tv Squawk Box CNBC December 1, 2017 6:00am-9:00am EST
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talks with makers of generic drugs. we will talk to anna gupta about the impact on the pharma business on this friday, december 1, 017. "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. it's not a jobs friday because of the way the calendar falls, it's because of the reference week that fell late in the november calendar. we'll get the report next friday look at how the markets did for november we were just playing bruno mars "24 karat gold" that's why
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the dow crossed 24 how for the first time yesterday, but for the month the dow was up 3.83% the s&p up 2. 1% and the knanasdaq up 2.17%. telecoms led the way for the month. check out the u.s. futures those gains yesterday were something to see the dow jones crossing 24,000 for the first time the s&p 500 was up by 0.8 % yesterday. all of these things we have been watching closely you are seeing a pull back this morning. maybe related to what we're seeing in europe the declines there are more significant. >> declines in europe are because of the tax deal. >> you think >> absolutely. after we got so close last night. it's not just the declines in
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europe, europe is not matching 350 points of gains that we had here yesterday but the 350 points, that was at 4:00, all of this stuff -- they were supposed to vote yesterday. >> i'm surprised there's not a bigger decline this morning based on the snags in the tax bill >> it was supposed to happen -- if we knew it would happen today, there would be further gains, now it's totally up in the air. >> you think that's why the dax is down 1.4% >> the whole thing has do with -- the global markets the day before were based on tax reform going up. i think we're the dog. i don't think we're the tail we're helping inspire the growth that these guys keep hanging all this on. you just watched it yesterday. we were in the morning up 50 points our memories are short we did 250 and 70, i said we're up 320 points in two days, then
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another 80 then up 50 yesterday we were amazed we were up 50 early morning. mccain came on board in the middle of the day, it surged 350 points >> i think yesterday was entirely because of taxes, i don't think the pullback this morning is >> we got mccain, murkowski, and then all of a sudden it all hit the fan. intractable stuff. >> that will be a tougher fix. >> you have the two parties that are opposed to each other moving further part you got the deficit hawks -- >> within the republicans. >> you have some guys that want more you have other guys that want less so now you're -- they have -- that score came out. were it said it would -- >> trillion dollars in deficit >> corker has said he won't go for anything that adds a dime to the deficit. a trillion is a lot of dimes
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>> the global synchronous growth, i said you almost sound like a parity. many of them didn't think it would be a good year because they were on the wrong side ochtd of the election their entire premiseis shaded by -- somehow midday yesterday, the global synchronous growth story got strong again, then overnight the global synchronous growth story got less strong >> let's talk about washington for a moment this is the story of the morning. the gop tax reform bill hitting a big snag in the senate at issue the trigger amendment proposed by senator bob corker ylan mui will break it down for us >> reporter: the bottom line here is that the idea of the fiscal trigger is not going to work the trigger would have automatically increased taxes if federal revenues fell below a certain level.
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lawmakers found out last night that position is not allowed under the senate's complex rules. now republicans are scrambling to come up with a new fix. i talked to one top lawmaker who said one idea they're considering is a stair step increase in the corporate tax rate, but that could upset conservatives who were unwilling to entertain anything above 20%, not to mention president trump himself who called that a red line corker is not the only senator republicans are worried about. there are three more still on the fence. and the danger is that anything they come up with for corker could derail the deals that the other senators were working on to get to yes. moments ago, senator steve daines of montana said he is a yes on the tax bill. that's good news for republicans. lawmakers went home early last night to come up with a solution they're reconvening this morning at 10:00 a.m we'll see if they can hold on to
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yesterday's momentum >> walk us through the timeline. they'll meet at 10:00 a.m. this morning. is there any expectation that something can happen today or now we're pushing into many more weeks or days >> there's hope that something could still happen today they convene at 10:00, the first vote is at 11:00 it depends on whether or not they can figure out a solution to replace that fiscal trigger, whether it's an increase in the corporate tax rate, whether it's making some more taxes on the corporate side temporary what are they going to do? replacing or reinstating the amt for the corporations and individuals. all of these ideas are on the table. it depends on how quickly they can come to a solution >> is there a way to satisfy these guys right now then when it goes into the pot, theytake it back could they -- is that not kosher we want your vote today, get
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corker -- >> then they have to vote again after. >> the hang up has been the senate if they put in a provision now, it has to be something the house accepts. if the house changes it, it has to go back to the senate they have to have a fix that all of these guys will agree to. it's up to the house to decide whether or not they'll swallow what the senate puts forward >> right joe, you pointed out that it's tough for business planning if you talk about a corporate rate that steps up overtime or sunsets. if you're looking for a fix, raising it to 22%, that would be more palatable, but that's something the white house said is nonnegotiable they want 20%. >> that's what we always thought. people thought the deal would be 23%, 24% to begin with >> your people >> maybe my people >> you were hoping for 28.
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>> no. >> president obama was at 28 i thought you were at 28 >> i was at rational math. >> rational math, as demonstrated by the last eight years. >> there's math involved >> i saw the deficit double with your rash mall math over the last eight years >> because it was a financial crisis that was -- >> that was caused by bush >> hold on, think about it like this if you want to give credit to who's ever on watch -- >> no, no. >> is that your deal >> no. no i give credit to the market going up after it was down 40% and doubling since 1999. >> right >> but the real moves that you were a little bit questionable about a year ago, the real moves that happened, these are policy based moves. the previous ones were normalized moves >> normalized. >> what pro business stimulus did you see during those eight
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years? that helped businesses out other than rebounding from the financial crisis the auto bailout >> the auto bailout happened second piece of t.a.r.p. and the fed. >> the fed >> but emergency measures with central bankers is not a growth policy that you put in that helps the private sector that's just -- that's triage for hoping to get back from 666 on the s&p, which we did. but now these are actual advances being made on the possibility -- >> on the possibility of policy. a policy that hasn't happened yet. i'm not saying it won't. >> a lot of it has a lot of deregulation -- it's all about animal spirits it's all about business confidence, which is at the highest -- >> can i continued let's bring in our guests? joe zidal with richard bernstein advisers and charles campbell with mkm partners. what do you think?
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how much of what we're seeing is based on the assumption that the tax bill will go through >> good morning. i hate to mention the word fundamentals after the conversation that has taken place, but we have this terrific cocktail now of accelerating profits growth, low interest rates all around the world and investor sentiment that remains september cal. you put those three things together, they're powerful forces maybe the day-to-day story will trade on the ebbs and flows of what's happening in washington, but the fundamental story argues that equities should continue to go higher and higher through 2018 i think it's an earnings driven bull market. people have come up with every name under the sun for this bull market the trump trade, the mccain rally. but no one is focused on the fact that s&p 500 profits are now back at record highs -- >> the entire way we've given credit to earnings and fundament fundamentals people have said don't chase the
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rally. we already got our move based on global growth and earnings it was up 8 0 poi00 points this, from all-time highs from levels that people thought were nosebleed. you hear about valuations. goldman says this is the most overvalued -- then it goes up another 800 because of mccain saying something >> the day-to-days will be driven -- >> we were up 800 this week. >> of course that happened from strong earnings and global synchronous growth >> when you look at the s&p 500 earnings that wrapped up, earnings were up over 20%. >> i know that that doesn't explain 800 points this week. >> the most interesting thing about it is investor sentiment here's what's amazing. you went over the november returns, the dow and s&p were up over the last four weeks, if you look at investor flows, how people are voting with wallets, they have withdrawn almost $20 billion from u.s. equity mutual
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funds and etfs and put over $20 billion into bonds that's skepticism. >> the dow and s&p are up for the last eight months in a row that hasn't happened for the dow since 1995 charles, you say look out below if the tax reform doesn't go through. >> this week you had massive moves in the market. part of that was powell's ted, where he said we'll have a lighter regulatory market for banks. part of it is the tax reform which was expected to go through. now there's incremental uncertainty about that the downside each 1% is 26 s&p i wouldn't be surprised if you get a 50 or 60 handle move in the s&p on disappointment, especially if there's uncertainty going into the weekend. >> that's not look out below that's giving back some of yesterday's gains. >> would be the beginning of a move lower i wouldn't be surprised if we move 2% to 5% lower.
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hedge funds, which so far, whether it's global macro or long short are underperforming benchmarks since mid-september the s&p has been up 69% of the time. since 1950, the historical average is 54% of the time that 15 percentage point difference is significant. most of these gains on the upside are larger in magnitude than the declines on the down side so when hedge funds at the end of the year now, as they go to preserve capital, if the market begins to decline, they'll pull back more aggressively and if the market is advancing, they will increase exposure more >> people are sitting at home saying i missed this if i have not bought into this i missed a big rally this week alone. would you tell people to buy now or wait and see what happens with the tax bill? >> i would choose option c a 1%, 2% move down is nothing. >> joe what do you think
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if we see the tax bill run into roadblocks, it would be a big buying opportunity the underlying fundamentals remain strong. joe, here's a point for your argument on animal spirits, if you do a google search over the last 12 months for the word deregulation in the news, you find more than two times the number of instances of the term deregulation being used now versus the 12 months before. >> all right >> there wasn't much in terms of that. >> there was re-regulation when you look at the way it happened, everybody remembers healthcare they remember that dramatic -- so midday yesterday, it's like -- you never know with the maverick you never know we talked earlier about how he seems to go back and forth this time he totally po'd his own party, the democrats love him again. i said watch, he'll flip back. midday, the guy who went like that says he's on board.
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this is done it's done! and then -- maybe that was the top. after that it was nothing but downhill you got the trigger can't go then you will go to 22%. and it was just -- i watched it. it's like straight downhill after the euphoria of -- >> in terms of the momentum. >> murkowski had come on snow was even like, you know, i'm not a no >> if they try and appease corker and flake on some of these issues, you will lose people like cruz who say forget it >> again, whack a mole every team you whack one here, you get another one coming up over here. >> this is only in the senate before it goes to the house and you have to cram the two bills together it's complicated charles what areas, do you like the best what sectors would you tell people >> technology has had a massive run. as professional investors look to preserve capital, they look
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to manage their risk, one thing that we're seeing, i think, is a rotation from technology into other areas. one area that's attractive is industrials. leading indicators are good. industrials and norfolk southern this week, rails are doing well. transporteds are at an all-time high that would make sense to me. >> does the market tell you guys that we will do four quarters of 3% we got 2% or 3% already. it could happen near-term. that wouldn't have been from policy t policy, it would have been from guys being more confident about the future with things they're doing with their business and consumers. >> what will the naysayers say about there was no population growth, no productivity change what will they say when it finally happens after not happening for eight years? do you think it's going to happen >> i think it will happen.
