>> me neither. >> i want to thank you very much for being here it's always a pleasure. >> thank you the olympics are coming up we haven't talked about that these are interesting olympics this year. >> i know. i'm looking at you. >> i know you are. we'll talk more about that as we get closer. >> it's going to be cold. >> it is it may be worse than cold. >> it's cold in here today anyway, join us tomorrow "squawk on the street" is coming up right now ♪ good wednesday morning welcome to "squawk on the street." the future is up as the dow and s&p come off four days of gains and a record close it is fed day. yellen's last press conference doug jones wins in alabama europe is tilting red. benchmark yields have come off we begin with the market

records, tax reform and that surprise special election result in alabama. >> plus a little more clarity and an update on disney and fox. we are less than 24 hours from the announcement of that deal. apple's billion dollar fund finds another investment fin asar surgeries on the news as apple builds on lasers and specialized chips. the fed is expected to raise interest rates again today as it concludes its two-day meeting. if so, it would be the third rate hike of the year. then this afternoon the president is said to deliver remarks on tax reform as happens trying to put the final tuchoucs on the bill. the president is going to have lunch with some members of the conference committee it looks like they're trying to meld the two by from the, get it to his desk by the 20th. maybe corporate rate to 21, some compromise on mortgage interest

deductibility. >> i think it's interesting also just in terms of what would pass versus not if you had democrats. a cut of 37 in the top tax rate for individuals, i don't think people -- those who say it's a giveaway for the rich, you just got your ammo. i was surprised that they did that. >> right in part that would be to offset the increase in taxes for the rich in certain states we spent a lot of time talking about that and others have noted that we've talked about it given that we are in those states and the lack of deductibility of state and local income taxes has continued to be an issue in reading about all the different approaches that tax attorneys are going to be taking, you do wonder how much productive time is going to be spent trying to figure out a way to deal with this new tax regime. >> yeah. i was thinking, do you just go buy into it because this is the

most confused i've ever seen everybody has a lot of questions. it is a b 0. boone i'm sure someone is going to say on twitter, why don't you recommend blah blah blah, and that's probably true this is where bill ackman should call and say, come on, guys, step up to the plate. >> creating a passthrough for part of your business or all or how lawyers are going to deal with it, it gets to the heart of whether or not enough people are going to figure out a way to pay that lower rate and therefore revenues are not going to be what had been anticipated or how the irs is going to make decisions, we don't know the answer. >> huge wild card and i also think that you mentioned the irs, don't you have to have four to five times the number of people to work for the irs remember, not everybody -- you're going to have to audit. i don't know how many more people, i mean, geeze. >> one of the earlier pushes was

about closing the tax gap and building more enforcement capability at the irs. that's going to be even more difficult if this passes. >> that's another job that i think you can get, the examiner. >> those will be available >> yeah. this would be a field audit, which are very expensive for the irs. you have to come to the person's house and say, okay, let me see your office. >> i'm a very production company. i come here every day, offer my services as a distributor of business news in a video format, and that's my company. got a problem with that? >> there are 40 people in the irs saying faber comma david. >> i'm wondering if you might exceed the profit -- there's a cap, right >> no. it's 50% above 500,000 that is deductible under the senate bill and then you can deduct 23% of that so yeah, it starts to narrow

i haven't looked at it at all. >> you obviously are brand new to all of this. >> yeah, right >> the house bill is different by the way that's 250. >> you're like the expert. did you -- is this hitting your desk >> i've got lots of tax notes coming in. >> i think you ought to wait to see rather than just jump the gun, but i understand. >> i'm just trying to retire, actually that's what i want to do, just stop working. >> you should prepay your taxes. >> if you have capital it's a benefit. >> you know you can prepay your state taxes. >> only if you estimate though >> if you w2, that whole company thing you put out, uh-uh. >> i know. >> w2, you are a wage slave. >> yes, i'm aware. but the point is that you can be doing the same thing and one person could be a company and the other -- you can try and yet you're paying completely different rates. does that sound right to you

>> may i suggest that you be permanently removed from florida. coming from david on assignment in florida. >> trade your entire life for lower taxes. >> a lot of people have done that. >> we'll talk more about taxes today and of course about the election in alabama last night for more let's get to john harwohawho is live in birmingham. good morning, john. >> reporter: good morning, carl. stunning result in alabama last night. democrats narrowed the republicans' margin in the senate from 52 to 51 in one of the most conservative states in the country. look at these numbers, narrow victory for doug jones over roy moore, the accused child molester this was significantly a margin that exceed what would trigger an automatic recount in the state of alabama so even though roy moore did not concede the race last night, he is not going to get an automatic

recount under alabama law. look at the key groups that propelled jones' victory, african-americans, women, moderates, solid democratic turnout across the board, subpar republican turnout doug jones who first became famous by prosecuting klans man who had bombed the bapist church in the 1960s called this a victory for justice. >> tonight is a night for rejoicing, because as dr. king said, as dr. king liked to quote, the moral arc of the universe is long but it bends toward justice [ applause ] tonight, tonight, ladies and gentlemen, tonight in this time and this place you helped bend that moral arc a little closer to that justice.

>> reporter: now, president trump last night after having endorsed roy moore and recorded an advertisement for him tweeted congratulations to doug jones saying, a win is a win, that he had a hard fought campaign this morning he cast this as a vindication of his own judgment, that he had backed a different republican in the primary because he thought moore couldn't win, but we're going to see now that the trump agenda gets more difficult to pass in the senate, may not have much to do with the health care -- excuse me, the tax cut fight if, in fact, republicans can propel forward a conference agreement later in the week. one unpredictability is whether or not some republicans get nervous by this outcome and try to slow that process down. that's not what iwould expect though however, republicans across the board can see in the results last night following on the virginia results last month a very difficult election landscape for republicans to try to hold the house and senate in 2018 >> we're going to come back to

you this morning, john, talk more about the impact on the midterms and of course the trump agenda in the years ahead. john harwood in birmingham, thanks fin asar is surging in the premarket. apple announcing it will invest $390 million in the chip maker the award is part of apple's advanced manufacturing fund to support innovation by american manufacturers. they'll use the investment to build a plant in tax where chips would be made to power iphone features including face i.d. stay tuned for an interview with apple's coo and fin asar's coo later one. one of the early ones to benefit is corning. >> this is a fantastic deal. i'll tell you why. sin afar is one of those companies, you want america to be the leader in what it's doing and this is kind of something that is so out of the blue fin asar is a heavily shorted stock because they missed a couple quarters and people feel that we're losing our leadership to overseas. when you get a check from apple it certainly does help

if you were short before, you should realize it's an entirely different company after this people will fight it but i say don't fight the feeling. >> this is from the innovation fund there's also the shazam deal earlier in the week. are you getting the sense that their appetite has become more acute? >> yes i think that they're stepping up, and i think that it's very interesting because they're all realizing like a lot of other companies, you're not getting any credit for your cash even after what we now know will be the importation of cash. of course apple did a lot of bond deals overseas but to put the cash to work is what a lot of companies want to do. i come back to what mullinburg did for boeing the other day he said we're going to hire people, return capital and boost dividend one of the reasons it's hard to take this darn market down is something like fin asar. they're one of those companies that until this i'd say, you're looking for a short idea, i don't know, think about fin

