to wendy's recently, i shop low prices and terrific experience but the winners are -- the winners are mcdonald's and quick serve. and it's just -- it's almost an issue of price wendy's is just min xul amount more but i think mcdonald's has the scale. people for a moment just -- wendy's was a big miss, i'm surprised. after the red robin. >> should have believed something, little more red rob bin. >> you know what's done okay shack, coming off 30 around labor day. >> maybe it's paid its dues. what is a shack per share? same shack -- >> let me ask you something. is it same shack number kind of like ge's accounting >> like what >> ge's accounting they don't use same store.

they use same shack. >> ge is watching, come on, one show, just one show can you not mention us. >> we mention adp i think it's only fair to mention the things we mention every day >> ge hanging in above 20. >> is it really? >> yes. >> it's really trying to flat line and hold that line. >> walmart is leading the dow, jpm dragging it. let's get to bob pisani. >> good morning, carl, this was a crumby open, 5-1 declining to advancing stocks, transports down, expediters having problems on earnings. banks are down again the 10-year yield has been down four days in a row energy is trying to consolidate the new 56, 57 trading range for oil industrials kind of weak defensive names and consumer staples on the upside today. it's one year since election, you heard the guys talking about. let's talk about who gets credit the president claims he's responsible for the stock market rally and s&p is up 21% since president trump was elected but

the entire world is up 21% look at this since the election, hong kong, korea, india, japan, germany, i can go on and on, global stock market rally. what is responsible for the rally? i think you can look at several factors that are obviously influencing what's going on. number one, we have record u.s. corporate earnings and we're going to continue to get the expectation is we will continue to get record corporate earnings, that is the number one factor in the rally that we're seeing number two, we've seen the return of global growth. the u.s. outperformed global markets for the last five years but in the last year, we've seen some global growth and other markets have now started to play catch-up with us as a result of that. that is number two most important factor in why we're getting a stock market rally around the world you can also throw in a relatively benign federal reserve and mr. powell looks like he may continue that. that's a big threat to the market if they get more aggressive in 2018 i do think president trump should get some partial credit for this rally and particularly

the more business friendly environment that's out there there's certainly a perception when you talk to people in the markets and business people, concerning president in the markets that there's tax cut is going to add to earnings, there's a perception that it will and that there is a generally more business friendly regulatory environment overall if you look at the s&p 500, i have asked many people, david costen yesterday, strchief strategist at goldman sachs, what would happen if tax cuts went away? he said the s&p would be worth around 2400 rather than the 2587 we're seeing now that's a 7% drop in the markets, that's typical of what people say if this tax cut thing goes completely away. more on trump and the markets at my trader talk column, trader talk.cnbc.com. ipo in china, a lot of chinese nationals here today for a big china ipo. education ipo zr are doing well,

ten million shares at $10. looking at indications that are a bit higher, 11 to 13, saw flashes of public ind indication another big chinese ipo, sogo, one of the big international mobile search engines out there, 45 million shares, 11 to 13 is the price talk we have possibly ten, maybe 11 ipos this week, busiest week of the year we'll have another ten next week the markets opening up a little bit but still down on dow 30 points. >> busy on ipos and m and a. another week might have been by far the biggest story and still a big one, broadcom unsolicited bid to acquire qualcomm for 10 billion, 60 of that in cash. that's the offer we've yet to hear from qualcomm officially rejecting it but that

is the expectation on both price and on the potential ability of the acquiring company not to get it done on antitrust grounds they'll build a defense on that. less than a month from now december 8th, that's the deadline -- a month exactly, the deadline for nominees to be on the board which will be decided at the company's annual meetings and scheduled for march, although that could slip a little bit broadcom is interviewing candidates for that board right now. going through names and talking to potential people who would stand for their slate to challenge existing board members at qualcomm, to use that as a ability to replace them and therefore get what they want, should and when qualcomm firmly rejects them doesn't mean they are going to do it but they certainly are keeping their options open and

they are very serious about potentially following that slate by the december 8th deadline to challenge board seats for the annual meeting that follows the number of months later that certainly will potentially at least the idea of it will put pressure on qualcomm to come to the negotiating table. will it work probably not will a proxy fight work to put pressure on them to come to the negotiating table and perhaps raise at some point along the way again prior to the annual meeting? maybe, that's what you're trying to figure out here and trying to design for if you are broadcom, certainly, but this is going to get elevated it would seem to the next level in the not too distant future and the question will be what will be the response and what will qualcomm shareholders have to say what is their view 70 that's probably not going to carry the day. 75, 80, where would they go to when they do challenge for the board or who they choose to wait

