cream? >> i don't even know if it's dairy. it probably is, i'm kidding. there's an app to tell if you the machine is working before you get there. ice check. it let's users find their closest mcdonald's and whether or not the mcflurry is up and running and anything derifd from dairy products in it it also let's users view the status of the machine. >> make sure you join us on monday have a spectacular weekend. >> happy veteran's day "squawk on the street" begins right now. ♪ >> good friday morning, welcome to "squawk on the street." i'm carl kiquintanilla. cramer is off today. a lot to pay attention to including disney and nvidia earnings and president in vietnam at the apek summit and

10-year, we have michigan confidence on the way in an hour futures pointing to a lower open, the fate of tax reform and progress spooking some invest investors. >> taking on netflix, disney's yet to launch screaming service. >> and forget black friday, the world's largest 24-hour online shopping spree getting under way in china today with more than $20 billion worth of sales forecasted >> futures are in the red looking to extend yesterday's sell off as uncertainty over tax reform appears to be taking hold on wall street the dow's drop was first in eight sessions and both on track to post their first weekly losses in about nine weeks some of the coverage over the senate bill, mike says -- looms a showdown looms between the senate and house. >> i think the challenges are more in focus than maybe the potential opportunities. i do think yesterday interday, you definitely got that little

ripple lower when it seemed like there was going to be delay in the corporate tax rate cut but in general, i think the market has been kind of trading in a heavy way for a couple of weeks. everybody has been talking about small caps lagging really a consolidation, which is kind of what you would expect if you didn't know what the news was and looked at the screen, but i think it's one of those excuses that says, look, maybe we've run far enough and i think 2018 earnings estimates to some degree or another, i think depend on -- >> this late in the game after slogging through august and october and fourth quarter is normally great. >> again, we're talking about being 1% from the high i'm not saying it's anything big but what it reminds me of, those few dayses when the aca repeal was nip and tuck and the market seemed like it was trading on those headlines. does anybody think the path of the market this year has had much to do with that >> no. >> we decide to fixate in a

short term because it is up 15% year to date. >> if you're wondering if it has to do with diminished hopes for tax reform, there's a couple of places you can check it's actually down 1.3% this week this is doing worse than the dow s&p and nasdaq for the week. the dollar which has been sensitive to the headlines around tax reform and fiscal stimulus perhaps and the dollar is heading for its first down week in the last four so it's definitely out there this gap especially when it comes to when the implementation of the corporate tax cut happens. one year later in the senate market didn't like that very much. >> how much bang there will be just on the fiscal side. it's not necessarily looking like it's going to be some huge rush of stimulus. >> speaking of that delay, the senate gop did reveal its tax plan as the house ways and means committee now advances its version of the bill. spent much of yesterday confirming details of that bill and joins us with details.

>> there are big differences dw between the two plans but either way it means big changes for businesses the senate does delay the cut in corporate tax cut one year to 2019 and that rattled markets yesterday. there's a completely new approach to companies overseas earnings as part of the move to a territorial tax system the senate effectively establishes a corporate minimum tax to prevent base erosion and also imposes a new 12.5% tax on foreign profits from intellectual property. both the house and the senate have special rates for repatriated assets but of course they have different numbers. the latest version of the house bill is at 14% for cash and 7% for over assets and the senate is at 10 and 5%. pass throughs they also see major changes, senate gives them a 17.4% deduction against their income while the house cuts the tax rate to 25% and recreates

new rules how much of that income can qualify for the lower rate the small business lobby was initially against this idea but it changed its tune after house republicans added a new lower rate for the smallest of the small businesses the national federation of independent businesses is also come out saying it's encouraged by the senate's version. guys, getting the nfib's backing is critical to getting tax bills passed through both the house and senate back over to you. >> ylan, a little callen der management, when does the senate need to move similarly before government funding starts crowding the calendar? >> they don't have a lot of time next week you're expecting to see a debate within the senate finance committee. they have to pass that and hoping that will happen before they leave for thanksgiving break and going to be out all week during the week of thanksgiving you're not expected to see any movement on the senate floor until after they come back

there's also some complicated rules which committee reports out the bills. they are running against a tight deadline before the federal deadline of december 8th. >> it's going to be a busy week, just like this one was thank you very much. disney is the other big story today. an earnings miss as you probably know it initially dropped after hours but did a nice aboutface as the call got under way up 2% premarket. bob iger did make comments on pricing for the company's new branded app. >> we've given a lot of thought to pricing both espn and disney brand of service and i can't get specific with you yet, we haven't actually officially determined it but we said we will be forthcoming with you on this sometime after the first of the year. i can say that our plan on the disney side is too price this substantially below where netflix is >> iger said they'll create a

new trilology set in the star wars universe. last night was spent looking at the number of business units, down year on year most of them. >> the market seems to be somewhat encouraged by the decline of what was it, only 3% in terms of subscriber losses, that is a slowing and that may be something that people are happier about given the focus for so long has been on the continued decline of subs at espn now the folk s seems to be turning in part the direct to consumer efforts that they are involved in. they did give some details of their expected plan although we won't see a lot for to for some time try to understand the coast associated with that direct to consumer offering, going to be on the sports programming side and then the entertainment side. not a lot of conversation you might expect on the call nor on fox's call about a report on monday, the talks between the

two companies that would he have involved disney buying a lot of the entertainment assets, almost all of them of fox themselves. let's get more on this right now. mike morris joins us nice to have you here. >> thanks for having me. >> stock turned around why do you think that's the case >> it really turned around on commentary about the subscriber losses sub siding. the call in general was a win for the company. investor expectations were pretty low able to give us perimeters for the coming years which eased fears a bit. they talked about using their on content on the new service and talked about pricing, they set a reasonable expectation for prices at a product below netflix and subscriber comment was what made the stock work. >> turned it around. >> do you feel as though it's indicative of a slowing of subscriber losses that will be extended or is it perhaps the likes of one quarter that somehow is a little bit better than the last quarter?

>> it is the question that's going to determine the value of this company, media networks are 40% of the business. i'm very skeptical over the long term you're going to see stability or growth in subscribers, whether it's a $80 bundle or $40 bundle, they are too expensive relative to the utility they provide and those numbers will continue to come down over time. >> did anything in the call give you more confidence that this direct to consumer offering will become an important component here and something that is going to sustain them in the world you're describe gs of ott bundles as opposed to the typical ones we're accustomed to >> this call didn't give us inxremtal information. we track the cable companies and sat lig satellite providers and traditional subscribers are declining 3 plus percent disney, fox, the companies we call the haves are in a better position because they are in bundle s relatively they are ben

than the have-nots not included paying a television tax to a world that's much more frag meanted and choice and that choice will only proliferate next year. >> disney stock is at the very top of the dow this week i would assume a lot of it on the excitement around david's reporting looking at buying the 21st century fox business or bulk of it do you think that reignites talks, the share price reaction? >> it would be hard for it not to if i'm in either of those board rooms and see a positive reaction on the concept of putting two large companies together, i think it shows that the market has some positive expectation or positive hope and in a world where you're competing against netflix and google and facebook and amazon the biggest probably need to look at getting together to combat loss of audience. >> on that front, we heard from