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if you look at how investors are positioned, they're positioned for defense, lower rates for longer they're not positioned for growth growth would be a big surprise >> 3-3 with the purr canes it cou it -- hurricanes >> the hurricanes were the net stimulus >> it's a slight headwind. >> 3-3 with the hurricanes people thought it would go back to 2 >> regulatory rollback is one reason and central bank accommodation. even if we raise the market expects two raises, the rates are still low. big healthcare news. cbs nearing a deal to buy aetna for $66 billion, and amazon is now in high level talks with pharmaceutical companies details and analysis straight ahead.
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reports the deal would value aetna between 200 and $205 a share. mostly cash. an announcement could come as early as monday. the rational, anna, is a one-stop shopping place for healthcare would that -- is that what they need >> it's defensive and ambitious. defense, it's because we talked about amazon a lot cvs needs to do something. aetna is not growing much at all in terms of the number of insured lives, margins are peaking. they have pressure on that all of those are the defensive elements it could be potentially transformative it would take a while, but it's an integrated offering across medical and pharmacy they could repurpose the real estate into community health centers, and the agenda would be to dwroorive up aetna's insuran
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offering >> is that what you think part of it is >> definitely. >> is it 50% change? cvs has a lot of unused stores and big space. >> 9700 stores, 1 01100 clinics. 70% of the revenue has been coming from the front store, but that's into the really growing because of amazon. they talked about low cost primary care, urgent care, and dialysis clinics, taking out the greeting cards, shampoo. what is the knock-on effect, if this deal happens monday morning, who's next? >> i think that humana is in play i wrote about this cigna is the potential horizontal acquirer. i wouldn't eliminate walgreens, walmart and anthem as other potential --
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>> walmart >> yeah. humana and walmart have been in a tight relationship for six, seven years. not a formal jv, but they steer humana members to walmartment what kind of a purchase would that be? >> we're talking about maybe a 25%, 30% premium now to humana, which is somewhere in the mid 30s. >> 37 billion. >> another 25% off of that i think it's a $300 a share offering humana is rallying the last couple of days on tax reform >> you referenced the amazon story a couple of times. meg tirrell says amazon is in exmroe exploratory talks with drugmakers, reportedly about taking a roll in drug purchasing and generics
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what do you know about that? >> novartis made some comments a couple days ago in an investor meeting hosted by our firm, they had discussions with amazon. a potential play, if you wanted to look at this more transformatively, could be amazon saying, hey, walmart is doing the $4 generic drugs in store. why don't we do something like that with online shopping and mail order let's say they work with mylan or one other >> do you think they need to own a mylan or -- >> no. no >> straight partnership stuff. >> straight partnership. the threat would be -- i'm not saying they would do this, but this could potentially happen. they disintermediate the pb marks because they negotiate the generics, they do the sailing,
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all of it, end to end in the drug supply chain. you know walmart is going bricks to clicks, and amazon is going clicks to bricks, but that's a good play for them at this point know vnovartis hat confirmed anything that ambitious, but it's a possibility. we don't know. >> amazon, god not an industry where if we don't talk about something happening, we don't go amazon. >> i know. they're likal ove athe overhang threat >> like kroger yesterday >> what's fascinating -- >> amazon and bitcoin. >> you talk about vertical mergers ordeals like this. at some point do regulators look at amazon, even though they're not in the space at all. on a traditional metric, you go, oh, okay they can do this groceries, they can do this. tv, they can do this
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but at some point do you have to look at them in a different way? >> too big to fail >> i don't know. i don't know >> don't mention his book. >> thank you. royalty he pays. president trump tweeting about tax reform he says republican senators are working hard to pass the biggest tax cut in our history the bill is getting bet every a better and better. obstructionist democrats trying to block because they will not get the credit, even though it's the republicans themselves who are doing this >> why does he write these things >> because he's -- >> because that's not -- >> did you read axios's analysis of how trump works read it. it's on axios today. it has a five-point chronology
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trump starts here. his people retweet it. all of his followers the rest of the mainstream media gets up in arms about it then it starts trending. at night fox does one side nbc does the other side. >> but you talk about fake news, here he is, he's 00% in the wrong. >> saying it's the democrats -- democrats are trying to block it >> sure. but that's not -- that's not why things are turning in the last 24 hours at all. to people who don't know what's going on -- >> that's not true a lot of these guys are scared, when they hear the criticism about taxes. >> to those who don't really understand this story, they read this, they retweet it, they send it out to followers. >> read it on axios. if you don't think the democrats are trying to block this, you're out of your mind >> but they don't have the
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numbers to do it >> we'll continue this conversation when we come back, prepare your portfolio for the new year we'll talk to the head of the national automobile dealers association about auto sales in the new year and how it could impact stocks in the sector. and a business leader for the next generation, amir williams is tops for girl scout cookieal ses she'll talk about how she used technology to reach the top. that's in just a moment. and high-dividend strategies. sure, these are investments. but they're not what people really invest in.
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hour, taking a quick look. i think these guys and people involved with everything that's happening, the equity futures, we'll find out what happened after we watch what they do today. it could be little things trickling out. it is amazing how the market does seem to be able to -- >> air things out. >> it's ears are everywhere. it has lots of ears. like a fly has all those eyes. it has all the ears. down 55. i don't know what that means supposed to happen at 11:00. supposed to happen yesterday didn't supposed to be a vote at 1:00. we'll see if they're wrangling these guys oil prices are rising a day after opec and other major producers agreed to keep current production limits in place until the end of year. >> stocks to watch, bayer says the committee on foreign investment in the united states has cleared its planned $66
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billion takeover of monsanto the regulator is a panel led by the treasury department that reviews deals for national security concerns. bayer expects to complete the transaction early next year. bayer slipping today vmware with better than expected third quarter results the maker of virtualization software said more companies licensed their products to ease the shift into the cloud ulta beauty beat forecasts, but same-store sales growth slowed, and the current profit will fall short of analyst expectations down 5.25% u.s. auto sales for november are coming out today, later today. the industry looking to finish strong for the year. joining us for what to expect in 2018 is marcus scar pell lscarp. it's a good year, but still off marginally from '16 to '15
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>> we have gravitated differently. coming off high numbers over the last couple of years, if we're at a plateau, i'll stay at this plateau all day long we expect over 17.1 million car sales this year in '17 for '18 we're expecting about 16.7 million so it's still a great, robust market for automobile dealers and for the consumer the >> car sales inclusive of leases, correct? >> correct >> what percentage of these are leases relative to straight sales? >> leases, depends by market anywhere from 10% to 15% of the market nationally. >> i would have thought it was more as it happens as you look to '18, what do you see happening? >> '18, we expect to be a robust year as i mentioned, 16.7 million in the market car sales will be moving just a bit more towards light duty trucks the sedan market is contracting a bit. suvs and light utility trucks
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are fuel efficient we have variations of hybrids, li electrics. good choices we talk to mark jackson from autonation, one of his complaints has been it's hard for the auto dealer to make money on sales of new cars, because there's pressure from the mrafr anufacturers, there'sy so many things you can offer the consumer what do you say to that thought? >> our margins are razor thin. there's no doubt about it for sure that's why we advocate for sure affordability of vehicles for the american consumer, as well as our business costs. we want to make sure we keep our tax situation in line, our deductibility for floor plan interests, things we can control and make sure we go to market with >> making sure you can pay for these things and keep the deductible of interest that survived in the house bill >> we hope it survives in the
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senate as well senator paul endorses the same type of legislation. >> explain the issue for those who don't appreciate it. >> my family owns a bunch of car dealerships in chicago over 1$150 million in inventory on the ground. we buy that inventory from our manufacturer every month we pay an interest loan on that floor plan. at 3.5% interest on that floor plan, that bulk of cars, it adds up quickly if we can't deduct that as a business expense, we're already working on a razor thin margin, right -- >> i get that, but why should the u.s. taxpayer be subsidizing that instead of the manufacturer >> that's to be debated. at the end of the day we want to make sure our shelves are stocked fool >> but why shouldn't the manufacturer help you out in that >> in some cases they do, but in a low-interest rate market it's affordable if interest rates go up, that's
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a different story for them and us >> but in most other industries they're not getting this benefit. >> it's been a staple in our industry that's how we run our business we're talking about razor thin margins. if that deductible is not there, there are lower margins. we want to make sure we keep that momentum going. >> where are you on the corporate tax rate >> corporate tax rate, depends on if you're a pass-through or -- >> i'm assuming most of your constituents are pass through. >> correct we have a seat at the table. if we're allowed to have a different tax rate, we'll be able to reinvest in our plants and expand >> right final question from me, tesla.
