good morning, everybody. welcome to "squawk box" here on cnbc live from the nasdaq market site in times square. it's a little chilly out there we'll all be colder. getting into the winter weather on the east coast. good morning i'm becky quick along with joe kernen andrew is on assignment at the deal book conference today he will be on throughout the day with some big guests joining us for the hour is james lu, founder and head of research at clearnomics we have a lot to dig through the tax plans out there. maybe you can tell us how that will be impacting the economy. >> the tax plan is one of the major legs of the trump trade. you had deregulation, the tax plan and then you also have fiscal stimulus so, the investment community is waiting on whether this will

happen at this point it's a tax cut plan which is still positive for the economy. in terms of whether it will get done this year, people are discounting that if you're watching the markets, markets are hanging in there with some of this. the dow is indicated down by 50 points, the nasdaq down by 4 1/2, and the s&p down by 5 they are all coming off record closes it's been seven sessions in a row for the dow that's higher. the s&p is up six out of the last seven sessions. we'll see what happens slightly lower indication for the morning. we'll see if that holds out. overnight in asia, in japan, the nikkei was down by 0.2%. stocks were higher in china. hang seng up by 0.8% shanghai up by a third of a percentage point in europe, in some of the early

trading we have already been watching today, you will see right now it looks like there's some modest declines the dax is down by 0.3%. the cac in france is off by 0.2% ftse is flat >> in media news, rocking the media world because it intersects with the political world, and with the president, at&t at this point now says it has no intention of selling cnn as part of the planned $85 billion deal to buy time warner. reports surfaced yesterday that the justice department wanted at&t to sell turner broadcasting or directv and they wanted to do that in order to win government approval for the deal. randall stephenson putting out a statement late yesterday i have heard this from him two, three months ago moonves at sun valley or

something, and randall said everyone wants cnn he said i have never offered to sell cnn and i have no intention of doing so. randall will join andrew ross sorkin at 10:20 on "power lunch. there were leaks and then denials on both sides. the justice department said they didn't tell him to do that either at some point >> the justice department said no, they offered to do this. at&t said no we did not. >> it's front page of the post >> very unusual to see the ceo in the middle of this come out and say this is the situation i have to comment on this. he's -- his hand was forced. he to say something. >> what makes it so tasty and what makes everyone jumping on it is because president trump has called it fake -- has been pointing the finger primarily at cnn for months now >> on the campaign trail, before he was even elected, he said he

would pose this deal based on how large it is and how much concentration there was in one hand >> thinking he would tell the justice department i don't like cnn, they're fake news make them divest that. that's what people want to see the paper trail that leads to that i don't know if it's there it's spicy and sexy. >> what's interesting about this is at&t seems prepared to fight. it won't walk away from this it will take this issue to the courts >> their latest narrative is that a vertical deal has not been blocked for 40 years. >> that's what they've been saying all along >> yeah. and the guy in charge of the government says there will not be political implications to this it will be a totally apolitical -- but is anything totally apolitical anymore i don't know about the market. i don't know about tax reform. and the -- >> for --

>> for having two blue states elect blue governors, the amount of -- maybe you need to look down ballot and see what happened and look at how big the spreads were i understand all that. and you see the discontent in suburbia with president trump perhaps among college educated -- >> does that mean you need to get a tax bill passed or pass something that doesn't tick off the constituents >> every midterm after the president is elected, his party loses a lot. obama lost 60 seats two years ago, whatever it was it was either two years ago or six years ago, both times the democrats lost a lot it was 66 seats in one of the elections. it wouldn't take much without seeing those results yesterday to think that the democrats will make gains whether they retake everything or not >> i think the leadership of the

republican party looks at that and says we have got to pass tax reform you can't fail on obama cair and tax reform i think the individual house of representatives say i need to make sure i keep my constituency happy. if i get rid of popular tax deductions, it will be a harder sell >> and if they do pass the tax bill and it hurts certain people, just passing it won't be sufficient not to lessen the losses in the midterms i'm reading that democrats are now running on obamacare in maine, that was a huge referendum, and governors in new jersey and virginia were pro -- so democrats used to be afraid to talk about obamacare. >> popular opinion changed rapidly. >> when you had your chance to do it as a republican and you didn't get it done, that's another mistake that republicans

made by not doing it when they had the chance it will be -- i don't know i have to talk to james lu about his crappy call last time he was on remember when i was arguing with you? how long ago was that? >> you were right about the wrong thing, all right >> hold on hold on. you were way too bearish >> i was not bearish i said we should be neutral in u.s. equities. six months ago we're up 12% with do you put the rest of that exposure >> i don't know. you just told me in the bathroom that you were -- >> that's a -- that's a good point. >> hold on a second. >> i said you were right about the u.s. >> i was right about the u.s >> wrong about asset allocation. international markets are up in many locations double what the u.s. is. what about now >> the question is what happens going forward. in the u.s. you look at the 20% return over the past 12 months half has come from earnings.

that's justified we think that probably can't continue the rest has come from high valuations, optimism, from expectations -- >> animal spirits. >> animal spirits. you guys talk to strategists every day on the show. everyone has the same story, tax reform, deregulation, global synchronized growth. there are few risks people are talking about. with valuations high, with earnings -- >> with rates going up, the multiple is going to expand. >> probably not. >> they may contract >> yeah. >> so the general view that over the next ten years we should see mid single digit equity returns, that wasn't true this year we should be thankful for that >> we have heard that line for the last ten years, everybody that has come on here said mid single digits. >> the difference now is valuations are quite expensive you should be fearful when others are greedy, and greedy when people are fearful. >> it's a question of whether that froth is really there yet >> in the last year it's been

27% or 26% that mid single digit -- >> he's right, international has done well. you're not the only one keeping an international focus we have president trump who is continuing his trip through asia today. the president addressed a group of business leaders in beijing and credited china for taking advantage of the united states >> both the united states and china will have a more prosperous future if we can achieve a level, economic playing field. right now unfortunately it is a very one-sided and unfair one, but -- but i don't blame china [ applause ] after all, who can blame a country for being able to take advantage of another country for the benefit of its citizens. i give china great credit. art of the deal, art of the negotiation. in a separate needing today with president xi jinping, president trump blamed past

administrations for america's trade imbalance with china several u.s. companies announcing deals with china. they could be worth as much as 2$250 billion though many have been in the works for a while. some are non-binding among the big the, qualcomm will sell $12 billion worth of chips to chinese smartphonemakers. general electric signed three xler initi xer initial de commercial deals, and boeing will sell 37 airlines to china >> big order for broadcom. >> exactly >> who knows let's get over to china. kayla tausche joins us live from beijing. a lot of times the delay between us and china is less than the delay than when kayla is in washington she has exclusive comments from lloyd blankfein. i will just say kayla and stare into the camera.

kayla. >> always happy to spar back and forth with you, joe, but there can be a little bit of a delay when you mentioned that deal making delegation that becky talked about, 2$250 billion in dea deals, a lot of thosesector, th. the administration is touting this as a win that will chip away at the 3$347 billion defict that the u.s. notched last year with china one of those ceos is lloyd blankfein of goldman sachs, who announced a joint deal, a new fund with china's sovereign wealth fund that will invest in u.s. companies who are trying to export products to china goldman was one of the first u.s. banks to make inroads in china. he's familiar with how complicated it is to do business and has watched relations unfold over several decades i asked him to reflect on what he saw taking place this week. >> you have to think that when the two presidents are up there,

what a historic moment this is and i keep -- i look at that and i think, you know, my goodness, this is the two biggest economies in the world everybody always wants to add this represents companies that represent sales of x, y, z, this amount, that amount. you think to yourself the gdp of the two greatest countries in the world, and i look at that and i think look how much we have to gain if everybody works together in this ceremony, let me tell you, everybody is working together this is the high point there is no friction in the signing ceremony everything has been worked out some of the details going forward may be -- may create some obstacle that has to be surmounted you deal with it at that moment you think to yourself, boy, if everybody can just really appreciate what you gained from working together, that's fantastic >> when is the tipping point that the chinese economy

surpasses the u.s. economy on a gdp basis? >> again, it depends on how you pressure gdp on a constant dollar basis, perhaps it's a ways away might be three quarters, 80% the size of the u.s. it's a ways away some people think it's already surpassed on a purchasing power basis. but the point is, it's just a question of timing eventually it will you have to keep in mind their population is four times the population of the united states. so, while their economy will inevitably be bigger than the u.s. economy because of their growth rate and the size, it's a function of the population and on a per canpita basis, it's not a wealthy country. they're still going through development. that's a huge burden and raises huge risks for the chinese economy that are not there in the case of the united states. >> he frequently talked about relations as a win-win for both countries. that's something that corporate

executives feel should be the end game but the countries might have difficulty reaching that positioning. blankfein has watched this relationship unfold for quite some time. he said the trump administration is trying to be constructive, that he supports the mantra of growth, of trying to create american jobs and right size that trade imbalance even though he's been a vocal critic of the white house in the past. >> he's conflicted he's conflicted. but he's in a good mood over there. i'm glad to see him happy. glad to see him happy. he will stick to 140 characters, we learned that yesterday. 280 gets boring, i think you start skimming any way, more from you kayla, we'll see you later in the show. thank you. now, see, there's the delay. let's get a check on the

markets. we've been talking about stocks continuing to climb to new record highs joining us to talk more about it is vince rheinhart from standish melon, a subsidiary of bny melon. our guest is james lu. vince, welcome let's talk about the u.s. economy. that's been a driving factor not just the u.s. economy but the global economy has been positive that helped push us to record high >> the last spot told us why you have the largest economy in the world in purchasing power parity terms growing at 6.5% that's an anchor for all the countries around the pacific rim that are levered to it it's an anchor to commodity prices.chor to emerging markets. we're in the spot where we'll probably get three quarters in a row where the u.s. real gdp increases 3% >> what could mess that up >> lots of things can mess it up normally first on my list is politicians.

we have heard about the tre veiveil travails of tax reform there is always international relationships. it was love and kisses in china. when you read the president's speech you understood what peter navorro has been doing for the last couple of months. it was very much confrontational in terms of there has to be something to be fixed. >> in terms of the trade >> in terms of trade and we have to do something on nafta soon as well you might worry about valuation. probably less so, but more policy you mentioned the travails of tax reform getting passed. if tax reform doesn't get passed, does that change your view of the economy? >> yes and no. the yes part is that i worry about the political economy of it that 2018 midterms is something all politics will be centered on if the president can point to a legislative achievement, he will

be much more inclined to find achievements elsewhere, that's executive action, and executive action is trade heavy. we might get more disruptions in terms of trade on the no part, market economies are basically self-regulating. if you take out tax reform, then long-term rates will go up the dollar won't appreciate as much the fed will be slower to raise rates. that kind of levels off the sharp edges of the forecast. >> you don't get the benefits of tax reform but you also don't have the economy picking up in ways that would look for other areas to tamp down on. >> exactly >> james, how do you figure out what to do with stocks in the immediate term based on whether or not tax reform passes >> in the immediate term it doesn't seem as if bottom up equity analysts are pricing in tax reform as it is. the question will be when tax reform passes, how much of a bump does it create rather than

what kind of a drag does it create to markets if it doesn't pass over the next 12 months, we assume it will pass in some form, some form of tax cuts. from that perspective it's an upside potential >> we're talking about the markets at large, if you look at sectors, maybe they would have more sensitivity to it banking stocks yesterday sold off a bit on this issue. they could get the double whammy first, as vince was mentioning, you don't get the benefit of tax reform, which will be highly beneficial to the banks if it goes through as written now. second of all, if the economy doesn't improve, you don't have the fed raising rates. that will hurt the banks >> from a sector perspective it's more complicated. financials are up 13%, but they're underperforming the market that's for the reasons you mentioned. so really we need all of the promises that came into place that caused stocks to jump up after the election to come to fruition in order for them to sustain those returns.