asar, they've been missing suddenly it's like, wow, i shorted bitcoin, i shorted fin asar. >> when you think about the $250 billion plus that apple has and what these numbers represent, it's nothing >> but for many companies in america that are struggle to stay ahead, it's killer if they distribute this money. it may be literally something that's excess for them but it's so needed for others >> right they're not going to ever distribute all of it we know that and a lot of it, to your point, they had no trouble raising money in the bond market at the lowst ratest rates. apple is always pretty good at hitting the low. >> they are. >> they have a very large capital return policy already in place. >> this is another problem i've been struggling every night i go home from work and say, i see certain stocks

trading wildly i know that there's a speculative bubble in some assets i really want to just say, you know what, it is time to leave and then something great happens and i say, okay, i know that it's just -- apple here, boeing here, disney there, honeywell here, but in the end it's like billionaire, billionaire senator dirkson, pretty soon it starts adding up >> real money. >> how many of these companies do great things that i can say s&p is way too overvalued but here's 500 companies that are doing things right. >> speaking of apple, city reiterates a buy today five reasons to buy including the upgrade cycle. valuation, tax reform. >> there you go again. apple has been acting sluggishly the last few days. what do people say when a stock acts sluggishly? it's the top

it's like cole porter, right no, you're not at the top. >> you're at the coliseum. >> there are some great lines in that they took out the cocaine line. >> they didn't cut it out. he was in the song. >> but they don't use the cocaine line. >> we can. >> they don't. >> who's they? >> they being the people. >> the cloud people again? >> we're going to get to bitcoin later this morning when we come back also david with an update on disney and fox. later this hour, an exclusive with wppc ceo martin sorrell take a look at the premarket this morning nasdaq unlike the dow and the s&p has not had a closing record since november 28. left out for the month of december back in a minute ♪ a wealth of information.

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away from what will be one of the bigger blockbuster media deals of all time, namely disney's purchase of many of the assets of 21st century fox in a deal worth roughly $60 billion

the boards of both companies expected to meet later today according to people familiar with the situation to sign off on this deal with an announcement expected tomorrow morning. now as always the case, things can go off course at the last moment but that does appear unlikely at this point some new details perhaps to share, of course we've reported so often on this and so many of the things around it but a price has been a key issue what i'm hearing at this point is the enterprise value for the fox assets being purchased would be roughly $60 billion i've reported that number before maybe it will end up being a bit above that we don't know the split in terms of debt assumption versus disney equity i don't know the ratio of disney shares but let's call it right around $60 billion i also can tell you that fox holders will own 25% of new disney if you want to call it that so you may be able to back into

a valuation based on the $60 billion number, the 25% ownership stake of new disney. yesterday i had reported originally they were valuing it at about $28 per fox share for that and then fox wanted to think that spinco would be roughly that $2.8 billion from those fox assets that will be spun, namely, the broadcast network, fox news business and fox sports among those assets you can figure it out based on how many shares are out of fox outstanding. but this deal is getting closer, guys key questions still unanswered, of course the debt assumption part, synergies for disney by the way, i would add there is not expected to be any word on management, and i mention that

because there's been some reporting that has james murdoch potentially going to disney in some role. i'm not saying that that's not something that might happen at some point, but it does not appear to be a part of tomorrow's planned announcement in any way >> okay, so moffit nathanson has some numbers out today tv down 13%. so where does that figure in in terms of why you would do this deal >> what do you mean? >> the viewership is down 13%. so is this someone getting the better of someone else >> well, fox is making their decision based on the landscape. we've talked about it often from the first day we reported this about the new world in which scale is so seemingly even more important than it was, the facebooks and the alphabets of the world and the amazons and netflix simply bigger. the consumer offering for disney, isn't that the answer? >> absolutely. we are so lucky to have sir

martin sorrell on today because scale, scale, scale is what you hear and disney's answering the call for scale, as at&t. >> anti-trust will conceivably be an issue. the single most expensive part of this overall worth at least $20 billion based on what they contribute, hooking those up with espn which i know you like. people are saying, well, is that an anti-trust issue, could it be sports programming is so important beyond that of the studios getting together. >> do we want -- if i were an anti-trust regulator i would say, you know what, this is nice to be able to pit the guys who had all of the pricing power, what are the sports companies. now they don't have it as much unless google and disney come in, google and facebook come in, and then amazon comes in and

then there's a bidding war and disney is left behind. they pay real money. >> keep waiting for that day we'll find out >> it's coming. we'll get cramer's mad dash and count down to the opening bell in a few moments. might get a record at the open it's going to be close more "squawk on the street" in a minute keyboard clacking ] [ mouse clicks, keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] ♪ good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours.

♪ all right, a little cars before we get to the open this

morning. >> we can do that and we can also do "rock me baby" because look at this u.s. arrerestaurants in search f the next takeover. can you guess? >> i can but i know what you're going to say. >> chipotle. all people know is numbers coming down. they are saying that on val valuations it is the one that should go. recently it was panera they're saying this is as cheap as that. cmg speeds is the best takeout candidate. david, i have not heard a good word about chipotle since i went to my one in brooklyn and was the only person. >> do you believe that chipotle could be a takeout candidate >> no. i made this whole thing up >> i'm saying -- they've got to

put ink to paper you don't have to believe it. >> i read this and oi know that they don't really have any leadership and maybe someone will buy it and say this is the new chipotle, we don't have a problem. but the answer is no. >> we don't have a problem >> there's been such consolidation. if a new guy buys it, it wouldn't be, hey, the new and improved. >> you were a believer for a while. >> i said 18 months after the most recent incident that's how long it took for jack in a box and taco bell then they had another incident so it started tolling again. we are in the tolling phase. this is a nice piece because everybody is going to be told make a call. chipotle, chipotle, chipotle, right? >> yep all right, we got an opening bell i think my phone is ringing. >> is that your phone? >> don't people know i'm on

television >> no. >> do they ever look up? >> my wife doesn't know i have a show my name is cynthia haynes and i am a senior public safety specialist for pg&e. my job is to help educate our first responders on how to deal with natural gas and electric emergencies. everyday when we go to work we want everyone to work safely and come home safely. i live right here in auburn, i absolutely love this community. once i moved here i didn't want to live anywhere else. i love that people in this community are willing to come together to make a difference for other people's lives.

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you're watching cnbc "squawk on the street" live from the financial capital of the world the opening bell in just over a minute a busy morning as we watch the results out of alabama, got a fed decision and a press conference at 2:30 today cpi a little light on core and then some corporate guidance out of honeywell and lily today, jim, for 2018. >> i don't know what people want lily did move from 80 to 86 and change ahead of this meeting honeywell obviously has been on a complete upward tear so what happens? lily does high end, honeywell does good, and initially lily was down now they've come back up lily is the cheapest large cat because j and j has run so much. honeywell is ideal it's ideal they're splitting into two main businesses and i think the stock's cheap. they're both buys in my book >> keep our eye on that and get

to some of the analyst calls, got a few of those this morning. let's get to the opening bell and the s&p at the bottom of your screen. at the big board, it is advertising and pr firm wpp celebrating the recent transfer to t cat and deer initiated as an overweight, barkleys, both micro and macro. >> i keep coming back to, okay, i cannot possibly recommend these stocks because they are up so much and then a barkleys comes out overweighting the stock. one of my great friends did a piece -- off the charts i work with him on the technicals