randall stevenson yesterday with this potential opposition from the department of justice. given your thoughts about the industry, the need tore scale that you just referenced, what are your thoughts about the doj's potential opposition to time warner and at&t >> it's a great question i don't have really incremental thoughts about t the amount of m information is so limited. even what we read in the press we hear from at&t management, they tell us something and see other things in the press. very difficult to tell historically we've looked at it and thought it was a merger that would be able to happen because it didn't really concentrate -- >> right, yeah >> if it didn't happen, let's say for whatever reason it did break up, it seems as if time warner -- it would be pressure on it but not as if it's valued so out of whack with the rest of the stocks, is it? >> absolutely not. i completely agree with you. if we think about a world where we could have consolidation, time warner has the warner brothers studios and dc comic

series and great sports rights and hbo, amazing asset we were a buyer of time warner before the combination with at&t and still would be now. >> michael, thanks, appreciate your stopping by thank you for your time. let me quickly since we brought it up, disney and fox. let me give you an addendum as the weekends the two companies have not been engaged in conversations, it does appear at the very least they have certainly not abandoned the idea of that combination where disney would buy as we pointed out the entertainment assets, the studio, the cable networks and nat geo and fx, starz, sky, ownership of hulu. pencils aren't down. that's about all i can tell you at this point. we'll see and continue to monitor that the difficulty of getting that deal done certainly comes when you deal with the tax leakage as bankers like to talk about, the

fact that these assets would come with a fairly significant capital gain associated with them but it does not appear that they are quite over yet, guys se we'll see. >> media stocks had a great week 21st century fox, up 15% today but all of them perked up on this, cbs. >> little unclear as to why that was the case but they'll take it because they haven't seen weeks like that in a long time. >> it is alibaba's singles day, the largest online shopping holiday. we'll talk to michael evans later on squawk alley. nvidia will have a nice opening and j.c. penney, we'll tell you what they said when we return in a moment i've been thinking. think of all the things that think these days. businesses are thinking. factories are thinking. even your toaster is thinking.

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>> it is alibaba singles day, the world's largest 24-hour shopping holiday about to get under way. last year they had 18 billion, topping the 13 billion that american consumers spent in the four days after thanksgiving we'll talk to michael evans later on this morning on "squawk

alley". >> taking a look at futures as head to a break. coming off the worst day for stocks, s&p and dow in about two weeks and it looks like we're set for a weaker open though futures are off the lows of the session. dow down 15 with about 15 minutes to go before the opening bell more "squawk on the street" straight from the nyse straight ahead. 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. wow! record time.s. at cognizant, we're helping today's leading life sciences companies

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[ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours. new york stock exchange getting ready to hold a moment of silence in honor of veterans day. it celebrates the service of all veterans living and dead and armed forces day honors those currently serving. this goes back to germany, hostilities ended on the 11th

hour of the 11th day of 1918 it is not a cliche to say if you see a veteran today, thank them for their service. and besides that, it is also the 242nd birthday of the marines. semper fi. here is that moment of silence

>> we'll now show an unveiling of a plaque on the floor of the exchange this is commemorating veterans from world war i and ii and korean war and vietnam we'll be right back. question. what is an answer and how can you measure the value of one?

today trusted answers from trusted sources are rare and precious commodities. they're out there but finding them on your own has never been harder. it's why at thomson reuters we provide you with the intelligence, technology, and human expertise you need to find trusted answers. the answer company. thomson reuters. i'm a substation electrician my nwith pg&e.ck varela. when i was 17 years old, signed up for the united states army and i started serving and i now get to serve the customers of pg&e. i get to help other families. and that's what it's all about. when i came back from iraq, couldn't find work. then i found pg&e's power pathway program. here at pg&e i'm successful living in eureka with our two beautiful kids with a brand new career all because of the power pathway program. if you are a veteran, go to pge.com/powerpathway and hopefully your life will change like mine did. together, we're building a better california. well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking?

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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. >> you're watching cnbc "squawk on the street. the opening bell in just about five and a half minutes on this busy friday. we're watching the friday wrap up his asia trip in vietnam at the apec summit and the moderate sell-off yesterday worst day since august, have to go back even farther to see a

worst day for defense. and people are looking at high yield below the 200 day on the etf, whether jeff's warnings about correlations with the nasdaq are coming true. >> a lot of attention to the high yield sector. it's been soft for a couple of weeks. there's a couple of people who want to say there's exten waiting factors in there junk bond indexes are in distress in the telecom area, breakage of the sprint talks and iheart radio big issues that are reeling and have a lot of effect and there's a tax reform angle the cap on corporate interest is bad for high yield all of that being said, high yield being strong was a huge beacon for the stock market all year by the way, the spreads are only up to where we were a month ago. >> take that chart back. doesn't look like much post nine, director of floor operations with usbs, happy friday to you. >> happy friday. your thoughts on yesterday's action >> i think the concern was the

possibility of postponing the corporate tax cut for two years, past the election. you know, a good part of this rally that we've had is the hope that there will be a corporate tax cut, it will thereby improve the earnings of all of the corporations and p/e ratios will remain respectable without that, the markets got concern. now overnight we have new revelations in the alabama senate race that will put extra pressure on the republicans to try to get something done right now. and not have one more democrat vote come in there so i think the market will pay very careful attention to what comes out of washington and of course, when the president comes back, will we get back to the mueller commission and things like that? >> we had this discussion before the show, whether or not -- suggesting a dem takes office in the alabama and senate >> well, it's a risk, let's say.

>> axe xios said that republicans are talking about it as a possibility it's a bad case sen arcenario ig stakes i want to ask about the expensing for businesses because the wall street journal argues even with the corporate cut delay presented in the senate version, the expensing is more valuable against a higher tax rate in terms of a pro-growth policy. i wonder if that idea can catch on >> i think it's going to be a slightly tougher sell to the market as a whole and make some accounting sense it should inspire people to buy new equipment and get things done if you can write it off right away but right now they had their mind set on tax cuts and that's what they are really thinking about. >> and just more broadly, art, we were talking about how this seasonal period didn't work coming into august, september, october.

mid-november i understand is sometimes a little bit of a soft patch but how does it feel to you right now? people sort of saying it's been a good year but we'll back away a little bit how do you read it >> i think what they are going to look to see is consolidation or does it look powerful enough to turn into a correction? you're getting to a year end and people would like a handle will we have a tax bill? should i make my decisions about selling my losers? what should i be doing here? there's some confusion ho holdi up. >> do you think resolution comes on that by thanksgiving? >> there is some possibility of that we'll see what happened -- >> in terms of deciding if we're going to get it or not going to get it. >> you'll begin to get a sense again as people in washington are saying that it's sloppy as this looks now, it's got more momentum than the health care bill had and so therefore the insiders are somewhat

encouraged. >> how do you interpret what's going on with treasuries this week we saw this move lower in yields, all the way back down to 2.30 which surprised people given the better economic data and now shot back up to 2.38 are equity investors taking cues from that? >> they are watching it reasonably carefully, it's not a big enough move -- you'd have to almost make either new lows or new recent highs to get the full attention of equities. >> by the way, we're going to get another asian chinese ipo. s&p had stats yesterday. the number of chinese ipos that came at this point in a presidency, gw bush a couple, obama maybe four we've had 16 -- >> yes, i know that's part of the opening for asia so -- let's hope they all go well. >> says a lot about -- paying

attention to the president's trip to asia and tough talk on trade, especially this morning let's get to the opening bell and s&p at the bottom of your screen at the big board, celebrating its ipo today, it is a chinese online consumer finance marketplace. we're going to talk to the ceo when that stock opens over at the nasdaq sell brighting its ipo, band width. we have not yet gotten to retail, which is going to be probably the best day for jcp in over a year as they come in with a loss that is narrower than expected and revenue ahead and comps up and we were looking for half of a point, attributing the revenue loss to 140 store closures but it does look like the inventory picture has gotten better. >> people willing to look past hurricane affected things like that the stock was below three. only really kind of got below three in the last few weeks. clearly everybody kind of crowded on that side of the boat that said this could be rough.