>> vince, i don't know how much you dug in to the tax bill as they have been written every day we'll talk about new areas of concern -- >> which tax bill? >> right because when you change the economy, you will have lobbyists, people are certain concerns that come out one that i noticed this morning was mentioned about the taxable municipal bond market. if 40% of it is no longer tax exempt, what does that mean? somebody was sending out things earlier this morning saying it's a 3$314 billion market. only 25 billion of it was taxed this past year is that a big issue? is it not? if you're worried about infrastructure spending as a support for growth f you'r worried about fraught finances as a number of state and municipalities are, you worry about this i think the issue is we don't know what the tax bill will look like we sort of know what the house wants to do. the senate wants to do something else it will be a while of negotiations what will happen is that the

individual equity analysts will suddenly appreciate what it means for their firm and oh, by the way, there's deregulation that's going on -- only mentioned inside the newspaper. but in terms of banking, what randy quarrels, vice chair of supervision could mean more to the big banks than anything in the tax bill does. >> vince, thank you very much for coming in today. james will be with us for the rest of the hour. coming up, the earnings agenda we'll get you updated on who we're looking for including big retail reports that's after the break and regulators casting doubt on the at&t time warner merger we'll talk to an analyst about the prospects for that deal when we return.

not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan. casual fridays at buckingham palace? alright, off you go. surprising. what's not surprising? how much money nathan saved by switching to geico. fifteen minutes could save you fifteen percent or more.

welcome back right now it's time for the squawk planner there are a pair of economic reports on today's wall street agenda weekly jobless claims hit at 8:30 eastern time. that will be followed by september wholesale trade numbers hitting at 10:00 a.m kohl's and macy's report earnings before the opening bell after the close we will hear from disney, nvidia, news corp.

and nordstrom. in politics the senate is expected to unveil its version of the gop tax reform bill we'll get a live report from washington at 6:30 a.m. eastern time the at&t time warner deal is back in the spotlight. and it's under pressure from the doj. the government approval for the deal hinging reportedly on at&t selling turner broadcasting or maybe directv. turner includes cnn. at&t ceo randall stephenson commenting it didn't come from him. saying he hasn't suggested it or say that he would. he said he won't sell any assets for deal approval. joining us is jennifer fritzsche. what is real and what is not real, jennifer, on the stories we've seen swirling around for the last 24 hours? do you know?

>> thavrng thanks for having me we were at the conference where john stevens, the cfo, indicated the timing was uncertain to a full room. i can tell you that was quite a curveball that we didn't expect nor did many of the arbitrage investors in the room. it's unclear to know what is true, what is not true this is still a vertical deal. suppliers buy a distributor or a distributor buying a supplier. as you know, the president said not one of these deals has been blocked in the past 40 years, i believe. so the law is still the law. it seems like the doj might be looking for concessions, which is understandable. but for randall stephenson to come out and speak to cnn, that was a bold statement spoke to where their view is on fighting this. >> they're both pointing -- the two parties are pointing at the other party saying it didn't come from us who was it, the ft said they had

sources at the justice department that randall -- that the ceo had offered to do it randall said he never offered to do it. the justice department said it didn't come from us. i don't understand >> i don't -- i don't know where it came from >> was any of this fake news that we saw coming from these reports? >> i don't know where it came from i can tell you i followed at&t for 14 years, randall stephenson, i know him to be a man of his word. i would leave it at that >> yeah. but what about the justties departme justice department if it is vertical, i don't understand the problem with turner or necessarily directv. too big? a scale thing? not a vert gical interfwraggrat thing? >> from what i read, the doj has

a problem with concern that at&t would restrict that content to their own customers. but as i think randall has been on record saying that's a non-sensible argument because they would be paid for those eyeballs that's what they want. they want that content to be watched through multiple vendors, not just at&t they have the argument and that falls apart quick. >> the deal gets done, is it delayed? if stephenson says the timeline is different, do you only say when you know it's not going to happen in the previous estimated time >> the word was uncertain. the prior guidance was by year-end here we sit mid-november i think that is a question, the timing i don't think this deal falls apart. i think at&t would fight it in court.

the law is still the law nothing changed with the law prior to the presidential election, prior to the antitrust heads. so i would -- i don't know what at&t will do if they decide to bring this in court, this case seems very strong to me >> how long would it take a court case like that to wrap up? >> unclear we know the steps from here, but if the judge does grant what's called a preliminary injunction, companies either can continue to fight or typical pull deals. i would not expect at&t to do this i think randall's comments would suggest as much. >> jennifer, thanks. appreciate it. >> thank you coming up, the senate ised n of the gop tax plan today. we will tell you what it could mean for your money. and we will talk taxes with tim phillips stick around

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 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. at ally, we offer a credit card with unlimited cash back. but if that's not enough, we offer a 10% deposit bonus into an ally account. and if that's not enough to help you save, we could help you cut the cord. that's right. cancel it. what about my reality shows? ok, if that's not enough, we'll give you reality. this is too real! maybe a comedy? alright, how about a comedian? arsenio? ain't nothing funny about laundry! we'll do anything, seriously anything, to help your money grow. people just walking in my house... ally. do it right. another day at the office. why do you put up with it? believe it or not you actually like what you do. even love it. and today, you can do things you never could before. you're working in millions of places at once with iot sensors. analyzing social data on the cloud to create new designs. and using blockchain to help prevent fraud. so get back to it and do the best work of your life.

and using blockchain to help prevent fraud. what if we could keep more amof what we earn?d. trillions of dollars going back to taxpayers. who could possibly be against that? well, the national debt is $20 trillion. as we keep adding to it, guess who pays the bill? him. and her. and her. congress, we should grow the economy. not the debt. ♪

♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. ♪ good morning, everybody. welcome back to "squawk box. you've been watching the u.s. equity futures this morning, after all three major averages ended at record closes yesterday, they are giving back. these declines have picked up some, just over the last half hour the dow futures are indicated down by 87 points. s&p futures indicated down by 9.

the nasdaq off by 25 in political news, taxes are at the top of the docket on capitol hill the senate version of the gop's tax reform bill is expected to be unveiled today. mu ylan mui joins us with more. you will have the democratic response, i know you lead with that >> we do try to be fair and balanced, joe. >> i noticed >> these are some of the details trickling out of the senate plan right now the senate is reportedly going to get rid of the popular state and local tax deduction completely as to the corporate rate, there was speculation that it could be delayed, but orrin hatch said that is not his preference the house is expected to vote on its version of the tax bill in committee today. if the senate plan comes out before that happens, some lawmakers may not like what they see and they could get cold

feet the house has a big math problem. the latest price tag of their bill is 1$1.7 trillion. and that is over the limit allowed by the special rules they're using to fast track this legislation. brady will introdu more changes today, that could include more guardrails for passer through businesses, limitations to the exercise tax on multinationals. i'm told by three sources that as of last night the committee was considering a repeal of the individual mandate that would raise 338 billion in revenue over a decade. but obviously it could muddy the waters on tax reform word of caution on all of this these details could change in a heartbeat. republicans are scrambling to wrap up the final details before

the holiday recess >> sources yesterday were saying it wasn't coming today, then it's coming today, is it coming today, the senate version? it was sources >> as far as we know, it is coming today >> i thought it was delayed. >> it is coming today, as far as we know. >> okay. >> senator cornyn said no matter what happens in the house, if they don't pass it out of committee or if the house is delayed, the senate wants to go today. >> definitely somebody yesterday said that -- i saw it. then i didn't see it on any of the websites, because it would have been delayed. i don't think it -- i don't know >> clearly this is all fluid i'll be watching. the senate is said to discuss the long awaited tax discussion today, though specifics may still be forthcoming. joining us is tim phillips,

president of americans for prosperity i just have a problem with that name you must get a lot of pushback on that. that's a very controversial concept. are you sure that that's okay to want that in this day and age? >> it's dangerous. some folks on the left think that's a bad word i guess. >> americans for prosperity? you're still trying to sell that as a good thing, tim you have to get with it. >> call us crazy >> get with it it's 2017, my friend any way, will this -- i'm not kidding. i'm sure college campuses are raising an eyebrow wait a second. any way. what do you expect the senate version to look like compared to the house? >> i have never seen something

like this but we expect this to get done there are not as many blue state senate guys left i think they'll have a negotiation with the house because they put that 10,000 property tax threshold back in on the house side. i think the pass-through situation will be significantly different in the senate. i'm not sure how they may raise from 30% of the income up, maybe 50%, 60% that will change we're urging the senate to get rid of this fourth rate at the top. it's unseemly to have republicans have class warfare go on. >> that almost seems like it's not one of the things they're considering. of all the things in play, nobody has said that keeping the top tax rate is something they're even considering >> opposition is building to it. people were stunned, mostly from outside groups and a lot of americans looking at republicans

saying is this what you signed up for rank class war fire that would make bernie sanders or ralph nader happy? >> trying to appease the unappeaseable. >> yeah. >> i made the point with the obamacare thing, they said we'll keep the tax the surcharge. did that appease the left? you will never satisfy people who will say this is for the rich reagan would have never done a tax cut that was just confined -- raising this level, lowering this level. it's all with the idea to do across the board >> remember what reagan did to the top rate in 1986, went from 50% to 28% >> how do we get to the 1-5 from 1-7, where will they get that? do we believe the scorers at this point >> the scores are a parlor game.