i always look to you for technicals because you can care less caterpillar is his favorite stock. it's like to the sky it's to the moon, alice. >> when you got mining up 80 and we're now getting some dealer numbers out of cat, the last few months it's gone -- starting in august it's gone 11, 13, 19, now 26 >> that is unbelievable. look, i know this is going to sound bad. fires in california, hurricanes texas, hurricanes florida, requires a lot of cal piterpill equipment. i say to myself, you have caterpillar overweight, united rentals under weight, there's something wrong there. again, like i said, they don't use cat, but there's great demand in this country cat obviously is international the world is doing better. people buy cat and when do they stop nobody knows

they're paying the same thing for the same product caterpillar cleaned up the supply chain no credit whatsoever i'm giving credit to doug. i never understood the transition i know doug made mistakes. one of the things he did was admit and then recover and i think that you admit and recover. ge, admit and recover. that's what you do >> cyrus was a good call, the earliest of good calls >> that's when he admitted it wasn't so good and the $500 million write off that i'm still trying to get a line on. >> then you had the investigation, the fbi. >> the investigation, not really clear. then the endless shortfalls. >> and now this year the stock is up 51%. >> doubled from when goldman recommended to sell it sometimes you fire enough people and the orders come through and we have what's called leverage

that's really what's happened here they fired a huge number of people i think anyone who didn't make an actual screw that was put into a heavy machine was gone by the end of this thing. >> by the way, in a normal year, 57% gain would make you the dow's best stock but there's no chance of them catching boeing. >> you can't catch boeing. >> up 87. >> look, they have orders out -- who has a ten-plan du besides stalin had one. >> moss and son has a 300-year plan and jack ma wants to be in the 21est century and the next centu century. is the multiple on boeing expanded >> no. number up, number up, number up.

>> keeps going up? >> when i interviewed mollenburg, the analysts who had been so -- okay, when is the cycle going to be over and remember the wide body/narrow body controversy one of the things that happened this time is when you heard that they don't want the wide body, went to the narrow body, in the old days you would say short boeing now they say we'll give you a narrow body. they're a great manufacturer and nimble it's really interesting because we had more bossidy on you're always trying to figure out who would set up the call. these are things -- >> set it up for the new guy, right. >> in each case they didn't wake up and say, we ought to fire a lot of people and stream the operation. no, you can't do that in three months i want to salute all the guys who set these companies up, not

just the current ceos. just making that point. >> who set up tulane and 3m? >> mcinerney the guy, fisher -- you cut me to the quick, darn it. >> i know who you mean it's not coming to me either >> we're like chumps >> cat's one of the best gainers on the s&p this morning. >> i've got this thing called google and it's looking it up. however tried it >> i'm not familiar with it. >> you have this bar you don't even have to ask in the form of a question anymore 3m ceo this is real journalism right here this is what it's about. george buckley was the guy i was trying to think of. >> okay. >> either tulane does not get his due, i went over that yesterday, but you've got guys shooting against him good luck.

he has a particular set of skills that's a nightmare for the short sellers. >> morgan stanley gets an upgrade. it's on the cusp of a new record high. >> jp morgan, is that expensive? that's before we see the earnings don't forget the tax rate coming down for these guys. there's so much to like. again, don't you want to short jpmorgan at 107? you can't. i don't think they even make the quarter. i don't even think they put the number up. have you seen wells fargo? >> i have seen wells fargo, yes. >> what do you need to get that stock down >> recession. >> investigation per share they've gone down. the investigation per share ratio is down. >> it is that stock has outperformed goldman sachs this year. >> goldman sachs is up the least. >> it is up the least. >> because they need the most.

they need obviously the most volatility. >> they could use volatility, yes. >> up 8% >> that's correct. 7.93%. >> thank you this is why my wife hates me so you know what goldman's multiple is and how much it's up but could you, like, shine your shoes? >> no. you're not capable of that. >> no, i'm not. >> pick your socks up off the floor. >> why are the boxers always down -- can you just -- no no i'm trying to figure out the p of ingersoll rand. get out of my face >> cat is leading the dow. not quite a record let's get to bob >> we are up here today. i think part of this rally, part of it you can attribute to the cpi, the core cpi. let's look at the futures. the core cpi was a miss this morning and i think a lot of people were positioned for a beat, stronger numbers after

what happened with the ppi yesterday. it's hard to see there but at 8:30 we saw stocks -- futures move to the upside we saw bond yields move to the downside, the dollar moved to the downside and i think that was in reaction to the core cpi miss yesterday if you look at the sectors we had banks up and technology to the downside that's reversed a little today this may be a little on the cp numbers here, bond yields down, banks a little weaker. tech is back, semiconductors are leading. rather remarkable to see retail perform well into december that's historically not the case but this year a lot of things that never have happened are happening. let's look at the crypto currency issues. bitcoin of course, volumes here fair but it's flattened out.

if y not nearly as volatile so far the bitcoin futures are creating lower levels of volatility even for the cash market that we've seen at least for bitcoin itself all crypto currencies like light coin we spent a lot of time talking about yesterday. if you're confused by that, a lot of people are, don't worry, there are investment funds popping up to invest in crypto currencies in general. if you don't know which to invest in there will be funds out there. one yesterday started, whole ten, they're investing in the ten largest crypto currencies. you can buy into it but they're only taking accredited investors. they only raised $4 million on the first day but it's the start. the point is you don't know what you want, you can buy into these different funds out there. i'm sure there will be many more crypto currency index funds out there. we tend to act like the u.s. is the center of the bitcoin universe and it's not. the volume by currencies in just

the last month, it's really over in asia. japan is far and away the largest. it was much smaller for the u.s. in earlier parts of the year south korea was a big player, vietnam is 2% or 3% of the trading, europe is 4%. the rest of the world is about 10%. those of you who are thinking we're the center, we're not. it's really in asia. right now the dow is sitting near the highs today, up 60 points carl, back to you. >> let's get to rick santelli at the cme. good morning, rick. >> good morning, carl. what a fascinating day at 8:30 eastern, even though the data was coming in sporadically, what we saw -- sporadically, i mean me trying to pick it off the boards up 2.2 year over year on headline was hot the core was only up one tenth and the following chart i think is what was most talked about

after i walked off this platform and tried to get traders' assessment of the numbers, this is a year-to-date chart and i think it speaks by myself. how the markets reacted, no yields, we clicked off very close to 185, then lost it ten-year was within striking s distance of unchanged. it's now down to 238 boone yields, similar. right back down, 29, 30. finally, the dollar index. granted, the dollar index isn't down a lot but it's down from a very key level it's going to lose that 94 handle again traders paying close attention to that. along with obviously today's potential quarter point hike seems to be built in to janet

yellen's press conference. we had the last big number in the form of payrolls now we're having the last series of big events, our central bank, tomorrow the european center bank, and you can tell by the way the market's acting. if there's no spreurprises there it's hard to imagine we're going to see more sellers in treasury as opposed to buyers carl, david, jim, back to ou. >> thank you very much, rick santelli. when we come back, what is next for the ad landscape. an exclusive with wpp's sir martin sorrell we're back in a moment