i think on balance, the department store results we've gotten the last couple of days are okay it seaems like things are stabilizing but it looks like it's okay. kohl's also got an upgrade after yesterday's number. >> one theme emerging from retail numbers, the back half of october looks a little bit better, which is helping the comps improve, especially recovering from the tough weather. also watching the open for nordstrom and e commerce is a big driver and celebrating nordfrmtstrom from others. that was up mid teen percentage rate for july and august net sales 2% comps .9%. sales decline, that was a little bit disappointing on the top line numbers nordstrom rack saw comp desell race, one of the bright spots, comps down 5%. the quarter before they were down 1%. with this stock, people continue to wonder, these talks have been

held on a buyout for nordstrom, but whether a strong holiday season could reignite that and make the financing picture easier. >> as you reference, they said when they bowed out from their efforts at least they were waiting until after the holiday season and they were having a very difficult time raising the financing and levering up a retailer in a certain environment. you can imagine why even in a world where liquidity seems to be abundant, there migtd be a reluck tans on the part of smf to lend money to that. >> very con speck uous the entire way down, no private equity activity, except in the most stressed bankrupt companies. low expectations didn't seem to really help out that much because it was near the low. >> toys "r" us obviously, finally went bankrupt. micky joined yesterday talking about the difficultsy in retail

overall, j crew another buyout there are times when it's great to be a shareholder and those are two of them. >> the comments not just the point about clothes being less important, your documentary was called the man who dressed america. but then revealing that they tried to tempt amazon into buying the company take a listen. >> you can't just blame technology because technology is part of retail retail today is seamless between online and bricks and mortar the fact is, one cannot argue with a customer in his or her taste in trends. in my personal opinion, this is all my personal opinion, there's a trend going on which says clothes are just not that important or as important as they were. >> on that note, it is surprising, the macy's and kohl's and jcp, macy's best day in a year. >> goes quarter to quarter with these guys

the cash flows are in place, they are doing what they can on costs and inventory and the rest of it and the stocks have been so depressed and so many people leaning against them they can bounce for a while >> nvidia is the best performer in the s&p 500 again. >> for a change. >> up another 4% interestingly the stock fell on the results yesterday even though they were better than expected across the board. it just shows how tough this one is to trade off the back of earnings when it's already run up so strongly to review the numbers, gaming again seems tok the strength here, better gaming environment, the visualization numbers also better data centers better numbers. overall revenue, 2.6 versus 2.3 expected and i guess that was enough to get the job done it's popping 4% here, even though mkn argues it's being valued at 44.6 times earnings, versus the peer group of semiconductors around 20 times earnings. >> $125 billion market cap, which i guess is about half of

intel. intel trades at the hugely depressed -- so the whole world is saying they are in the exact right place for this moment in time even weathering $1,000 price in bitcoin, everyone thought this was a scyber currency mining ply as well. i don't know how much is too much. >> cramer's dog is probably jumping up. >> he always seems to be sleeping in every picture we see of nvidia. not really named nvidia. >> i'm not so sure. >> maybe they transformed it now to that. he had another name. >> it was a joke and maybe now it's not. >> something not a joke is time warner and at&t and department of justice shares of time warner are rebounding after a tu multiuous week, it was made clear to at&t by the department of justice and made clear at the shareholders that this thing may have to go to court if they want to try to prevail in terms of actually

buying time warner yesterday another day of back and forth to a certain extent, ran daul steven son joining the conference and saying, it is patently false to say we ever observed to divest cnn in any way shape or form. the doj senior officials in the government certainly that we've spoken with responding like that is what in fact they say happened and continuing to say it's either got to be direct or turner -- structural relief needs to be taken in order for them to pass this deal through that is not something that at&t is willing to do nor does it say that history in any way requires it to do given the vertical integration that would be taking place here the concern seems to be on the putting together of distribution and content, but so often it seems to come back to the idea of hbo coming back to advantage the at&t wireless service. they are not even saying do something with hbo

there's a lot of lack of clarity here one thing, gene kimmelman, president and ceo of public knowledge but was the doj chief counsel during the obama years and worked very closely with christine varnny, she's at -- she's advising time warner on this he thinks this got from somebody in a meeting yesterday, wall street firms all interested. 20% chance that the government has of winning in court. just to give you some sense here in terms of what they must be thinking about at the doj, megan dell rahim, did seem to change the tenor, they were close to a behavioral remedy. we'll see where it ends. >> this op-ed in the "times" by tim wu saying that essentially there is a theory you can put forward as to why at&t could have enough market pow er as a

distributor. comcast has its territory, it can't enlarge the market share of subscribers beyond that territory unless people move into it. at&t, 150 million jobs, in theory if they have a better offering and exclusive content and et cetera, it might not -- >> it is nationwide. >> be as vertical. >> it's true it is nationwide but that would be a somewhat novel theory on antitrust grounds and one we haven't seen a plied that often you're right, there are voices saying they need to think about this it's alternatively, randall stevenson, we're trying to compete with google and amazon and netflix, we're not even close. >> it's like asking kenny rogers to fire his bassist otherwise he becomes too powerful. >> he's saying in the context of the digital advertising, google and facebook dominate that, nobody else can be considered that much market power. >> a viewer reminds us this is the anniversary of vix 59 and

change and points out it is not at 59 today. >> it's closer to 9 than 59. >> let's get to courtney reagan, who is on the floor for us with the dow down 40. >> good morning to you, carl we see major averages starting the day lower. what's going on in d.c. at least may be giving traders a little reason to sell-off maybe some profit taking. this rally has had pretty strong legs to stand onand some of that has been the idea that tax reform is coming for korngss maybe those legs are a little less steady this morning that's the reason for the early sell-off we'll see what happens we know the day is long and this rally is really holding on pretty tight take a look at the major averages and rest of 2000 interestingly, just hardly green here but we watch that very carefully because it's been underperforming the s&p 500 for the last 30 days. we're seeing a reversal today versus what we've seen for the week for the week energy is up almost

2% and financials are down more than 2%. but we're seeing a bit of a reversal in that move today. you've been talking a little bit what's going on in the chip sector, worth showing again and talking a bit about nvidia better than expected earnings. we know the chip group started the week higher because of all of the deal chatter beyond broadcom and qualcomm. potential partnerships happening in the spags and you have earnings from nvidia, revenue almost doubling in the gaming unit and that's getting the street's attention, up 4.5% at this point and lifting the group continuing going into the weekend after this pretty big week the earnings season is mostly done but retailers, a lot of them left to report. on average we're seeing earnings up about 7.9%. i hope retail doesn't blow that for us reports are mixed. we have j.c. penney, they warned and went past the expectation and warning came fairly recently same store doubling what they

said and inventory down about 9% the company is closing stores and they are trying to get a little bit more disciplined on what they are offering in the stores to shoppers you always want to see inventory lower and sales higher and that is what we saw happen here in the nordstrom reporting with lower than expected same store sales and everyone had the highest hopes for. they missed the mark a little bit and nordstrom shares are coming back just barely. after the bell they were lower yesterday. next week we'll hear from walmart, target, home depot we'll be very busy, those of us that watch retail. last thing to talk about, the ipo we're having here today at the new york stock exchange, it's the 12th chinese ipo this year -- excuse me 12 rgt ipo this year for the stock exchange from china it's a peer lending online platform, translates to clap clap loan. it did price up $13, that was below the range 16 to 19 but one we'll watch here today and see