a year and a half before they can make sure they have antitrust approvals, it doesn't seem they want to. he's an aggressive man, your friend hock tan. >> my friend i haven't even met him. >> an upgrade from qualcomm, they say the upgrade doesn't assume the deal closes but call reflects the attractive risk reward among the possible scenarios and the fact that the worst case scenario, nxp not closing and apple not being resolved is not a likely outcome. sorry, we had it for you, now we can quickly move through it because -- >> essentially the same thing today. >> i have a cramer report. >> give it to me. >> i've got more to tell you. >> qualcomm loses against apple. qualcomm has trouble paying the dividend qualcomm is without a portfolio and greatness, because they always talk about how great they are. what's your safety net hock tan that's how it's going to play

out. >> his level of confidence, david, when i talk to that team, the level of confidence just tells me they have a card up their sleeve but it's not their card it's apple i think apple prevails if apple prevails, this stock is going to be much, much lower and there's broadcom saying come to papa tan >> by the way, real quickly on nxpi where a lot of people think that's the pill -- qualcomm could pay 140 bucks a share and completely screw the deal that broadcom might want to have. >> it's not going to happen. >> of course, broadcom would rather the deal died completely but they'll do it. we'll see where they end up. they'll go up. >> hock tan -- >> he needs a deal because they have to get out of the cell phone business. >> they need that deal. >> that's not incorporated into the price he's willing to pay,

the benefits of that deal. >> elliott is a shareholder that advised many people not -- my charitable trust won't tender. but we have to move on. >> we have things to get to, including rick santelli at the cme group in chicago take it away >> thanks, david the flat track continues in treasuries now let's look at the individual components and let's look at the shortened represented by the one week chart of two-year note yields, a very slight upward curve, upward slope. 10s, exact opposite. we looked at six days in a row this could be the six day yields or lower hasn't covered a lot of ground but breaking away with the short end. we started 2.38 and here we are seven basis points lower in yield. it isn't only tens and twos. look at the one week chart of tens and twos, covering a lot of ground at 68 a one week chart of 30s minus

five under 80 the following spreads, it isn't only the biggies, ten minus five since september 1 stt, getting close to 30. minus 10s, it's hovering right under 50 so the entire curve, and various pieces may at some point invert without the longer inversions, kind of like the chinese yield curve. and finally, the dollar index. i picked the july 1st start. you know, it's toying with some significant levels above the market, but it really is holding some of the breakout levels at 94 you see the right-hand side, really tight consolidation traders are selling volatility, but still a bit bullish, the dollar back to david, carl, and jim >> thanks, rick. we'll talk to you soon when we come back, former twitter chief dick costolo we'll get his take on the company doubling the amount of

characters per tweet >> dow, financials struggle to get out of the gate. we're back in a moment [ keyboard clacking ] [ click ] [ keyboard clacking ] [ clacking continues ]

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street." i'm carl quintanilla with sara eisen and david faber. dow is up six days in a row but settling back today alt the open, down about 36 points the president in china, obviously the election night last night, the anniversary of last year's snap earnings and the tax bill >> our road map for the hour begins with one year under president trump. we'll take a look at the bull run since the election and the companies under fire since trump took office. >> snap shares are getting slammed as results disappoint and the company's ceo pledges a redesign of its app. >> in the hot seat, the former ceo of yahoo, marissa mayer, along with the ceos from equifax testifying on capitol hill about cybersecurity breaches >> we start with the markets this morning, down a little bit. the dow coming off its sixth straight day of gains. just fractional declines though. this as we hit the one-year mark since the presidential election

where we have seen all the major averages rise over 20% so where do we go from here? let's bring in liz ann saunders from charles schwab, and gabriella from jpmorgan. reflecting on one year, what strikes me is how wrong everybody was, not just about the election but what stocks would do under a trump win so easy to find. you find it all over cnbc and some of our competitors. bridgewater predicted a 2,000-point drop in the dow if it happened and look what happened since what did everyone get wrong? >> not to make this a political statement, but i think the primary reason for the move we have had in this period of time were -- was a function of two things that occurred preelection, which is two very important inflection points. one in global growth all 45 oecd countries are growing now. the first time in ten years. 33 of them have accelerating points of growth, and the

corporate earnings predating the election it's the counterfactual. it's easy to say the market probably would have done well under any circumstance in the election, but i think those were the most powerful drivers. >> and some of the other predictions, gabriella, emerging markets would not do well in an america first world. they sold off quite sharply in the beginning, technology companies. donald trump bashed on the campaign trail that was considered a bad bet. those have been bigger winners than the s&p 500 >> this is not about politics. it's not about the market responding to policy it's much more about these underlying global reflation trends and that's something that's very positive for emerging markets, for example. the other thing to think about is we didn't actually see a lot of those negative things that people were expecting that could have been very dangerous to emerging markets such as protectionism, right so there's both things going on that have helped some of these asset class. global reflation as well as the lack of protectionism that some people were expecting.

