meaningful profit. >> we're heading very rapidly in that direction but it will require changes in the way facebook and snapchat and google -- >> do you know chris hardwick? >> i've heard this before. >> have you ever been in the same room? have you two been seen in the same room? >> you're not him? you swear you're not him. >> you do talking dead you're not him. >> he's also -- >> didn't get my great answer but anyway >> join us tomorrow. right now it's time for "squawk on the street. ♪ >> good tuesday morning, welcome. i'm carl quintanilla with jim cramer and david faber futures steady, that breaks the record from 95, the house votes on the tax bill today. fedex and micron report today.

housing startswere pretty soli this morning roadmap begins with that record run for the markets. the dow has now closed at a record 70 times this year. will the rally push through year end amid turmoil in d.c. >> speaking of records, the nasdaq breaks through 7,000 for the first time we're going to take a look at the names driving that index higher. >> and downgrade for apple has the stock down slightly and hot holiday item that is sold out. we've got the latest first up, futures are on the rise after another historic day for stocks, including the dow posting the record close of the year the house is expected to vote on the tax reform bill later on today. looks like pretty clear sailing and senate begins a mandatory debate but pretty much with colins and corker and lee, this thing will get done. >> i think that people are driven by estimates. and i had united rentals last night.

united rentals immediately gets more cash. what are they going to do? put more people to work, buy back more stock. when you ask people what are they going to do ollie's bargain store, the fastest growing knockoff retail chain, what are they going to do they are going to build more stores and put more people to work there is this kind of very cynical rap, they return to capital. when you speak to these domestic companies, they are first of all shocked. they didn't see it coming. >> if you're a retailer you're going to open more stores if you think there's an opportunity to make money from doing so, right? not necessarily just because -- >> great point the regional national chains, a dollar tree, a dollar general. >> in retail, i find even that idea hashrd to imagine. >> that you're going to expand as a retailer. >> ollie's bargains in 20 states it's a job lot remember consolidated stores it's one of these placescter & h

product. this accelerated their buildout. if you already are like home depot everywhere, it's going to be interesting to see what they do. >> i keep coming back to this idea that there has not been an inability to access capital for most corporations that those who want to expand with record profits and cash flows certainly had the opportunity to do so amidst record low interest rates for a long period of time. you're only going to do it if you think the market opportunity is greater than it had been previously it's not going to be about the money because the money has always been there. >> you're absolutely right i mean, that's why united rentals is in a lot of the country and they want to expand. remember, they've got to buy stuff. you know what we don't talk about enough, the expensing, the expensing of machinery i mean, that is going to -- >> most people looking at this say that is the biggest

immediate bang that's what we're going to see first. >> i wonder why the industrials are doing so well and machine stocks, because they are predicting that. david, you are absolutely right, if you don't some anythisomethio do with the money and already been able to borrow overseas, it is probably going to come back in the form of dividends and in the form of buybacks. >> the president for his part this morning, few hours ago says stocks and the economy have a long way to go after the tax bill is totally understood and appreciated in scope, immediate expensing will have a big impact and then goes on to say create many beautiful xbrobz. the point is it seems to be that we're not truly appreciating what's about to happen. >> i think that a lot of companies didn't know to truly appreciate it. i think that darden report ted a good quarter could they do more olive gardens? no, but they have a lot of other concepts that maybe they could build over the country

it's selective, let's not forget this is indifferent to where the money goes he believes if you buy back stock, that's positive. >> right, i mean, that's what others will say, it doesn't really matter at the end of the day, it ends up being in people's pockets in some fashion and it will be spent i don't know if that is the case and there are certainly plenty of critics who would say otherwise and this will not in any way including all of the economists who weighed in, never had hearings, actually increased gdp anywhere near where they were -- >> i think they will increase gdp, i really do i think more money i'm kind of a reagan backer here and i liked reagan very much reagan said if you get the government off the backs of the people you get that money in the hands of people, they do far more now, do they do far more for the poor do they do far more for the working poor i think the answer is no i never believed in triple down. what they do is they make it in

combination with deregulation, easier to do a project now, is the project going to be pipelined out of the permeon maybe. if you ask -- why do i default to united rentals, not just because it was their 20th anniversary, that's who you use because you can't is a ford to buy a caterpillar truck. and they are saying it's a boom in this country. i think we're in nonboom territory. i think we're in sullen gloomy territory -- >> because we've hit every record every single day? >> i'm saying new york, new jersey, if we were doing this show in louisiana, i tell you what, you know what the comment would be, it would be like hey, what new factors you seeing put up today >> i think we're in some world where we're like, are you kidding me 55%. i work until september for -- what >> i look around here, all i see