how the action shakes out. back over to you guys. >> thanks very much. courtney reagan on the floor for us let's get to bertha coombs at the nasdaq. >> we're watching the nasdaq here on pace to perhaps break its six-week losing streak and really this has all been fired by the large caps as courtney was talking about, the weakness we've seen in the russell 2000, that's down three weeks in a row what's power has been the chips, the philadelphia semiconductor index is about 10% away from its all-time high back in y2k if you're old enough to remember the year 2000 when chips ruled nvidia, already doubling this year, up 101% today and new all time high. believe it or not, that's slower last year it was up 223% but even for a slower growth, remarkable change this year for that stock meantime, we have media stocks today among the winners on a day

when we're seeing a lot of stocks edged lower news corp reporting better than expected numbers on the top and bottom line and continued interest and intrigue over 20th century fox after it reported better earnings as well. back to you. >> let's get oil prices as well. jackie >> good morning to you, carl crude oil is trading slightly lower but holding over the $57 mark what a difference a month has made in the trade, a move over 12%. psychologically oil didn't just hold 50, it's now close to 60. this is a totally different range. right now consensus is that there could be more upside ahead, possibly a break over $60 a barrel and the headlines out of the middle east, they've been driving this trade there doesn't seem to be a reason to think it's going to fade at the moment gee toshio politics the name of the game here, fundamentals on the back burner but those fundamentals are bearish

wti moving well over the 50 day, indicating strength there. opec will be out with the monthly report on monday, we'll get a better sense of compliance with production cuts and see how it's going the market will be watching that back to you. >> thank you jackie worth looking at the entertainment complex again, disney shares are up towards the high of the session, at least up 3% right now also did want to get to on the strength of earnings and largely the earnings and the lack of subscriber losses, only 3% down which is being applauded it would seem by investors this morning. did want to get to cable briefly, altice, we pointed out this week pummeled after poor earnings big shake-up, replacing the ceo. very aggressive having acquired cable vision with eyes towards

charter though unclear whether he could figure out a way to get that done. but the chief executive resigned this after what was not a good quarter at all at the company. guya who runs the u.s. operations will take on the role of the ceo of the overall company. while mr. drahi and founders appointed president of the board, wants to mention that altice are up this morning, positive comments about value overall. and when it comes to charter, next week we'll have liberty day. liberty media, when i get to sit down with the likes of john malone and greg mafay, there's liberty formula one. yesterday on the liberty broadband call he said the following when it came to charter and softbank quote, we're capitalists out there and if massa has a lot of capital, so if he has something

interesting to be done, we're always available always willing to say, we're here we're here come. >> we have assets, you have cash. >> you have a lot of cash. we would certainly happy -- the key is engaging there is not between softbank and liberty, it's between softbank and charter and that's where really nothing has happened we'll see whether it does. >> really quickly, guys, netflix, the 200 day for the first time in about a month on disney pressure perhaps and ge is hovering below 20 monday is going to be a busy day for flannery over at ge, david as we await the results of this months long review. >> we do and of course the key for investors as you know, carl, has been will they cut the dividend and by how much? jeff immelt said it was the worst day when they had to cut the dividend, during the crisis, the financial crisis but there are great expectations that they have to. >> yes. >> given the cash flow of the

company and inability to meet -- and from the cash flow, the dividend cut is comingand woul seem to be reflected in the fact that ge stock currently yields 4.8%. >> sure, it's so close enough to five, it's largely priced in in the context of a bigger strategic plan, right as opposed to its emergency running out of cash i do think the market would be okay with it given assuming that there's a plan. >> right, that they can buy into as well. >> a strategic plan and capital allocation which does figure prominently in the decisions the companies make in terms of how they use their money. >> when we come back, jack dorsey waying in on the deactivation of the president's twitter act. what he told andrew sorkin we'll talk to the president of alibaba, michael evans as we go to break, a look at the movement in treasuries this morning. back in a minute

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an opening trade on ppdf the newest chinese ipo this morning. we'll talk to the ceo later on today. >> meanwhile, disney is leading the dow. although the index down 44 'ltapots wel ke a short break

reputation president trump continuing his asia tour. today, he's in vietnam overnight, he sent out a strong message on trade at a meeting of asia pacific countries kayla is in beijing with more on what he said and what the reaction was good morning good evening >> good morning, sara. well, good both to you today president trump's laid out a vision of economic nationalism of an america first strategy that includes partnerships and a world for global trade that needs a better enforcer.

>> countries were embraced by the world trade organization, even if they did not abide by its stated principles. simply put, we have not been treated fairly by the world trade organization organizations like the wto can only function properly when all members follow the rules and respect the sovereign rights of every member >> reporter: that was the opening keynote at the apec summit in vietnam where 21 nations are gathered to talk about the global economy they represent about a half of it, and some 11 nations are trying to hash out a salvaging of the tpp deal that excludes the u.s., canada is currently balking at some of the negotiations, but the hope is they'll notch that deal before the end of this summit for president trump, this was sort of a reversion back to the

mean after a couple days of friendly reprieved from hardline trade talks in chuna with his counterpart, president xi jinping, but this comes an at interesting time because it's right before some very key deadlines in open investigations that the white house has in china related trade issues one happens before this trip is even over. the president will have to deliver a recommendation on whether to implement tariffs on solar panels, and then in january, they'll have to decide whether to institute tariffs on steel. by february, on aluminum, and then another deadline for this investigation into forced intellectual property transfers. comments were due by the end of october, and ustr has until august to wrap that up there are lot of factors converging at this point, but it does appear the president, while he put on a good face in china, and while they had a productive set of meetings according to all officials who have commented on

the matter, that he does still hold true to that guiding light of america first, and that could still play out when he returns back to the u.s. guys, back to you. >> kayla, what a great week of work in asia this week thanks for that in beijing >> when we come back, the ceo of panera, ron shaich with us, on the heels he s the news he's stg down from the company. "squawk on the street" continuesane moment. [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours.

welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber. a lot going on as we digest disney earnings. earnings from nvidia and jcpenn jcpenney, and oil is roughly flat >> our road map for the hour begins with a big day for bobba. singles day begins in just under an hour. the largest shopping event of the year we'll take you live to shanghai for the latest >> tax reform worries. stocks in the red after yesterday. is more volatility in tore

>> finally, disney reporting a miss on earnings in revenue, but the stock is moving steadily higher we'll tell you why >> stocks are moving lower as investors, some investors, some say, are rattled over the prospect of a delay with tax reform after the house and senate unveiled different tax plans. joining us, anastasia is jp morgan's global investment strategi strategist greg is a commentator at the "wall street journal." do you attribute some of this to jitters over taxes >> i do. the thing that's happened in the last two weeks is the probability of tax reform has increased significantly. whereas in september, i would say the markets weren't pricing in success, today, they are. that in itself creates a vulnerability because now the upside risk from tax reform is actually not as great as the downside risk from tax reform not potentially passing. >> greg, the speaker argues house marked up, they're going to vote. senate's going to mark up, they're going to vote.