>> we would rather have it this way, right we would rather have the market reacting not to policy but to global reflation more steady than policy often is >> it's always nice when the market is reacting to fundamentals the other important fundamental which has been the entire underpinning for the market has been a massive amount of global liquidity. any market is a function of supply and demand. prices go up when there's more demand than supply given the shrinkage via stock buybacks, the 5,000 only having 3800 stocks in it, limited ipo activity in the last eight years, and $25 trillion of excess liquidity sitting on central bank blassheets and it has to find somewhere to go, and it's gone into asset markets >> where are the cracks in that? you see any reversals in any of this, whether it's household credit or we keep talking about high yield all year. to little avail.

>> i think what we have to think about in 2018 for the next few years is we shouldn't be expecting the same pace of returns that we have gotten this year out of the u.s. we should not be expecting double digit returns for the rest of the expansion. it is still a later cycle kind of economy, right? we are expecting earnings growth to moderate. and that's why when we talk to our clients, we talk to them about are you too overly concentrated in the u.s. are you really appreciating that there is a global reflation rally. that it is about other houses on the block beyond just the u.s. >> i get this argument, and you see it in overseas markets, no question about it. but then, how do you explain the sharp spike in confidence from investors and businesses, small businesses, and consumers post-election? >> i think the calculus there was not so much about an expectation for immediacy in the fiscal policies, whether it was tax reform, regulatory reform, but i think the calculus was it's not going to get worse from here tax rates are not going up from

here the regulatory structure is not getting tighter from here. that's what represented the surge. the good news in terms of the prospects for some of this fiscal policy is it's not in the numbers yet. where don't know a single economist who upped their gdp forecast because of tax reform or tried to put into the calculus the regulatory piece, which has been an ongoing piece. i don't know any analysts who tacked it on to corporate earnings numbers i think that would be the upside if we eventually got those things, but i think during the election what boosted that confidence in animal spirits was sort of a sigh of relief on those two major fronts, it doesn't get worse from here. >> and the deregulation, which seems to be less talked about but happening on an agency level in the government and impacting certain agencies what's going on with bond yields here treasury yields back down to 2.30 on the ten-year boons at the lowest level since september. why are yields moving south again? >> it's been very interesting to

see the extent of flattening of the yield curve. and i think it speaks less about economic growth or inflation expectations, and it's much more about the tremendous amount of liquidity we still have floating around the market. and when we think about 2018, that's something that's not likely to continue right? we do have the ecb they're not calling it, but they are tapering their qe purchases. we do have the fed ramping up its process of bringing down the balance sheet. so that dynamic is likely to change but we don't look at this flattening of the curve and think it's a harbinger of doom in terms of the economy. >> regional banks are on pace for their fourth day down. we haven't done that 6 july. is that a reflection of the curve or some of the complications we keep hearing about regarding the tax bill, both >> i think probably both, but also, correlations have crashled we're getting these sector rotations that are a bit more fierce than when we were in a

highly correlated market, both in the asset classes and in the s&p 500. you're going to continue to see that correlations stay low. it's to the benefit of active management, to the benefit of the notion of diversification, but it also means you're going to see sharper moves within sectors. >> and within the u.s., but also globally, right? we have had a very sharp move down in correlations amongst global markets so what moves the u.s. doesn't necessarily move europe, and that's a really good environment for that international diversification. >> thank you for joining us. >> thank you so much >> with a look back and a look forward, one year. liz ann and gabriella. >> as we have said, it's the one-year anniversary of the president's electoral win. ameamon javers joins us with a look at the companies that have been in the president's crosshairs since day one and even before. >> good morning, carl. i don't have to tell you we have never seen a president who has tweeted like this president has done as a core part of his political and his media messaging, getting his message out there to the american voters

around what he calls the filter of the media we have never seen a president willing to criticize and praise american businesses by name as this president has we asked the cnbc vaunted data team to take a look at the tweets the president put out naming specific companies. more than 15 specific companies named by the president in tweets over the past year looking for some patterns here as to exactly what gets you on the president's criticism list and what gets you on the praise list some surprises and some things that are not so surprising in all of this. not so surprising is what you have to do as a company to be criticized by the president, including distancing yourself from trump or the president's family that will get you a negative tweet. building a plant outside the united states. overcharging the taxpayers in the president's view, all those things could get you as a company a negative tweet from the president. how do you get a positive tweet? pretty much the inverse of that. open a plant inside the united states announce a job creation initiative or invite the president to an event at your plant with your workers. all those things seem to generate positive tweets from