>> how do you take away 200 billion? >> we're hoping the corporate rate does not get delayed. i saw that in the "washington post" and a couple other places, one thing the president has been crystal clear on, let's have the 20% corporate rate, have it start in january of next year. he's been clear on that. >> where do they make up that 200 billion? >> on the senate side that's why they're going for the full elimination, in their version. on the house side they are looking at -- >> by doing that you lose the careful negotiations you had with all these house members who are in new jersey and california and other places in order to get them to vote yes >> you do. but the goal is to show momentum to get this thing out of the house next week, hopefully weighs aweig ways and means today, house version next week. i don't think the individual rates will be that different,

certainly the corporate rate will not you get to conference, that gives you a fighting chance to get this done before christmas after the healthcare epic fail, these guys have to come through with this. i think they know their majority is in eril >> the details matter. it's not just that i got points on the board, you have to go back to your constituents and say you like some of these details, right >> if you get economic growth above 3%, they'll like the details. >> that will take a while. >> we'll see it's amazing a tax policy that lets people keep more of their money and -- >> that's always the rational i come back to leaving money in the private sector by definition, you know, 90 cents falls through the cracks these guys take their eye off the ball, instead of it becoming a growth plan, it again becomes a fairness redistribution plan >> yeah. >> the republicans fall into that trap as well. if we get 3%, 3 1/2, 4% and god

forbid someone in the top 10% pays less, doesn't that make up for it by getting the 3% or 4% growth >> it does the left's argument of envy fades if the economy starts growing again at 3.5%, 4%. it fades i know we haven't had that in a decade -- >> we got no redistribution by doing redistribution the income inequality got worse because the fed had to come in and prop things up assets go up rich people own assets >> did you see what randall stephenson also said yesterday he said at&t would invest $1 billion in additional capex if those corporate rates go lower next year. that would free up their money >> i travel -- i'm outside of washington way more than inside of washington, we hear that every day.

american countmpanies are not as competitive as they can be one thing that favor the well connected and powerful, we're urging them to do that as part of getting the rates down. when we return, three big topics dominating the business world. retail earnings on the docket. president trump in asia, we will bring you his comments on north korea and the u.s. trade deficit with china, and a potential roadblock in the pporosed merger with at&t and time warner. you're watching "squawk box" on cnbc 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 wetime for the executive ed. a round up of the morning's movers for this morning. the daily movers sales of century link falling after sales dropped more than expected monster beverage shares are

coming under pressure. earnings missed wall street estimates. down 5%. roku shares are skyrocketing aflt after the company posted its first report as a public company. the streaming company posting a narrower loss than expected thanks to strong sales. up almost a third. >> holy cow. that's a big jump. adidas earnings beating estimates but revenue falling short. profit and sales growth driven by expansion in china and north america where adidas has been taking market share from nike. that stock down by 3%. programming note, the ceo of adidas will be on "squawk on the street" later this morning do we say adidas or adidas >> the guy's name is adidas. >> i think we say adidas ugly americans >> yep astrazeneca raising its forecast for the year.

the drug company says its profits are unlikely to drop as much as it previously thought. the decline in sales of older drugs has slowed down. shares of burberry taking a hit. the luxury retailer warned it doesn't expect sales growth until 2021 regardless of its higher half-year profit. when we come back, the at&t/time warner merger in question after regulators demanded asset sales ilunncdiin cnn to improve that deal much more straight ahead stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker.

that's the power of and. 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.

that 1% on consumer spending is good, probably a bounceback from the hurricanes p

welcome back, everybody, it's been a big week so far for media deal buzz. the latest develop system the doj reportedly requiring at&t to sell turner broadcasting, including cnn, to get regulatory approval for the time warner megamerger joining us to talk more about it is the business editor for axios. dan, there have been a lot of reports out there that the justice department saying that this has to happen, either that or the sale of direct television then somebody else saying randall steven son of at&t offered this up. what really happened. >> our understanding of this is that justice said -- it's not an ultimatum but they said if you want this to go through you have

to divest one of the two, either turner, of which cnn is a part, or directv and the basic argument they seem to be making seems to be look directv gives you this over-the-top streaming capability, turner gives you content. the analogy somebody made is they'll let you have the bullet or the gun but not both. >> at&t said all along that this is a vertical integration, that there is no overlap, that issing this something that -- a vertical integration hasn't been blocked in 40 years, do they have a strong case >> i think they do if justice were to try to block this, unless there's something we don't know, something in the weeds we don't know, they would be breaking with precedent trying to make a new rule. and there's been a lot of talk in general about antitrust, the way we currently think about it, is it antiquated people talk about the tech industry, is amazon or facebook a monopoly >>. >> right, if you're looking at people amassing power. >> but you would need to be changing the rules and i think

at&t would have a good case in court. >> if they were to go to court, we're trying to figure out what that means, how long do you get tied up and what duds that do in terms of running the businesses and trying to talk to wall street and say here's our plan it adds all kinds of -- >> it's a huge problem and one of the reasons why doj even if they were to bring what in they heart of that is rights bring what is a losing case know they have leverage over at&t for the very reason you said. >> political iications are huge here because of how vocal president trump has been about his -- his problem with cnn. >> yup. >> so how does that add to the six? >> i think it -- well, i think one of the reasons -- not that i'm on cnbc but the reason why it's the front of the tabloids in new york is because of the political angle and it puts pressure on doj to say -- >> to pass it? >> or to come up with a very, very compelling reason why

they're not. >> you're saying rupert murdoch would use one of his papers to try to hurt a competitor >> i would never suggest that. never. >> but by putting it on the front pages i think it helps at&t. >> hurts cnn, maybe. >> potentially. >> but helps cnn and at&t because it puts justice on the defense i have >> it's more likely they will have to say we have to come up with a real reason for this and go through with it how does this play out what's your guess? >> my guess is this thing goes through. everyone thought it would go through for a long time. i don't see a compelling reason again unless doj is about to put a stand and use at&t time warner as its guinea pig to say we are changing the way we're looking at antitrust and that could be a substantial thing for the administration to do it could be very interesting for trump to do as a big business supporter. >> he couldn't do do that -- if he wanted to follow through on a campaign pledge, because he said

it back then, he's not in a position to dictate -- >> not to dictate but he is in a position to say loudly what his preference is and these people even though they don't directly report to him they kind of sort of >> do by the way president obama did it with the fcc with net neutrality. >> but trump said randall is a great ceo doing great things >> and randall threw an olive branch saying we love this tax reform plan, president trump please pass it and we'll invest a billion more dollars >> dan, thank you for coming in, good to see you. >> thank you. >> by the way, folks, randall stephenson will be on cnbc today live from the deal book conference at 1:20 p.m. on power lunch. that will be an interesting conversation. >> thank you to james liu for sitting with us for the hour. >> thanks for having me. >> back on your international still, right >> international, that's the place to be. >> okay. all right coming up, president trump is in china talking trade, talking north korea, we'll get a live report from beijing plus

retailers are reporting we'll get results from kohl's and macy's in the next hour. macy's is a $17 stock. wow, "squawk box" will be right back.

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 a record rally the dow extending its win streak to seven straight days as strong earnings push stocks to new highs again. deal drama -- maybe not today -- the latest report on the back-and-forth between the justice department and at&t over its megamerger with time warner. and a test for the nation's financial system against a major cyber attack how did the system hold up we have the ceo of siff ma joining us with the results as the second hour of "squawk box"

begins right now >> announcer: live from the beating heart of business, new york city, this is "squawk box." good morning, welcome back to "squawk box" on cnbc, we are live from the nasdaq market site in times square. i'm becky quick with joe kernan, andrew is on assignment, he's at the "new york times" deal book conference and he'll be on throughout the day with big guests he's talking to there let's look at futures, they have been been under pressure dow futures down, nasdaq down by 22, all of this coming the morning after all three of these indices closed at record highs once again let's check in with the headlines the senate is set to release its version of a tax reform bill today. the focus will be on the differences between this bill

and the house version and the prospects for trying to hammer out a final bill between the two. lawmakers are wrestling with all kinds of issues, things like the timing of a corporate tax rate cut, if it happens next year or the year after, the elimination of deductions for state and local taxes. among the earnings reports out this morning, home builder dr horton up a penny a share they saw sales orders jump more than 18% from a year ago here's an earnings report to watch for, equifax is planning to release its quarterly numbers, the first report for the credit reporting agency since the disclosure of that massive data breach. equifax was facing an s.e.c. deadline it would have been in violation if the release doesn't hit today. president trump is addressing a group of business leaders in beijing he called out china for taking advantage of the united states but kind of in a unique way. >> both the united states and china will have a more

prosperous future if we can achieve a level economic playing field. right now unfortunately it is a very one-sided and unfair one but, but i don't blame china after all, who can blame a country for being able to take advantage of another country for the benefit of its citizens? i give china great credit. >> in a separate meeting with chinese president xi jinping, president trump blamed past administrations for america's trade imbalance with china. several u.s. companies announcing deals with chinese partners, those deals could be worth as much as $250 billion although many have been in the works for quite a while and some are non-binding. qualcomm says it will be sending $12 billion worth of chips to chinese smartphone makers. general electric has signed

three commercial deals valued at $3.5 billion and boeing sealed an order to sell 300 planes to chinese partners that would be worth $37 billion at list prices turning to washington news, the senate banking committee will meet on november 28 to consider jay powell's nomination to serve as the next fed chair president trump said last week he intends to nominate powell to take charge of the fed in february when chairwoman janet yellen's current term expires at&t says it has no intention of selling cnn as part of its planned $85 billion deal to buy time warner this after reports surfaced the jamplt wanted at&t to sell turner broadcasting or directv to win government approval at&t's ceo randall steven son putting out a statement yesterday saying i have never offered to sell cnn and have no intention of doing so. we'll hear more from stephenson

later today. let's talk markets joining us, doug ramsey, chief investment officer and tom lee tom, i'm start with you, the markets continue to trade at all time highs but we're doing it by six points, eight points here and there. any signs of fatigue you're seeing in the underlying technicals or no >> perhaps there are some divergences because i think the leadership really has been increasingly from a handful of stocks but undervaluing fundamentals have been good so for most investors it's not necessarily a warning sign. >> not yet but does it need -- does it continually need some like positive news like tax reform is moving forward does it need to keep throwing wood on the fire or can it go on its own? >> when you consider valuations, i think equity markets are

looking nervously at credit markets because in europe for instance high-yield bonds are so low that a double b borrower is paying 1.6 to borrow money that's cheaper than the u.s. government double b is junk bond so vam situation is getting markets nervous but i think the fundamentals have been good and as long as inflation is tamed it will hold together so inflation is the big scare. >> historically if risk is priced too cheaply doesn't that cause people to take risks they shouldn't be taking that come home to roost? >> i'd say that's a fair worry when cost of capital is low, capital gets misal gaited and it's maybe worrisome if you introduce tax cuts because it's giving industries that don't need capital more capital. >> what do you think, doug >> i agree with that possibility of overstimulus here

the interesting thing is here we are with a deficit of 3.4% of gdp with unemployment at 4.1% and there used to be something called the cyclicly adjusted budget deficit, you don't hear that too much any more but where we are today is as wide as it's ever been. so the idea of putting more fiscal fuel on the fire at a time like this when rates are still only a point off their lows is interesting. we're a little worried about -- and when i sate "overheat" it's all relative, right? getting up to 2.5% to 3% inflation number relative to where we've been is going to feel hot. >> rates are still low and multiples are high is there any reason to think multiples either contract or just stay where they are which puts the onus on earnings to continue to go up every year you need to get -- to get 6% in the stock market you need 6% earnings growth, can we count on