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they're not in your network effectively. do you see a day where that model becomes much larger? >> on today's roads, there's over 75 million automobiles on the road tesla has a small park in order to handle that girth and cars on the road, you need a bigger presence. footprint, service centers, dealerships. at the moment, tesla is a third and fourth car for a lot of individuals. our model currently sells anywhere from middle america to budget-minded. that's not a tesla buyer at the moment it's not >> thank you appreciate it. >> thank you >> you sound like taxi drivers talking about uber that's what that sounded like. better start thinking. start thinking about -- >> we endorse it it's a great product >> sure. >> we do >> but it's a model of whether
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you can go direct to the son super -- >> then we wouldn't be arguing about the interest deductible. >> we are ready to sell and promote cars any way we can. wove been car dealers for many years, we're very flexible >> you have to get those sales people to be less salesy has your experience been better with those guys? >> yes, very much so, after i wrote about it in "fortune." >> they call you little lady don't ask questions about the engine, honey. >> let me talk to your husband, clearly you don't have a work phone number >> exactly thanks for coming in when we come back, the dow closing out november with a bang, jumping more than 300 points and topping 24,000 for the first time we'll talk technicals with katie stockton then it's make or break season for shippers. we'll get the predictions for
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welcome back pricwaterhousecoopers says it has accepted a payment in bitcoin for the first time the company's hong kong division accepted the payment because it's increasingly working with startups in the city involved in digital currencies and blockchain it appears to be the first of the big four accounting firms to embrace bitcoin. the hot buzzword on campus this semester is blockchain. students at the top business schools in the united states are writing case studies and launching cryptocurrency clubs to better understand how to tap into the emerging technology seema mody joins us from philadelphia, the home of whartons business school what are you finding
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>> this is just fascinating. a growing number of business school students from harvard, stanford and wharton are pivoting away from standard private equity and hedge fund roles and are looking to blockchain for opportunity >> you got a lot of people who came from more traditional backgrounds, private equity, hemg fu hedge fund and consulting forgoing chances to go back into that world and getting involved in this one. >> we've seen a huge increase in interest in blockchain and bitcoin. >> students are interested in how this technology can change things >> harry difrancesco is a member of the penn blockchain clock which has over p300 members, the are using these clubs as incubators to launch startups it's a similar story at stanford school of business faculty and staff are feeling the pressure to update
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curriculum and launch new classes on this emerging technology, but many say it poses a challenge given how new blockchain is. >> the fun part in teaching about fast moving technologies is you have to stay on top of it, keep owe involevolving and n asking yourself every year what new is incorporate into the class >> wharton hopes to launch its first class on this in 2018. stanford will have its first class on cryptocurrencies and blockchain in the spring of 2018 bitcoin is getting a lot of attention. i was at a campus bar last night. students say while they're watching bitcoin they're more interested in investing in ethereum, light coin and ripple. >> seem ma,a, does this seem lia fad of like something that gets
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built on over time >> when i first started researching this topic, it seemed like a fad, but you see that all business schools are not only trying to launch classes in the field but putting time and research into understanding what blockchain is here at wharton, the professor we heard from, is allocating a larger part of his time towards research on regulation in cryptocurrencies so it doesn't seem like a fad. there's a lot of interest, not just in cryptocurrencies but the underlying technology which is blockchain >> thank you we'll see you later today. coming up,we'll talk about a younger generation of business leaders. the 9-year-old girl who sold the most girl scout cookies in brooklyn is here to tell us about her sales strategies, and how she keeps track of customers and used technology to help reach the top spot as we led head to break a quick check of what's happening in the ropean markets right now
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>> she's going to school after this >> you are >> yeah. >> and i hope you're not, you know, mobbed for autographs after this, which is possible. so if there was one thing that allowed you to scale, to get up to numbers like that, what was it did you do it in this front of supermarkets did you -- what was your sales strategy i would go to where it was busy, and i would use technology >> what kind of technology >> i would use square, the credit card taker. >> people were paying with a credit card? >> yeah. >> on like an iphone or android? >> android >> did you bring physical boxes with you, or is that necessary do you just need to bring a sample for -- to show people what you've got, or how did that work would you set up a little area
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on sundays at the church or at schools or parks i would go have my little setup table and have the square boxes and set up all my cookies. >> just you? you didn't partner up with any other -- this was all you? >> sometimes i would do it with my sister. >> with your sister. >> keep it in the family >> sometimes i would do it with my friends >> really? >> how many days a week were you working? >> probably seven. >> seven days a week you are doing this seven days a week did you sell more on the weekdays, more on the weekends >> weekdays. >> week days >> after school? >> yeah. >> what was your best location >> the park near my house. >> the park near your house. >> what kind of cookies do people like? what are their favorites >> thin mints and samoas >> samoas are the -- >> i've had those. carmel inside? >> you take a bite, and there's a carmel that -- >> by the way, this is a chart
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you made yourself, right >> yeah. >> i can't do this, so this is incredibly impressive. 25% thin mints samoas, are 25%. >> they take up 50%. >> nobody likes the toffe-tastic >> it's gluten-free. not many -- >> not many people like gluten-free. andrew he just figures gluten, bad. i don't know >> no, no. >> so there's a couple of kinds of peanut butter ones. >> yeah. >> what's the one that doesn't do very well it's got chocolate, right? >> that's -- >> the tag-along >> the dos-i-dos don't do as well as tag-alongs tag-alongs do a little bit better >> do you have to buy a certain number of boxes? do you get to choose which cookies want to sell could you just sell samoas if that's what you wanted to do >> no. >> you got to do them all. >> they force you -- not force you, but -- how does it work
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i do all of them because some people like the other boxes. it would be nice that they got to try them. >> but you don't have to buy the merchandise? >> no. you don't own it you don't own it you can order. >> you have to choose which boxes she's going to bring out >> so you don't like the -- yourself, you don't like the peanut butter with the chocolate. what are the other peanut butter ones that i like >> do-si-dos >> you haven't tried those why not? >> i'm not a fan of, like, oatmeal mixed with peanut butter >> i thought you might like them if you tried them, so you didn't try them, huh? that's a conscious -- really i do that too. it's better if i don't know, sometimes. >> she has some amazing patches. did you see this cookie sko super seller i'm a digital cookie boss. how did you get each does each one represent a different thing? >> yeah. >> is the thousand plus for how many boxes you sold? >> yeah. >> way to go
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so is this -- are we looking at the future for you are you going to be an entrepreneur of some kind and have a really successful business do you think is that what you want to do? you want to be a doctor? >> i want to work for lego >> you want to work for lego >> why >> because i like using legos and building >> that's great. >> you know, they were doing great, and they recently had a little -- they've never stumbled before >> they could use your help. >> they had a little bit of a stumble. >> only because they were coming off such massive comps >> i this i that -- when are you -- >> when are you going to be available? >> that's the question >> over the summer >> over the summer shoo she's availab >> she's available for over the summer >> for the ceo overall she's available in about 20 years. >> this was a great interview. do you think it went so well that you should maybe send us some cookies >> sure. >> really? >> could you see fit to send samoas >> no, we're going to pay for our own.
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>> we'll pay that's right actually, what about that bitcoin thing that you have? could you -- >> hand over the -- >> do you take bitcoin >> he has, like, $80 >> do you know about bitcoin >> no. >> you don't know about bitcoin. >> good idea >> do you like to take cash or the credit card, or it doesn't matter to you? >> credit card >> they take a little bit of your money, did you know that? >> girl scouts' money, not hers. >> come back >> you'll be running a company >> i think so. >> it's great to see you >> thanks. >> okay. when we come back, says it doesn't get better than that you know, i'm not going to tell you can turn your tv off, but november went out with a bang. we're going to talk about yesterday's rally and how you should prepare your portfolio at the end of the year. technical strategist katie stockton is going to be our very special guest host for the next hour always has great advice for how to think about the markets
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>> if you had to wreet this, it starts out a setback for tax reform what kind of adjective do you think we should use? it says slight here. i don't know yet we're going to see whether it's just the slight setback or really the beginning of something. we don't know. there's supposed to be a vote at 11:00 a.m. today it was delayed last night. we'll see where we are the markets have been moving based on every little whisper that you hear about whether it's going to happen. full details we will have those straight ahead. the delay, by the way, could have an impact, obviously, on the markets. futures were down triple digits. they cut that in half. we'll see where they are in just a couple of minutes.
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the latest dow record-setting run and where we go from here straight ahead we've got katie stockton to talk about the technicals plus, hershey doing something it hasn't done in two decades it's going to be a sweet friday as the second hour of "squawk box" begins right now. ♪ it's friday, i'm in love live from the beating heart of business, new york city this is "squawk box." good morning welcome back to "squawk box" here on c nks. we're live at the nasdaq market site in times square i'm andrew ross sorkin along with becky quick and joe kernan. take a look at the futures this hour we are in the red this morning after, well, we'll see whether it's a hiccup or not with tax plan in the senate we'll get to that in just a moment right now the dow looks like it would open off about 75 points nasdaq looks to open down about 45 points, and the s&p 500 looking to open off about 11.5
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points here's what's making headlines at this hour nation's automakers will be out with november sales figures this morning, and it's expected to be mostly upbeat according to analysts surveyed by edmonds sales will be up 3.5% compared to a year earlier. another green light for the takeover deal involving u.s. ag cultural chemical maker montsanto. germany's buyer says the committee on foreign investment in the u.s. has no national security concerns about the buy-out. the two sides had been hoping to keep that deal in early 2018 monsanto up slightly on that news bitcoin may be surging in popularity, but american eagle it, gold and silver coins, not so much. sales of those coins were down by 92% in november from a year earlier, that puts 2017 on track to be the weakest year for sales for those coins i wonder whether -- i don't think they're the same buyers. i was thinking to myself is the movie -- is the money moving from one to the other, but i think it's --
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>> you know, the market has gone up eight times in value. silver is right on a lull, and it's still got a triple before it gets back to its highs. why don't you buy that it's, like, yeah, that would have been a great idea for the past eight years while the market keeps higher, higher, higher, higher silver just dead in the water. why didn't you buy that? it makes -- you know, i feel bad for people that are sitting at home going, yeah, why should i buy the market when i can get silver it will never move again the senate republican tax bill hit a snag last night, but there are signs of life this morning. elan louie joins us now. we're watching every tick in the futures. are these guys -- when do they set their alarms when will we start to hear anything about what's going to happen at 11:00? >> it is not going to be the final vote on this, but
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republicans were working overnight on a potential deal, and there's a new glimmer of hope now that senator steve danes of montana is a yes on this bill. danes had already won assurances from the gop leadership. the detucks for businesses would rise from 17.4% to 20% that had gotten him on board with a procedural vote that was held earlier in the week today he said that he negotiated a new deal overnight to bump the deduction up even more this time to 23% this might be enough to get senator ron johnson to go to a yes. we are waiting to hear back from his office a spokesman for senate majority leader mitch mcconnell just told me that they had lots of good discussions last night the senate does reconvene at 10:00 a.m., but there is still no word on whether that final vote might happen today.