the president. here's what's surprising, though, is that this isn't just pixels flying out there into the air with no real value there is a real measurable dollars and cents impact to all this take a look at this stat that we dug up in looking at all these different tweets of the president. positive tweets seem to have a 1.1% immediate stock price impact in the very short term in the wake of the president's tweet. the inverse of that, negative tweets down 1.2% overall in terms of the stock price this is right in the wake of that tweet a very short-term impact, but our data team did see it and that can be expressed in dollars. takeaic l a look at this. positive tweets seem to generate $1 billion for companies short term, the negative tweets down about $1.3 billion there's a number of caveat here which i probably don't need to tell you one of which is a lot of factors impact these stock prices. there are things going on in these sectors overall that are

bigger than the impact of the trump tweets so it's very difficult to sort of assign an apples to apples comparison in terms of what's actually moving the stock prices, but you do see the spikes up and down after the president tweets when you measure them, on average, that's what you come out with fascinating impact here. >> a whole new paradigm for companies and their pr teams and investors. eamon, thank you >> when we come back, a disappointing quarter to say the least for snap we'll break down what it means for the stock and the future of the company. shares down almost 13% plus, we're keeping an eye on capitol hill for you this hour the former ceo of yahoo, marissa mayer, along with the former and current ceos of equifax are getting ready to testify before the senate commerce committee. we'll monitor it for you, bring you any highlights and headlines. quk t see wl be right back last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques.

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welcome back to "squawk on the street." take a look at snap right now, down about 13% the company reporting the earnings miss due to the spectacles product they face competition from rivals such as instagram michael graham's an analyst, victor anthony is an analyst good morning to you both what a story overnight victor, you had a hold you keep it. you take your target down to 13. and you have a section about silver linings what is silver about this? >> well, yeah.

i mean, you look at engagement was up, so that was positive they noted on the call last night that a number of advertisers on the platform is up about five times since the beginning of the year. ad impressions were up by triple digits ad loads are still low compared to if you see the narrative coming out of facebook, they're pulling back on ad load growth i think snap has the ability to increase ad loads in the next one or two years with all of that said, plus the 10 cent investment puts a floor on the share price all that said, they did miss revenues for the third consecutive quarter. that's a very, very big negative on my part >> yeah, you broadly say the model remains a work in progress, which is not often something we say about companies that are already public. >> yeah. i mean, in many ways you can probably argue they probably went public too soon what also is happening in the market, if you look at the earnings for the technology companies in the third quarter, all of the subset platforms with

a few exceptions, all of these subscale platforms are having a difficult time driving per user modernization within the presence of google, facebook, amazon, and netflix to a certain extent and you also tack on the fact we're in the midst of an advertising recession. that's what you have seen play out with the numbers coming out of snap as well as the fact that they're having an inability to monetize because of the programmatic shift that's pressuring cpms. >> michael, i want to get your view, and specifically drill down on what do you think this redesign could look like and might do for them. >> yeah, you know, one of the things that's really happening in this marketplace is when advise tizers go to facebook, they're so impactful because it has such great data on users what we're seeing happen at snap is some of the initial advertisers went on the platform, maybe had an okay experience, but as snap opened up the platform to the great massive advertisers,they're

coming on and saying we're not getting great value for that spend. they're driving the prices for each ad lower. that's not a great trend for snap and i think, you know, one of the key drivers there is that snap has to do a better job of getting more engagement from its users. and then capturing the data from that engagement. so i think that the app redesign, which is going to take several quarters, probably, to become solidified is really oriented on those two things helping to improve engagement of the user base and also helping to do a better job of absorbing better data from those users >> victor, i'm wondering why you have confidence that it's going to work. there appears to be a very large disconnect between this company and what it delivers on a quarterly basis and wall street expectations and also, the entire business. that conference call didn't inspire much confidence, the fact they said tie have to totally redesign the app because it's not working and hard to understand, and they don't know how it's going to impact the

user which is what made it so valuable to begin with >> i had a difficult time hearing the last part of your question >> sorry it's a little loud down here i wanted to know what gave you the confidence after the earnings call and after the big mismatch of expectations between wall street and what the company has been delivering on a quarterly basis. to buy the stock and to see the long-term vision here. >> just to be clear, i have a hold on the stock, so i'm not making a recommendation on it. but you know y have seen companies with the right level investment over time, it could possibly work. the visibility into whether or not they could drive up pricing on the platform, that visibility remains low today. i do think the platform redesign is fraught with risk you know, whenever you see these huge platform redesigns, there's a chance users could defect on the platform i think it's the right thing for them to do i think right now in order for them to drive users, they have to capture, i think, users above 34 years old

the older users have to come to the platform i think they have acknowledged that they're going forward with that redesign my confidence is low, though which is why i have a hold on the stock. >> michael, over to you for a second what do you make of the 10 cent investment it may be helping the shares be down less than they otherwise would be given how bad that report was. >> yeah, i think it's definitely helping. it's interesting because it didn't really come up during the earnings process last night, but when snap files its 10-q, you know, this ownership level was disclosed. 10 cent has been an owner of snap since 2014. it's not quite clear how much that ownership is ramped up until very recently, but snap did say it was a little over a 10% stake as of yesterday. you know, tencent has been doing a good bit of investing in some u.s. internet companies. i think in part, they're trying to sort of learn and get access

