shattered art auction records. it's thursday, november 16, 2017 "squawk box" begins now. ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. u.s. equity futures seeing a bounce back after a down day yesterday in the markets yesterday twe saw the biggest declines since september 5th for all three major averages all three now are at the lowest levels of november this morning things are turning around dow futures indicated up by 88 points s&p up by 10 nasdaq up by 31.

let's see how things did overnight in asia. asia was leading the declines yesterday. this time a little different story. nikkei closed up by 1.5% hang seng was up by 0.6% shanghai was flat. in europe, at least at this early trading hour, there are green arrows across the board. barely hanging on for the ftse the dax and cac each up by better than 0.6% looking at crude oil prices, at least right now, crude oil looks like it's down 7 cents 55.26. couple big stories we're watching, mattel has rejected a takeover approach from rival hasbro reuters reporting that mattel believes the offer undervalues the company and doesn't take into account the potential for regulators to rejected the deal on antitrust grounds reports saying mattel's new ceo who took over in february may be trying to drive a harder bargain in talks with hasbro

the company cut its full-year revenue outlook. you are looking at both of those stocks now time inc is reportedly restarting talks to sell itself to publisher and broadcaster meredith corporation the deal backed by charles and david koch the koch brothers are part of this their plan to invest more than 5$500 million into the combined company as part of this transaction it would keep the company investment grade big questions about whether they will reach a deal. meredith tried three times before and with the koch brothers involved would it change the appearance of meredith/time. what are the koch brothers wanting in all of this most things they have historically invested in in

this -- historically would be politically related. >> the reason time has to come back to this is because they are in more and more dire straits. >> time is in terrible trouble onnal wall stre the wall st, 8:30 a.m. come jobless claims. industrial production at 9:15. the monthly home builder survey at 10:00 lael brainard and rob kaplan are speaking today as well you have to watch for them walmart and best buy reporting before the close -- before the opening bell after the close, we will hear from gap and williams-sonoma big day in washington today. the house is set to vote on its tax bill today but there is trouble brewing in the senate with a key republican voicing opposition to the bill ylan mui joins us now with more. >> reporter: republicans are a man down in the senate wisconsin's ron johnson is the first republican to come out

against the tax bill he's worried the benefits for corporations are bigger than the tax breaks for pass throughs he says they're the engine of the economy and should not be left behind. johnson is not the only one feeling uneasy senator susan collins of maine was on "meet the press" last night. she said she was concerned about getting rid of the individual mandate as part of tax reform. >> i doesn't think it's a good idea from a political or a policy perspective healthcare is is such a complex issue. to pull one section out of the affordable care act without any kind of replacements such as an auto enrollment, bill cassidy suggested earlier this year, and put it into a complex tax bill does not make sense. there's a different story happening in the maek makers wa

bill this afternoon and president trump will head to capitol hill to push this over the finish line. there are a few local hold-outs, but right now it looks like the house has the votes to pass this bill there's a risk of deja vu here with the agenda moving forward in the house, and then stalling out in the senate. we've heard this story before. back over to you >> thank you very much we'll watch this closely we'll be talking with senator ron johnson at 7:30 a.m. eastern time on "squawk box. his big concern is that it gives too much to big corporations and not enough to small businesses >> it's a pass-through issue i don't think he thinks it goes far enough for the pass-throughs. you're not sure of the whole rational for the pass-throughs ron johnson is a conservative. i know him pretty well had some off -- when he's not just interviewed, i had some

relationship with him. he doesn't seem like the guy who is going to -- >> he's really frustrated. listening to his comments yesterday, he was like i've been talking for months about this. >> it sounds like a cry for help he wants action. to me, we'll talk to him, but i think he wants to get to somewhere -- >> i would agree but i'm trying to figure out how he does that without up ending the bill >> you can't say that about mccain, murkowski or flake -- >> i'm -- i think it would be complicated for them to get to yes, because it would require massive restructuring of the bill unless you raise the corporate tax rate you're talking about 6$600 billion. >> he's got his subjective viewpoint of what fair is. >> right >> if everybody is going to have a subjective viewpoint that's a

republican in the house or senate, it's never going to get done if you have a subjective viewpoint of what's fair and not fair so in ron johnson's case, he thinks the big corporations are benefitting too much, not whether growth comes out of the big corporations >> that's why in the past you always needed to do something bipartisan because so many people have different views on this. if you try to do it with 52 and can only lose two votes, it gets problematic. >> you will never have a bipartisan bill where if you are lowering taxes democrats will support or if you're raising taxes republicans will support it you are never going to get that. >> i mean, it's -- you're right. everybody has their own -- >> obamacare -- it's a pipe dream thinking we'll get back to thing like that. look at bamacare, there wasn't a single -- 17% of that, not a single republican vote you're not going to do tax cuts bipartisan >> then you can't lose more than

two votes. ron not being part of it -- >> i think he comes around this is also a guy that was down in the polls he rode trump's coattails, and he's in the same state as paul ryan i think it's a cry for help. it's a cry for help. >> by pushing the obamacare repeal end of this, how much more complicated does that make it >> a lot >> but i thought when we talked yesterday, i watched a lot yesterday, we had paul ryan on, he said we already -- we want that >> the house does, but not the senate >> the senate is putting it in their bill >> but they couldn't pass it before >> but they supposedly to do that, they splus thougmust have they turned someone. yesterday i watched kevin brady, he said, no -- i watched the interview. you didn't know what was in the bill, he was talking about medical expenses he says they don't take it away in the senate bill >> that was in the house bill.

>> that's what senator thune was on earlier brady came on afterwards, and he was saying it won't be in our bill, but we definitely in reconciliation, if it's in the senate bill, we voted on that already in the house we're for that we'll do that. susan collins won't. let's get to the broader markets. you know, we just spent a lot of time talking about tax reform. both of these guys, doug coate from voya and mark freeman from westwood holding, both of you said the movements in the market right now, the sort of tough advances that we're seeing from what we were getting every month, it's because of the uncertainty over tax reform. both of you think that's causing the stall, right >> true. but it's much to do about washington look at euro sentiment surging to a 17-year high. china's retail sales, 10%.

their capex up 7 % >> did you not say -- they asked you what's pressuring the markets lately the first thing you said was uncertainty about tax cuts did you say that >> that's a one-day thing. >> a one-day thing >> so manufacturing, 30-year high >> right >> fundamentals drive markets. despite the worse impact of politicians and irrational thinking >> if it becomes clear this is a no go, you think it's a one-day thing? >> no, because the fundamental back drop of the my is so strong -- >> so you think if tax reform doesn't get done, that's a one-day phenomenon and the mar ketd kee market keeps going higher? >> i do. >> i would take the other side of that. you can look at what forward earnings estimates are, they're incorporating -- >> forward

>> forward >> okay. >> forward earning estimates are incorporating some form of tax reform i think that doesn't come through, that gets backed out of the market >> okay. so that's one thing to watch yesterday bullard said don't raise. you think they're still raising, don't you? >> yes in december, i think we get another rate increase. the real question is what do they do going into next year ultimately we need to reconcile the -- what the fed has projected what they proceed the path to be versus market expectations which are much lower. to the degree how that gets reconciled will be a key issue >> if the fed was only going to raise, if there was an inflation on the horizon, would they be raising? why are they raising >> they're -- i think this notion of a new normal needs to be debunked. the thing that's holding back

growth, reflation, productivity, is that we don't have pro business policies. we get that -- i think the fed -- >> i thought you didn't care about what they did. >> i think the fed is standing in the way because any time the market goes down, the fed comes in, all the central banks come in i call that moral hazard they are in the way of pro growth economic reform i do want taxes, but we have a global synchronized expansion. that is far more important i would like tax cuts? yes. but why is productivity all of a sudden 3%? why is gdp 3%? we have a pro growth administration that is implementing deregulation and at least wants to do tax cuts >> where is inflation? >> little below 2% >> but why >> with 4% unemployment, with the global synchronized recovery, with everything in the

past that would have gotten you thinking -- >> it should be much higher. >> why >> there's a laundry list of issues >> apple x or the ten -- >> i like x. other people call it ten >> all these things. >> it's because we haven't let capitalism do what it does, inflation will go up yesterday's number was strong. it was reversal of a negative trend. inflation popped up. three-month trend on inflation was positive that was a good sign why? because productivity is up because gdp is up. pro growth economic policy is working. >> that means the fed can continue to raise. is that okay because of the economy being able to withstand that >> a degree. that's what's important. we are talking about real growth from an earnings stand point nominal growth is important. that's where the inflation comes in some inflation is actually a very good thing. if you look historically, the

highest market multiples when inflation runs between 2%, 3%. for me, going up 1.5, 2.5, i don't view that as a headwind. >> that's reflation, aka good inflation. >> exactly right >> okay. all right. all right. we will be hearing a lot -- we are hearing a lot of similar things with a lot of the people we have on that's that everything is justified. because the earnings were there. >> it's a global economy >> we keep hearing that again and again. i wonder how that becomes less -- wonder how our belief system is shattered at some point where we look back and say why whether we all saying that when this was so obvious i don't know what the obvious thing is >> we have an administration that is at least trying. i believe they get tax cuts done the next week or next year i don't care the biggest thing i want is full expensing for the next five

years. that might be better than a tax cut. >> the last thing, in terms of all those factors t comes back to the profit cycle. the market and economy will follow the profit cycle. >> that's long in the tooth, but doesn't die of old age >> that's what you watch. we will get over to leslie picker some corporate news. nelson peltz battle for the board seat at p&g took a dramatic first >> the latest recount swinging the vote to nelson peltz pote potentially granting him a board seat p&g said they had won, but in this recount nelson peltz won by 43,000 votes so what happens next you guys know, we have talked about it on "squawk" before, it's the snakepit. that's the process where the two sides will huddal in a room and investigate each wrote p&g's shareholder base is 40%

retail and they vote more with paper ballots than electronically in the snakepit they will look at each contested ballots to make sure it's valid p&g can choose to challenge the result if it wants the company spent $35 million to keep peltz off the board other share holders seem to like the idea of him joining. p&g stock jumped about 3% in the after market yesterday when the latest recount results were announced. >> leslie, i don't mean to have a real commentary on this, except to say i think it's almost embarrassing for p&g at this point for it to be this razor thin, to go through the motions, and then continue, if they do continue, as you describe this snakepit scenario, i don't understand what's happening are there that many share holders on the other side that feel as vociferous clearly as management does about this >> it's unclear. typically retail tends to vote more with management

if you have 40% of shares outstanding held by retail investors, i received e-mail from a lot of retail investors from this proxy fight that seem adamant that nelson peltz should not be on the board. that said you have a significant amount of shareholder base who supports him no matter which way you slice the vote count from p&g's perspective it couldn't hurt to put him on the board. if they do successfully keep him off, it's still a close vote, then they have a mandate to make the p&g stock price soar or risk very, very unhappy shareholders. >> when will we know >> p&g said the final tally will be in weeks to come. i was told it should be before christmas time with this one, you never know. >> what do they say the cost will be to continue the counting >> the cost to continue counting

is not that much, about the six figures. >> oh, okay. just six figures >> but six figures relative to the 35 million we have already spent to keep peltz off the board, just pennies. >> weeks with egg on your face >> exactly >> who decided that -- to go out and say we won when it was obviously so close >> leslie can speak to that. you did the interview. >> was ivs associates, an independent inspector of elections. >> they said you won, they told p&g you won. >> they did. they said preliminary. >> who are they employed by? >> they're their own company who pays the bill? >> the company does, procter & gamble >> bingo >> looks bad >> looks terrible. >> yeah. don't listen to peltz. yeah he's going to say it was close we got this. then it turns out -- bad >> a painting by da vinci

breaking an all-time art auction record last night. we'll tell you how high the bidding went after this break. your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