is cranes also they don't put up factories. >> made a big mistakes. >> put up a lot of buildings. >> that is a mistake supply will overwhelm demand if you're sitting on investment property in the area -- people come on the air -- >> the beneficiary of this type, we had howard on squawk box -- >> your house is a big benefit no -- >> not our house. >> you don't see it the way politico described it as a bill written by senators, largely from southern states, putting a knife in the side of blue states, blue coastal states, you don't see it that way. >> no, look, am i going to pay more -- we're going to pay more taxes. we're too focused in our own -- we're too focused in our own book if you're in florida where there are just swaths of land, where you can be able to expand as people come down because of what happened, i mean, i think there's going to be -- not a mass exodus, i lived in florida when it was a small state. now you have such an advantage,

florida. when you speak -- david, you probably don't spend a lot of time in u.s. concrete. >> no. >> probably not his thing. you are probably in with concrete goulashes, when they went back in time -- >> i do remember that one. >> cement goulashes but u.s. concrete is building more headquarters in texas than you would ever believe they are just -- in california, where there is kind of where you have to go for the jobs, again, those cranes, david. they are putting up buildings because they thought that real estate was going to go up in brooklyn that is ridiculous i got a house next to me valued at $5 million. you know who's tgs it is >> yes, i do manafort's. >> he lives next door -- >> he doesn't live there. >> but cleaning it up. it was derelict and driving us crazy. it was like a haunted house.

i love brooklyn -- >> you've been all over the place, you've gone from california to texas to concrete to your nextdoor neighbor and i'm still -- i don't know. >> that was anecdotal. >> i'm saying if we lived in texas and doing the show, it would be like so carl, how much did you save yesterday david, what are you going to do with the new found money instead it's like okay, are you going to sell? no, i can't, my property taxes are so high, i'm going to redo my kitchen because we'll own the house forever because that's how i feel. >> okay. >> hopefully some of those households own some stock because the nasdaq jumped to 7,000 about eight months after it passed 6,000. composite notches at 78th all time interday high and 70th record close, just shy of 7,000, year to date, nasdaq, 29.94% >> look, the president -- the previous president always felt that i felt that this is my view and if the market went up, so

the rich get richer. i look at 401(k)s and say to people, did you see your 401(k) lately people used to put it in the drawer and now you say, how did that happen? it happened because a lot of new policies but also because a lot of business -- the globe broke out. if you look at the worldwide indexes, we're not -- we're kind of in the middle of how we've done but i really align tech, invisiline, what is that doing millennials like their teach perfect for the experiential these are nasdaq stocks doing well maybe we ought to -- nvidia was up a dollar earlier. >> do you think if we get this vote in both houses and goes to the president's dervsk that we sell what people say are overbought conditions and the disconnect between our market and global markets. >> yes, i think we should sell off a little because in the end

this is a runup where we finally do recognize what happened there's nothing past it other than santa santa weighs in. >> love santa. >> you love santa? >> sure. >> finally found something i agree with. >> other than discovery is an inexpensive stock. >> you think it is >> john malone has been buying it i saw your interview. >> buying a little bit it went up the last couple of days. >> stop being so sardonic. i'm going to see hamilton for the second time. >> better the second time. >> he did. >> hamilton, we forget, this is a hamiltonian rally. >> except that he's the reason the financial services business is in new york city. he was a new york guy. >> i know the second national bank was second to pop in philadelphia it is a rally based on true mercantile -- he didn't like the

debt and we got a lot more debt. but i do think that this is a rally that is based on capital formation ever capital and i think it is positive there's more capital being created. >> this is true. this is a tax bill for capital holders, no doubt about that. >> it's a pro capital, not pro labor. >> how's that? >> still to come this morning, one ceo not pulling punches when talking about the boost his company is going to gets from the bitcoin boom find out what he says is insane. got big calls on apple, walmart and gm and coor's and putting in order for tesla sem, ene m iswhw come back. feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible.

and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

apple is moving lower in the premarket. the firm believes gains related to the iphone 10 have been priced into shares of the dow component. best buy, and target and walmart, apple's online source says buyers can expect delivery in the first half of january the nomura call says the super cycles in the late -- there's

nothing to flount the trend of 30 to 40% intercycle downticks. >> i think any close reading of the previous quarter's transcript would directly contradict this. there's nothing in here that i see as new in the sense of the doubters of the service revenue remain steadfast, it's not an important -- that's wrong. the doubters of significant upside next year i think they'll be wrong i think you own apple, don't trade it this kind of research and i have -- nothing against jeffrey who wrote it this is the kind of research that got you out of apple at 100, 110, 120, need i say more when you read this kind of saying here's the deal, then you get on the conference call and saying, why did i sell it?