to executives and sort of understand what's going on in the ecosystem. it's obviously an extremely well run company with market dominance in its home market to me, it doesn't really mean that snap shares are overvalued or undervalued it's opportunistic for ten-cent to gain a bigger hold and try to figure out how they might be able to enter the market more completely one day >> really quickly, victor, i want to get your take on twitter. journalists love to obsess about the 280 character count, but there have been some smart pieces about what it might mean for the model, whether or not it does drive engagement or time spent. you have thoughts on that? >> i think it definitely drives time spent, which ultimately will be a positive, longer term for advertising growth clearly, they have tested it, they have seen positive results. they're deciding to roll it out to the masses. i think it's a positive for them

longer term. >> michael >> yeah, you know, twitter has some similar issues to snap. the product has not been proven to really drive higher engagement twitter is also struggling a bit with user growth so i think, you know, both properties have the need to keep innovating on the product front. you know, raising the character count, i think for twitter, is something that's probably going to help. to me, they need to just do a better and faster job at innovating and trying to make the product more appealing to the masses you know, it's really useful for consuming realtime news and as a platform for thought leaders to disseminate their views. as you were just talking about with president trump in the previous segment but i think that for twitter to really become more of a mass market, everyday, must-use product like google and facebook and amazon, and some of the other internet leaders, i think they're going to have to do more than raise the character count

>> we'll see clearly, obviously, stock not responding very much today guys, thanks very much talk good to talk to you. >> we're keeping our eyes on the hill this morning. marissa mayer, someone we have not talked about in a while, testifying today about the security breach in 2013 at then the tech giant yahoo, which affected, we now know, 3 billion of its users a number that kept going up and up and up with each consecutive estimate >> that's probably going to be one of the focuses of the questions, which is what did you know when and why did it take so long to disclose it, from 1 billion affected users in october to 3 billion after they had been well into deal talks and announcements with verizon, which knocked $350 million off the deal price because of the scope of the hack. >> as we head to break, take a look at shares of taketwo

interactive. jim cramer and i went over this earlier. great quarter. stronger than expected holiday season sales forecast. the video game publishing company getting a boost from its latest nba game. ongoing strength from grand theft auto quk t see bk.oc "sawonhetrt"ack after this [ keyboard clacking ] [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours.

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it is the one-year anniversary of president trump's electoral victory. courtney reagan joins us with a look at how the retail sector has performed since election day. >> retail has had many headwinds that aren't necessarily political or policy related. there have been a number of those, too, since president trump has been elected looking at the group broadly since the election it has shown about 7% versus the s&p's gain of more than 21%. you can see the clear down trend, though, in this chart despite sort of gains here and there. overall, it's been trending lower. retail's biggest win since trump's election, definitely squashing the border adjustment tax, which the sector argued would have forced companies to raise prices around 15%. many retailers pay the highest

levels of tax rates. a lower rate would definitely be cheered by most of the retail group, but stocks haven't proven there's a strong belief so far it's actually going to happen. while most retail goods are made overseas and not in canada or mexico, a renegotiation of nafta could upset some trade, particularly for men's denim makers much of that actually is done back and forth across the mexican/u.s. border. which retail stocks have performed the worse since trump's election, since we're talking about the down trend a scan of the stocks, under armour is the biggest loser, down 59% those losses aren't so much politically rected the ceo made some comments about the president on cnbc that turned out to be controversial and moved the stock. mattel is down 58% foot locker stock has lost 56% since trump's election on the flipside, the best, as of today's market open, it's actually best buy, up 46%. amazon, the company disrupting

nearly all others in retail. and other sectors up 42% since trump's election despite some negative presidential tweets about that company home depot number three, up 32%. back over to you guys. >> i wonder if this is -- it seems like this is going to be a really important sector to watch in the coming year to see if the job growth can continue. biggest industry in terms of employment, and with such structural headwinds that you're talking about, if he wants to get more jobs and higher wages, retail could be a big focus. >> yeah, it's so interesting we know that the president has really pointed out sort of the manufacturing jobs, the coal jobs, but really, look at retail we talk about the department store losses a lot when they show up in the jobs report every month. certainly, labor in retail is a really key area, and the president could potentially have some pretty major sway in this area so i think that's a really important thing that we should be watching going forward. not just next year, but in the years to come as well. >> yeah, think 40 million jobs or so smout exposed to retail.

>> with some connection to retail, exactly. >> courtney reagan back at hk, thanks >> when we return, the ceo of zilla, spencer rascoff is with co renter his company reported rerdevue growth. "squawk on the street" continues in a moment.