♪ driving it home. >> it's not about you. >> talking about my hair color my world paint it black the lighting the lighting we're working on it. i swear. >> i'm looking at it now -- >> in the chairs it was okay on the set, anyone that doesn't think it's dyed doesn't have eyes i will have to bdye it so it doesn't look dyed. which is not fair. you had to do thatbefore i don't wanted to have to dye it so that it -- a painting by -- a painting by -- there's bugs in a new studio >> just takes time to get used to things. >> i don't have black hair a painting by leonardo da

vinci -- ♪ >> color my world. >> cry me a river. >> over here it's different. it's the -- i think it's when it's dark out. leonardo da vinci reportedly painted this, set a new record "salvator mundi" paint sold for $450.3 million at christy's auction. can't think of anything that has gone for anywhere near that. recently rediscovered work is one of less than 20 da vinci paintings that are known to exist. it was one of the last ones that was left in private hands. it was purchased by an unidentified buyer bidding via telephone. following a bidding war that lasted nearly 20 minutes >> who do we think it is >> how could we ever know? >> we may find out >> the most expensive work of art ever told. experts say it was painted in the same time frame as the mona

lisa similar sort of feeling when you look at it the previous owner bought it for 1$127 million >> our art guest yesterday thought it could go for less >> they had to have it insured and promise that it would go for at least 1$100 million >> christy's did a brilliant job of marketing this. what does that mean? that means there's a lot of money in the world if it goes for 450 million, doesn't that say -- >> things are choppy >> it's hard to buy something, if you have a lot of money, it's hard to buy something not -- especially with zero interest rates. >> poor babies >> big diamonds. people like buying big diamonds. if you have a lot of money >> who wants to bet -- the other conversation is taxes. who wants to bet whoever did buy this will put this in a museum somewhere, tax shelter museums, in a little town somewhere in the middle of nowhere, you -- it

becomes a not for profit if you leave it there for a certain amount of time, it changes the tax scheme, then you can take it back >> hmm >> it changes it permanently even though it's there for a little while >> i doesn't know enough about how they do it >> you have looked into this >> i read about it it's a huge -- in the art world, it's a huge thing. >> could i do it with an $800 painting >> you could i don't know if it's worth your while. >> must be a pretty small town we talked about inflation and how it seems to be not showing up anywhere. that's no exception when it comes to thanksgiving. thanksgiving dinner is getting cheaper thisyear the cost of a traditional meal for ten people to sit down is 75 cents cheaper than last year that's a decline of 1.5% it falls to an average of $49.12 for those ten people to eat. that's the lowest price in five years this year's decline was led by falling turkey prices which fell 36 krens from last year it's not turkey that's lower

decline in bread rolls, milk, sweet potatoes whip cream went up, cranberries went up. >> we can still feel good about this, right? pilgrims, you know, they did some mean things you sure we can keep doing thanksgiving >> politically correct >> that's what i mean. >> will you be cutting a -- i can see you with a big thing of cabbage. as long as you're wearing your special pants. >> i'm not wearing anything. i'm just going to be -- under the table. >> so you're expecting a big group. >> it's a glass table rnd, too >> big head of cabbage >> turkey is cheaper >> i know, but it's -- you know, people -- >> it's thanksgiving >> i'm hoping we can keep doing that the fight against isis goes digital. we'll talk to a former state department official about the new front in the war against terror

♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. ♪ >> good morning. u.s. equity futures at this hour are in the black and -- >> so to speak >> yeah. right. they're rebounding up 85 points after one of the worst recessions we've had it got everyone's attention yesterday. we are up 85, 86 points on the dow today. the nasdaq strong, up 28 points

for it's snap back the s&p up double digits up 10. some stocks to watch, bhp bil billiton hopes to exit shale operation in two years the drop in oil prices has led to pretax write-downs of about $13 billion. rh is raising its third quarter and full-year guidance citing a more efficient operating platform this is a home furnishing retailer formerly known as restoration hardware they expect third quarter revenue growth of 8%. ratheon is launching a $2 billion stock buyback program. that is in addition to the 900 million it targeted in the current rounds it must be getting close to completing that. it's adding a $2 billion option into the future. emerson electric plans to

raise its offer for rockwell automation the new bid would be $225 a share in cash and stock for a total of 29 billion. as the u.s. claims, military gains on the ground against i says, the extremist group is making gains when it comes to the digital world. joining us now is harun ulah from the broadcasting board of governors author of "digital world war. thank you very much for being here today >> thank you very much for having me. >> describe the problem. what's happening and how bad of a situation is this? >> you know, what we have is we look around and we think isis is on the retreat we see the pictures from syria and iraq they are make gains on the battle freefield that's most important to them, the digital battlefield. they are churning out content a

day. this is a content war. it's the next war people are not paying attention to. you look around, you see these key influencers. and they're recruiting so they set up a david and goliath paradox where they can lose on the physical battlefield but win on the information battlefield. >> we heard situations, i geeues these are terrorists inspired by isis, not actually ones brought into their cells and trained by them >> that's right. they built up this ecosystem they look at vulnerable and at-risk youth. oftentimes i study social media behavior, i travel a lot in the middle east. i look at someone like mohammed el erafi he's the number one person on twitter in the middle east an extremist cleric. 20 million followers on twitter. he's not just on twitter, he's on snap, various other platforms, probably the single biggest driver of why young people get motivated to join a

group. they have a number of folks they try to build this ecosystem with in my mind, how do we push back against this hate? >> how do we if this is the situation where it doesn't cost any money to do something like that >> i think part is that we need almost a sort of a manhattan project sort of idea around this we have some of the best minds we have these organic stories, thousands of young people around the world. the research, and i take a data driven approach. we know voices of victims, stories of defectors work, voices of mothers are influential. but this is at end of the day a content war. we have to mobilize folks to sort of produce more content in my book i look at a 1-9-90 model. 1% of people on social media, they are the influencers, they create content 9% are the curators and share it

90% are the consumers. when i talk about a venture capital approach, it's getting that 90% mobilized we have to incentivize that 90% to great content right now we're losing the battle >> one thing i'm curious about is how you view censorship or efforts at censorship. you mentioned this gentleman based in saudi arabia, who you said was on twitter. what effort should either technology companies or frankly saudi arabia, the country, take in relation to somebody like that >> in terms of censorship, the technology company doesn't want this stuff on their ecosystem. they're making efforts they made huge strides, all the tech companies in the past few years. i think, again, this is a content war. you can scensor, but these grous are faster there's a new group that most people have not heard of, it's isis 3.0

they're using coded language, using basically nutella and kittens. so censorship cannot take that type of content down it's drowning out the content with mobilizing this organic content that people are looking for. >> not keeping up with it is one thing, but knowing that you have someone who is spewing this stuff and allowing it to continue is another. i understand we're into freedom of speech, but is there a point where you're talking about really radicalizing people online and causing them to go out and do things? >> that's a great question look, what el erafi does is puts up a bushel of apples. he says the caliphate is pointiful, or show a robert frost poem, the road not taken, and he says take the other path to success >> so it's not overt >> a lot of it is positive messaging. it doesn't violate terms of service for the companies what it is highlighting people like

this spreading hate, but it's mobilizing other folks, other organic stories. young people are hungry in the middle east and in europe and there's organic authentic content out there that really can sort of have impact. >> what is the saudi government thinking of this >> well, what was surprising and in this version of saudi sopranos that just happened -- >> that's what i'm referring to. >> a lot of people were arrested, under house arrest yet this person got off scott free part of it was puzzling because he's one of the biggest detriments to u.s. national security you have people like this that are really influential, have outside influence in this ecosystem, and so yet -- yet it shows the power of somebody like this that this person wasn't put under house arrest >> there was a study that came out from george washington university, they said about 10% of the terrorists who had committed actions recently had been radicalized online. does that number sound right to

you? >> yeah. i know folks there, they do a good job what i go back to is that young people, there's a whole journey. there's identity grievances, but oftentimes what i also go -- there's a misnomer that it's not young kids that otherwise would be playing video games in their basement that suddenly get radicalized overnight by watching content there's recruiters, there's a whole ecosystem of people being touched every day. they'll move them from open source to end to end encryption platforms. there's almost a -- if you think of hot spots, there's a whole network around these things. when we tackle this, i think we've had a counter insurgency approach to try and -- whether it's censorship or trying to get rid of taking out isis, i think we need more of a public health approach so we have to think about this in terms of more viral how do you actually think about these hot spots. 80% of foreign fighters from

tunisia, they come from one small part of the neighborhood in tunis so you see hot pockets around the world. >> thank you very much >> thank you. coming up, quarterly results from walmart and best buy at the top of the hour. we'll bring you those numbers and reaction from wall street. and then republican senator ron johnson is speaking out against the gop tax bill he will join us live at 7:30 a.m. eastern time. later, markets in focus after yesterday's pullback we'll talk to investor john rogers stay tuned, you're watching "squawk box" on cnbc november is epilepsy awareness month.