they're going to get this straight in committee. what's different about that, what's surprising about that >> like anastasia was saying, whatever your probability of tax reform was twomonths ago, you have to raise it right now but i have to tell you, carl, i think what we're seeing now is a relatively small deal in the bigger scheme of things. if you want to ask why the market is up by 20% in the last year, i think tax reform is a small piece of it. i mean, highest tax firms have over that year underperformed. what you have here is a global tailwind that every country is enjoying stocks are actually up more in japan and france and germany than they are in the united states we're enjoying some of that. the fact that trump, i think, has opted for continuity on monetary policy is really valuable tax reform is definitely a positive and a solid positive going forward. it will be a negative if it fails but i don't think it's a disaster if it fails >> which sort of gets to your column, which i love the global rally, the global

synchronized growth story. trump should give thanks, not take credit for economic growth and the market, you argue. what's the risk that he continues to take credit for this rally you think he'll own it if it goes down. >> there's nothing wrong with taking credit. you should be stripped of your politicians license if you don't take credit for everything good that happens in office there's nothing wrong with that. here's what i think is the real challenge and risk for trump he campaigned not on two quar r quarters of 2% growth but ten years of three% growth that needs powerful, lasting reform to the supply side of the economic and he's put his best foot forward. there's a lot of good stuff happening on the regulatory side i think tax reform is positive, but this is big lift to go from 2% to 3% growth. everybody was cheering we had 3% growth in the second and third quarters i was cheering, but we needed a big drop in unemployment to get that after five years, the

unemployment rate is going to go to zero if we continue that pattern. he needs the supply side growth that can be sustained over a decade that's what tax reform has to deliver and it's very much a wait and see >> can it do that based on what you have seen from the house and senate 3% growth? >> you know, i think that's a big wild card. what it does initially, it does boost the corporate earnings i think it can boost the overall economic potential, but i don't necessarily see that we are going to see that in the next year or two. so i think that's very much a point in question. but i would point out the treasuries would actually move on that expectation because they would move on expectations of higher growth in the future. that's one of the reasons why we see upside risk to a treasury yield, if you get tax reform, because as a result of that, you would also get a more aggressive fed as well because they will likely have to hike rates because of that expectation as well >> getting us over the 2.6 line,

to 3, what's the upside risk >> i think it would require a tax reform to get us over 2.60 for sure, and the upside risk that i see in 2018 for rates is that inflation actually starts to firm up i think we may see some weakening between now and february, but i do actually see scope for inflation to rise into later into 2018. so that's why we're looking for many more rate hikes in the market as currently pricing at >> greg, are you that hawkish? >> well, i actually agree with anastasia's forecast what i say is, yes, higher interest rates, higher inflation. faster fed tightening, but don't say it like it's a bad thing it's a good thing. inflation is too low the low level of interest rates has been a puzzle and troubling puzzle for some years. if people are anticipating higher sustained growth like this administration has promised, we should see higher interest rates the real treasury yield is 0.7% right now. that should be like 2% if we get to 2%, we should be

cheering it means higher equity prices, higher long term returns, higher growth that's a good scenario, the risk, again, is that you get that growth without it actually showing up as sustained growth that it starts to actually develop inflationary problems. it's really not what i think is a big risk right now, and i think that the fed under janet yellen and under jay powell will be very much in the kind of like slow but steady mode of thinking, and welcoming upward pressure on inflation. but that said, i go back to my original point what you want to see is sustained supply side, not demand side growth >> anastasia >> just a quick comment. i agree we should cheer a rising rate, but i would do so to a degree, because at theend of the day, the yield curve does have more potential to flatten it becomes more and more of a concern as we progress through 2018 >> greg, real quickly, i know you back from your reporting days have you had an opportunity to

review other people's work as well as what the impact of this is going to be on middle-class families this thing has morphed in political dialogue from being a corporate tax cut to something they certainly are phrasing as a middle-class tax cut, but there seem to be a lot of questions about that i realize we haven't had a lot of time to review the senate bill, certainly. >> sure, i think both the house and senate bill will deliver a moderate tax cut for most middle-class families. but i think that in some sense, the administration has not been selling this plan the right way. because honestly, the idea here is not to give everybody a one-off check in their pockets it's to incentivize companies to invest more, and it raises productivity and real wages. if they pull this off, and i actually think most of the central pieces of this bill get it right, then the benefits to the average family over ten years of all that supply side investment swamp the sort of short-run impact on taxes. and if you ask me, that is what we should be focusing on >> one last point for you, greg.

i wonder if you could put the president's trip to asia in some context, because a year ago, he was talking awfully tough on trade, vis-a-vis china the "times" lead used the word flattery to describe his word in beijing. although today, now that he's out of the city, talking tougher. what's the lesson? >> i'm one of those who believe the more diplomatic one is on the high profile trips abroad, the better this is a president who has a reputation of kind of being shooting from the hip and perhaps not observing the traditional norms. and so when he has summits with many of the u.s.'s most important trading partners and china, and it goes smoothly, that's all to the good i think, you know, as you were telling viewers in the last segment, not withstanding those very nice words, the united states, this government is bringing a lot of bilateral trade actions against china. so i would not mistake the kind words that were exchanged over the last couple days as some sort of break in the hard-nosed

trade rhetoric >> even the tweets were more diplomatic maybe that's just the expansion to 280 characters. >> on a day with yet another chinese ipo, as we pointed out earlier. >> thanks. have a great weekend shifting over to retail, we have a few big movers today. jcpenney reporting better than expected earnings. nordstrom seeing a mixed quarter. jcp is up 17.6%. nordstrom shares are down 1% as we continue to focus on retailers and the amazon effect, here's the former chairman and ceo mickey drexler speaking yesterday at a conference. >> i would not sell my goods on amazon >> because >> because number one, they own the customer number two, i would be afraid that they would take every best seller and put it into their private label collection which i think they would do. now, i have enormous respect for

amazon and they're extraordinary competitors, but i would not do it >> joining us now is jan niffen, cnbc contributor a lot to unpack there. first on the results from the department stores and the big moves we have been getting in the stocks jcpenney, macy's having a nice move up again this morning i can never tell whether the business is actually improving or the expectations and the stocks have just gotten so low which one is it? >> the business isn't improving very much. the second quarter was about as good as it gets. the third quarter, really not real strength there, and the fourth quarter, given the set-up with the customer, you know, the long calendar, the ideal christmas positioning, the fact that everybody is working. it should be a really good quarter, and i don't have any reason to believe it's going to be a strong quarter in brick and mortar we didn't see that in the third quarter. we didn't really see that in the second quarter even though that was the best one when i look at these, i say macy's reported a good quarter and they went up 5%.