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but we're only as strong as our community. who inspires and pushes us to go further than we could ever go alone. sofi. get there sooner. i'm sue herera here's your cnbc news update at this hour. u.s. and chinese companies signing a series of business deals worth about $9 billion as president trump arrives in china. 19 documents were signed during the ceremony the deal spearheaded by commerce secretary wilbur ross and china's vice premier >> addressing the imbalance in china trade has been the central focus of collaborative discussions between president trump and president xi and achieving fair and reciprocal treatment for the

companies is a shared objective. >> a pakistani judge rejecting a plea from former prime minister shareef to have three corruption charges against him merged into one. that leaves him to stand three separate trials with hearings stretching out for months. he was indicted last month and dozens of pro-secession catalans blocking a highway in northeastern spain as part of a regional strike. the blockade caused long lines of trucks and cars on the highway, which is close to the border with france you're up to date. that's the news update this hour over to jackie deangelis for the eia inventory report >> thanks so much. watching crude prices a little lower after this eia inventory report we got a build in crude oil, which wasn't expected. 2.2 million barrels and a draw in gasoline of about 3.3 million. those two balancing each other out. it's a mixed report, but what i found interesting inside the report, the u.s. production number 9.62 million barrels a day that's the highest that we have

seen since the most recent peak, june 5th of 2015 traders are going to be focused on that. what that means is as crude prices have been elevated, you have the u.s. drillers they are drilling more, and they are breaking through some of those records. remember, the trade isn't necessarily being impacted by this report today. this trade has come a long way really quickly up 5% in a week, up 15% in the last month alone and a lot of that has to do with what's going on overseas and in saudi arabia as well a lot of this support is baked into the price, but right now, trading at $56.64. back over to you guys. >> okay, thank you, jackie >> president trump arrived in china overnight. kayla joins us from beijing. she's got more on the president's trips, as we hit that one-year mark since he won the office kayla. >> reporter: good morning, david. president xi welcoming president trump today with some rare hospitality in modern china. some private events at the

forbidden city before bilateral talks between the two countries get under way in earnest tomorrow trump coming off visits to two close allies and military partners where they pledged closer cooperation on north korea, and on twitter just a few minutes ago, president trump surpassing the great firewall that blocks twitter in china, tweeting that pyongyang should not try us reiterating his warning from earlier today, and saying that underestimating the u.s. would be what he calls a fatal miscalculation here on the ground, trump is expected to pressure china to cut financial ties with north korea further to try to balance the trade deficit, but i'm told any long-term policy deals are unlikely an a state affiliated newspaper here in china has dovish diplomatic speak it calls for win/win bilateral operations between the two countries and says, quote, trump holds high the banner of america first, but the chinese leadership will not prioritize the interests of the u.s. over those of china

beijing/washington competition should be benign so now doubt, china will have a wish list of its own what could be on it? here's some things they have asked for in the past. they have wanted to be recognized as a market economy they have wanted a fast track to do deals in the u.s. both of those were denied by the obama administration according to trade officials that i spoke to in april, trump officials granted china their willingness to recognize this one belt, one road infrastructure initiative, but one thing they still want is they want further engagement on this bilateral investment treaty well, that had been negotiated by treasury secretary steve mnuchin, who is not here so it's unclear whether that would progress at any point during the day tomorrow. it's going to be a jam-packed session here in beijing. we'll bring you more as we have it but expect a lot of developments, both on the national security and the economic security front. back to you. >> all right, we will, kayla, thank you very much from beijing tonight. watching zillow today,

recording its highest profit ever in its latest quarter, getting a boost from strength in all of the real estate firms marcus places. the revenue outlook also came in above consensus. still shares are slipping about 2% this morning. joining us now for cnbc exclusive interview, zillow group ceo spencer rascoff. welcome back nice to see you. >> thank you good morning, sara >> revenues up 25% looks like the growth is coming from agents spending on advertising. what's driving that? give us a little picture of the business right now >> sure. revenue overall up about 25% about 70% of our revenue comes from real estate agent advertising. that part of our business is doing great. and what happened is earlier this year, we transitioned from a fixed price model to an auction price model. instead of zillow group deciding how much agents pay, now the market is choosing that's having a benefit on our business now, the hard work begins of trying to help agents improve lead conversion. that means helping agents with software tools and training so

they make sure their advertisin is more effective. they can convert and become transactions when that happens, agents are willing to pay more, and everybody wins, the advertiser, the consumer, and us >> 98% growth rate in premier agent spending, stuff like that. duds it say something about where we are in the housing cycle, the strong outlook you provided we did see newhome sales leap in the month of september, up almost 20%, though not quite the numbers on existing sales. >> yeah, i think our revenue growth really says something about how agents spend is shifting from off line to online when you have the huge audience share that we have online, we attract the lion's share of the ad budgets as they shift online. in terms of overall housing, housing is hot home values are up about 7% year over year. it's a seller's market and what's happening in housing is constrained inventory we have 12% fewer homes for sale today than we had a year ago and so because of limited