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republicans found out last night that a it doesn't comply with senate rules, and now they're scrambling to come up with an alternative to satisfy senator bok corker and other deficit hawks. president trump, he sounded supportive on twitter this morning. he said republicans are working hard and the bill is getting better guys, we will see if they can hold on to yesterday's momentum. back to you. >> thank you very much a big surge in the blue chips pushing the dow well above the 24,000 level for the first time ever yesterday. don chu is here with more on the dow's march to another all-team high >> good morning, becky that october 18th date, the first time we actually closed above 23,000, can you see it didn't take very long at all we know mathematically these 1,000 point milestones get easier to cross because on a percentage basis it's a smaller move it's a pretty big thing to look at and just to see the tab the dow has rose from 16,000 to 20,000 wrrks 1,060 some odd days
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and then 24,000. 43 cal deer daendar days what has driven the gain in the dow? there's only a handful of stocks maybe 12 or 13 are responsible for the entire move in the dow from that 23,000 and just a hair over 24 where we are right now these ones in particular have done all of the heavy lifting. united health group has added 239 points to that rally 3m, 1 67 points. boeing, 117 and home depot, 107. those four stocks account for more than half of the dow's gains in just that 1,000 point march that we've seen. i want to point out one other so being. the biggest drag, merck, has dragged 55 points off the index during that march higher as well those stock, one to key on for sure we'll see if that momentum stays. one other point to bring up, guys, where was all the action yesterday? we saw that big flurry of buying we look at some of the big etf that track sectors the spider financial etf, we're going to expect that on to month-end we could see trading
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volume surge still, 158% average daily volume, that's what the s&p 500 financial etf did in terms of volume a lot of activity there. the tech etf, 136% more than its average 90 day volume. then the industrials, 128. financials didn't finish on their -- we'll see if that's a warning side back to you. >> stay tuned. stalk about these markets now. we're joined by sarah hunt, portfolio manager at alpine funds. jim tierney, dan quayle dopplerleganger of concentrated u.s. growth at ab, and our guest host for the hour, katie stockton, chief technical strategy katie, i'm sorry just because this is like snid of each appearance being new and dirs i distinct, this is episodic, like
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something you follow every week to see where she is. the last thing katie was at before the end of the year, you thought we might have like a 3% to 4% pullback, i think. here you are, you know, you are in your office, and you are watching advanced decline. you are watching this and all these technical underpinnings. then this week we start to see this tax stuff, and we go up 800 points i mean, what good is technical analysis what do you do on weeks like this do you throw your hands up and go this is a week not to be a technical analyst because it had nothing to do with technicals? >> it's been good. the market has been moving higher over the long-term. the need for a pullback was really minimized last week during the thanksgiving holiday shortened week when we saw the s&p 500 break out to a new high. obviously we saw great volume. 3m back at that break-out. >> you don't even think about what's causing it. you are just -- you are still in your own little corner there with talking technicals. >> i do care obviously --
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>> this confirmed technical things >> the charts tell you what. they don't tell you why. what we have here is positive momentum >> you say they screw this up royally, which would not surprise anyone that follows this stuff closely let's say the market doesn't like it, and then the momentum gets broken. how is that technical when it was totally due to republicans not being able to -- >> there is a driver the drivers are really never going to be technical in nature unless maybe it's sentiment, and sentiment actually right now is quite conducive to further up side we actually during that little rotational pullback is what i'll call it, we didn't really see much down side on the s&p 500. >> you got lost on itself. are you looking for a near-term weakness >> not anymore we saw it from the russell 2000 already. we saw a rotational pullback there. we saw it in the equal weighted sbeks. the s&p 500 could have forged higher what i want to point out about
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this week is that the financials picked up the slack where the technology stocks -- >> that might have been -- again, that was based on jay powell, supposedly, which is also not -- wouldn't see that in the charts either. you would have to read the newspaper to see that too. who cares? doesn't matter you'll be here for an hour we have a lot more to figure out. you have some new objectives on that too we're at 2,650 was that your old objective? >> that was the key four target was 2,640. >> we're above that. >> wie did compete the target >> could we go 3,000 now >> 3,000 is not on my radar yet. these are not necessarily stopping points. these are not where we expect bearish reversals to occur, but rather, just objectives, like you said we could get to 2,775. >> 2,775 from your lips where are you in all of this you have to fill us is in on all fundamental stuff. >> i think the tax reform will be a big deal for earnings, which is what people were starting to build in, and then all of a sudden you got this it's going to happen, and now this morning it's, well, maybe that's not going to happen
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i think that that certainly is going to help the earnings picture if it goes through i think some of the regulatory stuff has helped it too. >> i think it's more directionally. you have also got the problem of european rates still being very low. you have the bank of japan you have other central banks that are still putting in quantity takive easing personal essentially. it's hard to see how the long end of the curve goes up very much i don't know if that flat yield curve is going to be a problem that we have to get over or if it's just part of what's going on with this unprecedented monetary policy. we'll have to see where that goes you would like to see a little bit of movement on that side
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>> did i hurt your feelings because it's taken so long you all right? >> you are -- and do you agree with sarah on this >> i generally -- >> you should a lot about the political side of things having served on all of this. >> yeah. >> i think analysts need to sharpen their pencils a lot, and there are a bunch of companies that will have 20% jumps in eps next year just from tax. look at charles schwab $1.90 is consensus if they get the tax cut they go from a 37% tax payer to a 22% tax payer that's 40 cents of earnings growth you go from a 25 multiple to a 20 or 21 multiple. all of a sudden stocks are cheap again. i think they're going to be some huge beneficiaries, and there's some -- going to be some companies on the other side that don't do quite as well >> or it just explains why they're so stressed right now because they're assuming they're going to get that. then it wouldn't seem they're so overvalued >> i think there's still some more i don't think this is going to be a lucy situation where lucy
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pulls out the football i think we're going to get the kick this time >> see, if you say a lucy situation, you could be on the conveyor belt making the cookies or you are talking about -- >> charlie brown >> kmarl charlie brown. >> got to zone in there. >> you have to be more specific. >> you don't have a target for the s&p, do you? >> you don't have a target >> maybe you should use hers >> we're much more stock specific in finding the breakdowns i like schwab and master card. master card will be a huge beneficiary of the tax reform. retailers, some of them. >> amazon doesn't make that much money, so they don't have much tax. >> i know. which retailers? is it. >> ulta reported yesterday in line results stocks get beaten up today i think that's a stock you could buy here >> all right >> since you're going to be here, let me just go back to sarah for a second
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>> i think that the definite group is going to be very happy. we had lidos, which is a defense contractor that does basically i.t. stuff i think you have some sectors of the economy that are going to benefit. >> why defense contractors >> because some of them are going to be having a lot of sales. especially the i.t. guys in the u.s. for them they're paying pretty high taxes now if you get a cut in taxes, that earnings -- that earnings gap is going to be positive for them. i think that you've got some places where that is going to be really positive. obviously, you know, you have seen some of the oil stocks that have been helpful, and for that we like bp >> u.s. manufacturing too. >> yes, u.s. manufacturing they have a lot of overseas sales. there's plenty of stuff where you have enough u.s. earnings where that will make a difference for earnings estimates and the earnings multiple, which is what people are worried about, that's where you can carry some of that momentum >> can we make some more missile defense systems? >> quickly >> is that too much to ask who does that? >> we own ratheon. they're a big part of that all the primes are involved in some form of that, but i think
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that that's one of those areas that now that you are looking at what's going on globally, it's someplace where you think perhaps we ought to have spent more >> do you have 100% confidence in it -- you need backup you got to do it at night. wouldn't you feel better if we knew for sure that -- because if they do it -- >> i would personally feel better, but this is why i'm -- the market seems to take all the -- >> south korean market >> i think partly because if they launch one and we intercepted it, it will be the last thing they would ever do, right, if they launched one. >> and we intercept. >> and we intercepted it our response knowing that they had done that might be, you know, significant. >> wouldn't we stop doing it >> they would stop because they wouldn't have the capability to do it. i think all bets would be off, don't you? i think -- >> if we stopped one >> if it was headed for us >> right if we were successful -- >> and stopped it, and then we would probably lay waste to --
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>> yes, yes. >> that would be -- >> then we don't need anymore. >> i don't know what the right answer is. >> well, i'll ask somebody else next time. >> we have guests. >> all right anyway, sarah, thank you you haven't aged at all. it's like the day you were -- and katie will be with us for the rest of the hour >> coming up when we return, rumors swirling in washington that rex tillerson could be on his way out as secretary of state in favor of cia director mike pompeo. >> the dow has been lagging the broader markets, but yesterday the index hit the new all-time high is it a sign the economy is picking up steam a closer look at some of the names in the index that are fueling the rallies. stay tuned you're watching "squawk box" here on cnbc
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times", which reported that the white house had a plan to replace rex tillerson with cia director mike pompeo that news quickly circulating in washington instantly circulating in washington. the white house at least initially refusing to say anything at all about it, but then sarah huckabee-sanders came out to the press briefing room and had this to say. >> when the president loses confidence in someone, they will no longer serve in the capacity that they're in. the president was here today with the secretary of state. they engaged in a foreign leader visit and are working together to close out what we've seen to be an incredible year. >> so sanders there saying that the secretary of state was at the white house and at work, but not saying anything at all about his future as part of the administration when the president was asked about this yesterday, the president simply saying that rex till areson, he is here, meaning he is here in the building the white house sort of confirming the secretary of state's physical whereabouts, but not talking at all about his
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future this is something a little bit new in washington, andrew. you know, follow me here we used to have the non-denial denial, which, they issued a denial that didn't really deny the underlying story this is sort of a non-denial non-denial in the sense that they're issuing something that looks like a denial of the story, but actually it seems more like a confirmation than anything else. it feels like it's only a matter of time for him to be replaced >> we've heard rumors about the president's view of tillerson. >> six months. eight months >> we've seen it, by the way, on twitter, but even before that -- >> commentators six months ago said dead man walking. he wasn't going to come back from vacation. dead man walking >> was that -- >> back to july. >> when the president made that speech at the boy scouts tlafs viewed by some as overly
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political and self-indulgent tillerson has been a life-long member of the boy scouts and was an eagle scout and was president of the boy scouts, and took umbrage to that, and that's when you see the reporting that said that tillerson allegedly called the president a manageron, and since then, that relationship has been deteriorating >> right amazing that if -- i mean, someone knows whether that's true or not. if you knew that was true and you were the president and -- remember, secretary of state came out and gave that impromptu press briefing he didn't really deny it, right? he sort of said i'm not going to dignify that i'm not going to go there. that's petty his spokesperson did deny it on the record tillerson himself never denied call the president a moron >> have you ever called -- referred to me as a moron in any conversation you have ever had with anyone? >> moron specifically? no >> yes, moron specifically you can ask me that question if
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you want about you where. >> i don't want to know. >> right i don't either ignorance is bliss, right? >> real quick, what is the chance that now pompeo, that nikki haley, or somebody else? >> it's at least a small possibility. nikki haley's star was on the rise earlier in the year this seems pretty locked in from the white house. for the past several months tillerson and the president have been on different pages. right? on russia earlier this week tillerson said that they've been using malicious tactics. much tougher talk than the president has had on north korea. tillerson has been talking about diplomacy. the president said he is wasting his time they've been going in different directions for months now. this is sort of an -- >> did you see who they said might replace nikki haley, if it was her? >> who >> dina. >> dina powell >> that was one of the reasons i asked that
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>> coming up, what is fueling the rally. the u.s. economy is picking up steam. we find out in just a few minutes. i'm going to -- >> what about you? >> then tax reform and housing you see how the national association of home builders is. they'rjoinuse ing he recently met with lawmakers about the bill back in a bit. 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.