that >> we haven't been anywhere close in the last decade granted, the first couple years of that were a huge down but we're compounding whether you look at gap or operating, we're compounding s&p 500 earnings at just 2% which is a third of their historical level despite all the share repo and margins close to record levels so i don't think we're anywhere near an historical 6% nominal growth rate you've seen on the s&p so that offsets when people talk about well, lower rates should encourage a higher multiple, that assumes everything else is equal and it's not equal the internal growth rate has definitely come down >> well, how do we -- we must assume eventually rates start going up a little bit and normalize so there's no hope for multiple expansion than by all her yur measurements this has to start decelerating, the gains in the market >> that's certainly our view

for -- >> you're bearish then. >> well, stay long but watch the ticks is sort of our mantra right now. >> keep one foot out the door? >> i think there will be an opportunity in 2018 to get much more defensive but as tom said, these new highs, until just very recently, and i'm talking the last two or three weeks, the there's been talk about the fang domination all year long but that doesn't mean the market hasn't been broadly inclusive during most of that period the russell 2000 has lagged but it was at a high just five weeks ago so most of these bellwethers that have a record of turning down in advance of the major peak have not done so so that would imply the next three, four months you should still see -- and i'm not ruling out a short term setback but you should be at higher highs three or four months from now. >> i'm getting ready to sell right now, tom, unless you can talk me out of it. >> we're in a period of seasonal strength at the end of this year it's rare for stocks to have a bad

period between now and year end. >> so we're supposed to sell in may and go away and that didn't work maybe it's opposite year. >> a lot of rules have been bochen this year but i think the underlying growth has been a positive surprise, especially outside the u.s. you'll only want to sell if you're tactical and short-term oriented but for the long-term investor, things still look okay. >> if you go back to the lows of the financial crisis with the markets tripled or some unbelievable number, if you go back 17, 18 years that's only doubled from where it was which is not a big annual return and -- just now taking the other side, i really don't think you'd get totally frothy for a while yet because people are still looking askance at this market. >> that's right. and if you look at the major peaks over the last 100 years, it's when s&p returns, accelerates so much that the ten-year gains have been 500%

and we're not even -- i think we're 300% off the bottom so if you looked at history we don't peak until 2029 so it's many years. >> all right, gentlemen, we will see. it's dependent on the bond market for a long time and now we know the market isn't a domestic phenomenon anymore. it's held captive by what happens in germany or god knows where, japan as long as that stays low money goes where it's going to be treated so the fed can't push rates up even if they want to. >> well, i think that's been the one realization we had this year is that the fed isn't the central bank driving policy right now because the ecb and bank of japan have bigger balance sheets and they've been adding stimulus so next year the story is where the tapering takes place. >> thanks, gentlemen. >> thanks. when we come back, veterans affairs secretary david shulkin

will be joining us on the latest campaign against suicide among veterans, he's going to join us right after the break. then at 7:30, the department of justice is reportedly insisting at&t sell off cnn in order to win approval of its deal with time warner. the latest on that drama is coming up. then an emergency cyber security drill taking place in the financial services sector this week. the ceo of industry group sifma will join us to talk about the results of those tests stay tuned u e yoarwatching "squawk box" right here on cnbc so you're looking for male customers, ages 25-54,

who live within five miles of your business? like these two... and that guy. or maybe you want to reach women, ages 18 to 34, who are interested in fitness... namaste. whichever audience you're looking for, we'll find them we're the finders. we work here at comcast spotlight, and we have the best tools for getting your advertising message out there. anywhere, any way your audience watches. consider them found.

welcome back to "squawk box. quarterly earnings out now from retailer kohl's. 70 cents a share was two shy of expectations revenue did beat the street, however alcohol's saw comp store sales rise by a tent of a percent and analysts had been anticipating a loss, maybe there was some type of outlook that we're not telling you about because the stock is down 8% so two cents shy of expectations,

maybe that's not helping but revenue is above a sat statistic. 20 veterans die in the united states everyday from suicide and in honor of veterans day, which is tomorrow, the v.a. -- this saturday, the v.a. is launching its suicide prevent campaign "be there. joining us to talk about it is veterans affairs secretary david shulkin. secretary shulkin, thank you for being here that's a horrible statistic, what can we do to help veterans who have served our country? >> i couldn't agree more, 20 veterans ada taking their life is something none of us should accept and we have to do more. it's why it's our top clinical priority at the department of veterans affairs and we recognize we can't do this alone so we've reached out and in this case we've worked with johnson & johnson to produce a public service announcement that we're fortunate tom hanks has agreed to narrate and the message is is that you have to be able to be there to reach out to help a veteran who's in need and our campaign

is called be there, #bethere. >> what will that translate to in terms of actual action? i know we all need to know that we should support our veterans but this is a complex problem. what needs to be done from a hard core situation? what resources do these veterans need that they're not getting right now? >> of the 20 veterans a day that are taking their life through suicide, only six are getting care within the v.a. system and we know when they do get care in v.a. that that does save lives so what we're asking to do is to have people in the community be aware of this issue and help connect veterans with resources either at their local v.a. hospital or if not in their community with local mental health resources, with their churches, with their spiritual leaders but not let people suffer alone. yesterday on this program we talked about a hunger program that is trying to reach out to veterans wherethere is a

shockingly high number of veterans who don't have enough food to eat or their families aren't being taken care of, either we talked about how there is a point of pride where veterans don't want to reach out and take help how do you get over that stigma. >> well, of course, these are very -- these are people with a great deal of pride and we have to always respect their dignity but 150 years ago president lincoln came out and said that we have a responsibility as a nation to care for those who have borne the battle and often some who come back from conflict don't have those physical wounds of war but they're more emotional so we have to recognize that and reach out with respect but offer that help because there should be no veteran suffering from hunger or taking their life through suicide. >> several years ago, veterans affairs was having some huge issues with the v.a. hospitals the, wait times. obviously the situation has been something that's been made very

public, something a lot of steps have been taken to try to address but even after congress passed $10 billion to create this program so veterans can go outside of the v.a. system for help, it looks like there are even more people on the 30 day plus waiting list than there were three years ago, what happened >> well, we've made a lot of progress we have same-day appointments available in our v.a. medical centers. we publish our wait times, we're adding appointments but what i think you're seeing is these are the demands that have been out there and when people are coming back from conflict you don't realize the requirements needed to care for them so we'reseein a system that hadn't kept up and now we're just dealing with the demands of actually the vietnam war as well as the last 16 years of war. >> the $10 billion choice program, though, is set to expire what will happen if it's not renewed? >> it's going to be very bad for veterans if this program isn't

renewed. we'll go back and see the long waits and it's a situation that will be unacceptable so are we're working very closely with congress and the president to make sure this choice program is renewed and a permanent part of the way we operate at v.a. before the end of this calendar year. >> before the end of this year your expectation is that it will be renewed and passed by congress >> i have every confidence we're working in a way that is unparalleled with bipartisan support in washington to get this done and i think everyone is aligned with the interests and the responsibility of doing if right thing for our veterans. >> mr. secretary, i want to thank you for joining us today. >> and happy veterans day to everyone out there. >> we appreciate it. it's a time to make sure we remember all the veterans who served our nation. that's coming up on saturday in the meantime, coming up on "squawk box," nordstrom offering some holiday shoppers something special. we have the details right after the break. "squawk box" will be right back.

x x x. 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!

t-mobile's unlimited now includes netflix on us. that's right. netflix on us. get 4 unlimited lines for just $40 bucks each. taxes and fees included. and now netflix included.

welcome back to "squawk box," everybody. we have a couple of corporate stories in the headlines today in order struck nordstrom w pickup at ten u.s. stores this holiday season customers will get an e-mail with a phone number they can call or text to say they're on their way to pick them up. an employee will meet them at the car any time day or night. sounds upscale but i think it's the same thing walmart has been doing for a while, too uber is asking drivers if they'd be interested in other services like house clean organize moving. the company has been talking about the idea over the past

year uber's food delivery service uber eats has been booming since it launched. can they clean my toilets, though you want to clean my toilet, uber guy >> you know, i took a lot of uber recently. >> did you >> yes, i did. >> i'm impressed. >> some of these guys are interesting, the individuals, they -- i had one individual that felt like if there was any silence whatsoever that the ride wasn't going well. [ laughter ] so you got to talk a lot. >> so for 40 minutes -- >> you got to listen a lot. >> by the end of it we all -- anyway. >> now you know how we feel. >> but you can't give the guy -- he's trying to be nice, right? >> so you can't say anything. >> and then you have to give him a five, too, because he was nice and a tip. anyway, a couple stocks to watch ahead of the opening bell, monster beverage shares coming under pressure the energy drink makers'

earnings missing wall street estimates. roku shares rocketing after its first quarterly report as a public company it's a streaming company it says here, posting a narrower-than-expected loss thanks to strong sales. >> by the way, that went right over your head i dissed you and you didn't even hear me. "now you know how the rest of us feel." >> exactly i was actually arguing with somebody else. somebody said we've been together 20 years around i said i'm getting tired of dragging you around i'm glad you lost weight because you're getting heavy. >> he's not heavy, he's my brother. anyway, when we return, back to business. will at&t be forced to sell off cnn or its directv division in order to win approval to buy time warner? a look at the government's reported opposition and whether or not the deal will happen. is that longer than his

marriage 20 years >> probably. >> a lot of people like that don't forget to catch at&t's ceo randall stephenson today on power lunch live from the deal book conference. as we head to break, look at u.s. equity futures. very

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. ♪ 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

♪ he ain't heavy, he's my brother ♪ ♪ so on we go >> inside oke. >> yeah, he is much lighter, how much did you lose, greco like 40 pounds >> way to go, greco. mat greco, our producer of this hour doing his job wonder fly. >> we changed the words, you're not as heavy [ laughter ] >> good morning, everybody, welcome back to "squawk box.

we are live from the nasdaq market site in times square, among the stories that are front and center, the labor department is going to be out with its weekly report on initial jobless claims in just about an hour's time economists expect we saw 230,000 new claims for the week that ended last saturday, that would be up from 229,000 the week before the insurance industry price tag from the recent hurricanes has reached $100 billion according to german reinsurance giant munich re. hurricanes harvey, irma and maria are going to be shaving $3.1 billion off the bottom line for munich re alone. and fox con will be building a liquid crystal display plant in wisconsin. the state's economic approved a $3 billion package of tax incentives for that taiwan-based company. the plant will employ 3,000 people then the number could rise to 13,000 lloyd blankfein traveling with president trump on his trip

to asia is part of a business delegation led by commerce secretary wilbur ross, cnbc spoke to blankfein exclusively in beijing where he stressed that trump's america is getting back to business, at least for now. >> i think this is a pro-business administration, not for the heck of enriching businessmen at the expense of -- you know, there's kind of a narrative that this is a competitive interest between business interests on the one hand and working people on the other or the middle-class on the other. i think if you support business and growth that enures immediately to the benefit of every american that's what we need, we need to have growth in our country. >> we're joined in the next hour

with more of the exclusive interview. and at&t says it has no intention of selling cnn as part of its planned $85 billion deal if it is successful in buying time warner. joining us now, andre bar low, a former trial attorney with the doj's antitrust division who's now partner at doyle, bar low and mazzard and frank luthen is a telecon analyst at raymond james. let's start, andre, i guess we keep hearing it again and again, this is a vertical merge herb, one of these hasn't been blocked in 40 years. could it still happen now or is that real precedent that makes the deal more likely >> well, i think most antitrust experts agree that vertical transactions raise less competition concerns than horizontal ones where the merge

firms compete with each other. here's a situation where the merged firm would not -- they do not compete so the -- i think also that the other things that antitrust experts agree on is that vertical transactions can lead to efficientsies and benefits to suppliers and consumers so those are important things that have to be studied and analyzed before the doj would block a transaction. there's a reason why there hasn't been a vertical transaction that's been blocked in a number of years and it's because of those two things that i just mentioned and so what we're really concerned about is there are times where a vertical transaction can be anti-competitive and that's when there's a foreclosure of rivals.