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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 welcome back check out the u.s. equity futures. stocks are on the rebound after a big down day yesterday dow down by 135 points, the worst day since the beginning of september. puts things in perspective when you talk about a down day of 135 being the worst we've seen in about a month and a half this morning dow futures indicated up by 82 points. s&p up by 10 nasdaq up by 30 points cisco systems reporting better than expected first quarter

earnings on strength in its security business. the company is also forecasting ref knew grow revenue growth this quarter. the stock is up 6%. netapp's second quarte earnings and revenue beat forecasts. third quarter results are expected to top expectations thanks for hyper converged infrastructure technology. l brands third quarter earnings were in line with forecasts but same-store sales fell at victoria secret. the retailer citing the negative impact of its exit from swimwear and other apparel. i had to do some research, morgan the trump administration wants a bigger navy. bigger navy, but how do they get there without breaking the bank? one option is more -- this could have been a typo, more literal combat ships morgan brennan is at a shipyard.

i bet you will tell us about this this is the newest class of navy ships, and the literol zone is just off shore have i done my homework? >> if i see littoral in the prompter, i will think it got self-corrected that's the actual name for this? >> yes let me tell you a bit more about this ship and about this navy build up this is a 57 millimeter gun. this can fire 220 rounds per minute it sits on the bow of one of these complete littoral combat ships. these littoral combat ships are fast, small and operate close to shore.

this is one of seven currently under construction here at the shipyard it's part of a program that has had its fair share of krcritics. if the navy is going to build up its fleet, it needs ships like this to do that. yesterday i was give an rare inside look at a naval warship and its executive officer said he was critic until he served on board one of these littoral ships. >> with the gun mount, aircraft capability that we bring to the fight, navigationally and war fighting, lcs brings a lot of assets to the combatant commander and operational commanders forward with those unique capabilities and the fact we can get it done with less personnel makes us a huge component of the future of our navy >> so the price varies with each ship, but even with the cost

doubling since the initial target set back in the early 2000s, these ships all in, about 5$500 million a piece that's a fraction of the cost of a destroyer or cruiser 29 ships have been contracted so far. lockheed has 14. austin in alabama has the rest the new 2018 budget would add three more but this is not just about military build up. this is also very much a job story. because more ships ensures and maintains the jobs of roughly 2,000 workers in the shipyard and thousands more in suppliers in this area that's quite a big number when you realize the community has 20,000, 21,000 workers those are manufacturing jobs in a state that did help president trump win the election last year >> there has been some criticism of the ship, glad you helped me with the pronunciation it's fixable

>> tomato tomato >> exactly they have aluminum hulls, sometimes they don't have quite as much fire power as needed this article says it is fixable. but that's much cheaper. they get the regular names the one i'm looking at is the "uss milwaukee" so they get named the normal things. the uss morgan brennan the andrew ross sorkin >> big ship. >> need a big ship >> you need an aircraft carrier for you. >> thanks. >> certainly there have been -- okay >> go ahead. >> certainly there's been a lot of issues with this program. it's a very, very high-tech ship, this ship has a crew of 50 normally a ship this size would have a crew of 100 there's been a lot of growing pains. what folks have told me is that's normal whenever a new r

warship is coming into the navy. we've heard from lockheed and others that production woes are behind them. >> she was ready for that it does say the crews seem to be overworked, things could go wrong. but it's bugs in a new program thanks when we come back, we'll speak with tech entrepreneur ankur jani he will join us right after this quick break. nah. not gonna happen.

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all of the individual tax cuts temporary.

welcome back to "squawk box. the tech industry under fire, sexual harassment lawsuits, sexism, racism claims and accusations of power of abuse have silicon valley on edge. joining with us his take on why the industry deserves it and what it can do to reverse the damage, he also has an announcement this morning, vice president of product at tinder good morning. >> good morning, guys. >> let's talk about the problem. you've spent a lot of time in the valley. >> yes. >> how significant is it do you think it's changing or not really. >> over the last few years silicon valley has had challenges but one of the biggest problems unique to our industry specifically is that technology today is more powerful than even governments in the way it's affecting

everyday people's livelihoods so the first time the products and technologies we're building are changing people's lives in ways we wouldn't expect ai over the next few years will automate over ten million jobs so the becomes when th world and our communities are facing these haar hardships and we know we're part of the problem, if question we have to ask ourselves is are we going to be part of the solution. the kinds of stuff we're putting billions of dollars into and the smartest minds, hundreds of millions of dollars went into a $700 juicer. yesterday peter theil announced a new company for a floating city, did you see this >> yes. >> the eighth "moral imperative" is that they wanted to make tasty sashimi to nine billion people so the disconnect between what the tech industry feels is solving problems and the real

problems everyday people are facing has grown so wide that i think the backlash you saw against d.c. or wall street -- just imagine when people realize their jobs aren't being lost to immigrants but to technology we're in for a -- >> then the question is from a market force perspective why is the valley focused on sashimi over some of these other issues? and what do you do >> we have a challenge in our industry of getting excited by hype cycles. so a few years ago it was drones and everybody was building a drone company. if you were an entrepreneur the way to get funding was to add drone to your pitch deck, then it was vr, then chat bots. just last year, $4 billion invested in chat bots but the irony is this isn't a charity issue, our friends, our colleagues are graduating with more debt out of college before they start their career, they're moving to cities where they're spending 50% of their income on

rent these are hundreds of billions of dollars of existing industries. >> but you're talking about a very insular privileged group, just like washington, d.c. and just like new york and mark zuckerberg just tried to take this on by spending time around the country. is that enough >> no, talking doesn't do much i think silicon valley has an opportunity to make an impact because technology has the ability to disrupt these industries >> so you're announcing a new fund. >> over the last few months we've assembled a diverse group of business and industry leaders to say what are the core issues our communities are facing that are good opportunities for entrepreneurs and key issues we mapped out five life stages people go through. when you graduate college, how do we rethink the loan process so people aren't going into the works for in a disadvantage. when you move to a city, how do we fix the rent cost when you have a child, how do we make the quality care you need accessible at a price point

using technology when you lose your job, how to get people back in the work force and as our parents get older how do we give them the health care they need so they don't get stuck in hospitals as part of this initiative we're launching over $25 million to help fund these entrepreneurs because these are big market opportunities and they're critical and if we don't tackle them we'll see a lot of backlash. >> so tinder as it stands is advanced enough to satisfy the social needs of people on tinder >> i left tinder in may. i think you see this -- in the past we were able to operate in our own bubble tech was the tech world. today everything is tech. >> we have to thank you. we have to congratulate you. a lot of people involved in this, roger goodell is involved, dr. oz is involved. >> where does roger get the money -- oh, wait a minute, i get it thanks. coming up, retailers walmart and best buy set to report results and reti fm ll reetaconrowa november is epilepsy awareness month.

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take your shot at the hamilton pose, donate to help us find a cure, and lastly, share it on social media. this is our shot to take. learn more at: myshotatepilepsy.org stocks pointing to a higher opening on wall street following yesterday's triple-digit decline in the dow this hour we have earnings from dow component walmart, exclamation point. we'll get through the numbers and get market reaction. and senator ron johnson comes out against the current tax bill in the senate we'll find out why in a first on cnbc interview and a long lost leonardo da vinci painting shattering auction records last night none of us on this set decided to bid the second hour of "squawk box" begins right now

>> announcer: live from the beating heart of business, new york city, this is "squawk box." welcome back to "squawk box" on cnbc. we're live at the as in dk market site. i'm andrew ross sorkin along with becky quick and joe kernan. we have numbers that are hitting the tape as we speak but we want to show you what's going on. the dow looks like it's opening up 81 points higher. we are hearing from walmart and best buy as well. >> 78 cents is in line with expectations, $9.32 billion is in line with expectations. comp store sales up by 4.4%. we'll keep an eye on where the stock trades but i see walmart is out right now, too. >> here with walmart earnings, earning a dollar per share for the world's largest retailer, that's adjusted and three cents better than analysts were looking for. revenues coming in at $123.179

billion. full year guidance raised to between $3.38 and $4.46 a share. the street sitting at $4.38, shares moving by about 1%. walmart's u.s. comp store sales up 2.7%. the best in eight years marking 13 straight quart eers of gains the cfo tells me 30 basis points of this comp is likely a hurricane benefit still without that the comp would have been 2.2 and 2.4 and still the strongest in years traffic also higher for walmart as the grocery wars wedge on, we know amazon and whole foods are lowering prices, cfo brett bigs for walmart tells me it's posting its strongest food comp in six years noting some of that was hurricane related but not all of it. they talk about produce improved quality so for the past year

walmart has given us on lane sales as a net number. net online sales up 50%. that's down slightly from the growth rate we've seen the last two quarters excommerce contributing 80 basis points to that total u.s. comp sales. b biggs says there's a loss related to ifcpa charges the retailer can reasonably with estimate, this is a result of years of ongoing discussions with the u.s. government that's all biggs could say about the fcpa loss at this point. over to you guys >> all right, back to best bye, thanks, courtney, just trying to figure this out because it's lower. 78 cents was in line with expectations revenue number 9.32. that's just a hair shy of expectations and the company says it's raising its fiscal year fweegt outlook. i don't know if whether -- >> when they talk about --

>> same store sales 4.4. is that below? >> i think it's the outlook. they talk about raising the outlook but they're talking about in non-gap operating income growth outlook to 7% to 9.5% so they're raising the lower end of that but they talk about how they are going to have higher expectation expenses in this fiscal fourth quarter because of the strong performance over the course of the year. >> stocks up from 39 and if you go back a couple of years -- >> yeah, they've done an amazing job of turning the company around as a result it's going to result in higher compensation costs >> well, they're written off. >> as if they were dead and gone. >> a place where you went to see the physical things you were going to order on amazon was what it was for a while then they started doing more service, they got a magnolia thing. isn't that what geek squad is? i still go to get things,

instead of venturing into the -- like an apple store where it's like god all mighty it's crowded, you know what i always need >> what do you need? >> more of those little things to allow you to listen to your headphones >> earbuds. >> because you've lost your wireless. >> so you have to go in to get the thing you can put your old headphones in. it's about this big. >> you mean if you have a newer phone? >> if you have a newer phone. >> are you talking about the dongle you're going from a -- >> yes, what the dongle? >> it's called a dongle. >> you plug your headphones into that and then plug them into the phone. >> correct, because there's only one slot. >> yeah, i'm talking about the dongle. >> i'll get you some dongls. >> you can get them free >> no, but you can get like a million dongles from amazon for cheaper. >> but you don't need to go into the apple store. >> but get a dozen because

you'll leave them anyway. >> everybody needs an extra dongle >> i'm all about the dongle. the dow closed at its lowest level in three weeks a rebound, make santoli joins us with more. >> by the way, you can call it an adapter i prefer to call it an adapter. >> i think a -- >> adapter is generic. >> but dongle you sound smarter and it sounds funny. >> it sound like dangle, dingle. >> the kids know what you mean. talking about the global pause in markets in november, i would characterize it as a half step back from risk across the world and asset classes. look at europe maybe not noticed by everybody it was down 4% to 5% japan went up in a straight line, now it's down more than 6% it's weighed on our markets. we're only down a percent and a half or so so nothing too crucial but a lot of focus is on

why, looking at high-yield debt is one of the culprits that have been rounded up for this little setback. yes, hi-yield debt has gotten softer it's nothing at a critical moment in terms of bringing this overall uptrend in stocks into question it seems to look something similar to the pause wes had in august and march in the markets where you had small cap stocks, underperforming defensive seconds or and it weighed on the broad indexes but only to the tune of 2% to 3% so it seems we might be in for something like that in which case nothing too much has changed but there's a sense people came into november expecting that rush to a year end new high and i do think you ran out of good news in the short term to keep it going so we'll see if this is something that is something where the markets can get its footing general in stay

here we'll talk more about this. joining ushis the chief market strategist from blackrock, thank you for being here. >> thanks for having me. >> let's talk about what mike was mentioning how do you feel in terms of watching things pause a little bit but trying to figure out what the next leg may be >> right so from us, we don't try to make sense of day by day moves necessarily. what we look at is an environment of sustained steady growth very broad-based across the global economy glower interest rates, very slow central bank policy normalization and that's an environment that's just as good as it gets for equities. >> that's been fuelling things >> now there's a pause people waiting for direction on u.s. tax reform, other catalysts around the world and we do expect stocks to keep doing well through the end of the year and beyond. >> most people we talk to say