inventory, home values are going up it's harder for buyers it's better for sellers. >> which makes this tax bill really interesting, spencer, especially after what the nahb said about the morgtgage interet deduction. how damaging would that be >> the tax bill, it's hard to opine on the tax bill because it's a moving target there are parts of the tax bill we think would benefit housing things like increasing the standard deduction, which in theory should help middle-income renters save for a down payment. there are parts of the tax bill that will hurt housing on the margin on the mid it's important to remember it's about an $80 billion subsidy for housing. there's only a slight reduction in that. for us, in our view, it's a very large amount of subsidy to housing that doesn't really stimulate on the margin incremental housing trance acti transactions there's a lot of other ideas that could be on the table, like

helping first-time home buyers with a tax credit. credit assistance. trade-up buyer assistance. those aren't really on the table. i think the tax bill as proposed today mostly side hp steps housing, not directly aimed at housing. >> you dent think it will hurt housing values and markets like new york city, where those big mortgages are needed >> it hurts it a little bit. on the margin, in very expensive areas. taking the whole kuncountry as a whole, it's small. overall, only about 10% of houses fall into the m.i.d what we're talking about is reducing on the margins. yes, it will hurt high-end home values in new york city, for example, but frankly, what will hurt the homeowners more is changes in the tax rates overall, not as much the m.i.d so i think overall, tax policy as proposed today, it just, as i say, side steps housing and focuses on other parts of the tax code >> you mentioned housing prices

are rising 7%, does it still make sense to buy over rent or do you have to pick which market you're talking about >> you definitely have to pick which market, but more importantly, you have to think about the time horizon in most parts of the country, the time horizon where you buy instead of rent is long. in new york city, it's a relatively long time horizon because it's so expensive to own as compared with renting they're both expensive, obviously, but in other parts of the country, the time horizon is very short like in detroit, if you're going to be in a home for more than a year, you ought to buy, not renlt. this is a very important metric. you can find it on the web on sites like ours and elsewhere, but that's what people evaluating rent versus buying need to think about. >> we have been doing this whole theme on cnbc today looking at the economy and industries and stock through the prism of one years since president trump was elected. your stock's up about 15% in 12 months just a little behind the overall

market do you see a big impact in the housing market on business confidence, or through mortgage rates as a result of last year's election >> i think regardless of how you voted in the last election or whether you approve or disapprove of the president, i think we can all agree the economy is strong. there hasn't been great wage growth, but there's been job creation gdp growth is strong that helps housing, for sure what we need in housing, though, is more houses we face a housing shortage, both on the foresale side and on the rental side as a result of the recession in 008 there were hundreds of thousands of homes and apartment units that were not built between 2009 and 2012 through the economic recession, and now in 2017, going into 2018, you see the impact of that is limited inventory, means it's a seller's market, home values are going up what we would like to see is pro-growth policies that help development, help home builders build new homes. help apartment wildings come online that's what really helps housing from here.

general economic environment plus more housing units created. >> we have been hearing that supply shortage for a while now. spencer, thank you always good to check in with you. the ceo of zillow group, spencer rascoff. >> getting news on sanctions in cuba michelle caruso-cabrera joins us >> good morning. just got off the call with senior white house commerce and treasury officials about the new regulations announced this morning in terms of thiment pablth on our viewers, there's a list of 200 entities connected to the cuban military that you can no longer do business with if you're subject to u.s. jurisdiction, specifically 83 hotels thereat are part of that list and also the port where the cuban government had been trying to encourage investment. if you're going to be traveling there and you haven't booked it yet, you cannot stay at the newest, nicest hotel in the island, it's $600 a night. you're going to have to stay somewhere else previously, grandfathered in

hotels are still okay. remember, marriott haa deal with the sheridan, which isn't nearly as nice, but it's more restrictive, your ability to go there and where you're going to be able to stay and spend your money as a result of what's been announced this morning back to you. >> that's big news thank you very much, michelle. michelle caruso-cabrera at hq. >> as we go to break, take a look at stocks dow down for the first time in seven sessions s&p and nasdaq if lowered today would be back-to-back losses only the third time that's happened in two months n'gow dot ay. once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing.