>> okay, frank, you follow this closely, this is what you have to do, what happened in the last 24 hours do you know or what do you think happened in terms of the word getting out? is it a leak, did the justice department leak? did at&t leak? who's telling the truth about whether there's pressure to get rid of turner or directv do you know? >> thanks. well, there's clearly leaks going on this looks like signs that you're coming to the end of a notion and both sides are trying to get support and put pressure on i think at&t is in a fairly good position as andre stated from the nantitrust position from a business case this is very important this is about having products you can combine with customers to give them a better experience and lower churn and this is important business case for them i would expect them to fight this heavily even if it means going to court and litigating.

>> so you don't know whether it came down from justice and then you know you can intimate -- you can intimate that president trump doesn't like cnn so justice wants him to get rid of cnn. you don't think that's what's happening here >> i don't know it's that detail but for randall stephenson who is a measured guy to make a statement like that, clearly something is changed so obviously something is going on but this again seems like late-stage negotiation but this is very important to at&t. i would expect them to fight this heavily and normally you don't want to go to court over this but they would probably push this as far as they can they have a good business case for this and it's important for them strategically going forward and they will fight this. >> frank, that's what i've been trying to figure out if you do go to court because it's so unusual, we don't have a great game plan for what that means, we've talked all the time about you can fight the government even if you're right

sometimes it doesn't matter if the government is punitive in its actions. >> i think the burden of proof is on doj and as andre said i think that maybe he can comment further but there's precedent for why you would break this up and have to make a case as to why this is anti-competitive at&t doesn't own any media assets, there's no competitive overlap and there's other precedents such as comcast and nbc for content and distribution being owned in ways they can offer the content to other pay tv providers and cell phone carriers as well for the same price they're offering at at&t so i think the burden of proof is pretty high here for the government so that should give at&t some confidence. >> how quickly could this be passed if they took it to court how long would it drag out or is it something they could wrap up quickly? >> going to court always takes some time. it probably knocks it out another four to six months you're going to have a full trail on the merits to block a

transaction and obviously it's an uncertain outcome for the department of justice because they haven't challenged one of these in years and there's a lot of good arguments that at&t will be able to make so this isn't done yet there's still negotiations to be had here this could be a leverage point for all we know. there's various ways of resolving the anti-competitive problems here of vertical foreclosure and one is a structural fix which is divestiture. the other is behavioral conditions which have been used in the past and the reason they're used typically in these vertical transactions is because you want to retain some of the benefits of the vertical integration. some of the benefits consumers would realize if the transaction were to go through but i would have to say that, you know, eight inning behavioral remedies is always tricky you have to be clear and concise, it can't be ambiguous

and vague and you can't have a situation where there's no policing power so -- because the doj has to remain active in enforcing that decree. >> so how does everyone save face here? what's the minimum the justice department is going to need to see to say okay, we're satisfied and it's fine. what do you think? >> they need a strict decree to the extent there was any gaps between what at&t was offering and what doj was requiring in terms of behavioral conditions at&t is going to have to move over to closer to where doj is because doj is is now if the reports are correct taking an extreme position to ask for a structural remedy. >> what do you think, frank, in terms of -- what does at&t finally have to do to agree to and what about the justice department will it be minor to save face? or will it be a -- will they -- are they stuck where they are

and they're not going to move? >> the biggest thing they can probably offer is a longer time tiered you for oversight, obviously companies want a shorter time period for oversight. they can offer a longer period, they could give more clarity on how you would negotiate pricing with other wireless carriers or pay tv providers for content but i think they're going to stand pretty hard on not investi idiv these assets putting the assets together are important to them. if you lower your churn by ten basis points, that could be 1% to 2% increase in earnings and that compounds on itself on top of the fact the consumers end up being better off so it's more of a time issue for them than necessarily any divestitures they would agree to. >> we shouldn't look at that cynically that they don't want -- the sooner we're not watched anymore when we can really get down to -- that

sounds awful. >> i wouldn't expect them to do that at all. i don't think they would have any intention of blocking content or not making available to others. that wouldn't make any sense for them at all. that's not a big deal so these are easy things to agree to but you always just having the oversight and extra reporting requirements there's real cost to that so getting that out of the way and then there's -- and even after that is over you have the threat that someone could say hey, you changed your business practices and take them to court so they won't change how they acted. >> okay, all right, gentlemen, thank you, andre and -- thanks for being with us this morning >> thank you for having us. shares of adidas are trading lower. the company reporting a slowdown in europe but the ceo says sales are set to pick up again in the holiday shopping season quarter. >> it's a third year in a row where we're growing 30% plus in a market that's either flat or slightly growing so we are taking share

we don't believe the overall market is expanding, perhaps slightly in the at leisure side where we're dominant but there's no doubt that we have taken share and we have doubled our market share in our food ware business in the last two years in the u.s. so very strong performance online and off line. >> you can see more of that interview on "squawk on the street" at 10:30 eastern. when we come back, a major security drill for the financial industry was conducted over the last two days. it was meant to test a worst-case scenario for the financial markets. the ceo of sifma will join us after the break with the results of those tests and in the next hour, kayla tashi speaking to lloyd blankfein. that's straight ahd.quk x"ea "sawbo will be back after a quick break. hat we earn? trillions of dollars going back to taxpayers. who could possibly be against that? well, the national debt is $20 trillion. as we keep adding to it, guess who pays the bill?

him. and her. and her. congress, we should grow the economy. not the debt. ♪

your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance. 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. a key emergency drill took place this week in the financial services sector involving hundreds of participants across the industry and the government. the idea behind what's been called the quantum dawn four

exercise is to improve readiness and response in the event of a coordinated campaign of cyber attacks on the nation's financial industry that drill wrapped up yet afternoon. joining us to talk about it is ken bentsen, the president and ceo of the securities industry and financial markets association, more commonly known as siff a. ken, thank you for being here today. >> thank you for having me. >> it's great these tests are taking place, they have been been since 2011 and this is where you get everybody together and say what would happen in a worst-case scenario. >> this is the biggest -- we have multiple testing throughout the year but this is a biennial test where we do it industry wide we had 50 firms, 900 people across the firms, government partners led by the treasury department, the fbi, the financial services information sharing apparatus and it's an opportunity to test a major attack, in this case a major attack on firms, futures activities, would not go into effect in cash markets to see how they deal with resiliency and recovery

this is a constant effort. >> i know you can't tell us a lot of the specifics because you don't want to give away the play book to anybody who's watching but what can you tell us in terms of how everybody performed? >> i think a couple things we can talk about are, number one, it allowed us to update our play books and firms to update their play books on how they operate internally when they're dealing with this, how they operate when they're communicating with other market participants and how they're communicating with the government looking for technical assistance so this is an iterative process we go through, just like the attacks were an iterative process as well. >> i think about the fire drills they have in our buildings and when you knew the fire marshals were going to be standing outside, everybody would get up and go outside when it's not clear, when you haven't been given warning, a lot of times people sit around and say i'm not going outside, it's cold. is it the same thing when you do tests like this? >> it's all simulated to begin with and we're with norwich

university and deloitte is our partner on this. we try to bring it in as a surprise obviously firms are setting up to do this, it runs across the different operations within the firm so it's not just the compliance people,it's markets people so we try to make it a real thing as opposed to when you have a sign that says "you'll have a fire drill at 10:00 a.m. "that doesn't do any good. but we do this throughout the year this is our biennial one but we do multiple tests throughout the year across the industry and we also do table top exercises with our government partners as well throughout the year and from those we learn things and every time we learn we can add it to our play book. >> this is necessary because attacks are coming in on a daily basis. >> right. >> how many and what kind of attacks? >> the industry is getting hit by houses of attacks everyday. cyber is a bigger criminal enterprise than the illicit drug trade so it's something you have to plan for everyday and you

don't just plan for defense. you have to plan for recovery and resiliency because we have to assume -- and this is what we do in our testing -- that some of this is going to get through so how do we respond this year we did it with respect to multiple firms being hit and affecting futures in cash. in the past we've looked at fracture, market open and close so every time we have to think of different contingencies we're dealing with. >> you paint this as a criminal enterprise but my guess is there are nation states we probably have to worry about a little more i think about north korea or russia or potentially any other nation. >> no question, multiple actors. some is criminal, so some is not and from our standpoint we have to rely on the government as well because this moves beyond our pay grade. >> and in terms of the potential for nation states to be trying to do something against us right now, has that increased or have you seen more activity since we've been listening to the rhetoric heat up >> i'll leave that to the

government to talk about that. all i can say is this is the highest priority among our member firms this goes to the c-suite, the amount of monetary and human resource being committed to cyber preparedness is just growing by leaps and bounds everyday and it's something the industry is completely committed to. >> you mentioned you think some of this must get through, you can't stop every attack all the time how concerned are consumers affected >> that's an important issue and something the industry is working on that came out of one of the exercises we did previously is how can we be prepared if a firm is taken down to the point their books and records are wiped out. we've seen instances in other sectors where books and records have been wiped out so we're working on an industry-led project to be able to preserve data in an off-line capacity, so to your point somebody can say i know what i had in my account.