they are positive about the global economic outlook. when they look for things that might throw it off, they worry about potential trade spats that might pop up in one place or another. what concerns you? >> the thing is when you have a steady a growth environment it would take a big shock to rerail things durably you can have the occasional geopolitical worry that will agitate valuations for a week or two but to go beyond that you would need something that derails growth expectations in a massive way and when you scan the horizon for a potential shock of this nature, there's no that many things and perhaps where one of the things we're looking at very closely is the nafta negotiations if that were to fall through and deteriorate into a much more protectionist posture from -- actually protectionist posture from this country i think that would lead people to reconsider their growth expectations across the globe. >> across the globe, just by nafta breaking up here >> it depends whether it's let's

agree to disagree and not change anything if that's the case it wouldn't be a big deal but if we were to have the u.s. affirm a desire to from now on step out of a bunch of other trade agreements, that's a very different story. >> how would that impact growth in china >> growth in china is increasingly domestically driven and that's very different to what we had in the years prior so it wouldn't necessarily be cataclysmic and in fact the leadership has reaffirmed this desire to switch to more consumption driven growth, more domestically driven growth so they have the resources internally to keep the economy going but it's still an economy that relies on global exports so if we move into a more protectionist environment that's not good having said that, it's interesting to see what's been happening around the tpp talks where despite the u.s. withdrawal the other members have decided to try and carry

ahead without them so it's not like the whole global trade system would collapse but obviously it would be a negative shock. >> isabel, when you describe the environment as as good as it get, what would make it less good is it things like just heating up inflation sort of like cycle characteristics of this environment that might emerge into next year i guess that would affect how central banks approach things. >> i think there's still obviously a little bit of a gap between what the fed has told the markets it was going to do and what the markets have priced in and sothere's a question mark around how does this get resolved i don't think we can possibly know yet i think it will depend in terms of what happens with the tax cuts that are being discussed right now. the fed probably doesn't know itself how it will adjust or not its policy normalization path. and there's also the question of how do markets -- how does the supply and demand rebalance as the fed shrinks its balance sheet?

that's completely unprecedented and the answer to that is also we don't really know. >> what do you suspect if the u.s. tax code doesn't get passed what does that do? >> if nothing gets passed, well, yeah, i guess -- so -- >> does it matter? >> yeah, probably it does. until recently i would have said, look, expectations are very low that anything gets passed so the idea that you would have a stock market collapse if nothing got passed would have been far-fetched. i think obviously in recent weeks there's been increasing confidence that something would get done, probably not something massive so, yes, you would probably see a bit of a pullback but nothing dramatic because the u.s. economy is very strong, has good growth momentum so you don't need that to keep growth growing. >> isabel, thank you for your time make, good to see you. >> nelson peltz may have pulled victory from the jaws of defeat.

he may have lost his bid for his board seat -- >> accord dog procter & gamble. >> but a recount shows him winning by a slim margin procter & gamble which didn't want the activist investor on the board says it doesn't consider this final and may appeal it may take weeks to find out what happened. >> hanging chads. >> going into the snake pit and looking at every vote some of which come in on paper for the second straight day we'll get three simultaneous economic reports. >> the government will be out with initial jobless claims and import and export prices and the philly fed issues its monthly sentiment index. the house plans its first vote on its tax reform bill later today. lawmakers will take up the legislation after a late-morning meeting with president trump. >> coming up, more on the dongle you are correct, it's a dongle, but that's not specific to what we're talking about because a dongle is any device, any

hardware device attached to a computer that changes its -- that alters its functionality. >> like my house >> so there's a lot of different dongles here i have a short dongle for my iphone. >> okay. >> some of these are longer and different shapes and weird looking. dong l specifically is true but you need to be more -- there's a lot of different dongles. >> you just like saying the word dongle. >> but i'm looking at all these different -- those plug in things that look like they have info that you can download are dongles. >> like a usb? >> a usb is a dongle. >> sometimes you have to put a dongle on to the usb to go from usb to usbc. that would be a dongle just to be clear dongle, dongle, dongle. >> you like saying it? >> you like saying it so we're

together on the dongles. >> mine's only this big. what coming up -- i have a picture of it, of the iphone -- >> oh, i thought they had a picture of the -- >> coming up, walmart reporting minutes ago. we'll speak to an analyst about the numbers. later senator ron johnson says he will not support the tax reform bill in its turnt state we'll find out why and what it will take to get him to yes. "squawk box" will be right back. . but they're not what people really invest in. what people really invest in, is what they hope to get out of life. but helping them get there takes a pure focus. because when you invest their money without distraction, hidden agenda or competing interests, something wonderful can happen. they might just get what they want out of life, and maybe even more.

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>> dongle. welcome back to "squawk box. the futures are indicated sharply higher this morning in a rebound, triple digits now 105 on the dow, the s&p indicated up 11. nasdaq indicated up almost 33 points so i think walmart may have helped. >> quite a bit quite a bit. >> let's talk about the walmart reporting just minutes ago the retailer earning a dollar per share, beating estimates by three cents revenue of $123.179 billion, far beating consensus we could just keep going with all of the decimal points. full-year guidance raised to between $4 .38 and $4.46 the street is at $4.38 joining us now to break these numbers down for us this morning

is edward euroma he's the managing director at key bank you love this stock to begin with >> these are great numbers this validates what walmart has been doing more importantly, the stores look better, better merchandise, cleaner stores, higher level of service and i think that's all working for that walmart consumer. >> do you think they're picking off market share from everybody else >> i this i so retail environment is still pretty difficult but as the consumer gets used to things like click and collect they're coming back to walmart once you make that part of your weekly trip, that's a tough thing to break. >> when do you think that happened it used to be a weekly trip then it felt like it wasn't do you really think it's come back there there's a component of it. >> bigger spend. >> some is bigger spend but how to make the shopping experience bigger for the consumer. so you can go online, have them pull your stuff for you and

throw it in your car that's fast. so that person maybe didn't want to go back every week, they're more interested in coming back now. >> was this an issue of reinvesting in its people? that was a controversial move when doug mcmillan said he would be raising wages for people, it would cost more than the street was ready to deal with did that work? was that part of what happened here >> i think so. you go into walmart stores, the employees are more engaged, they're happier. you have employees when you need help when you're out there on black friday there's employees to ring you up that labor was a part of it but the stores are cleaner, brighter, the merchandise is more compelling so it's those things together that have been driving these results. >> we were talking about best buy. i don't know if you cover it but that's not a good story. >> i don't cover it but i tell you again walmart seems to be shaking shares in electronics which may have been a contributing factor and all they've done with this investment with e-commerce has helped >> when you talk about

e-commerce stuff, how critical are these tuck-in acquisitions we're seeing for vj they signed with lord & taylor. >> or is it mark lurie himself having him on board as part of the management >> i think mark has been a big unlock so it's all of these things, some smaller brands bring a more affluent consumer to walmart.com some is the investment in the web site when you look for items you can find them. they tried to build what a r i think is a viable competitor to amazon. >> who's going to win? >> i this i it's a two-horse race a year or two ago it was amazon and everybody else, now we see walmart and amazon neck in neck which to me is interesting >> is there a third player we don't think about? >> we're watching some of the chinese players, not a factor in the u.s. today but you can't count them out we're watching target closely, they've been investing not to the level or speed of walmart but that could change. retail is a competitive game. >> in terms of what we heard from target, would you tell people to buy that stock >> we don't cover it but i would

say i think walmart is taking a significant amount of share and that's a tough thing to break. >> thank you, appreciate it. thanks for coming in. when we come back, senator ron johnson on why he is opposed to the senate tax reform bill. plus leonardo da vinci salvatore municipdi shattering records. $450 million we'll have more on last night's auction in just a bit. stick around, "squawk box" will be right back. 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.

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>> yes, yes. and it could have been the dongle but it's not a smart home device but you need dongles at different times. >> to make the smart home devices work. >> i have my dongle here and i can bring it out and actually -- because i have it attached to my head phones. >> you'll have to cshow us.

>> i may just because it's important. if you don't have one, you can't use your headphones. >> that's true. thanksgiving dinner is getting cheaper this year. the cost of a traditional meal for 10 people is down 75 cents from last year to an average of $49.12 that's the lowest price in five years. why? the decline was led by falling turkey prices, down 36 cents from last year 36 cents a pound, do you think that's probably what they mean >> yes, 36 cents a pound i saw the numbers earlier. >> thanksgiving is great, isn't it i wish it was spread -- >> all your favorite foods you get leftovers so you can eat it for a week. >> because you can't really eat as much as you planned to ea that day. >> no. >> but that's okay it's all your favorite foods spread out as a smorgasbord over the course of a week. if you're going to be traveling for the thanksgiving holiday whether it be by plane, train or automobile, expect a bigger crowd aaa's annual thanksgiving travel

forecast says nearly 51 million americans are expected to travel this thanksgiving. ah >> ready for traffic >> that's the most people traveling in a dozen years 89% of all travelers, 45.5 million, are expecting a road trip oh, goody. despite the highest gas prices since 2014 for those traveling by plane, they'll pay the cheapest average air fair since the year 2013. >> do we drag out the old turkey prep is it too old? we may drag it out. >> they say it's a tradition. >> it's a tradition. because i do make bigger or ares i had no idea what i was doing. >> you're not supposed to cram the stuffing in because it doesn't cook properly. >> if you pack the stuffing in you could die. >> get food poisoning. >> don't put it in the night before. >> i just want to do fried turkey. >> that's dangerous. >> i know, but it tastes great. >> have you ever had it? >> i have.