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>> riding the dow rally. right now, though, as we head to that break, let's take a look at the u.s. equity futures. yesterday we saw the dow up by over 300 points. sharp rally. this morning giving back some. down about 70 points as we await to see what happens in the senate with the tax bill s&p futures down by ten. the nasdaq down by 45. quk x"ilbeig bk.
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among the stories front and center at this hour, the nfl's recent problems are a factor in one of the morning's earnings reports. check this out a seller of boast footwear and licensed footwear apparel, genesco is reporting dampening demand for nfl merchandise they reported quarterly earnings 10 cents short of estimates. revenue and comp store sales upbeat and housing the forecast. we had the ceo of fanatics in it if earlier this week he said the opposite >> that was this week. you're right it's just been a long week >> earlier this week i also saw -- >> all runs together >> some of the physical stores that sell those were largely -- i thought the thing. we didn't hear that. he was positive about everything that he was doing. it's jerseys it's a little different than just nfl paraphernalia it's all sports.
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>> the dow transports. the index hitting an all-time high after jumping nearly 2% phil lebeau joins us now with more on the -- it would be a problem if it didn't hit an all-time high. i'll tell you that, phil, with everything else. >> everything was moving yesterday, and the transports in particular got a lot of attention the move was signalled in part by one of the transports the airlines we'll talk more about that in a little bit because prior to yesterday's move, the airlines were part of the transport index that really had not been keeping up with everybody else the shippers had been on a roll. we've talked about that extensively as we head into the holiday season the fuel costs, while they have been moving higher for the most part they've been in check now, take a look at the airline index. this is now over the last several months it's at multi-month highs, and
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getting back to the levels where it was last year american airlines is one stock that had a big day yesterday remember the reports about the scheduling problems with pilots and people were sailing, oh, my goodness, we're not going to have pilots to fly these flights over christmas, and they're going to be mass cancellations that's not likely to happen. there are still only a couple of hundred flights are that don't have pilots scheduled at this point, and the airline expects those flights eventually to take place. there will be pilots for those flights. that stock was moving higher, and, finally, the rails. these guys are at multi-year highs. whether it's kansas city southern, norfolk southern, union pacific, they are just broken out,ing and that chart really doesn't do it justice if you look at a multi-year chart for the rails, wow, really impressive performance over the last couple of months. that's what we saw with the transports be interesting to see what we see today. >> now, one quick question on the american situation american airlines. >> yep >> somebody tweeted a good question to me yesterday i don't know the answer.
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he says is it going to be a last minute thing and the flight gets canceled is there any way you can check your flight is staff snd. >> there's no way to check it in advance. that require american to then say, well, here's our schedule here's what flights don't have scheduled at this point. they're not going to do that >> is that a problem for american airlines paejz out there thinking -- >> i understand. becky, i understand the concern. look, i'm taking a flight during the holidays it's not on american, but i would be concerned if i was an american customer and i was flying my point is the initial headlines made it sound like it's a mass shutdown that's not what's going on the initial headlines really made it -- >> there are 1,800 flights >> well, they made it sound like there was going to be no flights. >> how many pilots do you have to bring back to staff 1,500 flights? whoa >> it depends on the length of the flight, what kind of rules are going to be required if it's
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an international flight for, you know, you have to do so many hours of rest before you can fly back there are about 15,000 pilots, and, you know, part of this is also the politics between the airline pilots union and the american union and -- >> we understand you're reading between the lines. this was their -- >> and we want more than 150%, which is the top of the pay scale. >> correct >> under the contract. >> we get that >> hey, nobody is denying that this is not a screw-up this is a screw-up by american airlines they can say it's a computer glitch, but it is a screw-up, and they will pay for it, and they are paying for it with 150% of the salary that will be going to these pilots who have to no longer be on vacation, but, instead, will be making a flight >> phil, thank you >> you bet >> joining us right now to talk about what else we should be expecting for the transport sector is don broughton. he is the managing partner and principle. also, our guest host is katie stockton she's chief technical strategist at btig. thanks for joining us this morning. >> my pleasure, as always. >> it sounds like a lot of things are firing on all cylinders when you look at the transports what do you think about the
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whole situation? >> well, across the board there are two things happening one is that big data is real we're seeing alternative data sources. you can gather real-time what's happening in every single mode that's changing the way we invest >> describe that when you say big data, do you mean that the -- that they can better dpig out where their fleets are and they'll make better use of that, or you're talking about some other >> first of all, have you things like we're doing where we're tracking every single load where it's going you have people that are bringing in alternative data, such as, you know, geofencing where your cell phone is and how much time you spend in the -- whichever retail store you spend it snoo it's almost the level of ridiculous is amazing.
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it used to be we tried to track the mpi and the ssi. >> which is? >> the north poll index and the santa's sleigh index now we track the real truck. now we actually track the real air freight shipment >> what's one company you think you know more about their logistics than they do >> oh, heavens you know, you can look at any of the individual trucking companies. you could look at, you know, what's happening in real-time with fedex, what's happening in real-time with xpo i mean, they've got amazing amounts of penetration into the marketplace, but then they're also all sharing they use these block chains to communicate with each other, so that they better know their marketplace and that result is you know that there are way more loads than there are trucks at this point in time than there ever have been, and we're seeing a real fall surge. >> that tells you we're going to have a great retail season if you can kind of extrapolate out?
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>> you look at the historical track record between driving a truck load and holiday sales, and they're one to one you might say, well, that's simple i can't sell it if i don't have it in the store. in this case i might have it in the store or i might have it in the amazon fulfillment center. >> that's the one issue, big data, and the other is a very strong economy and all of that playing into it, which makes you like which individual stocks out of all the transports that you follow >> we like the people who benefit from delivering e-commerce if you are a fedex, if you are an xpo, i like you if i'm someone who drives that supply chain to you, if i'm the expedited trucking that makes what fedex and xpo do possible, then we're also very favorable >> anybody you don't like in transports right now >> it's hard not to. as you guys know, i'm often the sell side analyst who knows how to say sell. i use sales as -- i know than
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any other transport guy does and more than any other sell side analyst i know, but it's hard to be a sell. what's happening right now is not only are we seeing the economy to reaccelerate with oil back above 55, but we're also seeing the consumer economy really finally begin to accelerate the lumber data is starting to form households. >> katie, do you use the transports to look at the overall markets, like dow theory, or do you do technical work just on the transportation. >> dow theory is definitely not important to me. >> it's not? >> the economy has changed very much information-driven these days to me technology is actually that much more important, and yet, when you see the transports outperforming, it tends to be indicative of a strong tape. probably also indicative of a stronger or strengthening economy. i think it's great to see them
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breaking out and, you know, it really is across the board the fedexs are breaking out, and also we're getting great action rotation into the airlines it's really been broad-based >> so the dow transport -- or the transportation looks similar to the s&p it uses the same sort of analysis >> it's up nearly 9% or 10% in just a couple of weeks it may be ahead of itself now in the near-term. again, it's a break-out. that's what we're seeing we went through the entire s&p 500 yesterday and found more than a quarter of the stocks that make up that benchmark had broken out above resistance. whether it's a previous high or moving average, really just across the board that's expanding
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>> if you have better -- you get better financials. >> we talked about them for the first half of the interview with you,ing it had nothing to do with the economy it had to do with the way that they're operating more efficiently because of big data. we need -- >> right >> but that underlying activity is accelerating in every single mode except maybe coal it was still the number one supplier >> for years >> because for years it was the cheapest method. for years it's the most available. at the rate we used to use coal
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there's still -- in the state of wyoming. >> finally natural gas has passed coal, but think about what we think of with coal >> it takes time to build a power plant. it takes time to change. >> we've been de-emphasizing that >> hillary, part of her problem was she said we were going to put every coal miner -- >> the marketplace is going to do that soon enough. they don't need her help >> thank you for coming in >> always my pleasure. >> katie will be with us the rest of the hour >> we're going to speak to the ceo of the national association of home builders and do that right after the break. you always pay
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the national association of home builders has a prop own ebt of the tax plan. the tax plan could lead to a housing recession with lowered mortgage interest deduction, among several other changes. nahb ceo jerry howard said he is much more optimistic after meeting with key lawmakers on capitol hill yesterday and joins us now to shed some light on those conversations. good morning to you. take us inside the room.