kohl's reported an okay quarter, they went down 5%. and even penney's today, if you give a bad outlook and your stock goes up, you're going to beat it. >> is there any department store you would say is investable here for the long term? do you like what any of them are doing strategically to turn around the business? >> for the long term, i like the last man standing concept. i think nordstrom wins its space, and lord and taylor doesn't. macy's wins its space, and dillards, baas kauvs, they don't. i think kohl's wins it space and sears and pennes don't they're investable longer term as the transition happens, and none of those i named are highly levered so they're not going to go broke they have the ability to pay a dividend they can buy back some stock there's a lot of good things going on in that space with

those companies longer term, but that's a much smaller business that they're running there will be fewer stores more online. and we're not sure what the return on investment looks like given that they will be the ones that win, and so they will be the ones that will be around if you're going to invest in one, they're the ones you want to be in >> does any of this do anything to stem the tide of closures especially for the most troubled retailers, and as a corollary, potential chapter 11 filings down the road? >> i expect to see a lot more closures, and i expect to see plenty of chapter 11s, just like we have seen this year i think we'll see more next year i think we'll see more store closings next year i think we'll see a continued transition with business to online that doesn't mean we won't see store openings i think amazon needs more stores, not less a lot of these guys who are mostly online will open small boxes and get close to the consumer those things are going tohappen, but in general, we're going to see twice as many stores close

this year as open. twice as many close next year as open and the ones that open will be smaller than the ones that close. >> what about mickey drexler saying amazon should have bought a big brick and mortar store like j. crew in addition to whole foods? is that something to ponder? alibaba today, launching its singles day and enlisting all of these convenience stores and brick and mortar stores across china. is amazon going to do similar strategy >> alibaba has 16,000 stores in china, and they want to have 100,000. and i think they've got 17 shopping centers, and they've got one store they're testing right now that's touchless you basically buy it with your phone, with really no help, like what amazon has done so yes, we're going to see more of that. amazon needs more stores but amazon should buy kohl's, not j. crew. they should also buy j. crew because they need good bands >> why should they buy kohl's? >> because it gives them 11,000 boxes in all the right spaces

that are only 87,000 square feet, they're not too big. they're these nice uniform ettities and they sit out of the mall by themselves on parking lots where you can do drive in pickups. they're the ideal accusation if you want to be in the apparel space and win. they also get much better brand recognition if in fact they have somebody like a kohl's, because they'll have boxes to put the brands in as well. kohl's needs more brands amazon needs more brands together, they could get more brands >> well, they do already have that joint venture together with the amazon experience and the pickups. jan, thank you for your thoughts, as always, on retail this morning >> thank you >> well, coming up, it's baba's big day. we'll take you live to china we'll get an update on the world's largest online shopping day. >> later, alibaba's president, michael evans, is going to join us on "squawk alley. t intoantoisnbc interview you're nogog wt ms. back in a minute

shopping day of the year alibaba hosts its singles day. 11/11 in china eunice is live in shanghai and has more on the big day. eunice >> reporter: thanks so much, guys celebrities like pharrell williams as well as maria sharapova are here to mark the occasion just to give you a sense of the size last year, singles day racked up

sales that were 2.5 times larger than black friday and cyber monday combined. analysts expect that record will break numbers once again at potentially $24 billion. now, you guys know how the day originated it originally was supposed to be a day for lonely hearts in china, but then alibaba in 2009 turned it into this massive shopping extravaganza. just to give you numbers that were interesting this year, 60,000 international brands are taking part 7,000 of those, american labels. that includes nike, lululemon, the gap, and estee lauder. these singles day, baby, isn't only talking about large sales but also their strategy forward. they see they shouldn't be staying only in e-commerce, but the way forward is to incorporate their technology and online platforms into bricks and mortar stores. so one of the examples they have

been showcasing today is with their supermarket chain. it's a company, and this company is sort of like a high-tech chinese version of whole foods so the idea behind it is that shoppers can go into the store with their mobile phone, they can scan information about each product. they can also order online and have those products delivered to their homes in 30 minutes or they can just take it out themselves if they decide to take it out themselves, they go to a check-out counter where there's a system that has facial recognition. it scans your face and then you pay. now, it all sounds very futuristic, but it's happening now in china guys >> we were just talking about that marriage of brick and mortar and online and how alibaba is approaching it. we'll waum that angsal today eunice yoon, thank you for the setup. >> when we return, panera announcing it will purchasa bon pain, adding to the holdings lineup that's a big portfolio, this as

punarrow's ceo says he will step down from the role at the end of the year we'll talk to ron shaich next. more "squawk on the street" right after this with the dow wnbo 2pots up, heart disease. you too, unnecessary er visits. and hey, unmanaged depression, don't get too comfortable. we're talking to you, cost inefficiencies, and data without insights. and fragmented care, stop getting in the way of patient recovery and pay attention. every single one of you is on our list. at optum, we're partnering across the health system to tackle its biggest challenges.

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this is au bon pain. au bon pai >> yes >> that's a song >> just six months after being purchased by jab holdings, panera bread's ceo announcing his departure, but not before purchasing au bon pain joining us is the founder of the company, ron shaich. good to see you again, ron >> good to speak to you, sara. i hope you're well >> i hope you're well as well. >> great >> big news. was this your final move before saying good-bye to bring your two babies together? au bon pain with panera bread? >> well, we'll talk about au bon pain in a second, but just to be clear, sara, this isn't an exit

in that sense. it's a broadening of my roles. i'm actually going to become a significant investor in the new panera, putting my money where my mouth is. i'm also going to be available to help them as needed, relative to consumer facing initiatives and acquisitions like the au bon pain acquisition but i'm also going to find the time i need to be able to help j.a.b. with their initiatives and then simultaneously my own desire from a personal investing perspective to invest against the kind of long-term transformation that has been at the core of panera's success over the last 30-odd years the fact is panera has been the best -- go ahead >> i know you have been talking a lot about the short-term thinking in the market for a while. why you were very happy to take it private even though the stock had been doing well. you're one of the most celebrated ceos in the industry, ron. why upon baau bon pain is it because of your attachment

to the brand, because it wasn't performing as well as the other fast casual type of restaurants out there. >> i think as you know i co-founded au bon pain, i then sold it to take our resources and bet on making panera nationally dominant. that worked. we drove 20 years of 25% annual returns. best performing restaurant stock over the last 20 years we beat warren buffett's performance at berkshire hathaway having said that, au bon pain and its acquisition is not about me, not about completing the circle for ron some people have said that what it's about is it's a powerful strategic acquisition that enables panera to do an even better job in hospitals, universities, and transportation centers. the reality is that now, with au bon pain and panera, we have one of the three top brands that hospital administrators want the docs want healthy food, they want wellness. we're able to give it to them in two different formats.

simultaneously, the same thing in universities. you survey the students, they'll tell you, panera, au bon pain among the top three brands they want on their universities we now have them you'll see us move more aggressively into hospitals, universities, and transportation centers, and this acquisition is a strategic acquisition to accelerate it, and it's a byproduct of our ability to work with long-term ultra investors like j.a.b this is exactly why we did it. >> ron, it's been fun to watch you get a little more active on twitter. a few days ago - >> yes >> you retweeted a report, a headline that said starting today, starbucks tries to morph into panera. you tweeted, lol what does that say about your views of the competition and the degree to which this space is getting crowded? >> listen, howard and i are friends for 25 years we all are colleagues. you know, listen, they're opening their first quasi-bakery, i wish them luck it's not panera.