>> this is why i don't take everything electronically. i make them send me paper copies of this stuff. am i crazy for doing that? >> consumers just like institutions have to be taking preparations to make sure they're safe. >> ken, i want to thank you, good to see you. >> great, thanks. when we come back, we have stocks to watch ahead of the open an wall street, plus facebook wants your nude pictures what i've got that story and more straight ahead good luck with that, facebook, "squawk box" will be right back.

here's a couple stocks to

watch this morning mobile payments company square earned seven cents a share for its latest quarter, beating estimates by two cents square says a growing number of businesses adopted its payments platform during the quarter and it's raised its full year forecast stock was $8 or just above, it looks like around 10 or 11, down 2% today but it's been on a role, generic drug maker perrigo beat estimates of $1.11, that's up almost 14% p their for shareholders, company raised its full year outlook even as it notes a tougher competition in the generic drug business magazine publisher "time" incorporated earned 36 cents a share for the third quarter. that was above estimates but revenue sfel short of street forecast as an increase in online advertising wasn't enough to offset a drop in print ad

volume this is one of the craziest stories i ever heard if i had a notification like this i would think it was coming from a scammer facebook is asking users in australia to send the company naked photos and videos of themselves so the company can block them from being distributed widely this is a trial program aimed at preventing ex-partners from posting explicit images once the nude photos are uploaded facebook would create a digital fingerprint so they could be identified and automatically blocked in the future the trial program could later expand to the united states, uk and canada here's an idea, folks, don't take naked pictures and video and they won't wind up distributed on the internet. the idea that you're going to send these pictures, take nudies of yourself so they can be blocked? >> or sends the one that you already have see, that's when i hear about people in have done that, while

you're taking the picture isn't something going off in your head saying -- >> isn't this a bad idea >> but what got me was it sounded like they're saying if we get a shot of you nude that we can put it in -- >> but that's going to get hacked >> is it so distinctive it's like a fingerprint. >> must be like a face although you know those facial recognition things. >> markings? >> we are like snowflakes, every one is different. >> are we? >> i don't know, you want to sew me >> oh, god, maybe birthmark, i don't know. >> not to mention if you gain weight or lost weight how would it be the same thing and if i was a hacker and i knew everybody was sending their naked pictures into this one place where we're going to safeguard it all that says s what you'regoing to talk to yo it >> announcer: this squawkward moment is brought to you by

becky quick. >> i remember -- i don't want to go here and when i don't i shouldn't but i remember certain sexual scandals in the past whether -- >> yours >> no, it wasn't necessarily about an ex-president or a pop star but remember they had -- >> never mind, we are not going there. you're right. >> supposedly there are distinctive things that -- i don't know. >> so you've heard. >> so i didn't know it was like a fingerprint, though. >> when we come back, will investors be rushing into macy's stock this holiday season? the retailer's quarterly results and a preview of the most important season for the year is coming up.

not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan. 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.

earnings alert retailer macy's set to report quarterly results. we have the numbers and reaction from the street straight ahead big day for tax reform the senate set to unveil its version of the plan. we will talk to top ranking republican senator john thune plus deal showdown the justice department reportedly throws a wrench in the at&t time warner megamerger. the final hour of "squawk box" begins right now >> announcer: live from the most powerful city in the world, new york, this is "squawk box.

how do you follow that anyway, good morning and welcome back to "squawk box" here on cnbc live from the "new york times" market site in times square i'm joe kernan along with becky quick. it says here andrew ross sorkin is on assignment i've got to mention this twitter person he says idea you sure andrew isn't hoarse from screaming at the sky last night?" >> screaming at the sky? >> it was the one year -- that was what all the -- that's not where he is. he's getting ready for the -- and his voice is fine for the "new york times" deal book conversation we'll check in with him in just a few minutes. you didn't see any tape of people screaming at the sky? you look at the sky and just scream as loud as you can. >> kind of like "stranger things 2" >> no, because it's been one year since the -- it's not a silent protest, it's a screaming at the sky protest the futures right now are indicated lower and quite a bit

lower. maybe triple digits by the way it was looking, more than that now. 122 on the dow, down 42 on the nasdaq and down -- the s&p down 13 let's look at treasury yields, i don't know how to read this because yields are probably lower here, what's ailing the markets? it's not the election, right is it less prospects for tax reform is it worry about the midterms what is ailing the markets today? >> i don't know. we keep saying it's the tax reform prospects but when you talk about ailing markets. i mean down -- >> i know, but it's been setting records by going up six and now -- a pullback has been a long time coming >> you are a perfectionist. >> do you know it's -- the first year is over. >> yeah, this is true. >> this is the first day of the -- >> the new year second time around so what will we measure from here >> exactly down 125 so far.

>> let me tell you quickly about macy's earnings. the numbers are out and it looks like an adjusted number of 23 cents a share versus the 19 cents the street was expecting talking about same store sales for the third quarter being down 3.6% that's worse than expected, courtney >> it is. >> they're making comments saying overall we're pleased with the third quarter and we remain on track to meet our full year sales and earnings guidance for 2017 but if you're beating in this quarter that doesn't necessarily mean you'll be hitting expectations for the fourth quarter as they stand he said "importantly we saw better gross margin performance primarily because of our tightly controlled inventory position. so we'll hear more about this. they say they're excited about their plans for their holiday. but if you look at the stock it's down by 4.2%. another retailer out with earnings is kohl's kohl's shares also under pressure after they reported 70

cents a share, two cents below estimates. revenue did beat the street's forecast however they saw comp store sales rise by a tenth of a percent. you add it up and that stock is down by 9% for more on macy's and kohl's, let's bring in dana telsey and our very own courtney reagan is here as well courtney, the numbers at kohl's and macy's -- >> yeah. a little shaky. >> a little shaky. it looks like there's some positives to look at i like the idea that they comped positive even if it was just by a hair, 0.1% we've seen negative comps for eight or nine quarters at least there at kohl's so that was good but the operating margins were weak so that suggests they were selling at a deeper discount than maybe we would like to see them do. >> dana, why the 9% selloff on the stock? >> i think one of the things that happened is while you get a

better comp the gross margin came in weaker than expected by 30 basis points. what does that mean for the upcoming holiday season? you have two different things happening at kohl's and macy's, lower sales at macy's on the comp side but a better gross margin and the better comp sales offset by the weaker. >> what's better >> i want to traffic traffic is the holy grail, if you can get traffic, you can translate that conversion into just a bit higher it's a ben pitt to the top line. >> is the selloff at kohl's overdone >> i think it is and the initiatives going into kohl's for the back half of the year, the tests with what you have going on, whether the amazon test, the new product on under armour and let's see what their active wear comps when they have a their earnings call. active swear a big driver for them. >> what about macy's and the loyalty program. is that going to help traffic? are folks going to understand that >> i think the loyalty program

coupled with marketing is key, you need both and i think we'll hear on the call a little bit about what these new initiatives are. the other thing don't forget from the second quarter, their international tourist business was weak let's hear what happened with that tourist -- international tourist business in this third quarter and did that lead to weaker-than-expected same store sales. >> you said you thought the selloff at kohl's was overdone because they got the traffic it's the opposite at macy's and that stock is trading flat on this news, is that the wrong we action >> overall with macy's we have so many new initiatives that just got started in september and october and for both of them you had hurricanes that took place in texas and florida the month of october in the northeast it was 5% warmer in october this year than last year you had some extraordinary things you need a good holiday season. >> you'll give them a pass and

say show me the money in the fourth quarter >> part of the reason why the uptick in earnings guidance at kohl's, may maintain that at macy's so can we deliver a fourth quarter that is decent? the congress sumer is in a good way. they have the ability to spend, we have to give them the want to spend. >> macy's maintained its full year forecast but it bet by four cents in the third and a quarterer, does that mean they're not as confident >> you have to build in some level of conservatisconservatism there's a lot of expectations in that fourth quarter. >> what do you think overall just about traditional retail when it comes to department stores and the guys in the mall? >> i think overall there is no word traditional anymore if you're traditional you're out of style and old you need to think new and reinvent yourself and all these companies in the mall are trying to have a path now of ways to become new you have in demographics, you have new channels of distribution and if you're not adjusting with technology, not creating loyalty programs and

customizing your offering because the store is coming to the customer now instead of the customer going to the store, it's a 360-degree loop. >> we saw nordstrom has an idea they're calling an upscale idea where you can buy something and show up the front door and they'll walk it out to you that sounds upscale but it sounds like what walmart is doing. >> and i think all of these stores that's their big push for the holiday season, you can order online, pick it up in the store like it's a big novel idea they're trying to give you even more convenience, faster than what maybe amazon could give you because prime isn't available in every city. >> if you can deliver it same day to my doorstep i'm not sure how showing up at the store is more -- >> i guess in fairness i'm from ohio, folks do drive home and may pass some of these stores so it's possible that actually they pass a coals before they get home. >> people drive to their mailboxes in the midwest. >> that's true, too. the stores have to give you

everything they've got so walmart says we'll give you a pickup discount if you order online but their big bailiff announcement came out today and so everyone knows you can't get the additional discount on the bailiff deals you order on line but you could order the bailiff deals online from your couch on this is morning. you don't have to go to the stores. >> confusing stuff >> there's a lot of deals going on in our heads. >> definitely, i saw that nordstrom local concept in california a couple weeks ago and they have curb side pickup, they have alterations, you can pick up the goods -- >> alterations is a good deal. >> people do need alterations. this is a test for hub-and-spoke concept. the full line stores and if you want quick you go to the picku >> dana, courtney, thank you both. >> thank you. >> this is a 360 degrees loop or 180. >> 360. >> all the way back to where you started? >> yeah, because you're in circles. >> wow, i thought you meant the

opposite so you meant -- it used to be you go to the store. >> right. >> then it was the store comes to you now people are going back to the store. >> no, any way you want to make it happen just spend money so that we are able to have a stronger retail economy. >> it means they're coming at you from three different 60 degrees. >> okay. all right. let's get you caught up on a few other earnings norwegian cruise lines beat on the top and bottom line. they said results were impacted by recent hurricanes but booking has rebounded to pre-storm levels but becky will not be on one of those probably. >> supposedly fun thing. >> legionnaires' cruise. >> i'll never do it again. although i am kind of interested in going to alaska and i think that's the best way to do it. >> on a cruise ship. do they reich it will water? >> i'm trying to get my head around this. i have a lot of parents and in laws who would like to see alaska. >> it's a closed system, if

anybody has anything you're going to get. >> it and i had legionnaires'. >> and you can't get off. >> no. >> same store sales fell 5% at office depot that smafs smaller than analyst forecast party city matched earnings estimates but revenue missed forecast and the retailer gave a full year forecast below analyst expectations citing hurricane discorruptions as one negative factor in the most recent quarter. one report that will come this afternoon, equifax, it's the first report since the disclosure of isz massive data breach, stock is already down quite a bit. you can't see it but the company is facing an s.e.c. deadline and would be in violation of the deadline if the release didn't come out today a lot still ahead, up next, we'll take you live to the "new york times" deal book conference andrew is there. some of the world's biggest business leaders getting ready to take the stage.

we'll check in on his voice and see if he is hoarse. later the senate will take the wraps off its tax bill today. we'll talk to senator john thune about the details. tedyoreatinchg "squawk box" on cnbc