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you sound like you've changed your view. >> well, we are, as you said, much more optimistic than we were for the past three weeks. we've had some very interesting and positive discussions with the speaker and with chairman brady, and we know that they are very aware of the potential impacts on housing they're interested in our ideas on how to correct some of those. yeah, i'm not saying we're in support of the bill yet, but we're in a much better place than we have been. >> in terms of what do we take for you to support the bill, it would be what at this point? >> what we really want to see is parody, first and foremost, with house, and some of the other sectors of the economy by that what i'm talking about is we have to make sure that house values are not damaged by the tax bill, and to do that you have to make the mortgage interest deduction, what's left of it, has to stay at the levels that the senate bill has
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the senate bill for mortgage interest reduction we also have to be very careful about these talks on salt. property taxes are really important in homeowners figuring of their economic status we want to make sure that something is done appropriate with salt. we like the house provisions on that it's probably the only provision in the house >> what what's your estimate on, for example -- i was talking to a real estate person yesterday who thinks that in new york city, where i happen to live, the prices of apartments and houses here are going to go down he thinks it could be a 5% to 150% hi 10% hit? >> if house values go down, we think they'll go down by 4% to 7% there are some who say 10%, and some say even higher we're not quite that bleak >> jerry, are you talking 4 to 7 nationally, or 4 to 7 in states that are hit by salt >> ationally >> 4% to 7% nationally means that potentially you could have some more severe hits in the states that do have high property taxes or high state and
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local taxes to go along with it, right? >> yes, that's very, very true >> what does that mean the last time that we saw housing prices decline nationally, which we never thought could happen we always thought it was a local market, and you may see ups and downs in one area, but not nationally the last time that happened was in 2007, and it created a recession. is that likely to happen again do you think this time is different? >> we're very concerned about that, and that's why we have been engaging in these conversations up on the hill >> but you seem happy with what you have heard what did at the they will you to reassure you >> what they told me is that although the game appears to be entering the fourth quarter -- well, maybe we're in a time-out now with what happened last night, but we're in the fourth quarter, but there's still room to make improvements and they're interested in our ideas. >> what does that mean when they say you're interested in your ideas? it. >> well, we want to make sure that in some way house values are protected. like i said, if you lower the mortgage interest deduction to $500,000, like the house bill does, you have over seven million properties nationwide
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that are sort of going to lose value because of that. they're priced over $500,000 they're all on the market. >> listening to your ideas and you are encouraged by that -- >> meaning they're going to do what raise it to $1 million what do you want >> meaning that wel would like the senate provision of $1 million. >> you do realize we're getting into a situation with the tax bill where people are going to have to start taking things off the table if they want it to pass the senate rules and if you want to bring on the people like bob corker who are very concerned about deficits going up after that trillion dollar scoring. what makes you think you'll be able to ring more out of it at a time when they're going to be looking to reign things in it. >> we think that the mere strength and importance of the housing sector to the economy warrants them considering it we understand the pressures that they're under, but they understand that the last time house values went down, there was a national long-term recession. nobody wants that. >> we're going to leave the conversation there jerry, do let us know if you
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have another meeting and perhaps could tell us more >> we'll be having a meeting today. thank you. >> you bet coming up, we're going to talk more technicals with katie stockton and bring you the list of stocks to watch check out european markets at this hour. they're in the red a fair amount. 'lbefrcenderny a gma wel back. looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital. i used to have more hair. i used to have more color. and... i used to have cancer. i beat it. i did. not alone. i used to have no idea what the american cancer society did. research? yeah.
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first new candy bar to carry the hershey's name in more than two decades hits the store shelves today. hershey, it's called hershey's gold it's a carmelized cream bar embedded this is sounding very -- like a lot of potential here. let me start again it's got cream inside it, and then it's embedded with salty peanut and pretzel bits. we don't have any, huh it's the fourth bar for the brand, and the first new one since the cookies and cream bar was introduced way back in 1995. send us. we'll try it on monday peanuts, pretzels, hershey's gold i'm ready to -- i mean, we should at least be able to weigh in on this, so to speak. let's get some final thoughts on the market from bti chief technical strategist katie stockton you alluded to it earlier. if you get through some of these
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levels and it's possible for 2,775 on the s&p -- >> it may be aggressive, but when we look at the break-out from the russell 2000 index, we can arrive at i target of 5% to 6% higher. unfortunately, we don't have a really, you know, sort of major break-out in the s&p 500 to use this methodology yet, if we translate that from the russrussell, which may outperform on small caps, i think we can see, you know, some good gains in the first half >> oh, not in the next month >> this would be more mid 2018 that's based on a combination of the breadth that has expanded looking for leadership to come from different sectors to financials, industrials, even materials, health care, energy not as much technology the momentum is there on a long-term basis. >> you get the feeling we could add another 7% before we have a 5% to 10% pullback that would come before -- >> market has proven to be capable of that for sure
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the pullbacks we have seen have been shallow, short-lived, and i think we can expect more of the same a pullback does not look imminent to me, and yet, usually i would say january tends to be a seasonally sort of challenged time of year that would be a natural time to expect some kind of down draft >> you missed the train from here to d.c., and then the market got on a plane and flew down to atlanta and then they rented a car and drove down to, i think, south florida >> we're running out of -- we're running out of land. >> you are you are going to be in the caribbean before you get on this thing. you're somewhere between here and philadelphia like hitchhiking, and everybody who did what they were supposed to do is in south florida >> south florida >> yeah. >> are you ready yet to throw -- >> i'm getting on a plane to cali that's sideways. >> that means you're buying bitcoin or something >> that would be the better way to do it maybe >> i'm scared of bitcoin right now. you know, i'm scared of
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>> this morning stocks under pressure >> tax reform obstacle >> delaying a final vote after deficit concerns and wonder about how they'll make it all work we have a live report from washington coming up plus, amazon might be one step closer to being in your medicine cabinet the tech giant holding talks with drugmakers. we have the details as the final hour of "squawk box" begins right now. ♪ i want a new drug
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♪ one that won't >> good morning. welcome back to "squawk box" here on cnbc live from the nasdaq market site in sometimes square. i'm joe kernan along with becky quick and andrew ross sorkin let's get a check on the markets. the futures have been moving around as little at this titid about which senators are feeling a certain way about tax reform i heard earlier that this senator daines was on board, but they're flashing that again. flashing that as something that's significant i don't know at any given time -- some of the guys -- >> it's changing privately that's the question. if by trying to win some on board, do you knock somebody else off the back of the boat. >> wack-a-mole you hit this one, and then corker comes up and then ron johnson comes up every time you get one of these other guys what they want, a concession, then -- >> they're trying to cram 15
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pounds of manure into a ten-bound bag. >> is there another analogy besides manure that you could use for the tax bill could it be potatoes i can't be totally out, which i am every day >> like a potato >> i'm with her. >> you can use all the bumper stickers that you still have because you didn't have a car. you can use it to becky instead of the h things. first trading day of the new month, says and dom chu joins us now. this guy is amazing. is this the same thing you told us about last time
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>> one eye there and one eye on the markets. >> i can't i'm just saying your wack-a-mole strategy is what traders are thinking right now they're trying to get their hands and figure out what is going on at any given time if you take a look at what's happened for the month, because we are starting that that time of year when we get to santa claus, but for the month of november, the thanksgiving month, it was a great time for the markets. as you take a look with regard to the overall picture as we head into december, check out some of the other stats as well because if you take a look at the best and worst performing sectors, i mean, it was telecom, the best performing sector overall some of the sectors have had some pretty good runs.
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all 11 sectors in the s&p were higher on the month. i would point out, guys, that the best performing stocks in it the s&p for the month of november, some of the beleaguered retail type names. footlocker, mattel, some of those were very big performers in november. as opposed to some of the lagards. one of the things we want to key on is the small cap market we talk about the santa claus rally sometimes. the folks over at kensho ran some numbers, and they found with the russell small cap index, the first half of the month is actually pretty weak. it's down about .2% on average going all the way back to 1987 if you look at the second half of the month for the russell 2,000, up a strong 3% in just two weeks, and it's positive 86% of the time. it does really add to the gands here dow since the election, up 32% the s&p 500 since the election, the laggard, only up 24%
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the nasdaq, 33% for the up side. guys, some pretty good gains we'll see if we can continue >> it didn't go down 33% >> it did not go down. >> it went up 33 >> it did. >> are you sure? >> i was a little bit taken aback by president trump's tweet about how if the democrats would have won, we would be 50% below where we are right now i'm not sure how the model of that works out this has been a good rally 33%. >> everybody has their own views of the counter factual we do know that it's at least to say that the worst case scenario that i heard from so many people did not come to pass >> it would be fair to say that we have all made 401ks and ira's great begin. >> we had a little bit of news cross coast guard the tape, and it is moving the price of bitcoin this morning
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>> oh. >> here's what's happening here. the u.s. derif tiffs regulator saying that the cme and cboe are going to be allowed to list bitcoin futures as a function of that you're seeing bitcoin now trading over 10,000. it's now a 10,200. >> roller coaster. >> the commodities future paving the way according to reuters for cme and cboe to become the first traditional u.s. regulated exchanges to launch trading in bitcoin related financial contracts. >> okay. now you can do futures are you going to buy a contract or sell a contract are you buying or selling? >> right this second >> are you buying -- >> what are you going to do? >> i wouldn't do anything with bitcoin. i mean, i'm just -- >> you talk about it all the
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time >> call it a hold. >> probably want holding it implies that you are wrong. you are staying out of this market >> i would wait for it to come downpour >> you are not in this or -- >> no live hawks >> all right today's top story, tax reform hitting a roadblock in the senate, and just crossing the wires, senator steve daies says he will support the tax bill let's get to elan in washington. this is a day where we are keeping score just about every minute, right? >> yes republicans are franticly doing their whip counts right now. we had a rocky night after
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finding out that the carefully negotiated compromise with deficit hawks is not going to work, but there are engaged fresh signs of life this morning. montana senator steve daies now a yes on this bill he said that overnight they negotiated a deal that would increase the deduction for pass-through businesses of 23%, and that's higher than what gop leadership had previously agreed to this is key because senator ron johnson had also been holding out for a better deal for pass-throughs. we had reached out to see whether this might win him over and we're waiting to hear back from his office. the senate reconvenes at 10:00 a.m. still no word on whether a fine vote could happen today. the big unknown is how they're going to solve the fiscal trigger. republicans found out last night that it doesn't comply with senate rules, and now they're scrambling to come up with an alternative to satisfy senator bob corker and other deficit hawks. president trump has sounded supportive on twitter this morning. he said republicans are working
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hard and that the bill is getting better we'll see if it indeed does. if they can hold to that momentum today back to you, guys. >> elan, just some of the details on how you replace the trigger. i mean, we've heard about this you could either have stair steps that get you back to higher tax rates, so for several years. you could have things that sunset and the tax rates come right back up in six or seven years like some of the individual tax hikes do. or you could be in a situation, i guess, where you just agree with a higher base let's say 22%, 23%, rather than 20%. maybe that's satisfying a lot of the issues all the way around. do you have any thoughts on what the most likely scenario might be in that situation >> i think it's all very fluid right now. members of the caucus have already said they won't take anything higher than 20% that's a non-starter in the house. that's why the senate initially opted to delay the start of the corporate tax rate instead of going with a higher baseline rate or instead of making it temporary in order to save some
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of the dollars i think it's going to be really hard for republicans to swallow a corporate rate that's higher than 20% although it seems weird. a standard rate that stays at 21%, 22%, 23% seems like it would be better than having rates come back up and not knowing when things are going to happen, just from are not corporate plan, right? >> the other challenge of having a temporary rate cut for businesses is as you know, that could actually -- that could actually reduce the amount of growth you get from the tax bill because, you know, businesses would just pull forward some of the investment >> until they have that final language, the problem was with the connection between increased
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taxes and with lower revenue this is a bill that can only consider revenue and spending measures -- revenue measures that it can't have that connection -- >> it's good someone looked, i guess because we had corker on a couple of days ago, and it was, like, yeah -- >> it looked like they had a deal it looked like they had a deal >> thank you >> thank you >> joining us right now is scott nations. he is a cnbc contributor, and, scott, we watched the market take off yesterday we see things a little bit lower today, but how are you handicapping all of this >> well, i i think giventhat the s&p futures are down seven handles right now, less than one-third of what we gained yesterday. we think it's a net-net huge win. we're also ten handles off the lows overnight that's another reason to think it's a win listen, consumer confidence and gdp growth are still great we found out earlier this week if you look at what droifz the
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stock market overwhelmingly it's interest rates still really low and earnings we just found out that for most corporations after tax earnings, about to get much, much, much better becky, there's one thing that would worry me, and that is momentum has really run away with itself. >> the markets can go sideways for a while. >> you're sounding as if you think tax reform is going to make it through, and that's important or it is not how do you kind of handicap the odds of the bill making it into law? >> i think it will happen. i think it will happen late today. i think mitch mcconnell -- this is his -- >> the voted today, and then it has to go back to conference and then come back >> they're very different voices in the house conference committee could be a
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problem. to the degree that the market right now is paying attention to what happens in the senate, the market is going to get what it wants, and i think it will get it today they'll start voting relatively early. i think that by the end of the day they'll have the votes that they need to pass the larger bill and i think that the fact that the s&p is more than -- now more than ten handles off its overnight low, it means that the market agrees with that. >> scott, the thing that you watch is kind of just like commonsense. i mean, you know, the dow is up how many points this week? it's to say maybe it doesn't continue at this pace just doesn't seem -- maybe it goes sideway says for a while seems like it's obvious because you are not going up 800 dow points every week, are you >> no. of course not. here's the thing relative strength index is a great tool, but it's rare to see something broad-based like the s&p in this over bought, and it'ssimply not sustainable it doesn't mean the market is going to crash or go down. it means we're going to run out of momentum.