my comment is in reaction to somebody saying is starbucks now going to try to compete with panera i think the world is increasingly competitive, but panera has won at it we literally are generating 6% comps year to date we're running 800 base points better than the all-industry average. we're winning. our strategy to be a better alternative competitor, through our innovation food bakery and marketing, our efforts to grow from $5 billion to $10 billion by betting on other consumer solutions like delivery and catering and panera at home, and to go, those are working we're on a roll. we couldn't be feeling better. and the benefit of having our partnership with j.a.b. is we're able to do infinitely more, and we're most importantly able to take the kinds of long-term views that has led to companies like panera and starbucks to win. >> ron, let me in on that note, the private versus public that

you have mentioned so many times. what's an example? give me a hard example of something you're now able to do to what you're talking about, the long term, that you weren't as a public company? >> this very acquisition it's the core. i mean, the reality is that in the public marketplaces, there is not a lot of support for multi-brand. and the first time there's a bounce, you are going to find there's a tax on whichever is the weaker of the brand because that's the quickest way to a short-term impact, and off we go to the races you would not as a ceo put yourself in that position. having said that, for panera today, this is a smart long-term investment it will pay off, i guarantee it. if you look at the history of panera, panera started as a cookie store we then became au bon pain au bon pain started as a bakery, it became a bakery cafe. we were the originators of what is called fast casual. we then sold everything to

better panera. here's the point you could have at any of those points bought boat loads of our stock for $3, $4, $5 a var we sold for $315 a share the point is, people say to me all the time, why didn't i tell you? i did tell folks nobody wanted to listen. we knew in the middle of transformation, nobody believes. and the point of the matter is, when you have an investor like j.a.b. at your back supporting you, you're able to make those kinds of long-term bets. that's the way, that's the only sustainable competitive advantage. it's been the core to our success, and i want to insure we're able to do that for the next 20 years. >> j.a.b. has built up quite a portfolio of coffee and breakfast companies. krispy kreme, pete's coffee, panera, au bon pain. dunkin' brands tanked on the news you were going after au bon

pain is that one that would fit into the portfolio in the future? >> we never comment on hypotheticals. >> talk about the restaurant industry and some of the challenges these stores are facing panera was doing a lot better than some of its competitors who else needs to go private >> i think that frankly the smaller companies are going to face that. there isn't enough interest. the market historically, i think, dave, you asked me about what's the difference between being private and public here's the reality for it. the market overvalues when they think that things are going well it undervalues on the down side. it's the reality and out of that comes great opportunity to take these kinds of companies private the truth of the matter is we've created a pervasive culture of short-termism in the marketplaces i don't know if you realize it, but last year, less companies went public. less pub companies went public in boon days than in the height

of the great recession ceos are saying this is a crazy world. aaron ross sorkin wrote, why would anybody want to be a ceo of a public company when the reality for them is they're going to be measured in weeks and months and maybe a quarter this infuses the way ceos think and gives powerful strength to guys like us here's the reality you look at what are the hottest investments today, the fang stocks facebook, amazon, netflix, google they have capital structures that let them do long-term investing. that's the kind of way that you can win. you can look at, i was on the board of whole foods, as i think you may know >> that's like amazon, do they get a free pass on this? >> no, it's exactly right. what do you think amazon did with whole foods first thing they did was cut the prices because they took a long-term view the reality is, in whole foods, they couldn't do that. they were up against the wall with folks climbing all over them, demanding short-term

action and the reality is that the ability to go long-term is competitive advantage. >> ron, we hope you'll continue to join us, talking about these issues and a lot more in the restaurant industry, the outgoing ceo of panera bread ron shaich always nice to hear from you >> thank you, friends. >> yeah, @shaich when you want to follow him. let's get to contessa brewer >> here's what's happening right now. president trump has been speaking to ceos at the asia pacific cooperation summit in vietnam. and he highlighted his desire for free and open trade, but he insists he will not let the u.s. be taken advantage of anymore. >> today, i am here to offer renewed partnership with america, to work together to strengthen the bonds of friendship and commerce between all of the nations of the indo-pacific and together to promote our prosperity and security

>> a senior u.s. military official says the ballistic missile filed by yemeni rebels was for iran, and officials are investigating how the missile was smuggled into yemen. >> o.j. simpson's attorney confirms the former football star has now been banned from the cosmopolitan hotel casino in las vegas. contrary to published reports in tmz, the lawyer denies that simpson was drunk or belligerent while on the property. he says simpson wasn't even given a reason why he was banned apparently, he was spotted out partying in las vegas. that's our news update at this hour back to you. >> contessa, thank you very much >> when we come back, a lot to get to with jim stewart this morning. the pulitzer prize winning columnist joins us to talk about the gop tax bill, disney, a t, and t, te waer, imrnand a lot more dow down 53. stay with us ♪

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disney reporting results yesterday after the bell missing estimates on earnings and revenue. this as it weighs potential proposal to buy assets from 21st century fox, as i reported earlier. those talks not on, but not dead julia is in los angeles. she has a lot more on that disney quarter, which is being responded to positively, in part, it seems, as a result of subscriber losses not quite as bad as people thought at espn and the like >> that's royalty, and disney shares are rallying. they're up around 3% this is a turnaround after the shares dropped on disappointing earning and revenues which were dragged down by the tv business. the media network's operating income did drop 12%, though analysts are noting that the pace of cord cutting slowed to 3% this quarter. the stock turned positive in the earnings call yesterday, as ceo bob iger discussed disney's digital potential, including the espn app launching next year and

the disney app launching in 2019 announcing that it will be priced substantially below netflix, netflix shares now down over 2%. >> our goal here is to be a viable player in the direct-to-consumer space, space we all know is very, very compelling space to be in. we also believe that our brands and our franchises really matter, as we have seen through netflix and all other platforms. >> iger detailing some content on his upcoming disney app, including a pixar series, marvel, and a live action star wars series. speaking of star wars, iger announcing the director of the last jedi film will create another trilogy. he also said the force is strong with han solo. >> we just wrapped production on solo, our second stand-alone

star wars movie. giving the huge popularity and global affection for this iconic character, we expect a lot of interest and enthusiasm when it opens over memorial day weekend. >> iger refused to comment on the report disney is interested in fox's assets, but he said that while the company doesn't need more scale, he also said you can never have too many powerful franchises. back over to you >> that was an interesting part of the interview thank you very much. to washington this morning, where both house and senate republicans are out with their tax reform proposals among the differences, the timing for that corporate rate tax cut, the number of individual brackets, what's in store for the estate tax one similarity, though, both keep the carried interest loophole, which allows managers of some types of private investment funds to pay a lower tax rate than most individuals our next guest says keeping the tax break calls into question the fairness of the entire proposed tax code. joining us at post nine to explain, pulitzer prize winning "new york times" columnist jim stewart. this is interesting.

you zero right in on this. >> exactly, because if there's one thing everybody agreed with, one of the most egregious loopholes in the existing code is that private equity managers, hedge fund managers, real estate partners, some of the richest people in the country were paying nowhere near the top rate because they get this carried interest loophole. trump said he would repeal it, mnuchin said they would repeal it, everybody was against it, and then suddenly, we get both proposals, house and senate, there it is intact my problem with this, there's some good things in these plans, no question about it, but as long as this thing is in there, what i object to is it's not just cutting taxes for the rich. it's treating some rich dramatically different than other rich and i mean, specifically, rich people who are investors, who happen to be in this tiny cautery of in some cases, billionaires, as opposed to rich people who actually earn their money by working they are still going to get hit. and if you live in new york or california, where a lot of them

do, they're really going to get hit. and meanwhile, these other people who, you know, trump himself referred to as, quote/unquote paper pushers, are going to still be paying a very low capital gains rate >> how amenable are you, at least, to changing the holding period steve bannon said he's up for three years. >> the holding period is better than nothing, but my argument is, the problem with the carried interest loophole is not that people aren't holding their assets long enough before cashing in and paying the low rate it's that they are not investors. they're not risking their capital. they are being paid for their services, managing these assets to the hedge funds, to the private equity funds, to the partnerships, just the way the rest of our work and lend our services and get paid. we pay ordinary income tax rate. this is income to them they should pay at the ordinary rate i write books. i don't know whether they're going to make any money. i invest i make investments i create a product, put it out

there. when the royalties, if there are some, finally trickle in, i pay the full rate. i don't get some capital gain rate why should they? >> have you done the math on how much it would save if they closed this loophole, specifically in private equity >> yes, look, it's not a game changer there. the cbo says it's estimating $17 billion over ten years there are other estimates that are much higher than that. but it's not going to, you know, close a trillion dollar deficit, but that to me is not what this is about it's about treating people fairly this is a maybe once in a lifetime opportunity to make the code more fair that's, i think, a key element of any tax reform. >> you have been focused on this for so long. it's enraged many of us, of course many of us whom have funds that are in the private equity and hedge fund business, taking nothing away from them, but you have to be kidding me is the thought. so how did steve schwartzman manage to do this? >> you know, look -- >> just to put one face on it.