♪ ♪

♪ ♪ what we do every night is like something out of a strange dream. except that the next morning... it all makes sense. fedex powers global commerce with vast, far-reaching networks... deep knowledge of industries... and, yes... maybe a little magic. ♪ i thwell wait. what did you meetthink about her? it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements,

work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital. wpp, the world's largest advertising company ringing the opening bell here at the new york stock exchange. joining us this morning in a cnbc exclusive is the ceo of

wpp, sir martin sorrell. >> great fun this morning. >> good to have you back welcome to the nyse. >> great to be here. super salesman tom don't take the e-mail and don't take the call. that's the answer. he's very good. >> you are too much. >> i'm just telling the truth. >> as we were just talking about off camera speaking of the truth, we could go any direction >> whatever you like. >> digital advertising, disney/fox. >> scale, scale. >> tax rate too. >> tax rates must be good. whether it's good for wpp is not the question given the fact our tax rate has always been low in the 20s. >> but you did model for higher. >> we're modeling for higher but that's to do with other things going on around the world rather than the u.s. but in terms of stimulus for the business world, it's a remarkable difference what we're seeing now. >> make a difference to how you invest in the u.s. >> i think it makes us more

bullish about the u.s. actually. >> does it >> yeah. i think three things tax, regulation, infrastructure, spending, that takes a long time to get going regulation we have seen a simplification of regulation and we're obviously seeing something happening on the tax front, not fully implemented yet but it will be at some point in time. i would be more bullish about the u.s., yeah, in the short to medium term. the big issue in my mind is how long it lasts. >> okay. what would create a shorter shelf life >> well, the question is whether inflation is going to get going, whether we're going to see a stimulus to wage rates, whether we're going to see -- eventually it must break at some point in time we were talking about the house market rolling over, so at some point in time we have a seven, eight year bull run. there's a two-speed economy. you look at tech, you look at some of the hmos

the package goods of course is not growing. 2% on the top line in the last three-quarters in the s&p 500. tech is at 8%, yet the pes are the same there's something distorted there that is a little troubling. >> you've been outspoken in the idea that this world that you're a part of -- >> fox and disney. >> facebook, amazon, netflix, they rule this world. >> we call them the seven sisters. you throw in ten cent and all aliba alibaba. the fearsome five. there are seven sisters, the analogy to the oil companies and john d. rockefeller may not be lost on people i think in 2018 we'll see regulatory of governments maybe starting in europe

they have to come down with two decisions on google. certainly governments in western europe are looking carefully at the domination they're partners for us. they are two biggest investments, google and facebook if disney comes together with fox, disney and fox would be a clear number two, facebook three. absent that deal, facebook would move up to number two, as media destinations for us in our media book so scale is very much -- i think the fox business deal is also about content. going over the top you need control. going over the top through sky direct to the consumer, a competitor of fox and disney said to me earlier this week we would all really cut our throats to get to the consumer directly. of course if you have control of sky, you get direct to the consumer >> but one of the things that

i've learned from you and you've taught us much is that this -- >> too much from what you said to me before. >> because i just love the fact that you're transparent and not afraid to be honest. that's a breath of fresh air. >> clearly too much. >> there's no such thing as too much i do too much. you talk about threat to your industry, and typically, people don't do that. i love the fact that you talk about alexa, but you also talk about dollar shave club. >> right >> that's a disintermediation. i have never seen an ad during a football game for the dollar shave club >> we just won the dollar shave club in europe there's a pitch going on in the media side of it, but the interesting thing about the dollar save club, it's unilever's response to alexa in a sense. people say it's against gillette it isn't i think it's a channel of engagement with the consumer and a channel of distribution. this is 3.5 million names they paid whatever they paid for because they saw this as a platform so if you think about a company

like marriott, why does it buy starwood is it to have 30 brands? no, it's to have a platform that your eye, the customers', is on, to disintermediate the disintermediator you have google and facebook able to engage with you on a hotel booking. what you want is a platform, facebook, you like, you can use to engage with your consumer base it's the response to alexa and by the way, every one of the seven sisters and then jd.com has ding-dong, which is another voice activated device it's been in the market for twro years in china not made the inroads people thought. you have seven or eight voice activated devices that are going to try to engage with the consumer what they're doing is really interesting. they're carpet bombing the u.s. market with alexa, and it's a real estate battle and they're getting in first >> can i steal some of this

stuff? >> we talk about facebook. and the degree to which scale itself draws the eyes of regulators we had a big discussion this week about whether or not their model essentially weaponizes truth and makes truth malleable to people with profit motives. is there something wrong with the model? >> i think there are some big issues there's fraud on the internet that we have to deal with. there's viewability issues is a three-second view as effective as somebody reading the times newspaper in london for 43 minutes on average. digital or physical. it's not just about time spent it's about engagement. there's value issues validation issues. there's scientificical issues. facebook have admitted they have statistical issues in terms of the data they're providing a tv network that admitted their data was wrong three times in 12 months would be in trouble you have to deal with all those issues the answer is not boycott.

it's not withdrawal. it's to work with facebook and google they are our partners. i call them more flexible friends than frenemies now they're our partners to try and make the system more effective, more transparent, less opaque, and more value for money i don't think you gain anything, if you look at our media book, if it's $50 billion and about $5.5 billion goes to google, you don't do yourself any good by cutting it off what you have to is make it more effective and better to be fair to google, they have been very response sk, increasingly responsive to the issues you're raising. when issues around the election, not just the american election, the german election, the french election, the uk referendum, the uk general election, all these issues come up they're being more responsive. facebook, too. maybe they have to shift another gear up. but everybody has to work together to get the bugs out of the system and there are bugs to get out.

>> i just learned so much. >> you are a super salesman, too. you should get together. >> how many credits did i just earn toward my degree. >> i didn't learn a thing. >> it's all education. the question is whether it's practically important. >> please come back, sir martin. >> thank you, guys >> dow is up 64. don't go away. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over $120 billion dollars in real assets. partner with pgim. the global investment management businesses of prudential.

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jim, what's on "mad" tonight? >> apropos of what sir martin talked about, we have dan hesse and who is doing good and whether it means anything. i cannot wait to see dan, the legendary dan from sprint. remember those ads put himself in ads i got to nothing i got to absolutely nothing. i didn't even get to which carson wentz - >> should we expand this show another 30 minutes maybe take it to 10:30 >> done. >> okay, producer says fine. from now on. jim, we'll see you tonight, 6:00 p.m. eastern time. when we come back, steny hoyer on everything from tax reform to the democrats pulling out that special election in alabama. in a moment. our customers have ,

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good wednesday morning quem back to "squawk on the street." i'm kwk kwk with david faber,

melissa loo here at post nine of the stock exchange sara is off. record highs for the dow and s&p with a ton of news the election in alabama, cpi, a fed meeting, and the president later today on the tax bill. our road map begins with d-day at the federal reserve stocks in the green as policymakers get ready to make their final rate decision of the year fed chair yellen gets ready to deliver remarks at 2:30 eastern time >> mega media deal we are closely watching for that announcement expected perhaps as soon as 24 hours from now from disney and fox we'll give you details straight ahead. >> apple making a major investment in finasar, which it says will create 500 jobs right in theu.s. first, let's get straight to that heated senate race in alabama. democrat doug jones winning last night's election, although republican roy moir still has not conceded john harwood joins us from birmingham morning, john. >> morning, carl as we have discussed, stunning outcome, where democrats managed

to narrow the republican margin in the senate from 52 to 51 in one of the most conservative states in the country. first time a democrat won a senate race in 25 years in alabama. look at these results. a couple of percentage points lead for doug jones over roy moore. and he is going to be outside of the margin necessary to trigger an automatic recount both sides are looking at the factors that contributed to this race and pointed to different things let's start with the things that made alabama very different from other places in the country. we're talking about the moore being a weaker than other republican candidates. that was why president trump said today that he endorsed luther strange in the primaries. and then secondly, the child molestation allegations. ron johnson, republican senator, just said the message from alabama voters was that voters