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>> what kind of margin would you ask for to trade bitcoin futures? you need 100% margin almost, wouldn't you the way that thing moves >> remember, the chicago american tile exchange i'm a huge fan of the exchange the margin is going to have to be incredible. you would almost have to margin at least 50% joe, you asked before, what do you do one thing about this is it it gives you the option -- now we're going to get -- it gives you the option to trade options on the future. when you buy the futures --
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let's face it. those options are going to be insanely expensive to buy. >> then you sell them. then you sell them you take in -- then you are also -- then you can also get killed by the way, it sounds exciting better than vegas. >> scott, thank you. >> in vegas they bring you free drinks >> yeah, but the house always wins as the seller of the options, you would think you could do some out of the money stuff and probably, you know -- it's great with stocks. >> furs, the discount retailer, a profit of 6 cents per share. 2 cents above estimates. revenue roughly in line with same store sales high of the 1.4% rise that was expected by analysts genesco missed earnings estimates by 10 cents. revenue came at above expectations the apparel seller cut its full-year forecast pointing in
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into question. you saw it happening after the euphoria from the mccain news yesterday. that withered away as the neat wore on, and so we'll see what happens. this morning one thing we do know is that daines is on as far as the senate goes now we're unchanged on the dow it's interesting to watch. >> we started the week at 23,552 now we're at 24,272. >> people gain the recovery, that changes how they feel about it it's not the tax reform. it's the -- it keeps changing. >> companies are taking a very hard look at their policies and how to protect themselves.
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trail blazing women at the top of the business world. let me start here, actually, before we get into the culture issue. we've seen this now manifest itself in the entertainment world specifically and in the media world just in week again one of the questions i keep getting asked about finance and wall street and all of the miss and other things that were made in the 1980s and 1990s about wall street, do you expect worry going to hear more about this kind of behavior on wall street now? >> i think wgs had a big problem with this in the 1980s i suspect the problem did not go away a survey came out yesterday, and it said two-thirds of women who are sexually harassed never report it. they're afraid of being labelled a troublemaker if some other women get brave, there's no question that is untouchable in my opinion.
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>> i agree men have a different opinion of this than women do >> the other question i have that relates to this is the more we hear about this and people are fired, people are suspended, all -- the people -- >> politics too. >> in politics too and dhen people say, well, what happens to these people? do they disappear from not the earth, but do they just go away? do they ever return? one of the things i wonder is the more names you hear whether it becomes normalized in a way, whether you -- do you hesee what i'm saying >> i think the opposite. the more we have powerful predators pushed off their perches, the less normalized that behavior will be. the more there will be public scorn and horrible perceptions of those human beings. that's what should have been the norm all these years, but women were afraid to come forward.
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>> and then the other question that to me relates to this is how far back in history, if you will, should we think about some of these behaviors i got an e-mail about something that had happened in the 1980s, and i thought, okay, this is interesting. -- >> there are statute of limitations, and i'm not sure if somebody did something bad from a behavior standpoint in the 1980s that it hasn't been repeated again and again, and it could just be that that is the bravest person to come forward >> it's fascinating. >> it is >> and it's 40 years
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as you said, it would happen again and again and again. >> this was not a one-time -- >> i understand that if it was 40 years ago -- >> many of these 40 years ago, but then since then, there have been -- i mean, it looks like he has been married for 40 years, and, i don't know, maybe stuff did happen let's say it was -- let's say he found something that allowed him whatever horrible impulses that he had whatever it was that you want to call it, let's say that somehow he found a way to not act on any of those and totally became religious. who knows what it was. >> the federal thais long ago in the south, if you wanted to have
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a big family -- you married someone 17 or 18, and then you had 12 kids or something >> i think there are a lot of companies struggling with this >> back down to tone at the top. if you don't have the right culture, if you don't have the right example being set by the ceo, you can have all the training in the world, you can have all the right regulations and rules and practices, and it means nothing. >> do they have to go back and look at every individual case at this point and say, hey, the only way we do this is zero tolerance, and here's how we start setting the example?
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>> that's part of what tone at the top is i really think that. >> thank you >> great to see you. >> when we come back, amazon's drug play. e-commerce giant is in talks with generic drug maerks, but will amazon pull the trigger we'll cover that next. check out the futures because after the big gains we saw yesterday in the market, you are seeing a pullback, but now the dow has turned positive. it's up by 12.5 points this morning. s&p futures up by 1.5. the nasdaq -- i'm sorry. s&p futures down by 1 .5, and the nasdaq off by 21 we're watching very closely every bit of news we hear out of washington with regards to the senate and what's going to foppen on this vote on the tax rerm bill. stick around stick around "squawk box" will be right back. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool?
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your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance.
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good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. among the stories that are front and center, the gambling industry recovery continues. casinos operating there -- that's compared to a year earlier. that's the 16th straight month of gains, although revenue is not quite back do that peak
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level of 2011. now a spokesman tells cnbc that the exchange expects to launch its listing by the end of the year wow. that's 31 days checking bitcoin this morning. it's now up by $572 even climbing by the second. that's a gain of 5.8%. automakers are going to be out with their november sales physician within the next hour or so. analysts surveyed by edmund's think that sales will be up from 3.5% a year ago. amazon holding some exploratory talks about potentially getting into the pharmacy space. meg terrell joins us right now this is interesting. >> there's been a lot of speculation about what amazon will do, if anything, in the pharmacy space what we've learned is they're having very early stage talks, and with makers of generic drugs about a potential role these are very early stage we have to emphasize that. the nature of the talks, we've learned, really implies that
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amazon hasn't made clear what role they'll take in the industry, if any, but among those generic drugmakers are mylan and the sandoz unit. amazon could potentially disrupt the drug distributor space that's dominated by amerisourcebergen and cardinal health and mckesson. what we understood at the time is that those weren't licenses that would enable them to move into the space >> the reason companies like it because better margins for them? they don't have -- >> there are three drug distributors that dominate the market they would like to see an additional player there or
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potential different kind of disruption from the branded pharmaceutical sight, these are a lot of thufrms. mylan was saying yesterday that they would love to see amazon coming into the space. >> we talk about amazon betting bigger and bigger and wonder if anything that is going to draw the attention of regulators, but in this case you're talking about a situation where an additional competitor could mean lower prices for consumers >> that would be the idea. everyone expects amazon comes in and prices come down that would be the hope we really should emphasize this is early days. cnbc.com has been reporting a lot on this, but it really does seem to be quite early >> meg, thank you. zoo thank you. coming up, a potential rexit. what would that be romania? >> russia? >> russia is not in the e.u., though >> rexit is tillerson. >> oh.