>> the stars were aligned. there's steve schwartzman, who seems very close to the president. i don't know these extremely rich people seem to, you know, they rise up at the last minute, and they save the thing. and they just keep getting away with it. maybe because there aren't that many of them and i think the republicans figure, oh, well, if everybody is getting a cut, they're not going to care that we're still protecting these fat cats i don't know the logic i will say it's not too late you know, brady, the fact that he extended the time period, he could say let's just get rid of this more likely the senate the senate, i was waiting all day yesterday. they said they were going to do something about it, and then poof, nothing happened when it came out so they could still do something about it it's not too late if they sense that people are as outraged as i am >> bringing the corporate rate down to 20%, the possibility of them being considered pass-throughs anyway, does it really matter even if they were to get rid of it isn't their tax rate still going to be low? >> the house version

specifically said the lower pass-through rate is not available to people who are engaged in financial services. so it looked like they were trying to make sure that they don't get the pass-through rate. the senate version is not clear exactly where the pass-through rate ends up i think it's a little bit higher it's still not clear to me whether they would be able to qualify for that >> you say it's not too late, but it's late if you want to thank by thanksgiving. >> and why not to me, this would have been item one, and quickly do that and then move on and trumpet it as a fairness element. by the way, it's not the only fairness thing that's still in there. the exchange for real estate partners -- >> i thought you were writing about the estate tax when i saw the title about what helps the rich it's the branding of this. >> well, you know, again, this is another way they could easily fight this i think they would get some -- the populist crowd is very much against it they could get them on their side i'm hoping they'll still do it i haven't totally given um, but

you know, if it doesn't happen, i'm despairing, the swamp is still alive in washington. >> states from what the clinton era, wasn't it, original that's where it came from. >> it shows if you can slip something in there that benefits like you and a handful of your cronies, it's very hard to get it out >> jim, thanks good read. jim stewart of "the new york times. >> when we come back this morning, chinese fin tech opening for trade at the stock exchange the ceo will join us next. the dow is down 55 don't go away. [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future.

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ameriprise all right. what group of stocks just posted their longest losing streak in seven months yeah, it exists. find out at tradingnation.cnbc.com

chinese fin tech company ppdai going public, growing a

list of chinese ipos this year for more on this company's ipo, we're joined by the company's chairman and ceo, cliff zhang. congratulations. >> thank you >> very nice we have been talking about chinese finn tech all week, all year long. what's specificpdai. >> we're the first online customer lending company in china. we founded the company in 2007 we are actually a technology company. so we use innovative technology to solve the underlying credit assessment and risk based on challenges in the business, and we grow very fast every year >> who is the target audience, and what underlying trends support your growth? >> yeah, we are very lucky to be great market we have a huge population. and a lot of them are not covered by our traditional financial institutions

so the huge market potential drove our growth and also, the technology we use to, you know, to help us to grow fast and our growth is exponential. driven by the technology >> how tightly regulated are you? haven't the chinese authorities been looking at this whole peer-to-peer lending business and trying to crack down a little bit on credit products? >> yeah, as you know, innovation is always ahead of the regulation and rules and we are happy because our regulators have issued a rule last august, and we believe the market will be soon, you know, regulated. we call it registered. it's a registration process. and we believe the market will be more orderly and more healthy. >> what is the average size of

the loan that one of your customers takes out? >> the size? >> yeah, how much are they borrowing? >> several thousand rmb. our borrows, they borrow many f same buy electronic gadgets for trade, or rent out apartments buy electronic bicycles or, yeah, et cetera. >> smaller products. >> right >> we spoke to, i guess, one of your competitors a few weeks ago, went public here on the nyse you're the third chinese company to go public here. where factors were you looking at when you brought the ipo back here, which we were talking about is interesting in a time president trump has been in china? >> yeah, we can't comment much on them. actually, we are -- the difference, verticals of the customers, so for us, we are

happy to be a public company, and the great, you know, new york stock exchange. and, yeah, we are committed to our customers and to our shareholders it's still a long way to go. it's a long journey. >> yes, this is day one of your life as a public company >> yeah, true. >> cliff, thank you so much for your time. >> thank you >> congratulations once again. >> ppdai let's get over to john fortt now and get a look at what's coming up on "squawk alley." john >> anything going on with china today? i don't know singles day. another thing going on that's important to the chinese market, arguably the biggest sales day of the year. is it losing steam is it changing at all? are there things that u.s. technology companies and other companies should go into we're going to dig in coming up on "squawk alley". tting edge university counts on centurylink to keep their global campus connected.

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here's a look at the s&p 500. media stocks amongst the best performers don't see that very often this year in fact, they've been the ones in the red more often than not but time warner shares are up. a lot of different reasons here. that in part because of belief

perhaps either at&t, time warner will prevail in court against the doj, or there will be some sort of amicable settlement reached between the two parties. disney up after reporting earnings, but it's the lack of subscriber losses that seem to be embraced by investors this morning. and fox up in part on continued reporting that they are not quite done yet with the idea of certainly selling a lot of assets to disney and embracing the smaller scale of a news/sports broadcast company. >> i wonder if the doj launched this fight, took it to court with at&t, time warner, if that would discourage other deals in the sector this was supposed to be an administration that was business friendly, antiregulation, right? deregulation or whether this is a special case because of cnn. >> it's a great question, and i don't know you know, it certainly wouldn't enhance anybody's belief of -- that a deal is worth doing if it

has some regulatory risk to it you have to believe, if they do go to court, particularly given what would seem to be applying perhaps some new theory in terms of antitrust in question here. >> deregulation with a populist ting maybe when we come back we'll take you back out to china for alibaba singles day. alibaba president michael evans set to join us in just under one hour dow's down about 51 points a quarter of 1%, as david said, disney in the lead, intel is lagging. we'll be right back.

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♪ ♪ good friday morning. we are counting down to midnight at alibaba's headquarters in china. it is singles day. the world's biggest shopping event. alibaba holding a gala in shanghai in celebration of the e-commerce, which is what we're looking at right now listening to this for a moment, but if you're not familiar with the holiday and the event, it puts our black friday to shame, it even puts prime day of amazon to shame

>> and they keep amping up the entertainment value around it. i got to say, now that jack ma is taking all of these entertainment turns, you know, the michael jackson thing, you know, the debut on an album, i expect to see jack ma. >> perform >> yeah, lowered from the ceiling, spinning around or something. if it's anybody else, i'm going to be like where's jack? >> we're told pharrell williams and maria sharapova are there. $17.8 billion in sales last year >> expected to be some $23 billion this year. there they go, off to the races. 24 hours chose on on this day, singles day, because you need singles to put together 11/11, which is what we are >> very clever >> welcome to "squawk alley. i'm at the new york stock exchange with sara eisen and john fortt we have full coverage of this massive shopping event throughout the hour and the affect it will have on alibaba we'll talk to the presidt