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

welcome back, cnbc first reported yesterday morning that right here the ten cent took a 10%ing stake in snapchat, in the parent company of snapchat, snap now we're getting more details about the chinese tech giant's plan tencent saying it wants snap to explore mobile games publishing and a news feed, two features not on the app currently and the addition of these features might make it more competitive with facebook -- with the instagram facebook owns. t tencent shares don't have a board seat andrew ross sorkin is getting ready for the "new york times" deal book conference. andrew, we've been talking all morning long about what's been

happening with at&t and the department of justice. you were reporting on this yesterday and today you will be sitting down with randall stephenson, at&t ceo. >> this is the annual deal book conference, the sixth one we've dope at the time warner center and we have an illustrious list of speakers all of whom i imagine are going to make headlines of one sort or the other, perhaps the one that make make the most is randall stevenson of at&t in the cross hairs of this doj negotiation, if it can be called that we will be talking to randall after lunchtime throughout the day, let me tell you what's going on h howard schultes is here, melody hobbson is here. >> then we have an interview, first interview ever with the new ceo of uber, he's never spoken publicly since he took the job and we will talk to him about the gnash missions and things we have been reading about and try to understand more

where that company is going. we'll have a conversation of ken chenault of american express who announced he'll be retiring from that company then randall and we'll talk to oscar munoz of united brian cris san niche of intand perhaps the debate between apple and qualcomm we'll talk retail with somebody i know we love on the show, mickey drexler, the original merchant prince. i'll talk about the amazon affect and what is happening there, then monica breckhart of facebook is join us. she's in charge of policy and anti-terrorism she's in the room on the ground dealing with all of the issues we read about every single day we'll tend day with jack dorsey of twitter and square and that conversation i promise you will be more than 140 characters but

maybe less than 280. so that's what we have going on. >> that's quite a lineup, andrew. >> but it should be a good day and we have lots of questions, some of it will be on cnbc throughout the day, some will be live streamed on facebook around then we have people here live with us and i should say also this will be available on the "new york times" and i should also mention that deal book is being reimagined today the newsletter and the site being reframed around the cross currents between business and policy in a way that we vice president done before so that's an exciting piece of news. >> i saw you tweet that, what does that mean >> more focused on washington? >> when i started the e-mail back in 2001 i used to send it out to bankers and lawyers and it was a deal sheet, that's what the world was talking about and as you know and the conversations we have on "squawk" business has become so interlinked with policy and so the idea is to bring a broader

frame. we'll cover deals as much as we ever have but to widen the frame a bit and so that's what we're doing. we redesigned the logo and have done some other hopefully clever things if you're not a subscriber you can check it out. >> andrew, did you get eight hours last night >> i hate to say i do not. >> told you. >> you know me well enough, i like to look stress-free on a day like today but i struggle with that. >> big day, big day. but you're feeling it about -- like a 7 or an 8 on a scale of 1-10. >> oh, on "how are you feeling given the week?" the adrenaline is kicking in so hopefully we'll make it to the end. but i'll see you tomorrow. >> could be steroids, could be anything. >> you be the judge. >> that's a long day a lot of -- no one else is asking any questions i'd be nervous. >> well, we'll have questions from the audience and there's fascinating people in the audience including barry diller will be here, i just saw bill

gurley who is a board member of uber will be in the audience, there will be a lot of questions being shot at these many guests. >> i think there should be alcohol there, andrew, just for the heck of it, for the afternoon or something you know what i mean >> so people really open up? >> we can hope, we can hope. there's a cocktail reception afterwards. >> okay, maybe interesting stuff comes out of that. >> thank you, andrew, see you throughout the day and see you tomorrow morning. in the meantime, saudi arabia's foreign minister is calling for sanctions on iran for its support of terrorism we're joined with highlights from that exclusive interview, hadley >> well, saudi arabia's foreign minister ratcheting up the rhetoric on iran, he says it requires an international response and refused to rule out the possibility of working with israel to do that. i also asked him about this massive corruption crackdown we've been seeing playing out against the backdrop of the

foreign policy elements of this story. one of the big questions is what is going to happen next and who are we going to hear about because the saudi government has yet to fully disclose who's been taken. we know more than 60 ministers, big businessmen as well as members of the royal family are being investigated and we know as many as 1800 personal accounts have been frozen. let's listen into what the foreign minister had to say about it >> quite the contrary. i think this will increase investor confidence in saudi arabia because it shows that we have adopted a zero-tolerance policy on corruption as we have adopted a zero tolerance policy on terrorism and extremism and terror financing the kingdom of saudi arabia announced more than two and a half years ago that he will fight corruption and fight it robustly his royal highness the crown prince has made it clear that no prince and minister and high-ranking official is immune from corruption charges.

the public prosecutor started an investigation two and a half years ago about a large number of cases of individuals who are involved in corruption and the decision was made to bring these people in for questioning and to confront them with the evidence and to deal with this issue in a resolute manner. a sizable percentage of our budget was being stolen, we discovered and this cannot stand. where you have corruption you cannot have justice, you cannot have investment, you cannot have deficient and transparent government i believe that the international community will be very, very pleased that the kingdom of saudi arabia is not only transparent, not only firm but has taken decisive abc against individuals who robbed public goods and the reason the names have not been announced is under our legal system we don't publicize names until after the

verdicts are out this process is still ongoing. the questioning is ongoing the individuals will have trials in accordance with our laws just like everybody else and they will be held accountable so this is a hugely important step for saudi arabia now foreign investors can compete on an equal footing with everybody else. >> there's been conflicting reports about what happened with the arrest of his royal highness prince abdul aziz. can you clarify what happened? >> i can't comment on the individual cases, i leave that to the public prosecutor. >> there is also a question of we're talking about $800 billion worth of assets either in saudi arabia or abroad is this about corruption or is this about getting the cash? because those funds you guys could use, especially with vision 2030. >> i can't again comment on numbers, i leave that to the public prosecutor and in time people will know the bottom line is money was stolen from the public treasury

and that robbed the country of the ability to invest it for the good of its people and so of course people have to return the funds that were stolen. >> so the bottom line there from saudi arabia's foreign minister is that these people under investigation stole from the state and you have to remember, of course, that since this era of lower oil prices, the reserves in saudi arabia have gone from something like $800 billion to $450 billion so this is cash they could use as they try to reinvigorate this economy from dependency on oil, guys >> we've spoken with analysts about -- i'm trying to figure out what it means, how to read this and many have said okay if you're adopting a zero tolerance on any corruption you'll have a tough time because it's the way of doing business if saudi arabia if you were to dig through any business deal you're going to come up with something along these lines. they've said they think this is something similar to what we've seen in china with xi jinping where you're cracking down on

corruption but using it primarily against people who might challenge you or your political enemies, is that's what happening here? >> i think it's a bit of both, becky, at the end of the day this is a mentality that for the last 100 years of the modern saudi state has been something that has generally been accepted, it was like trickle down economics, if you will, but the we is going forward how much they'll be able to do and what this will change in terms of power structure. we've seen the former crowd prince under investigation as well we've heard his account has been frozen and it's basically say nothing one is immune and going forwa forward, if the crown prince is looking to consolidate his power this is something he has to do in order to make that a rhealky. >> were any allies of mbs rounded up in terms of corruption that's what looks a little bit weird. it's just weird that only

adversaries were the ones involved with the corruption. >> i wouldn't say only adversaries, for example if you look at the actual names that have been released so far, or haven't been denied as you heard the foreign minister, the government is refusing to officially release the names but one of the people held was the minister of economy and he was one of the foremost supportersovsupport yerers of mohammed bin salman the former finance minister was still an adviser to the royal court and he was a great proponent of mbs and his plans and vision for the economy so in terms of the broader story it's an individual case-by-case basis but as i say, we're not privy to the information of what the charges are. could they be corruption are they oops? were they just miss managing funds? bigger questions because this is an individual case-by-case

basis. >> hadley, thank you very much again, hadley gamble coming up, breaking economic news weekly jobless claims are about to hit the tape. those numbers coming up at the bottom of the hour

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. welcome back we are just seconds away from the weekly jobless claims. we've been watching the futures and, wow, they're you should increasing pressure the longer the morning goes on. the dow future is indicated down

by about 120 points. s&p futures down by 114, nasdaq off by 50, a lot of people have been citing what's been happening with the potential for tax reform as the reasons behind it if you look at the ten-year, it's yielding 2.336% all of this in play as we get closer to the opening bell jim, take it away. >> becky, we have the jobless claims coming in at 239,000, we were expect 232, the reason it being higher than expected is last number we saw a week ago was backlog of claims not being filed because the hurricanes were gettingaway from the distortion continuing claims up higher, too. the question is going to be if these numbers are going to have market effect when we're dealing with the tax reform thing. the stock market ticked up about a quarter tick, still down 14 on the day. ten year still 2333. again, these labor numbers are becoming more and more important because they're less

weather-distorted. today is probably not the day that singled them out considering there's other fish to fry back to you, joe. >> why the market turnaround i saw japan was up, the nikkei was up then it went straight down did that hurt? >> well, the japan thing it seemed like a big technical breakout and i still think that move is okay because it went up 2% then back down 1.5% i think the fact that japan didn't continue through, and i do think that the tax reform thing, when we see a hurdle like this and we realize that it's going to be more and more difficult around a lot is priced into the market. we take that out, that's 14 ticks easily by the time this is done it will look more like a tax hike than reform, that's just a personal opinion and the market realizes it's a long row to hoe. >> that's one thing and also, jim, and we have to run, but i

don't know about that election, i mean, you know, you're talking about virginia and new jersey so neither one of those is a big shocker but everybody then goes back and looks at previous midterms and goes oh, my god, look what happens every time there's a midterm to the president that's sitting there, you never add seats, you almost always lose seats and it's a question whether you lose enough to lose congress or not and suddenly people are like wow, that's possible this time. >> no question it emboldens one party. remember this, the tax reform thing is specifically a republican thing and it would make the market feel better if they thought the wave was continuing and gaining strength and those two elections, i don't know if they proved the opposite but they were definitely a hurdle there's no question that that's part of it as well. >> we didn't know trump was going to win before he won, tim, we had no idea so i don't know at this point -- i just saw something on drudge that, what is it, 82% would vote for him

again, the same ones that voted. so i'm not sure where we are in terms of popularity but we're not going to know from what we're hit with. >> joe, that's been proven time and time again, the polls that we've seen over the last five years don't show us anything so we have no idea, one thing we do know, a tax cut that put $1.8 trillion back into the corporate sector over ten years is good for the stock market i don't think anyone can take the other side of that debate, that's what the stock market is made up of, the companies getting the money. >> the "new york times" and the "washington post" polls, let's call our subscribers and poll them and see how they -- >> good luck with that wow, look at this. anyway. >> amazing. >> look at that, amazing >> anyway, thanks. the senate unveils its tax plan. joining us, senator john thune of south dakota serves as chair of the senate, a republican conference and the commerce committee.

senator, yesterday i thought there were like rumors it was not going to be today. is it going to be today for the senate. >> it's going to be today, joe what do you know do you know everything or did you have to kill us if you told us what do we know? >> does anybody know everything is the question. there are some staffers who have been working night and day that probably know everything but the highlights of the bill will be similar and follow the contours of what the house has done, we'll take a slightly different approach on a couple issues but in the end we all want to get to the same place so this is going to be about delivering meaningful tax relief to middle income families, you do that through rate reductions, through doubling the standard deduction and through an expansion of the child tax credit and then the reduction in rates on business which is we what we think will be essential to get growth back into the economy, get those better-paying jobs, higher wages, most of americans haven't had a pay raise for the better part of the last decade so it's time to change that and we think

we have to have the right incentives in place and we believe this bill will accomplish that. >> senator just changing subjects, we'll get back to the task at hand but is it -- does it feel different to you with your colleagues from where we were monday and where we are today given the election? >> you know, i think that it's always a temptation, joe to overinterpret an election and i think in some cases that's been done but obviously the outcome tuesday night was not a good one for republicans although i don't think it was unexpected. hillary won both new jersey and virginia in the presidential race in 2016 but i think the margins were bigger than what people expected and what that suggests is that there is an enthusiasm gap out there perhaps among republicans, the democrats are very energized and i think the way you counter that is you start putting wins on the board and get accomplishments to run on i think tax reform clearly fits into that and it's important

that we get a result for the american people and if and when we do i think that they will recognize as they see how this translates into more money in their pockets, better standard of living and things they can do for themselves and their families that they'll recognize that when it comes voting time. >> right, but some of the people you need are in the same type of swing states or blue states and those are the people you need to vote yes on this and is there any way they start getting cold feet about the repercussions if -- if you listen to the democrats about this tax plan, senator, it's like -- they called it a tax scam, i think, so if you have a blue state or a swing state republican that is at all nervous, you might not be able to do this, to put the win on the board and a win night not be sufficient to stek the losses

in 2018 because it just seems to happen every midterm. >> i think midterm elections are difficult to predict and as you point out, typically in a middle of a presidential term the party out of power tends to do well but that's given that history i think it's also important that republicans give -- here in washington those who are running for office this next year, candidates something to run on and getting a major accomplishment like tax reform which hasn't been done in 30 years across the finish line i think is a very compelling rationale for why republican majorities matter. with respect to the states you're talking about, in the end there will be a lot of people -- this will be attractive. when the bill comes out today there will be a lot of discussion and debate around it, we'll have amendments and everything when we get to the finance committee but democrats are not going to change, their arguments are always going to be this is tax cuts for the rich. you can't win. that's what it's going to be.