don't want people who date 14-year-olds in the u.s. senate. on the other hand, there are common elements to this race, to what's happened in other parts of the country you had a surge of african-american votes the balance of mobilization has shifted. you have republicans hemorrhaging suburbanites, especially women you have donald trump's weakness he was weak in alabama not as weak as the rest of the country, but weak nevertheless, and all of those things suggest you have difficulty for republicans in 2018 when democrats are now just going to need two seats to win the senate and 24 seats to win the house. both of those things are possible next year, guys >> john harwood, what a race last night in birmingham, john, appreciate that of course, the win by doug jones makes the gop's push for tax reform perhaps more urgent our ylan joins us from washington looking at that morning, ylan. >> good morning, carl. there appears to be a tentative

deal on a final version of the tax plan i'm told the senate version is the framework for that but there are some key differences, including the fact that the corporate rate would go to 21% though still unclear if that could take effect right away or delayed until 2019 also the top rate for individuals would fall to 37%, which is lower than what had been proposed in the house and senate also, the deduction for mortgage interest would be allowed for loans that go up to $750,000 and the deduction for passthrough businesses would be at 20% the lawmakers involved ipthese negotiations will be meeting with president trump at the white house this afternoon for lunch. and then trump himself is going to be delivering what his administration is billing as the closing remarks, the closing argument on tax reform but especially after last night's elections, democrats are really hoping this isn't a done deal democratic minority leader chuck schumer holding a press conference right now to call on

republicans to delay a vote on the tax bill until doug jones has taken his seat progressive groups, meerm, they're planning massive rallies across capitol hill today, over 1,000 people are expected. and their strategy here is to weaken the resolve of some wavering senators. that includes susan collins of maine who said she is not a fan of lowering the top rate for individuals. also, marco rube yeof florida said he also doesn't like that idea he thinks that any increase in the proposed corporate rate should go toward paying for an expanded child tax credit, not toward tax cuts for the wealthy. we'll get a clearer picture of where the chess board stands once the conference committee holds their first public meeting on the bill this afternoon >> a lot of moving pieces. thank you. it's d-day at the federal reserve. policymakers getting ready to make their final rate hike of

the year what we can expect >> if all the markets and prognosticators are right, the fed's holiday gift to the nation will be another quarter point rate hike. the third this year, fifth under janet yellen who will sit for likely her last press conference and second to last meeting under her tenure, the fed will have raised rates by 1.25% the case for the hike, went from 88 point to 98%, largely baz of the unemployment rates also, the market previously didn't price in a single hike. you can see now, it expects two on the 50% of two rate hikes and it's working on the third one. all this raises a couple questions for today's meeting. first, do any of the members, are they concerned -- they dissent? there have been members who indicated they're less comfortable with hiking rates because of low inflation

second, is the consensus for next year forecasting four hikes or get close to the third, as the fed lowers the unemployment rate below the 4% rate and notch up its growth outlook. ian shepherdson said in our view, an unemployment forecast for next year which doesn't begin with a three would lack credibility. a fed forecasting a three handle on unemployment would deliver three hoar more rate hikes next year regardless of who is in charge the idea of a tax cut and a greater deficit spending is going to weigh on the fed next year as well >> and steve, how does this morning's cpi number play at the table? >> you know, it plays a little bit both ways. on the one hand, that headline number was higher, but that was driven by energy and gasoline. take that out, the core number is still very contained. the fed continues to miss on its inflation target while the unemployment rate looks like it's continuing to go down it's a real quandary, and that quandary is going to fall

essentially to jay powell, and we don't know how he's going to decide which way, towards more rate hikes driven by the unemployment rate or fewer driven by the inflation rate >> look forward to learning more steve, thanks for that big day. steve liesman watching the fed today. >> we're joined by mike swell, co-head of fixed income portfolio management at goldman sachs. great to have you. wow, i mean, core cpi, average hourly earnings today, waiting game continues >> i think it's more of the same with regard to the cpi print i don't think it's going to change the course of the fed we're going to see a rate hike today. we're likely to see an upgrade to growth forecast and potentially bring down the unemployment forecast to the three handle potentially today, if not, next year but in terms of next year, we think we're going to see three hikes next year. and inflation is not at the target, but we have price stability. so i think that the concerns around deflation are limited

and i think there are a lot of factors going on that's going to cause the fed to be active next year and in play to be more aggressive next year >> four instead of three >> potentially four. >> are you calling for a flat curve in '18 >> we aren't we really believe that the idea that we're going to be in recession and there's a great need to own long duration assets when inflation is going to be very contained, we don't think we're in that type of environment. we think you're going to see a normalization of tyield curve. >> in terms of stubltd, do you expect instability to be introduced by a tax reform package or the infrastructure package? >> if instability is stronger markets but more volatility, then yes i think you're going to see strong equity markets for the next three to six months it's a pretty constructive environment for earnings there's very, very strong growth outside the u.s., which is good for the u.s. as well

but you're at such low levels of volatility, you're not pricing in the risk of a big infrastructure spend you're not pricing in the risk of inflation actually picking up and while the inflation numbers were weak today from a good standpoint, the earnings numbers continue to improve, so this whole concept of are we going to see wage increases, we're starting to see that we think that's going to be one of the bigger drivers of inflation in 2018. it's clearly not priced in >> when people look at the ten-year and this wedge we're in between, what, 2.28 and 2.45 since october, you see the breakout would be to the upside in your view >> breakout to the upside next year you're not paid to take on that risk 2%, like who cares it's just not a great return and you can get the same return by owning much less risk, by owning a two-year asset instead of going out further in the curve. a big game changer, a lot of us talks about this a year ago, two years ago, the same story.

the big game changer is growth outside the u.s., and some of the narrowing of the output gaps european growth is stronger. you're starting to see people get back to work you're at the point now where you may start to see rates rise outside the u.s. you're seeing a little bit in europe you have a number of central banks dealing with some inflationary issues. sweden, kurx uk, canada. so the game is changing. when we look to next year, we look at the fed starting to remove accommodation in terms of quantitative exit, and then you have the ecb as well going that direction. a lot of what's occurred post-financial crisis is going to start to reverse. it's not going to reverse day one, but it's going to start to reverse. owning fixed income at 2%, which has been the asset that has benefitted from the accommodation, doesn't make an enormous amount of sense >> what happens to corporate iss issuan issuances. is there going to be a pullback because companies with bring money from overseas or do you

expect no impact >> i think there are a number of factors to impact issuance one is repatriation. that's going to impact mainly on the tech side. you also have in the high yield market the attractiveness due to the change in the tax law of issuing debt and deducting interest, changes as well, so the concept of debt financing verses equity financing changes. the corporate market, that's an issue. but there's been a significant releveraging of corporate america, and not necessarily on the consumer side. that's something to watch relatively closely if you look at the investment grade index, a few years ago, 25% of the index was bbb now 50% is bbb also, the rating ageanies have become a lot more open to releveraging the balance sheets and allowing companies to maintain the bbb rating. the question you asked earlier about potential volatility, if you have that, a lot of companies aren't the position to absorb that, and you could see companies move from investment