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former yahoo c erko marissa mayer in the hot seat on capitol

hill she's testifying before senate commerce along with the current and former ceos of equifax adede roy joins us with more on the hearing. >> hi, there the hearing got under way about 40 minutes ago, and marissa mayer along with the equifax executives have given their opening statements in her opening statement, she talked about yahoo's breach, which affected virtually all of its 3 billion users. right now, you can see a live shot there of former equifax ceo richard smith speaking marissa mayer said the company learned of the breach in late 2015, at which point they notified law enforcement and users. she also apologized for the hack >> as you know, yahoo was the victim of criminal state-sponsored attacks on its systems resulting in the theft of certain user information. we worked hard over the years to earn our users' trust. as ceo, these thefts occurred during my den itenure, and i wat

to sincerely apologize to each and every one of our users >> upon questioning, she testified that she still doesn't know how the intrusion took place. with the rise of state-sponsors attacked, no company is safe from hacks we also heard from current equifax ceo. he, too, apologized for the breach that occurred in his company with 145 million americans. he, too, has apologized and said the company is taking steps to secure itself from future attacks. mayor appearing before the committee after being subpoenaed, and the committee is taking a look at how the breaches happened and how consumers can protect themselves we'll monitor the hearing and keep you posted on the latest developments >> thank you let's send it over now to john with a look at what's coming up on "squawk alley." >> it's going to take more than a filter to make snap earnings look any better than they were >> plus, twitter has some changes now with 280 characters rolling out to everybody, so

what is twitter's former ceo dick costolo think of all these changes in social media? we'll ask him on "squawk alley." [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours.

let's go to cme in chicago rick santelli, good morning, rick. >> good morning, thank you i'd like to welcome my first time guest ira, thanks for taking the time today. >> absolutely. glad to be here. >> if you look at the news cycle over the last three months to two years, intrigue, cuba, russia, government agencies, politicization of things in politics and relationships and trying to find transparency. i'm not talking necessarily about the times we live in, i'm talking about the similarity to 54 years ago i was born in mid-50s, november 22nd, 1963, john f. kennedy assassinated we had a jfk doc release, about the end of october, early november, another one yet to come at the end of april my question to you, sir, a, why all the redactions b, is there something to this

story the public needs to see that you think may be coming out eventually >> maybe is an open ended term we can't speak to what we don't know because by definition we don't know it. the government explained the redactions as something done against the president's will the president said he wanted to release everything, not a single redaction and was prevailed upon by intelligence agencies that there needed to be continuing redactions and further review. the reasons for that broadly described as sources and methods, information that would compromise government sources or government's ability to use the same people, use the same methods, in the future put people's lives at risk to the extent we're talking about information from before 1963, obviously every year that goes by makes that more and more attenuated to the extent files contain documents relating to the investigation of the

assassination that might have been generated in the '80s an '90s, it's a bit more understandable. >> you know, ira, i remember it so well. i also remember lyndon baines johnson said much released after 25 years that point in time came and went an everything was swept under the rug. i'm very fascinated with the fact that president trump wants a review, wants more put out there. it really is disturbing that whether nowadays it's the irs. the public never learns. sometimes when there's issues the government did things they shouldn't have or didn't give us complete information, all parties seem to agree on a solution, but the public never seems to be included in that loop do you think at some point in the next several years, pending the current president's review, that people of my generation and people now looking for answers will actually get that type of transparency and be completed? it might not be anything there to see, but we need to feel

confident in that answer. >> well, i agree i think that even mr. trump said, i want it all out there. remember, last year trump was speculating maybe senator cruz's father was involved in the assassination, which turned out to be obviously nonsense." he's saying he wants it out there and held back by the agencies what the agencies are trying to protect, people who believe -- who don't believe in the oswald acted alone view of the assassination -- >> ira, we're almost out of time, let me interrupt you this cannot be my opinion about individuals, they are too old or passed away. any redactions would be ongoing relationships with countries like cuba and russia or the fbi and cia. wouldn't that make sense your final thoughts. >> i think we'll know more in six months they say they are going to unseal everything in six months that's not absolutely necessary

to hold back they will either live up to that or they won't. >> ira, thank you. it's such a fascinating topic. i really do think if you're a young person today, you're going to be looking another 50 years down the road, and i hope you get a lot better answers than my kennedy generation have generated. back to you. >> all right, rick thank you. when we come back, the ceo joining us on earnings report. stock moved despite better sales. former ceo of twitter weighing in on the company's new character limit. on snapchat, you won'tant wto miss it. big show ahead on "squawk alley. don't go away. opportunities aren't always obvious. sometimes they just drop in.

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stocks marginally lower, energy stocks among biggest drags so far today. following prices crude oil lower on the heels of supply data in the united states and demand data out of china as well. shares of range resources, newfield exploration has among the worst performers in the sector keep an eye on that overall as

we watch what happens with oil prices that does it for this hour of "squawk on the street. let's head to new york stock exchange for the start of "squawk alley. back to you guys. >> thank you very much 8:00 a.m. at snapchat headquarters in california, 8:00 a.m. on wall street and "squawk" is live. ♪ ♪ good wednesday morning welcome to "squawk alley." i'm carl quintanilla new york stock exchange. joining us former ceo dick