>> you try to appease them then they smell blood in the water. is there -- there the senate plan does it delay the corporate tax till 2019, do you know >> well, i know, yes, but that will all come out later. we've looked at different options on that. >> is there a bracket above -- is there a fourth bracket? >> the bracket rate will all be available later today and the structure will be available later today, too. >> are you happy with both of those answers? are you happy with what it does with when it puts in corporate taxes? are you happy with what it does in terms of the rate structure >> yes, and we have a different rate structure than what we have today and a different rate structure than what the house plan has but what we try to do is ensure there's progressivety in the code, that the tax burden is similar to what it is today and that through all the different brackets that the

relief flows evenly and everybody benefits so all the different income cohorts we've been paying very careful attention to make sure everybody gets meaningful tax relief from this but as you know, the real gain in temples of the economy is on the business side, getting the rate down to 20% and lowering the rates on pass throughs and accelerating cost recovery those are the things where you get the incentives for expanding and growing your business and that's where you get wage growth, all studies show that. we think the one thing that ought to come out of this is higher wages for american workers. >> we're hoping for that, state and local taxes are -- the deduction is gone in this plan >>. >> we treat it differently, slightly differently than the house did but in both plans as you know there's a big -- there's a big change in terms of how that is treated but by doubling the standard deduction you dramatically decrease the number of filers who are going to itemize

it will go down under 10%. >> are you in bergin county? >> i'm in bergin county. >> can you exclude -- bergin county and essex county, new jersey can we still deduct? >> do you can a becky carveout >> i don't want a becky carveout. >> a joe carveout. >> a joe carveout. more importantly. >> but we want to make sure we have the carried interest. is that in your bill, senator? >> thanks, guys oh, she's trying to get me to talk about that. >> we'll share the pain. that was a joke. >> here's what's important, he said it's a different tax rate structure on individuals than the house and they deal with salt differently 'lfi will answer some questions. wel nd out in a bit. we'll be right back.

♪ buried just under the surface, the answer to it all. ♪ we want to need each other. ♪ the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence.

when we come back, could the time warner at&t megadeal in jeopardy what is the power of pacific? it's life insurance and retirement solutions to 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. ronoh really?g's going on at schwab. thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

a big week for media, 21st century fox holding talks with disney and, of course, the department of justice reportedly demanding 2008 sell off turner broadcasting or directv in exchange for approving the time warner deal. joining us to talk more about all of it is "los angeles times" television and media reporter

stev steven bataglio. thank you for joining us everyone is trying to track down this story about what was or wasn't said at the department of justice. how much bigger of a deal is this to get this passed because 2008 saying they don't know the time. >> i would think it's going to end up in court. they were completely taken aback by this at time warner and cnn and i think what they're also trying to figure out at secnn is what is the president trying to prove here >> you're convinced this is the president saying this politically? >> i don't think there's any doubt about it the president has had a vendetta against cnn for a long time. it goes back -- he feels bet trayed by cnn president jeff zucker who had his biggest success while he was running nbc the apprentice, he doesn't understand why his friend has turned on him. i think that that's at the core. >> that may be difficult to prove and the justice department

may have been dealt a bit of a blow by randall stephenson coming out saying i never offered to give this up and i'm not negotiating. >> i don't know why this deal can't go through no one has presented that rational for me. do you think this winds fwhup court or will the justice department have to back-pedal? >> they'll have to back-pedal or it will end up in court, there's no question. >> this sounds sort of like a media reporter's take on -- it's sexier and more interesting but like someone that follows it from the business angle would find -- i think it would be hard to make the case that the justice department is going to do something based on the president's personal feelings -- >> the president -- this presidents does what he says he's going to do he said during the campaign i'm not going to let this go through. at the same time he's calling cnn fake news, he's angry at them. >> watching the way cnn has covered trump, do you think it's

warranted that he feels that way. >> let's play this out let's say they do spin off cnn and cbs buys it. is cnn going to go away? do you think they're going to cover him differently? >> i've watched cnn and for years i saw 24 hour breaking news covered by cnn. and i've got to tell you there are times when i think it's 24 hours of undermining and subverting the trump presidency. you don't see any truth to that at this point that they have shifted their entire focus to be part of the resistance, the loyal resistance. >> whether they have or not, what does it have to do with this deal and the legality of this deal or the antitrust aspects of this deal. >> if we talk about trump doing this to cnn, i thought let's call it like it is. >> should a president interfere with merger and acquisition based on his own personal feeling of how he's covered it >> i don't think that's the case, i think that's the media reporter's take. but should a 24 hour news channel devote its entire time to what i -- >> there's a 24 hour news

channel that gives the president excellent coverage all the time de. >> depending on your perspective, fair and balanced coverage. >> people have a choice and they're expressing that choice everyday in the nielsen ratings. >> i would like to see some actual proof that the justice department is department is being swayed by personal -- >> i would like to see one reason why this merger shouldn't go through >> ultimately, you think the merger does go through >> i think it does >> and you think it takes how long to get through? >> i can't be sure about that. >> but it could eventually wind up in court, one way or the other. >> it's obviously going to take longer, yes. >> but eventually, you think this deal gets done? >> i think it happens. >> okay, great >> because i don't -- you're probably -- i don't understand how -- i guess if you wrap it in turner broadcasting, you could say that that's too much power you couldn't just say cnn -- >> which, by the way, trump said he was campaigning -- >> -- unless it's purely vindictive about cnn >> they can say it's turner, but

it's about cnn >> all right >> steve, thank you very much for showing up today >> thank you >> appreciate it later on cnbc, don't miss at&t's ceo randall stephenson. he'll be live with andrew coming up at 1:20 p.m. eastern time on "power lunch." and this is the story everyone's waiting to hear what he hato y ouits my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony financial. what are you working forward to? whether it's connecting one of or bringing wifi to 65,000 fans. sycampuses.inancial. businesses count on communication, and communication counts on centurylink.

well, it'sonce again.eason >>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. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

we are the driven... the dedicated... the overachievers. we know our best investment is in ourselves. we don't take no for an answer. we fight for what we want. even for the things that were once a given. going to college... buying a home... and not being in debt for it for the rest of our lives. 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. without pg&e's assistance, without their training our collaboration with pg&e is centered around public safety. we could not do our mission to keep our community safe. anytime we are responding to a structure fire, one of the first calls you make is for pg&e for gas and electric safety. it's my job to make sure that they have the training that they need to make the scene safe for themselves and for the public. it's hands-on training actually turning valves, turning systems off, looking at different wire systems all that training is crucial to keeping our community safe

and our firefighters safe. together, we're building a better california. let's get over to jim cramer he is live at the u.s. military academy at west point, back on -- in this neck of the woods again, getting ready for a special veterans day show. that's excellent, jim. good morning >> thank you, joe. we're pretty excited up here this is -- look, it doesn't get greater than this. and we know this is an amazing institution. i'm thrilled to be here. i'm thrilled that the military academy, west point, has allowed me to come up. and we're all set to do a great show >> who's -- in addition to that beautiful setting, it is great up there, isn't it up in the valley up there. what's coming up i know we've got a lot of andrews stuff coming up, which will be interesting. he's got great guests today. >> we've got alex gorsky, who i

think has done the greatest job in the pharmaceutical industry, and he is a west point graduate. i think he learned a lot of lessons there. and those lessons have been put to work at the only major company that has a aaa spletria sheet. and i think there are many good things to hear about j&j, about leadership, but also what veterans need to be able to do to connect and get good jobs >> i didn't know alex gorsky was a west point graduate. and by the way, that is the most beautiful shot i think i've ever seen, jim. >> oh, thank you so much yeah, we're very proud to be up here >> who's your makeup person? >> oh, my god, unbelievable team no -- the makeup speaks for itself >> just gorgeous >> jim, you didn't like that shot -- that tweet of you with the shaved head? you saw what i said. do it! is there any thought that that may -- >> i may have to my kids say go for it. and my wife says, go for it. that may be a look that you see

maybe on monday. >> that's breaking news. that's breaking -- that's huge all right, gjimbo, look forward to that 'll wesee you in a few minutes. "squawk box" will be right back. 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. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

your bbut as you get older,ing. 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. 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. a month after the vix crosses below 10, as it dad last week, the s&p tends to gain 1%, trading positively 80% of the time

all right, folks, we have a weird story about an amazon echo going rogue. in germany, the smart assistant started playing loud music at 2:00 a.m., completely on its own. no one was home. but it was so disruptive to neighbors that police came, knocked down the door, and unplugged the device the homeowner said he did not remotely activate alexa. it's alexa gone wild >> you got to -- really, you got to be careful with that thing. we have one. never hooked it up >> yeah, we didn't either. >> i don't own a parrot, either. >> for the same reason >> parrots can rat you out >> yes, they can >> you don't do anything in the privacy of your own home all of those facebook shots that you're sending in -- >> the nudie pics i'm sending in, yeah, none of that >> let's get a final -- >> the bell goes off in my head.

europe is week this is not necessarily a domestic concern here. it's more of a -- >> starting in japan >> japan, europe concern make sure you join us tomorrow we'll see whether the market recovers at all today. but "squawk on the street," coming up right now. >> academy at west point starts its morning. jim cramer is there, hosting a special veterans day edition of "mad money" tonight. welcome to "squawk on the street." i'm carl quintanilla with david faber at the new york stock exchange futures, dow set to open down 100 points we haven't had a triple digit loss since late october. jitters about tax reform, retail is weak. th