grade into high yield. credit, not a great place to sit. >> at what point do we start seeing that, do you think? what is the tipping point there? i would imagine these companies are mostly in certain sectors. are there certain sectors that are more at risk than others >> the bottom line is people talk about idiosyncratic risks and it's only that company or that sector. then that sector becomes a broader sector and then becomes the market i think there's not an individual sector that's most susceptible. you have seen it pretty broadly. the big catalyst is less the fundamentals, and they are susceptible to a shock and slowdown in growth the biggest shock is back to the rate side. if we do see actual continued growth outside the u.s. and i would say europe and japan is the main areas, those have been the drivers of the long end of the curve in the u.s those have been the drivers of the credit market as well. if those markets become attractive again, it changes the dynamic for demand for credit. i think that a change in that

demand factor as well as the fact that the fed is no longer buying everything can have an impact >> any sort of index, etf right now for the guy at home, invest in corporate issuances, it sounds like there's going to be pressure on that next year >> potentially i think that a smart move for investors is to reduce the duration of their portfolio. there are ways through etfs to move from a five to seven-year duration instrument to something on the shorter side. that's very prudent. >> it sounds like your eyes are really overseas for '18. >> they are in terms of the rate dynamic in the u.s probably the bigger driver than inflation in the u.s i think that the other thing that's very interesting and probably one of the only markets we find very attractive are emeremr emerging markets both on the equity side and the debt side, still very attractive. significant restructuring that's occurred over the course of the last few years it's one of the cheaper asset classes. the interest rate differential in emerging markets in the local

currency versed developed markets is massive we have 6%, 7% rates in the emerging markets we think that's going to lead into inflows in the markets and have an impact on the currencies and on emerging market equities. >> good stuff. please come back soon. mike swell, goldman sachs asset management when we come back, closing in on a media mega deal. awaiting an announcement on disney/fox we'll bring you up to speed wit the latest >> we'll talk to steny hoyer, get his take on tas xeand a lot more when "squawk on the street" comes back

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less than 24 hours away from what may be than announcement of one of the largest media deals of all time. disney and 21st century fox, as i reported, of course, expected tomorrow morning to announce that complex transaction under which disney will acquire many fox assets for an enterprise value of roughly $60 billion don't know the exact fixed ratio of disney shares and unclear on how much debt assumption is part of that number but we're working on it. and for more, we're joined by michael mightenson, founding partner at moffett nathanson i know everybody in your part of the world is trying to understand this thing, as i did in the days before i even broke the story, because it was, what? even though i knew what i had was true what do you make of it now with let's call it over a month under

our belths of thinking about it? >> it's still a shock. i have to tell you, when you first reported that, we thought it was a crazy idea. 30 days later, it is still surprising that rupert is a seller and disney is willing to get so much bigger in businesses than they never really wanted to get bigger in. cable networks, satellite, international cable. those are businesses that they have never really had an appetite for so it's a big change of strategy, and that's why we're all still waiting to see, you know, how disney spins this story. what are they going to do with these assets >> the communication around it tomorrow morning, ostensibly, will begin on both sides there's a lot of explaining to do to both sets of shareholders. let's start with disney. do you understand it certainly, you would think the direct to consumer offering, i get that sports, entertainment, that's bolstered significantly. >> we did a lot of work about netflix's library. it's hard to get under the hood of netflix, but the work we did said that fox had given a lot of their best content to netflix

and had driven a lot of value to netflix. disney's library value is nowhere near as good as fox is for disney to understand they need to get bigger in scripted television for ott, it makes tons of sense. the data supports fox's content, family guy, all the fx stuff, that works really well in ott. so that's a really good building block. that makes a ton of sense. on the film side, without a doubt, avatar, the avengers, that fits great. then, owning india, which is a market growing really quickly, they get in there, and lastly is hulu that's the underappreciated star here they need to communicate tomorrow about what does hulu give you, how fast can they grow it, is it a global asset those are the plays we care about. >> does hulu become a template of sorts for what they eventually want to do on ott >> i think there's three strands. one is obviously there's a kids strand, a disney family strand that they can't bring some of

the fox assets into that then there's an espn overlay asset, where you're not going to get espn ott, but let's say you like games from indiana -- that's a bad example from different sports, those sports are going to come in on an a la carte basis. the third strand sounds like the hulu idea could be a global idea that challenges netflix globally >> what happened with its interest in hulu, comcast? >> that's a great question up to this point, comcast has not been able to because of government regulations to make much of a stand there. >> decree expires in august, or i think following next year, comcast is under the other partners do have the opportunity to size up a bit but you are talking, time warner's 10%, comcast, 30%, so they're at 60% >> the question is hulu, we talked to jason who used to run hulu how much has the structure of

three owners slowed down the strategy of hulu right? and would it be better to have one company with a pocket to disney become more aggressive. they never lost internationally. netflix has 50 million subs internationally. what does that do? they change strategy there so the hulu piece to me is really the underappreciated opportunity. we need to get more strategy around that. >> let's talk about fox while we have you $2.8 billion is going to be the number from what they're calling spinco, the assets that will remain i know it gets complicated they also may delever as a result of this you have a balance sheet with less debt on it. what are your expectations for what that company will mean. does he try to buy news corp, does he think about taking it private, or is he happy with that number growing at a small but steady pace and delivering a lot of free cash flow. >> i would think that company that size can't stay that way. here's why in three or four years time, the nfl rights come due for fox

broadcasting he becomes a small company, and if the nfl rights go up by 50%, that's a huge hit to his ebita what i'm waiting to see is what happens with time warner/at&t. this is a crazy idea, but time warner would really benefit from having fs1 and the fox network to time warner if time warner has to be an ongoing company, that merger doesn't happen, is there a fit there? we're trying to figure this out because i would say to you - >> if you think that's possible, why not have waited to announce this deal until you know the doj action >> because fox news will be fine either way fox news can be fine public, private, big, small. it's the other assets, fs1, fox sports one, and broadcast, which is going to require more spending to pay for rights i'm interested in seeing how that asset communicates its strategy i would think one or two years from now, it doesn't remain an independent company. it probably comes together with fox, goes private. so we think that asset is about $10 a value.

you reported similar types of numbers. if you look at where cbs trades, you can get to $10 a value for the spinco, which is the remainco >> roughly $20 billion in the marketplace. >> exactly i think it's a fine asset. interesting to see what happens. but if time warner becomes back out, i think things may change >> michael, while we've got you, i know this is the other side of the firm, it's more the moffett side, but t. mobile announces this tv effort this morning, the press release is out they're calling it, of course, their buzz words, mobile video strategy they're buying a company called layer three tv and you can share with us here, because it's not completely clear what the strategy is >> the strategy is to offer people more and more video with directtv bundled with at&t, with verizon yesterday getting nfl rights, they're trying to offer t-mobile subscribers similar to what others are doing. we know about the company they're buying

they have been successful in small scales in rolling out new products in colorado so i think their idea is to try to bundle in more video with their mobile phone product >> by the way, john says if we have questions we can tweet him literally right now. >> i'm sure he's on there. >> i didn't find his release quite as clear as i would have liked so i will be tweeting you. does the day come with 5g, with the ability to bring a broadband wireless product into the home is a threat to cable >> the other side of the house, craig's view, we're a business of how quickly that business can scale. it sounds great on paper but there's tons of technological issues that would slow down the ability to roll that out at scale. >> michael, we'll be waiting to see tomorrow and get your analysis as well when we finally get answers to the questions we raised >> thanks. >> thanks, michael by the way, we're going to talk to the coo of t-mobile at 1:15 eastern time. when we come back this morning, f

finisar surging. awarded this $390 billion investment by apple's investment fund we'll get a check on stocks at this hour. dow holding on to a near 80-point gain. s&p up almost five backn mont ia me ♪ working as an emt in a small town usually means hospitals aren't very close by. when you have a really traumatic injury, we have a short amount of time to get our patient to the hospital with good results. we call that the golden hour. there's nothing worse than when we're responding to the hospital, and the hospital doesn't have the right specialist. evaluating patients remotely, by an expert, is where i think we have a potential to make a difference. robots can do a lot in medicine these days, but they can't think. they're still machines. for nuanced decision making,