>> you do it on an outside grill. >> start a fire. >> it won't work on that kabuki thing you have on your deck. what does it called? h hibachi. >> i do not have an hibachi. >> i'll get you one. >> i also don't have a deck. >> ron johnson opposes the senate tax package bomg ecinthe first gop senator of the senate, we'll find out why after the break. "squawk box" will be right back. 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.

good morning, welcome back to "squawk box" here on cnbc, we're live at the nasdaq market site in times square corporate earnings front and center best buy reported a quarterly profit of 78 cents per share, that matched estimates here's the problem revenue fell below forecast and comparable store sales increased less than expected that stock down 3% in the pre-market also a mixed quarter for viacom, the media company earning 77 cents per share for its latest quarter, missing estimates by nine cents revenue beat forecasts on a rise

in theatrical sales. then there's food company jm smucker earning $2.02 for its latest quarter with revenue exceeding forecast smucker raised the upper end of its forecast. a couple other stocks, pandora was upgraded to outperform from market perform which notes better-than-expected subkrieber numbers that stock is up by 3.8% dow component cisco beat the streets expectations by a penny. the company also issued an upbeat forecast and that's helping that stock up by 7.5%. then you have l brands in line with the street forecast earning 30 cents a share but it reported a big drop in comp store sales including a 4% drop at its victoria's secret store sales and that stock is down 4%. house republicans plan to vote on their tax reform bill today. ylan mui joins us with more on

that. >> it's game day today and it looks like the house will be able to get this one across the finish line. president trump is going to be heading over to the capitol later this morning for a pep rally before the vote. he tweeted last night that tax cuts are getting close and he blamed democrats, of course, for obstructing and delaying tax reform the white house had been courting some centrists and red state democrats but that effort appears dead in the house the moderate blue dogs have come out against the tax bill and in the senate adding the elimination of the individual mandate to tax reform ensures no democrats will come anywhere near this deal. and, in fact, it could even make it harder for some republicans to support it as well. senator susan collins of maine said it's both bad policy and bad politics to mix health care and tax reform she's pointed out the expected increase in premiums for low income households could wipe out the benefits they would get from tax reform another swing voter, lisa

murkowski of alaska is withholding judgment until the final bill comes out and senator ron johnson of wisconsin is the first republican to come out against the bill i know you're going to talk to him in a few minutes but he underscores how much sway individual lawmakers have in the senate someone like collins and johnson have very different concerns with this bill and that's what makes it so challenging to cobble together a compromise back over to you. >> ylan, thanks. let's get to senator johnson, he's the first republican senator to come out saying he will not vote for the gop's tax plan in its current form joining us now, senator ron johnson of wisconsin i describe it, knowing you as i do, maybe i was just being optimistic or hopeful but i described it as a cry for help that you will eventually get to a point where you are able to support the bill that's what i thought, at least. have i got that right or you're

going to be a knno if it doesn't change the way it is >> i want to get this thing fixed and i want to vote for perot grow pro growth tax reform. the folks that wrote the framework realized that in doing -- in making businesses globally competitive we can't leave anybody behind which is why they came up with the 25% rate for pass throughs the problem is neither the house or the senate version honored that commitment to pass through business which is i would argue are a huge engine of economic growth and innovation in our economy so according to my numbers using jct scores, 82% of the business tax relief goes to the sea corps, 4% of the big companies. i got nothing against big companies but only 18% go to pass through entities. i can't get information on the details so i'm looking for help to get this fixed. >> i'm going to talk you down off the ledge, senator

i just -- when senator mccain gave that thumb's down on health care, how did you feel at that moment i'm just wondering. >> i'm not voting right now. i haven't said i'm an absolute no. >> i gotcha, that's what i said because i know you and i was just thinking this guy doesn't seem like the one -- you know, other people are saying you just got reelected so you don't -- you've got six years, that's part of the problem. >> joe, i care deeply about this country, i care deeply about our deficit. >> but the perfect versus the good -- if we try -- think if -- this is when people are out there and they look at what's happening in washington and they see like one person have concerns and they think how do you get 52, it will never happen susan collins, she's got -- that's a different story with her, i have no idea where she ends up but that's why people

get cynical. >> joe, here's the problem, in this process don't even nope what the senate version is until last thursday, the house is voting on theirs today, we'll be voting on ours after thanksgiving i've been trying to get scores on different provisions for months, can't get any of them. they say it's an open amendment process but i can't get the jtc score which is required to put in an amendment so it's not a good process, it's not leaving this bill open enough to scrutiny to understand what's happening so the very quick summary i did on this bill, i've got concerns when 82% of the total tax refund business goes to corporations and we are leaving pass throughs at an economic disadvantage in terms of competition so, again, i want to work this white house, i want to fix this problem and i want to pass pro-growth reform. because here's how important it is, even with the meager economic growth we've had since 2009, revenue has increased by $1.2 trillion with meager economic growth, we should be focusing on economic growth and

right now i don't think this tax proposal does that. >> if you want to change this it will require significant changes. are you talking about raising the corporate tax base so it's closer to what the pass throughs are dealing with or are you talking about coming up with another $900 billion to give equal weighting or equally lower the rate for the pass throughs those are two massive moves. >> becky, this how bad this process is, i can't answer the question because i don't have the information on how much it would cost, how many pass through businesses are being left behind that do compete globally i can't get the information. i've been asking, they don't give it to me, i got a call from president trump last night, he's telling me "i'll get the information, i'll meet with treasury officials today, i will work my tail off over the weekend to fix this problem so we can move forward with a perot growth tax reform. >> looking at the numbers. $1.3 trillion in tax cuts to corporations only $362 billion for smaller businesses that are pass throughs so you want to equalize that you have to take from what

corporations are getting or come up with another $900 billion that you would give for that and that is going to bust the budget so, again, you may not have the specifics but you know there are going to be big moves to make you happy based on what you're saying. >> there may be large moves, there may not. i need the information before i can express an opinion all i'm saying is right now i know pass through businesses, the innovators that employ hundreds of people that create all kinds of jobs are being left behind and i want to fix that problem. >> senator, one of the things we've been trying to understand is how the pass throughs would affect both folks at the most upper income and then farther down the chain most of the numbers that i've seen suggest the majority of pass throughs are already paying a 25% rate so those that would benefit would be at the highest end. so you'd be taking people in the 1%, if you will, and bringing their tax rate down.

does that -- >> well, first of all, if those larger more successful pass throughs that compete globally that employ a whole lot more people than the smaller businesses that are paying less than 25% they're getting a tax break that's why nfib is on board. so i don't have the breakdown of how many pass-through businesses in that upper echelon that are being put at a hus distrang. prior to obamacare the differential between the top marginal tax rates was 4.6%. obamacare drove it to 8.4% the senate bill takes it to 16% to over 17% that differential. that's what i'm talking about. that's the problem that's what has to be fixed. >> senator, your opposition to this bill is new to us but as you've made the point you've been working to try to get this changed for months behind the scenes since you've come out publicly and said this, have any other republican senators come to you and said "yes, i have problems, too. >> i've been talking to my colleagues non-stop since yesterday. a lot of people have concerns. guy, i'm not going to let my

version of perfect by the enemy of a good pro-growth tax package. we can do better than this. >> you have time. >> i do have time. >> and you have to do the -- you have to reconcile the two bills and all that stuff let me ask you this, senator, changing subjects a little bit, what was the calculus in the senate that got this obamacare thing back in there? i can't imagine -- >> $338 billion. >> i got it. >> it's just one number. >> i know but like i would think that, hey, this must indicate that someone has turned or they can talk someone into it orring in has changed but i saw the previous attempts where that's what i thought because they were going to bring it to vote and it never was. as it turned out it was never doable do you think it's doable in the senate >> i think it is i'm one of the guys that wanted to put instructions for help so we could do the graham cassidy johnson bill with this

that was rejected but what we found out is in the math, we constrained ourselves to the $1.5 trillion limit which i thought was foolish because economic growth as i described it is so much more in terms of revenue generation but we constrained ourselves and we can't make these things permanent without extra room and the $338 billion whacky number, that's whacky. >> who turned? who turned >> i think the reality of the situation, if we want to make this tax reform permanent we need that extra revenue and let's use it we've had these whacky cbo scores used against us let's use it to our benefit. >> so this is totally different than within the way it's being played up. because you saw it says uh-oh in certain sectors of media it's this is the beginning of the republican mutiny on this.

what do you think the chances are that eventually before the end of the year this is on the president's desk what do you think the chances are? >> i'm hopeful again, i'm going to do everything i can to make sure we get a better bill that can be signed into law. another factor on the whole individual mandate repeal, we were hearing rumblingrumblings,s looking at it and realizing it's not that important, it's not driving people, all these individuals paying the penalty, 80% of them, are less than $50,000 so the individual mandate is harming real americans. low income americans and so that score probably would have changed anyway so we have more information on that and i think people are just souring on individual mandate in total. >> yesterday -- i got a lot out of these two interviews i saw yesterday, the interviewer was trying to pin brady down on whether salt -- whether he was stuck in concrete on salt and all he would say is he wants to make sure property tax is in

there. he didn't say he was going to insoois that there was -- >> property tax is a version of the state and local taxes. >> >> he didn't say the other one that the new yorkers in new jersey types are all up in arms about. he didn't say he was guaranteeing that wouldn't be there. >> by the way, another big problem between c corps and pass throughs, c corps cans deduct state income taxes, pass throughs can't that's a major kbcompetitive environment. >> i think they want to help property taxes in every state and don't want it to look like they're passing something in four or five states where they have high local taxes. >> well, the income tax is a big deal in new jersey and new york. >> if you're talking about $10,000 you'll talk about that property tax and forget about the rest of it. >> >> if you're like andrew and you and paying $400,000 in state taxes. >> half the price as you. >> half as much as me. all right, senator, someone

tweeted that " @joesquawk is whipping the senate. >> i'm trying to fix it. i want to vote yes. >> i resemble that remark. >> are you still standing by the idea that if this is not something you see as being fair, if there is not an adjustment you will not vote for the bill >> all i've said is in its current format i wouldn't vote for it but i have a great deal of optimism we can fix it. >> okay. thanks, senator. >> thank you. >> we appreciate your time today, thanks. we'll see you. >> when we return, a new auction record sale for a rare leonardo da vinci painting. we have the details straight ahead. but right now as we head to break, look at the european markets. they've been higher throughout this morning you'll see a lot of green arrows gglobal bonds, and high-dividend strategies. sure, these are investments. but they're not what people really invest in.

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welcome back, everybody, crude oil pulling back from its most recent high earlier this month with some supply concerns just the latest factor in things

to consider. this happens as our next guest says oil's rise was finally helping energy stocks contribute to the s&p's historic run. joining us is john dillduff, a cnbc contributor it's been a long time since we've looked at oil companies and thought oh, this is helping things >> when you say no sector left behind this has been left behind these energy stocks have been underperforming with the exception of the refiners to a degree but even their returns approaching double digits like royal dutch shell or exxonmobil but the commodity pullback and fears over the middle east situation hurting them again >> how much of that was because of uncertainty in the middle east and trying to discern what saubt has been doing >> there's always a new wrinkle for the oil market and the new

wrinkle right now is that it's saudi arabia that's causing us to be nervous in the market. it's generating this tumult. this new crown prince has been well reported is consolidating power in a big way the rumors have been remarkable over the past couple weeks that he was going to ascend to the throne one way or the other, either from his father stepping down or not. there was a lot of fear there was going to be direct military hostilities between saudi arabia and iran potentially tons of rhetoric from the saudi prince as well about certain things iran has done equivocating to acts of war. that was the exact phraseology so there was a point when oil prices hit almost $585 barrel that the anxious was at its highest. >> let's be realistic,how much of those concerns moved away it may not be as high but it's not like it's been resolved? >> the rumors were that it was going to happen within days.

the other rumors about direct hostilities with iran, there's been leading conservative voices in the u.s. that have been trying to tell president trump to get limb to step back that seems to be on the -- in the works as well. >> what's the fair price of oil without those geopolitical tensions >> i this i you're starting to see now the invintories replenir we're going to be oversupply through the first half of next year so in the 48 to 52 is probably the right range but as you can see, on anxieties, we'll speak but you get a couple weeks worth of bad inventory reports or bearish inventory reports you can take a trip down to the low 40s so we're in this torturous range. the balance is still tilting towards oversupply not undersupply and our shale guys continue to pump out the oil to record level this week, 9.6 million barrels and they're showing no signs of stopping >> john, thank you, good to see you. >> same here, thank you. coming up, the art of the deal, leonardo da vinci's painting, we hope, shattering

records at auction last night. details after the break, then at the top of the hour, more on walma walmart's quarterly results. we breakdown the numbers and tell you what it means for your portfolio. "squawk box" will be right back. whoo! ( ♪ ) woman: class, let's turn to page 136, recessive traits skip generations. ( ♪ ) molly: i reprogrammed the robots to do the inspection. it's running much faster now. see? it's amazing, molly. thank you. ( ♪ ) 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 ] hmm. the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower

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welcome back to "squawk box," a painting by leonardo da vinci setting a new record for art auctions last night. robert frank joins us with more. this is an unbelievable crazy over-the-top situation. >> for a guy who's covered wealth for over 13 years, even i was stunned by this number

it's only 17 inches tall and 15 inches wide, leonardo da vinci's salvator mundi became the most expensive work of art ever sold going for $453 million at christy's. the buyer is unknown it went to a bidder on the phone. 19 minutes of history-making bids there fewer than 20 of leonardo's works survived despite the painting's controversial history and its condition -- it's been painted over and restored -- christie's marketing campaign was considered a new model in the auction business the painting attracted 27,000 people as it toured the world before the sale and they sold it at a contemporary art swrael all the big money gathers at night even though this piece, of course, is more than 500 years old. so how did a painting that sold for less than $200 in 1958 get to nearly half a billion well, for centuries it had been owned by lots of european royals, including england's charles i but then it was

damaged and painted over, it fell out of sight until 1958 when it was sold at a soth theb auction in london for 45 pounds. it was marked as a student of his. it disappeared when an art dealer bought it in louisiana for $10,000. it was then authenticated and sold to a swiss art dealer for $80 million in 2013. he quick lly flipped it to a russian billionaire for $127 million, so that's the last sale price before this. now the russian's trust is suing for fraud, he is the guy who was selling it last night and we don't know who the buyer is. i suspect it was somebody buying this to give to a museum there's only one leonardo in the u.s., that's in the national gallery. >> not related to marge bouvier i assume >> no.

>> maybe -- the daughter what about all the scuttlebutt that it's only possibly neal have. >> there's a big -- still a big debate and that's why people thought it was going to go for maybe $100 and it went for $h 4 -- $450 when we come back, more on dow component walmart plus the battle bwireng between jerry jones and the nfl. stick around in every town, across america. small businesses show their love to you. with some friendly advice, a genuine smile and a warm welcome they make your town... well, your town. that's why american express is proud to be the founding partner of small business saturday. a day where you get to return that love, because shopping small makes a big difference. so, on november 25th get up, get out, and shop small. the market.redict but through good times and bad... ...at t. rowe price... ...we've helped our investors stay confident for over 75 years.

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ringing up retail. shares of walmart popping, shares of best buy dropping. what both companies are saying about the u.s. consumer as we head into the crucial holiday season straight ahead. >> going, going gone a da vinci portrait sells for a record-smashing $450 million plus, a big money battle in the world of sports. why the nfl is accusing famed cowboys owner jerry jones of damaging the league. the final our of "squawk box" begins right now >> announcer: live from the most powerful city in the world, new york, this is "squawk box." good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market

site in times square, i'm joe kernan along with becky quick and andrew ross sorkin futures are up 102 on the dow. the s&p indicated up almost 11 and the nasdaq almost 35 treasury yields, a lot of the stuff we saw that was disconcerting yesterday we're seeing reversal today in not just the equity markets. the ten-year went up a little, the darr which was weak strengthened versus the euro a little bit of a reversal and who knows where we're headed now. in our headlines, nelson peltz may have won after all he lost his bid for procter & gamble board seat last month, according to the company, but a recount shows him winning by a microscopic margin you can see shares of procter & gamble are up about 1.75% but procter & gamble didn't want the activist investor on its board and fought a long proxy battle to keep it from happening. even now with the recount the company says it may appeal so it may take weeks to iend out what

happened in washington the house is set for its first vote on the tax reform bill. gop lawmakers will meet with president trump late this morning and take up the legislation. emerson electric has raised its bid for rockwell automation. emerson raising its prior offer by $10 per share to $225 making a deal worth a total of about $29 billion. also mixed quarter from viacom, earnings missing the mark, the plead ya company's results were impacted by cable subscribers. shares of best buy dropping this morning. the retailer revenue and comp store sales falling. the results were hurt by hurricanes among other factors that stock down close to 5% in the pre-market. >> in other retail news, walmart shares are rising following the company's latest results courtney reagan joins with us the details.

>> good morning, joe walmart putting up another strong quarter on what the company calls broad-based strength beating analysts on profit and revenue and raising full-year guidance to a range abovethe street u.s. comp store sales up 2.7%. that's the best in eight years marking the 13th straight quarter of comp sales growth for the country. walmart cfo brett biggs points out that 30 to 50 basis points of that comp growth is likely a hurricane benefit but even without it, a 2.2% to 2.4% comp growth is the strongest walmart has seen in years. amazon may be lowering prices at whole foods but brett biggs at walmart tells me his retailer logged the strongest food comp in six years he says semi-was likely hurricane related but pricing is helping and so is improved quality. walmart's u.s. e-commerce sales contributed 80 basis points to the total. that's typical net u.s. online sales up 50%, down slightly from

the growth rates of the last two quarters as it anniversaries that jet acquisition biggs says there is a $238 million loss related to fcpa charges. the retailer can now reasonably estimate this is a result of years of on going discussions with the government but that's all walmart was able to say at this point. back with you guys. >> we'll continue to talk about the stake here stay where you are don't go anywhere. joining us is karen short, managing director of barclay's what do you make of this >> well, i think when you look at the results, as courtney said, it's a broad-based strength and what i think is so critical about what walmart is doing is that on june 16 when amazon bought whole foods the world changed and you were either on the right side or the wrong side of the wall and walmart was on the right side of the wall walmart had been working well ahead of that, they weren't doing things to transform their business ahead of june 16 but what they've clearly demonstrated is that they're on

the right side. >> you say the world changed did the world change or was it wall street's perception of the world? i think probably our perception of the world changing is more severe than what the average american or consumer is seeing and doing but the world will change going forward and everybody has to acknowledge that but the other thing i think is also so critical about these results is that there had been some kind of kmern tear that walmart waslightning on investing in price you saw the gross margin decline. a third was hurricane-related but they are not holding back and what you have to do in this environment is keep investing in price and that's what walmart is doing. >> isn't that what target is doing, too target results had a strong forecast for their sales but their profit was weak because they're investing things like their stores, paying their employees more and prices but wall street treated that very differently. >> well, there's a couple things, when you look at the actual dollars walmart is investing and what they've

allocated as it relates to basis points on food sales, it's orders of magnitude exponentially greater than what target guided to. >> fair. and over half of the sales from walmart are grocery. >> and walmart is much further ahead. i'm not a primary analyst covering target. i do cocover it but my sense was there were a lot of investors hiding in target thinking it was safe and not realizing the third quarter was fine, it was the fourth quarter guide that was the problem so that didn't play off so well and that's why you saw the volatility. >> how does this relate? we're talking about best buy and how all of these different players look. >> well, i don't cover best buy. >> no, but i'm saying you look at that situation relative to what's going on. >> well, i think what's happening is walmart is moving -- as doug said many times -- with speed and decisiveness and they're not afraid to take risks and what they've done is they're

investing in their employees that was the first critical step and they're transforming their model to move with how the world is changing. they're being nimble and i couldn't speak to best buy at all but i think that that's what's critical and you need to be nimble. >> when doug macmilan made those investments, wall street rocked the stock. they said if it weren't for having family ownership in the stock macmilan might have gotten chased out. >> absolutely. you can see the cultural shift in the stores. you can see within a year employees care about what's happening with the customer. >> so management matters but having a long time horizon also is a huge benefit that something that walmart and amazon both have equally those are two of probably the only retail stocks that have that patience. >> i would argue costco, too. >> costco, that's true. >> what about the new partnership or relationship with

lord & taylor online this is an interesting one >> i think it's about broadening the appeal that's what they've talked about. i don't know if amazon is up to 400 million skus on line, walmart is 70. it's about the tail. and that's what they've talked about endlessly. off million skus that account for sales so what matters for walmart is the 69 million skus that are the tail and the profitability of that tail so that's part of the evolution. >> you think shoppers are going to walmart.com searching for a high end product, not finding it and leaving so walmart wants to keep them on the site, capture and offer the product? >> i think the signg singh -- sa is changing. they were talking about bose sellers wanted to sell on walmart.com. the other thing that hasn't been discussed, walmart pay that's becoming such a dominant

payment form that now walmart has the data on their customers so they can reach out much more than they have been able to and they have the frequency of food so that is the whole reason amazon bought whole foods. amazon lock add frequency play and that's what walmart has. >> thank you, guys, appreciate it is. when we come back, morgan stanley ceo james gorman on tax reform and what wall street wants to hear from washington right now. plus, a battle on and off the gridiron why the nfl is locked in a major fight with one of its most famous owners. then coming up at 8:30, we have breaking economic news. jobless claims, import prices and the philly fed index stay tuned, you are watching squawk here on cnbc. my ambition is to find something. me. ambitions live everywhere.

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the administration knows that if they don't get this tax plan done, 2017 was a wasted opportunity. there's a republican congress, a

republican administration, this was a core plank of his administration's platform so i think a plan should get done but it's not certain. >> that was morgan stanley ceo james gorman speaking to cnbc earlier. wall street is closely following the tax debate taking place in washington right now joining us for more on all of this is bob doll, chief equity strategy and senior portfolio manager at nuveen asset management how much do you think is riding on the passage of a tax plan >> it's important but it's not the whole ball game. earnings have been off the charts and that's why stocks have gone up 40% in the last 20 months yeah, the tax bill would be icing on the cake, no question about it i think the republicans know if they don't do something it's political suicide and so they have to come together. if it's a simpler bill watered down from what it is, and the president will sign whatever comes across his desk. >> the timing has to be when