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welcome back tensions are high after north korea's latest missile launch. meantime, rumors swirling, the secretary of state rex tillerson could be on his way out. joining us now william cohen, former defense secretary during the clinton administration currently ceo of global consulting firm, the cohen group. this sector. thanks for joining us, and welcome. have you seen anything, let's say, in the last two or three months that makes you optimistic or is it just all frightening news and missile launches? anything good happening in terms of sanctions or in terms of china's cooperation? i mean, is there reason for hope >> good things happening here at home in terms of the economy
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starting to take off beyond that, i think the relationship with india, i just returned from india about two weeks ago, and i spent a week visiting with the various officials there. that relationship is a very positive one beyond that, i think, you go to north korea, and we have a big problem. we have a very few choices you can either aquiesce and allow the north to develop its long range michls armed with nuclear weapons. we could go to war where i believe there's a third way, and that is to really bring about a change of the regime from within by shutting down their chicago that the chinese and russians have been propping up. putting more anti-missile defenses in south korea. the chinese were able to sway the president of south korea to put a hold on that i would accelerate the deployment that. i put the thad missile system into china, into japan, rather
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over the objection of the chinese, but to say that japan needs more protection, south korea needs more protection, and then i would wage an information campaign against north korea by showing films of the north korean detectors, showing films of what life is like in the south, undermining the credibility of the north korean leader a number of things we could do and really put more pressure than we have, but we have to look at what the end game is of the north koreans. why do they want the nuclear weapons? crept e they want the nuclear weapon to be able to hold the united states at risk so that if they start to achieve their goal of reuniting the korean peninsula under north korean control, that the united states would not be able to intervene because we would never trade san francisco, seattle, or washington for seoul now, that is the sentiment that is really developing within south korea itself saying we really don't trust you we want to have tactical nuclear
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weapons. that's what's happening i think on the ground in that region, and it's -- it should be a great concern, but i think we don't have to accept either war or acquiescen acquiescence, but persuade the chinese. we are going to be really hard on the economic benefits going into north korea, and if you're not with us, that really will spell the relationship for the future >> mr. secretary, i want to ask you quickly about secretary of state tillerson. it's been -- i don't know. we're in an interesting environment here critics of the administration, i recently saw, tillerson is hollowed out the state department it's just -- it's awful. then the same critics when it looks like he might be gone, he said, oh, my god, that would just turn the state department upside down. this administration doesn't know what it's doing in terms of -- if he stays, he is hollowed it out. if he leaves, it's tumult in the
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administration what should happen with rex tillerson? are you a fan? do you think he should stay? what would you urge trump to do with him >> well, i know rex tillerson. i like him, admire him he is a man of integrity and principle and honor. i think he feels committed to once having made the decision to join the administration committed to seeing it through it's clear the president has undercut him at virtually every stage of his tenure not agreeing to allow him to pick his own deputy secretary of state. that would have been the first thing i would have asked for if i would have taken a position like that. i get to pick my own team. that was not done, and from the very beginning, the president was allocating jurisdiction to jared, to ivanka, to others in the administration undermining rex tillerson being the principle spokesman. then there were the budget cuts that were recommended of a 31% budget cut in the state department and then a reduction of some le% of the top level
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personnel. it has been hollowed out the question is what are they doing to him now they say they're trying to shame him into resigning that's not the way you really conduct business or should conduct business that may be done in the private world, but when you are in the government public eye as such, the dig need way and the classy and the decent way would have been to call secretary tillerson into the white house, and the president saying secretary tillerson, i don't like your position you've taken on the iran deal. i don't like the position you've taken on north korea pushing negotiations i don't like the fact that you can send a team to support ivanka in india, et cetera i think it's time that we have a separation here and allow secretary tillerson to offer his resignation. that would would have been the classy thing to do, rather than hanging him out there, twisting, and all the critics are now surmising how long has he got to go is it days is it months i think that's a shameful thing.
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they're trying to shame him. it's a shameful way for the administration to behave >> all right secretary, thank you we appreciate your analysis and time today, and we will meet you again soon i think you're right south korean stock market doesn't look like anyone believes that that first shot is going to happen. just hopefully there's not an accident or a malfunction or something like that. anyway, we appreciate your time. thank you. >> coming up next, when we return, bitcoin rising back above $10,000 after futures trading got the green light from regulatory agency. we're going to talk to an early bitcoin investor barry silver will be with us next and respond 60 times fast. it lets you know where your data lives, down to the very server. it keeps your insights from prying eyes, so they're used by no one else but you. it. is. the cloud. the ibm cloud.
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check out the price of wit coin it is higher on news we've been talking about for the past hour. the cftc approving the listing of bitcoin futures by the cme group and the cboe also learned that the cboe expects to launch its listing by the end of this year joining us right now is barry silver he is the founder and ceo of digital currency group he is one of bitcoin's first backers, and his company controls almost 1% of all bit coins in existence and 3.5% of another digital kurnty etherium classic. you were there early i remember when you told me about it, and i remember we -- i remember when we met i don't know if you remember this i thought you were slightly crazy. boy, have i turned out -- >> the time is building.
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you said you were going to think about putting in billions. >> i think it is going to enable finally the approval of bitcoin etf's and other currency etf's, which is game changing >> explain this. we talked about this what do you really think about the liquidity of bitcoin right now? we were talking about an investor yesterday that i had met with who was saying, look, or something like that, first of all, there's mujahedin fees that coin base charged. 4% on both sides of the ledger at some point -- >> >> i think it's a little more than that. nonetheless, the question is you got to have a buyer. you got to have a seller
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in some cases they're market makers are people going to really -- are they going to put up the gates if everyone has to flood out at one time? >> i think it's all relative a year ago daily trading volume globally was $300 million to clars $500 million today it's multi-billion we're going to see global order books get created, and you can tap into liquidity around the world. we've we're finally finding the point -- >> how much of this right now, though, is still a speculation meaning, people think about bitcoin -- is bitcoin a currency -- a real live currency yet that can actually be used given the volatility, or is this something else maybe it gets there. i'm not saying it doesn't get there, but how many -- it's nowhere close to a currency. it's digital gold. gold investors should be
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worried. >> given there is no federal reserve, true federal reserve, that somehow, you know, that the value gets changed overnight >> well, i think people view the lack of a federal reserve as a good thing not a bad thing. that's what they say a feature, not a bug. bitcoin has forked recently. there's a -- essentially it serves a a dividend for people that hold main bitcoin btc hitting all-time highs i think it demonstrated -- the company is called digital currency group not bitcoin investment group i'm the first to admit that it is super early
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i think what's important is we have to start looking at this as an asset class >> according to the "wall street journal", but it hasn't moved, though i get not the surfer guy -- not ron john do you know ron john surf shops? no, they mean the senator. >> guys, let's change the headline if we can. put that up for a moment put that up under the futures board. >> the futures -- >> i don't think it's trickled down >> i don't know. the "wall street journal" is reporting that now he is a yes because he is more satisfied with the pass-through treatment or something like that they said they characterize him as one of a half dozen possible hold-outs or something daines and johnson >> one of three that came to the floor after the parliamentary vote that you couldn't take the change that corker wanted, and the three of them came to a conference on the floor. people were watching ron john very closely >> i can't say it. i'm going to
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we're efforting getting elan >> talk to us more about this. >> we will get to that in a minute just two more things about bitcoin. look, you own it by >> when you look out and try to think about what this could be worth, did you think this year it was going to be worth $10,000? >> if that was even a possibility, i would have said no i started buying bitcoin at $10. >> i remember. >> i like two others right now atherium classic and z-cash. the asset class i think is here to stay. bitcoin appears to be here to stay i think people have to start thinking about this differently than just the price. >> is there any moment in terms of the price where you say, at this price, i have to take something off the table? >> diversification you have to move into the other digital assets keep safely invested in the asset class but diversify into the other ones >> we'll leave the conversation there. we need to get to elon in
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washington, d.c. what can you tell us >> becky, as you see on your screen there, senator ron johnson is a yes on the tax bill, according to nbc news. and he was swayed by that increase in the pass-through deduction that we told you about earlier from 17.4% to 23%. that won over steve gaines of montana and now senator ron johnson of wisconsin so that means republicans are getting closer to those 50 votes. still up in the air what happens with bob corker and jeff flake, two of the big deficit hawks in the senate as they work on an oo alternative to that figure but ron johnson is a yes >> it went from 17.4% to 20% but you just mentioned 23% when did the number go from 20% to 23% >> that happened overnight they negotiated that number with republican leadership that adds
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about another $100 billion in tax breaks for pass-through businesses on top of the $60 billion that came from bringing it up to 20% so bumping up to 23% was a big deal ron johnson had been looking for a bigger break for pass-throughs. >> what does that mean for the deficit hawks like senator hawk, senator flaker and senator langford >> do they need those senators in order to pass the bill? what happens with susan collins? is she close enough to a yes what about senator langford. he hasn't been quite as vocal as flake and corker on this if you have all the others you can lose flake and corker. >> the two guys that aren't coming back. >> exactly >> it's crazy. >> those are two guys that don't need to be re-elected. >> wow. >> i didn't think about that get langford and snow, you don't need corker. >> pat roberts of kansas was saying this last night
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the two guys who aren't coming back are here making the decisions for the rest of us, so there's some resentment from their colleagues over their holdout. >> but langford was seeing as aligning with those two as being a deficit hawk they have to find some way to take langlangford out of that g. >> he's a question >> we efforted you and there you were i don't know if i've ever done efforting. >> ask and you shall receive >> thank you >> it sounds so cool have youfr efforted -- >> i effort every day. >> "squawk box" will be right back
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let's check out the futures right now. a quick look so now up 65 cents on the dow but still down on the s&p. down 2.5, down -- >> "squawk box" will be right back opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
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day. the utility sector tends to be the top performing sector from thanksgiving to xrms the top stock last day of the week but the first day of december. let's get a final check on the markets. the futures hovering around flat line for the dow and s&p 500 down by 2.5 points s&p off by about three points. the nasdaq down by 39. it's what we've been watching on these headlines moving out of washington about senator johnson and senator daines both saying they'll now vote for the next step of the tax package. we'll see if that clears the hurdle today take a very quick look at what's been happening in europe and overseas when we first started the show this morning, dax was down by
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1.4% now off by 0.5%. cac off 0.3% the ftse is positive and what's been happen with treasures? the ten-year at this point is yielding 2.3 i'm guessing 2.3 -- >> 2.4 big difference championships like ohio state, wisconsin, auburn and georgia and cincinnati xavier basketball tomorrow >> so a full weekend >> a lot going on. >> see you later >> where are you going >> headed to china ♪ ♪ good morning welcome to "squawk on the street." i'm david faber. he is jim cramer we've live from the new york stock exchange our colleague carl has the day
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