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investment, this time in finisar. we sat down exclusively with apple's coo and finisar's ceo and joins us with more hey, josh. >> carl, apple did just announce this big $390 million investment in finisar it's part of apple's $1 billion advancement manufacturing fund, and check out shares of finisar right ow they're surging on this news company is going to use this money, carl, to ramp up production of what are called vixal chips. they help power a range of apple technologies, so face i.d., animoji and ar kit i just did speak exclusively with jeff williams, apple's coo. i asked what exactly apple is getting out of this investment, and williams saying it comes down to access to cutting edge

technology and ramping up production of these chips. take a listen. >> vixals are at the heart of some of the most advanced technology that apple produces and they're used in a wide range of applications across industries but when we were working on iphone x, we realized we needed a much more advanced vixal, and we needed way more capacity. if you take the entire worldwide capacity for vixal wafers, we looked at that and realized for the iphone x, we needed ten times that amount. we worked with finisar and a couple other companies to put that in place. now we need more, so that's why we're here >> now, with this investment, carl, apple has now spent $590 million of the $1 billion that was earmarked for that advanced manufacturing fund but jeff williams just told me that apple could very well spend even more. he said that $1 billion does not represent some type of hard ceiling for the fund take a listen.

>> when we announced the fund in may, we said it was an initial investment of $1 billion, and we're really not thinking in terms of a fund limit. we're thinking about where are the opportunities across the u.s. to help nurture companies that are making advanced technology and the advanced manufacturing that goes with that that quite frankly is essential to our innovation. and so we want to nurture those companies. often, those operations are very capital intensive, and we want to help them and that will create more jobs that's a fantastic match for the american workforce >> now, i also spoke to finisar's ceo. i asked about this market for fixal chipped because it's not just apple a lot of different applications have big really is that market here's what he had to say. >> we've got 60-something companies right now that are communicating with us and in many cases requesting specific

samples of vixal products for all kinds of applications, and not only mobile devices but automotive devices so we're going to -- there's going to be a lot of uses for this >> with this investment, finisar is also going to be not only building out that plant in sherman, texas, but also hiring 500 new people, including engineers, technicians, and operators. back to you. >> hey, josh it's melissa it's interesting, we're seeing lumental down about 10% on the notion because of apple's investment in finisar, it might not invest in lumental it sounds like they could be open to investment in other companies. >> i think that's absolutely true listen, they're sourcing these vixal chips from a range of suppliers. you heard jeff williams saying they need to get their hands on as much supply as possible it's a range of technologies that he needs this technology for, not just face i.d., but

animoji. also talking to analysts already about what they think the impact on apple is, they say listen, it also means apple, if it's really going to have this much control over this much supply, it also perhaps giving them an edge in other technologies, too. perhaps in the great fight for augmented reality market share as well. >> josh, thank you josh lipton in sherman, texas, for us >> let's send it over to sue herera for a news update >> good morning, everyone. here's what's happening. minnesota's governor has chosen lieutenant governor tina smith to fill senator al franken's seat until the november election she will run in that election to complete the final two years of his term this is according to multiple reports. the official announcement will be made later this morning in st. paul >> iran and the six western powers meeting in vienna to discuss the ongoing implementation of the iran nuclear deal president trump has repeatedly threatened to walk away from that pact. >> south korea's military says for the first time, it conducted

a successful air to air missile firing drill from apache helicopters. it did not, however, mention whether that drill was conducted specifically to address north korean provocations. >> and the newly released death certificate for infamous cult leader charles manson is shedding light of the cause of his death. it says manson died of cardiac arrest accompanied by respiratory failure triggered by colon cancer manson died on november 19th that's the news update this hour i'm going to send it over to jackie d. for the eia inventory report >> good morning to you you can see crude prices are just about to flat line after the department of energy reported a drawdown in crude oil inventories of 5.1 million barrels. this was a mixed report, even though that np seems reported. we had a build in gasoline of 5.7 million barrels. how the market reads it is says the product isn't moving, and that's why we're not moving

thought much in terms of crude oil price. we looked into the production numbers for the week u.s. production, 9.780 million barrels a day. up slightly, but a new record nonetheless. back to you guys >> all right, jackie, thank you. >> when we come back, a stunner in alabama as democrat doug jones wins that unlikely senate seat we'll bake down what it means for pushing forward tax reform and the trump agenda representative steny hoyer joins us next.

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republican leaders working to consolidate both the house and senate tax plans and have it on the president's desk before year's end this has president trump set to deliver a speech on the tax bill this afternoon we're joined by congressman steny hoyer. thanks so much for joining us. we appreciate it >> thank you glad to be with you. >> i want to ask first about what has gone on in alabama and if at all that changes the tax vote, you're a colleague of senator chuck schumer, is

seeking to delay a vote until after doug jones is seated as senator. do you support that? and what are the chances, do you think, that could actually happen >> i think that would be very appropriate. as a matter of fact, mitch mcconnell thought it would be very appropriate after scott brown was elected in january 19th of 2010 the day after senator mcconnell said there ought to be no more votes on the aca until scott brown was seated the theory being that we had a new senator. the public had spoken. he pointed out in massachusetts, we point out in alabama. neither one of our home states, if you will, so it should be delayed. chuck schumer is absolutely right. we have a new senator, a new voice that has been elected in alabama, and that voice ought to be heard on arguably one of the most important pieces of legislation i think one of the worst pieces of legislation that we have considered in a very, very long time that will cause the country great harm so i think mcconnell was right in 2010.

i think schumer is right in 2017 and we ought to follow both of their advice >> what is the procedure for this happening >> the procedure for this happening would have to be the senate would agree to seat doug jones prior to final certification, if there is no challenge. i don't think there's going to be a challenge a pretty good victory for mr. jones. we do that in the house of representatives all the time before certification of the vote, we say there is no contest and we'll seat the member. some members we seat the day after they're elected, which i think is appropriate >> do you feel renewed hope, congressman, that perhaps the democrats could actually defeat a tax bill >> i certainly hope we can defeat this tax bill it is a terrible tax bill. a terrible tax bill for working people a terrible tax bill in blowing a hole in the deficit and the

debt and if offered by democrats, this tax bill would have received no republican votes on the debt issue alone, $1.7 trillion added to the national debt, which our children are going to have to pay and in the process that it raises taxes on 72 million americans, and gives the resources that speaker ryan talked about struggling americans, the resources don't go to struggling americans the resources go overwhelmingly to the richest people in our country and the corporations we need a tax reform bill, but we also harm veterans in the process when we take the work opportunity tax credit away, which has led to 300,000 veterans being employed. this is a bill that has not seen the light of day, that has not had any hearings, not had any witnesses come forward, and most economists believe, a, it will not be paid for. and will leave at least a trillion dollars debt, and