>> i don't think that matters a whole lot. my guess is next year. i don't think anything happens this year. a lot of noise, they've complicated it by throwing health care in there and you have senators who weren't even expected, you had one on recently to say "i don't think so." they can't lose too many votes >> at the very least it will take tinkering >> and i think some simplification. >> it's been earnings driving the market higher because of what's been happening in the economy. the economy has been firing on all cylinders. >> we've been growing closer to three than where we've been so long then you add the synchronous global growth and those things are enough to make at the margin a difference earnings have been off the chart this is year. >> earnings have been a surprise but now wall street has higher expectations so what has to happen next? >> i think we're shifting from a gallup higher market to a grind higher market 40% in 20 months,

that's 2% a month, that's not normal in those 20 months, only four were down and if you round them only two were down so that's not normal we'll be in a period of time where markets grind higher, we'll see a down month, believe it or not, from time to time but the bull market isn't over because earnings environments are still good. >> having said that. when you're here for an extended period of time you're looking at individual stocks. what are the stocks you like right now? what are the sectors you like? >> we still like tech, visa, mastercard, vmware would be good examples >> you're considering visa and mastercard as tech stocks? >> that's where s&p classifies them you can make them financial services if you want they're improving their margins. the beaten down health care area, bio tech, we would be adding to those names. you have to own the names that have good earnings, boeing, walmart, cisco, i would add to target i think the weakness was overdone. >> is that new that we'll grind

higher for you >> i think too conservative, joe, we've been galloping higher 2% a month i thought we'd have a grind higher market because i thought earnings would be okay, not great but certainings have been pridingly positive. >> do you ever remember -- probably not this year but there have been times when you've said buy with both hands, i'm not cautious at all. >> i'm still fully invested. >> i now, but i don't see the difference for example, there was august where you said we're definitely at a consolidation phase, time for caution. in april sentiment is too high, i'm cautious march, bob doll is cautious on stocks in the near term. april cautious on the market february, i've got -- those are the headlines. >> i'd say a couple things one, talk is cheap, two, i've been fully invested -- >> your talk is cheap? >> my talk ischeap i've been fully invested the entire period. august is the last one i remember. >> but i would say it's not a bad idea to always have --

cautious optimism is what you can say at any time in any market and what a prudent person would say. is this different this time where you are or similar >> i think we're down shifting 40 months or 20 months of 40%. i don't think that continues, joe. i think it will be more normal, bumpier. >> as a result -- let's dig down, you are not taking money off the table. maybe you're changing your allegations. >> is this more cheap talk [ laughter ] >> how do we know when it's expensive talk i've seen what you get paid. >> we get negative. >> and you would not be taking money off the table? >> i would not, no if my choices are stocks, bonds, and cash, stocks are still the best alternative i may not get the return going forward i have that enjoyed surprisingly over the last couple years but i still think we go higher. >> that would be the big difference >> yes, we would have a yellow and red light. >> because i think the opposite

of cautious is reckless. i'm always cautious i'm afraid aren't you afraid, andrew? we leave here, i'm afraid. i go out in the car, i'm afraid. you know what i'm most afraid? when i wake up in the morning. i'm afraid of everything it's dark and cold, i have to get up. >> we know markets do well when they climb walls of worry. when you can't thinks to worry about -- >> cautious is better than reckless. >> walmart's numbers, you mentioned that as one of the stocks you'd be buying >> it shows they're differentiating themselves from the rest of, can i say, bricks and mortar retail? their online business is part of what's fuelling that growth and i think they will continue to gain market share and every time i look at amazon and think about buying amazon i typically buy more walmart. >> thank you. >> i don't want you to be negative on tax reform because i know you want it to happen. >> big time, big time. >> i want you to be positive

i want you to be half full, i want you to be positive on this. >> can you name me the 50 senators who are going to say yes? >> ron johnson will say yes. there's a couple i worry about big time bigly. >> it's yuge coming up when we return, big money in the nfl, new twists in the war of words between the league and cowboy's owner jerry jones. but first as we head to a break, check out the price of oil right now. you're looking at wti crude at $55.16 ay tuned, you're watching "squawk box" right here on cnbc. . our home was ruined... we couldn't live there. mom: our first concern was the kids. this was going to be hard on them. chubb got us a place to stay in the same school district. otherwise it could have been a nightmare. dad... chubb turned a disaster into an adventure for our kids. mom... and no one missed a day of school.

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welcome back to "squawk box" right here on cnbc a major business story in the world of sports. a high-stakes feud growing between the nfl and dallas cowboys' owner jerry jones what's going on? >> so it's getting worse and worse, it's escalating yesterday the nfl's lawyer sent a letter to dallas cowboys owner jerry jones urging him to stop his lawsuit threats against the league and several of the league's owners. cnbc obtained a copy of the letter in which the nfl says jones' antics are damaging the league and reflect conduct

detrimental to the league's best interest the nfl says jones' campaign is misguided and has no legitimate basis. jones is leading the way against extending commissioner roger goodell's contract but it's been widely reported that other owners agree with jones' position yesterday cowboys running back ezekiel elliott dropped his court appeal to fight his suspension which is one of the reasons why jones is going after goodell and on tuesday papa john's apologized for its anti-nfl comments. many league owners were furious about that because they think jones put him up to it in an extreme case, the league's owner could force jones to sell the cowboys but he and his son have laughed off those threats on dallas local radio. it's certainly bad pr for the league it's been escalating every since the players spoke out against the players kneeling who would have thought a couple months later it would come to this >> they're saying because goodell dropped the ball on ray rice he went overboard on

ezekiel elliott. i don't know if he did it seemed like we can change where we go to zero tolerance and i would see how he could do it to ezekiel elliott so i don't know if jerry jones has a point. you saw what happened with papa johns. they said that then the entire alt-right crazies started saying "we're only eat ping papa john'. so nknee neo-nazis were tweetin john's is our pizza. >> the official sponsor. >> oh, boy. >> it's almost impossible to pick a side here. >> who's on jones' side? i know there are other owners with jones on the kneeling stuff. >> they're with jones on the kneeling stuff and there are owners who anonymously are with him on the fact we don't need to extend goodell's contract. it's a five year deal with one and a half to go so it's early and let's see what happens the league keeps pointing to the fact that it was a 32-0 vote in

marge saying let the committee work on the extension but that was before. >> do you know a lot about football >> i know a decent amount. >> what could we get you for to be nfl commissioner? >> are you available >> i would do it for a fraction of the $49.5 million. >> would you do it for 5 snld a year >> i would. >> that's a tenth. would you do it for a driver instead of a private jet maybe someone takes you to work? >> i get motion sick so i'd rather drive myself. >> how about a company car, a prius? >> if i can drive it. >> so $5 million a year and a prius and you're done. >> i don't think prius is an official car of the nfl. >> well, take your pick, you want a hummer? >> how about ubers >> that's another big thing. they leaked the fact that goodell wanted $49.5 million and a lifetime jet. >> what do you want? do you want $5 million and an uber >> i need to drive. >> i said i'd do a turboprop.

>> i like the bigger jets, they feel safer the smaller jets bump around a lot. >> you might ask more than him. >> less money but better jets. >> boeing business jet or global express. >> you're a real professional traveller. >> you can't land at certain airports in such a big jet that's the issue. >> this is the nfl, you're only in big markets >> you rail against corporate competition, you say these guys don't deserve it $50 million, isn't there someone who can be good for -- >> i think he's around media executives who make $50 million. that's with les moonves and -- >> good point. >> but it's a value creation story. >> what the franchises are worth now. >> he's saying i've created this amount of value, you have to pay for the value. >> and joents wants incentives rather than a guarantee deal that's what this is about. why are we giving you a fix t raid >> let's mix stories does he want a chaser jet in case his breaks down is that -- we'll get them all in

here ge, nfl? >> jeffrey immelt, by the way, is talking to mike hallen today and i hope that there's some questions about the plane. >> but i don't think it's about his tenure, i think it's about management. >> i know, but talking about management, this is the ultimate -- >> i think it's about how to do a startup. micong up, we have breaking economic news. stick around feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over $120 billion dollars in real assets. partner with pgim. the global investment management businesses of prudential. every day, on every street, in every town, across america. small businesses show their love to you. with some friendly advice,

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weekly jobless claims. import prices and the philadelphia fed index, let's get to rick santelli rick >> add 10k to last week's 239,000 initial jobless claims and you arrive at the new number, 249,239 remains unmolested, unchanged, sticks as is 1.86 million on continuing claims that's a bit of a drop from 1.904 so we'll call it import prices up two-tenths. if you take petroleum up

one-tenth, 2.5 year over year, 2.7 on the export price index year over year, export prices were unchanged in terms of year over year so these are very interesting numbers and that zero is month over month, of course, the 2.7 sounds high but actually sequentially it's lower. it follows 2.8 we have philly fed and that is a number coming out at some point here, don't see it out on the screens yet. that is a november number, we always like to keep a close eye on what that may be. don't see it one thing we want to point out if you're thinking stocks in are lower they're not but the fascinating part is as stocks rebound we see interest rates spongy still in the mid-230s so we want to pay close attention to that and welcome to 170ville. two-year note yield popping over 170, that hasn't happened since

i believe 2008-ish, i will double check but that should be close. andrew, back to you. >> thank you rickster. we appreciate it we have a guy in from chicago, john rogers, chairman and ceo of errol investments. great to see you, sir. before we get into stocks, individual names, where are you on where the real economy is and where the market is right now? >> i think right now the economy is stronger than we think. it's building momentum, confidence is great in the business community so i think with we're well positioned i think with tax reform earnings will be better than expected so the market is reasonably valued and i'm optimistic about stocks here. >> you want to be fully invested >> fully invested. >> we were talking to bob doll about this earlier, this idea of buy everything you can still or are you more cautious than you would have been a year or two ago? >> i'm not more cautious.

>> i'm very optimistic your friend warren buffett talks about how important interest rates are. as long as we can keep interest rates low, p r e multiples are reasonable. >> one name you own is mattel. we've been talking about this potential transaction between hasbro and mattel. what do you think? >> i think margot is a terrific leader at mattel, i know her from being on the mcdonald's board with her she's very strong, very tough, very smart they will do the right thing for shareholders they realize there is a lot of value there, if you put hasbro and mattel together, it's been talked about for years but we think there's a lot of synergy. >> earnings will be better when you put the two together so we think it's a terrifically priced stock today. >> you saw the news that the plans are rejected at this price. >> we think that's the normal part of the negotiation process because we think over time you can't get away from the fact

there will be so much value created if you put these two companies together. >> one of the issues raised on that particular transaction is whether there's an antitrust risk do you believe there's a risk? >> we don't think so there's so much competition out there, there's so many things that compete with toys more than ever, all of the things going on on the internet so we are convinced this won't be a antitrust prop at all. >> what else do you love >> i favor being in new york madison square garden network. we think the knicks are on their way back steve mills is doing a great job, my old princeton teammate we think the team is doing extremely well and it's such a cheap stock. less than ten times next year's earnings. >> what's been holding that stock back >> i think there's a dole-in discount i think it's unfair. i think jim dolan has made a lot of money for shareholders but there's the discount. >> are you a believer he ultimately might sell the company?