secondly, it will not have the positive effect on the economy that its proponents argue. so it's a bad bill it ought to be defeated. >> when it comes to the math, it seems like that's an uphill battle to say the least. given our residence in a high tax state, many of us are focused on the deductibility of state and local income taxes there were a number of blue state republicans who supported the bill in the house. is there any hope, i shouldn't say hope, any expectation they may change their vote as this has started at least to gain a bit more currency among some of their constituents as a real concern? >> i think it is a real concern to an awful lot of states that have significant number of republicans representing them. i think those republicans voted against their states' interests and their taxpayers' interest. so yes, i think there will be some rethought i frankly think there will be rethought as a result of the election last night where it is

clear that republicans in virginia and in other states as well, in alabama, in even maine, where you saw the voters who have a republican governor, who was against extending medicaid under the aca, voted 60/40 to do so against the wishes of their governor i think you're seeing all over the country a disgust with the present leadership of our country, a disgust with the congress' inability to work, and a support for democratic positions on the affordable care act and on this tax bill where you see some 60% of americans saying they have no doubt that this is a tax bill for the wealthiest in america and not for them this is a tax bill that will take us backwards, hurt our economy, hurt the taxpayers. we need tax reform we can work on tax reform in a bipartisan way we need to bring down the corporate rate to make it more competitive so there are many

things on which we can agree but this bill is a bad bill. and i think no republican is voting for it on the basis of policy but on the basis of politics >> once this is resolved either way, congressman, you got any visibility on what infrastructure may look like other than what's been reported? and what would the democrats be looking for if one were put on the table? >> we need an infrastructure bill but it's sort of like health care taxes, infrastructure, jobs the president said he was going to do all of those he hasn't offered a single bill on any one of those issues, including infrastructure he's just waiting upon the congress to do so, and they haven't done so very successfully, the republican majority we need an infrastructure bill i think there's broad agreement that we need to invest in very, very substantial amount of money in our infrastructure. not only on roads and bridges but our internet, our grid, our

ports, our airports. we need to make sure that we are competitive with the rest of the world on infrastructure, and we don't have a bill from the president. there have been a lot of discussions. pete defazio, the ranking member of the transportation and infrastructure committee has a bill obviously, he's included in there some revenues for that bill and that's the key revenues where are you going to get the revenues john delaney, my colleague, has a bill in as well. >> congressman, we're running out of time. real quickly, you really don't think you have a shot here, do you? >> a shot at what? >> a shot at winning this vote is going to happen next week. jones is not going to get seated in time. the house is going to vote in favor and it's going to become law. don't you think that's the highly likely outcome? >> i hope not. i think it's a bad bill, bad policy, and bad for the country. i would hope at least one or two republican senators would come to that place. i think susan collins is not a guaranteed vote at all she thought she had a deal it appears that paul ryan says

no, there was no deal. and i think that they're going to continue to put at risk health care for some 13 million americans. and i think they're going to put at risk prices for everybody who has health insurance in america. so if that happens, i would be shocked if susan collins voted for this so we'll see but i haven't lost hope that good sense will prevail any more than i lost hope in the voters of alabama that they would use good sense to vote for decency and good order and common sense in the united states senate race, which they did last night. i still have hope that the united states senate will do the same >> congressman hoyer, thank you. steny hoyer, house minority whip >> when we come back, that tax plan still in flux, but the wealthy are getting out ahead. we'll tell you how in a montme >. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him?

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find out who it is and if it's still worth you money on tradingnation.cnbc.com more "squawk on the street" coming up.

let's get to the cme group in chicago and get the santelli exchange good morning, rick >> good morning, carl. i would like to welcome my guest, fed day guest mark olson thanks for taking the time today. >> thanks, rick. thanks for the invite. glad to be here. >> before we get to the action today, we're going to most likely receive from the federal reserve, let's talk a little bit about this morning's data for november's cpi year over year headline up 2.2 that line is going up pretty nice if you look at year over year, that line at 1.7 is going down if you look at month overmonth a .4 hot how did you read that? one thing i read is the market yields went down after the release. >> i would combine that, rick, with what came out of the

minutes of the last fomc meeting where they said that the core inflation as opposed to the top line that you mentioned, core inflation, they do nod expect to reach 2% until 2019. so i think what that means, and then they cited several other studies that said inflationary expectations are way down. what i think that means is that the fed is going to have to look at an entire new paradigm. we've been locked into two metrics for the last several years. 5% unemployment and 2% inflation. we're down to 4 on the unemployment and it's still headed south we're not going to reach two on the core inflation for a while it's time for a real rethink and that's the way i read it. >> you sound a lot like establish sounded on cnbc saying the 2% threshold but arguably the fed quote, unquote, may have ignored it a bit because they have actually done some

tightening the point is it distorted some of the way they proceeded and got them on a late start to remove stimulus. generically do you agree with that, mark >> stan probably uses bigger words than i do but i think there's an extent to which that is correct i think we started moving towards normalization particularly on the balance sheet at a much earlier time i think that would have been relatively painless. we needed to restore the balance sheet so the fed could be in a position to have its normal role where we have times of financial turmoil or upheaval. so i'm fundamentally supportive of his comments. >> gotcha. now, specifically tore today, is there anything in your mind that would prevent janet yellen on her last press conference in meeting with respect to whaegs occurring with rates, quarter point higher

anything that will prevent that from happening in your mind? >> i can't imagine i think they have pretty well signaled it. i think it's time for another move i think the next two meetings are relatively quiet we have four seated governors one of whom will be moving out in a month and a half. so i think the next two meetings are going to be quite quiet but i do see -- i do see a quarter point move today what will be interesting to me today is the extent they refine any views on inflation inflation is the real mystery, i think, right now. >> gotcha. mark, we're out of time. you managed to finish just in the nick of time i thank you for that david faber, back to you. >> okay. thank you, rick santelli time to send it over to jon fortt for what's coming up. >> facebook, amazon, netflix, google, the alphabet, those are

monsters heading in th morwiaj indexes this year and what's coming up next back on "squawk alley.

congress is working towards getting a tax plan in place by the end of the year, but some

wealthy people already taking stones avoid or minimize the effects of the possible bill our robert franks joins us with more have you our complete attention, robert. >> where there's a tax hole, there's a loophole devising strategies to get around most people will get a tax cut under gop plan, but some parts of the plan would be costly especially to high earners in those high-tax states. three tips first, load up on salt house of senate bill eliminates state and local taxes. so in some states certain taxpayers can pay their estimated tax for next year now and take the deduction before it disappears now, there are a lot of caveats around this and stay above amt new york, new jersey, other states allow to you prepay next year now and local governments do as well so check with your accountant and see if you can do this second, harvest your losses. the senate bill requires first

in, first out tax treatment. advising clients to sell tax lots that have losses to capture those losses and offset future capital gains before the end of this year. you can also gift tax or gift those lots that have low cost basis so the oldest ones you purchase, give those now because you might not be able to in the future lastly, lock in that mortgage. it looks like they will cap mortgage at 750. so if you haven't gotten the mortgage or refinance, do it before december 31st guys, back to you. >> that's a lot of good advice have you to work fast, robert. thank you. robert frank watching tax bill . r us our co-host arianna huffington with us next when "squawk alley" starts in a moment directv has been rated number one in customer satisfaction over cable for 17 years running.

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welcome back to "squawk on the street." i'm dominic chu. health care one of the leading sectors, one of the best performing stocks, certainly to keep an eye on let's send it over to "squawk