>> it's possible. >> that's where the discount comes to play. >> the regional sports networks need to come together. you bring more brands together, more sports teams together there's a lot of value. >> it's not everyday you can bet on an investment based on whether a team is going to do well like the knicks what if i bet on the bengals i'd have nothing nick are you sure the knicks haven't been a great investment maybe it's time? >> cincinnati is not new york city. >> oh! >> we'll get great -- >> we have p&g. >> salt in the wound. >> where are you on tech >> zebra technology is our favorite bar codes are so important amazon uses them as well as retailers. it's a terrific bargain. >> what about the big tech names? do you like amazon or apple? >> we think those are expensive and too large. i focus on small and mid-sized

companies. >> fair enough. >> the browns. i just -- i don't know the cubs finally but what about before that? after years in the making wynn boston casino is a year and a half from being complete, the largest private development in the history of massachusetts is expected to transform the area the town of everett, that's how i used to say it, near revere and lynn, is preparing for an influx of tourists and visitors and that's where we're going to find contessa brewer. nowhere near braintree, contessa. >> we're near all of those, brookline, the city of lynn, everett. you know where we are. we're just across the water from boston, we can see the skyline from here. so exciting. they've finished now, guys, 14 floors of the 27 you can see at the top of this crane that's where the structure will come up and just this week

they've started installing that iconic brown glass on the outside of the building. here's win ee's wynn making a b can turn this hard scrabble town into a luxury destination. when we're looking at the kind of construction that's happening here, $30 million just digging out decades worth of chemical-drenched dirt, dredging the river bottom to reclaim the harbor it's spending $100 million snapping up adjacent real estate just to improve the nearby aesthetic. it's budgeted $250 million on local infrastructure now it's hiring 4, 000 people, most of them low dmal massachusetm massachusetts, all of them union to bring the wynn boston harbor to life. >> i am hoping that ten years from now long after we're open that the folks in this community and the surrounding area will look back and say mr. wynn and the team did it right. >> wynn will pay $25 million in

taxes to everett that almost doubles its tax base, almost 50% more than its tax base and i asked a local restaurateur, do you worry at all that everett could go the way of atlantic city >> he changed las vegas. he changed it. he came up with the new concept of las vegas it's there the way it is now because of what wynn saw and did so i would never bet against steve wynn. >> here's what $2.4 million will buy you, a rendering of what it will look like when it's finished in the summer of 2019 back out live, winne is bynn isg it can best mother nature. it's building up the grade to put the entrance of the casino 25 feet above sea level. that means it's above the 500-year mark. we have our set up here but i wanted to show you the other side here's the grand ballroom, it

will be like an acre big look at this shoreline this waterfront used to be industrial corrugated metal. it is building a living shoreline that attracts bugs and fish and birds to this more natural setting and attracts people who locally in everett haven't had access to this waterfront in 100 years. >> wow, okay contes contessa. >> if it works, that's a great area to -- for wynn. the person was talking about steve wynn that makes it different than atlantic city, just the name wynn, but tough business i don't like the feeling of gambling. >> no. >> i don't. >> that's one of the things they're going after in the tax reform bill. it used to be you could write off gambling losses, they're getting rid of that deductibili deductibility. i love that. they're getting rid of that in the house plan. >> it's the combination of the

feeling and having a debit card in my wallet with one of those machines nearby because i know i can make it back and i was so far off, how did it go. we're coming back in just a moment the fight for tax reform earlier this morning senator ron johnson said he opposes the plan because it benefits corporations more than small businesses small business administration linda mcmahon joinus fs or her pitch on tax reform in just a moment when we return. most etfs only track a benchmark. 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.

the problem is, neither the house or the senate version really honored that commitment to pass through businesses which i would argue are a huge engine of economic growth, innovation in our economy so right now according to my numbers using jct scores, 82% of the business tax relief goes to the c corps, 4% of the big companies. i got nothing against big companies but only 18% go to pass through entities so i can't even get the information on the details of that so i'm looking for, again, i'm looking for help to get this thing fixed. >> that was republican senator ron johnson on jaux earlier this morning. joining us now, linda mcmahon, administrator of the small business administration.

do you have similar concerns ms. mcmahon as ron johnson on the pass through issue are big corporations being overly favored in the senate version? >> well, i can tell you i have been traveling the country over the last few months since i took on this new role and what i have heard consistently from owl small businesses, most of home are pass throughs is that they want to see tax cuts that tax cuts will help them they'll have more money in their pocket and without fail every one of those businesses told me they would reinvest that money in their company whether it's increase in wages, a new product line, new location, just being able to make their business stronger and better. they're looking for tax cuts and either of these bills that would come through would provide tax cuts for our small businesses and i'm really pleased to see right now the process that's going on, the house is going to vote today, i believe, the senate will vote soon, we'll have reconciliation and i honestly believe we'll come out

with a tax reform bill that will benefit everyone, especially our middle-class and small businesses. >> administrator mcmahon, senator johnson said earlier that a lot of the small businesses, at least the pass throughs he talk to think they'll still be paying 25% but he doesn't think they understand how this will impact them. what do you hear from those people you've spoken with, do you think they understand it >> i think that they understand that what is going to be beneficial for themis that they're going to have tax cuts we're going to look at all of the different brackets in paying lower tax, the standard deduction is doubled there's greater increase for child care all of these are going to benefit those pass-through entities with lower taxes and the optimism in the country hasn't been higher for small businesses, they're ready to start up, sba is hoping to provide them with access to capital and counseling and mentoring they need to grow and have successful businesses.

>> you at this point, administrator mcmahon, do you have any trepidation that it will be deja vu all over again with health care with this was ron johnson the beginning of a slow sickening decline in the momentum for, do you think >> i certainly don't get that sense. i think what senator johnson is looking for is to have a little bit more clarity and maybe to have a bit more input. i certainly don't fault anyone for doing that but here's -- you know, when i was a ceo and i wanted to get a deal done, both sides came to the table. we sat down, we talked through our issues, we knew that we weren't going to get everything either side wanted and the best deals, the ones that held, were the ones when both sides walked away from the table getting part of what they wanted but not all and i think we'll have a good tax reform plan.

>> the great thing is you are talking about that and both sides talking and listening and making compromises unfortunately you're talking about republicans only that's -- which is the classic part of where we are i just saw something i think in the "new york times" today that another -- just hammering that this has nothing do with the middle-class and it's all about these fat cats enriching their friends and cutting taxes for fat cat corporations and throwing a bone to the middle-class so that's what you're going to hear and that's -- people -- the public sees that and they may not connect the dots between corporations doing better and competing globally and wage gains going up for people that work at the corporations. >> well, i think when all of those folks start looking at how their taxes are going to be impacted, the simplification of their tax returns, more money in their pockets to do with what

they desire i think the proof is going to be in the pudding and i couldn't disagree more that this tax reform package is not geared towards middle-class it is more than it is to the higher wage earners and their tax rate is staying the same, by the ay. >> linda, do you know what percentage of people using pass throughs pay higher than a 25% rate currently >> i don't know that percentage. >> that is, i think, the central question at hand and we've seen a variety of numbers, right? >> well, i think that is part of the question for sure that it's going to be capped at 2% i do know there are a lot of small business pass throughs that not only pay at the top level but then by the time you add their state and local taxes, they're paying into the 40s. but i think most of the small businesses that i talked to probably are below the 25% right now but they're going to still benefit with all of the deductions at the different

bracket levels so this is a good tax reform package across the board for middle income taxpayers and those pass through small businesses and they get it. >> >> do you have a preference over one plan or the other, house or senate? there's still some -- only one -- there's tradeoffs in both because of that $1.5 trillion that you need to get under you have to keep some things and i don't know how they put ilgt together do you have any idea >> well, i just hope they continue to work at it in the same spirit that has been brought to the table so far and i think both sides dowant to get this tax reform package through because it will be so critical to our middle-class americans and the continued growth of our economy. if we keep our small businesses and our middle income tax payers healthier, if you will, then our economy will continue to grow and that is what i've heard when i evil traveled all over the country so far is that the

optimism for this tax reform package is incredibly great among our small business owners and entrepreneurs that want to start up so i'm in their camp. >> that's the sector we need that's what we need for jobs and entrepreneur nurp spiral and everything else. jobs an entreprene sbr entrepreneurial spirit and everything else. >> when we come back, we'll get down to jim cramer live at the new york stock exchange. we'll talk to him about some of the earnings we've seen today. stick around 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?

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welcome back to "squawk box. let's get down to the new york stock exchange jim, i want to get walmart, wow, on doug mcmillian, incredible new high but i notice another dow component, general electric, yesterday, bounced off 17.5, right? and it's up a little along with management, the board is turned -- i mean, a lot of criticism. and just the thought occurred to me, and i thought i would ask you, would it ever make sense to say, jack welch built this company. would it ever make sense that just temporarily, like 18 months, put him back on the board to see whether he had ideas for the company? >> well, first of all, who wouldn't want jack welch on the board? because jack's got more business

sense than ever. second, i know that flannery and jack talk, which is a good -- if you put them on, maybe he could find out what went wrong, fix a lot of the stuff that went wrong, so it can inform flannery's decisions and he wouldn't afraid, he's a tough guy, but a fair guy. so, yeah that would be a cool idea. >> i thought about it. you know, flannery would have to be a pretty comfortable in his own skin you know, i wouldn't invite jack welch back, you know, if i was worried about, you know, being my own guy, i wouldn't, you know but, so it would help the company. if it would help the company and the shareholders >> for a short time. look, just make him special adviser. i don't know how you would do that, but flannery is very comfortable in his own skin. when he sat here, he took a lot of punches and bobbed and weaved, but bobbed and weaved in the right way. so let's see what happens. >> and everybody wants ge -- not everybody, but those people want ge to regain some -- look at that nobody could be happy with what

you're looking at. >> the country's unhappy with it >> exactly thomas edison, for god's sakes all right, so walmart, unbelievable, it's closing in on $300 billion >> yeah, look, food is great for them half of their business is food they're also, i think, offering lower, lower, lower prices and you know, i think you guys were right mark lowery's fabulous it's only one company that can stop amazon and it's this company. mcmillian turns out to be a guy who reinvented the company good for him he's a lot like sam. >> all right, jim, i was going to ask you about tax reform, but you're not positive about -- you're worried >> well, i was listening to the senator this morning and pass-throughs and this and that. and you know, linda -- it's just so -- i don't know if anybody really knows -- i think we're kind of back in that carried interest for auto loans. whatever that was. >> yeah. >> carried interest in cars. we should ask michael jackson about that you ask mike

if mike says he needs carried interest, maybe we change our mind >> right all right. jim, thanks. we'll see you in a couple of minutes. also on "squawk on the street," don't miss coca-cola ceo james quincy "squawk box" will be right back.

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after a similar performance,

the russell 210 tends to outperform a month later new treasury secretary making his mark on your money and he's doing it literally. steve mnuchin, touring the bureau of engraving and printing and got a peek at new $1 bills that, yes, they bear his signature. those bills expected to go into circulation next month mnuchin posted a photo with his wife and the bills generated a ton of buzz on twitter >> i think it's the gloves >> i think it's the gloves >> and the hard-on stare hard-on to the front of the camera stare >> i know! >> because it looked like they were in a vault and with the gloves, there was an element of -- >> awkward moment! >> -- burglar -- >> -- brought to you by becky quick. >> it was the gloves it was the gloves and inside

and -- >> but it was a throwback to the other thing, too >> if you were going to be part of a great heist, you would wear gloves >> but it was also part of that other, where she tagged some of her designer clothes i think it's a throwback to some of that. >> get us out of here. >> we've got to go make sure you join us tomorrow we have a big show >> what kind of stare? >> good thursday morning welcome to squawk ont street i'm carl quintanilla with jim cramer at the new york stock exchange david faber is at liberty media investor day in new york they'll have exclusive interviews beginning with media giant john malone. a lot from david in a moment futures agreeing for the first time this week as a several retailers raised their guidance today. house votes on tax reform later on this afternoon. europe's helping out, ten-year's around 235 our road map begins with walmart's big earnings beat, on track to open this morning at a record