what was that downgrade? what was that about? there's a notion here that if you get this kind of 15 times multiple -- 15 multiple equals super cycle highs the iphone peaked at 13 times, this time can't be different you know what? let's think about that should you have bought apple when the iphone 5 came out was that a mistake was it a mistake if you sold it off the iphone 5 how do we calculate, david do we look at the stock price? should we think about something more ethereal like the -- i don't know, emotions to earnings ratio. once again i find that this is the kind of piece that will drive you nuts and out of the stock. >> stock could be sick lickal once again in this cycle >> i think there's an service stream underestimated and i think china is coming back we forget about the power of

india. i think there's share take whenever phone komcomes up theya take and i continue to believe -- you know, this is also a gdp play at this time, gdp play. look at carnival that's a gdp play. fantastic numbers, also experiential my daughter rebrands herself on a cruise millennials rebrand constantly i look at this, this is taking into the account that many americans just got a break i mean maybe iphone sales will be weaker in new york so i can get one for my wife. >> i think you'll be okay. >> i'm going up to the 75th, do you think they have 10s. >> i don't know. >> i hear you can't get them in time for the holiday. >> i doubt it, at this point too late >> what do i do, give her a box and say -- >> it's coming. >> it's coming that's really a great gift, isn't it

>> ice always works, every kiss begins with kay, jared. >> get her hershey's and whatever, put hershey's in amplify. and throw in a ring. >> you'll be fine. >> how about cocoa puffs with a ring. >> how about cocoa puffs in general? >> i think they took the taste out. >> for millennials. >> i was tricked they took the color out. >> they had to take the taste out because millennials don't like taste. >> how could they not? captain crunch. >> they don't like anything you like i grew up on preservatives and i'm fine. >> you are fine. >> right i came out okay? >> we're going to get cramer's mad dash and count down to the opening bell in a minute look 'premarket, look maybe approach new records but we might be just short of the opening bell we're back in a minute

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♪ >> we have less than 8 minutes before the opening bell for tuesday. we want to talk a little walmart. >> start with a query. you've been queriless to me. do you remember the age of walmart? >> yes, i did it twice. >> you've got to go back to bentonville. this note today, this is a citi upgrade of walmart they do say home depot's run and costco run 20% upside get on the channel right there's a sense that walmart has

figured out how to do both offline and online doug mcmillan, mark lori, and what i will say, i believe i believe and i think this stock can go higher because i remember the days when you would look at walmart and be in the '90s and then look at it and it would be the 100s we broeke out of this range -- >> it's been an incredible year for the stock. he cratered the stock by saying listen we have to -- family endorses me. amazon had to get public to raise money. he had the waltones saying go ahead and win. i think he's winning when i go to walmart now, i find it exciting. i find the food section electric i find that there is a feel of treasure hunt and you can get things for five bucks that i paid 12 bucks for online it's not like where i would go to buy a diamond ring. >> no, but you feel as though there's been a change.

>> i know there's been a change. >> not just in the store but we're obviously talking about the omnichannel, jet.com purchase. >> they went from featuring two for one velveeta, buy one, get one, to being a fresh food aisle that is second to none second to none fabulous fresh food aisle. >> second to none. a 40% up year this year given the market's response -- >> and the reset that took place over here. but you think they can do it again? >> i don't want to say 44% but you continue to think there's momentum -- >> i think walmart is -- i think home depot and walmart and costco are -- they are the threesome that people want to own because the rest of them just seem like, well, you know what, they have upped their trading stocks, they are trading vehicles this is not a trading vehicle.

this is an investment vehicle. i've been to a bunch of walmarts since the last time we talked about walmart. wow. i have bought a lot of things i didn't want to buy because i love the price that's a dollar sign. >> got it. >> get those cement gool ashes off and focus on dribbles. don't go anywhere.

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so you can head into retirement with confidence. talk with your advisor about shield annuities from brighthouse financial established by metlife. the opening bell in two minutes. a busy day as the house votes on the tax bill this afternoon around 1:30 or 2:00 eastern time dow is up 7 or 8 and gm as well, jim, rbc takes it to outperform. >> i like that call. they improve capital efficiency, i like that. levered to a south american recovery i hadn't thought about that at all. it's still an incredible inexpensive stock on a price earnings multiple. i think they are much more

forward looking than people realize when it comes to anti-fossil fuel cars. it makes sense inexpensive stock for those still looking for stock that hasn't had the next leg up that the caterpillars and boeings have had. >> target goes from 51 to 52 they do say a new seat at the table in mobility. >> right not a new story necessarily. >> sometimes you get a piece that basically says hey, look at me i'm not an expensive stock maybe you should buy me. i thought this piece was like that. >> not the only one. coor's gets a initiative buy price at $69 there's it's more a middle innings -- >> jimny choo, it's rather remarkable the new shoes and boots. the selection has gotten -- david, you should listen up, the selection has gotten much better. >> haven't noticed, sorry. >> i've noticed and there really is and they do have price points

that's smart. >> let's get to the opening bell with the s&p at the bottom of the screen, it is bank of america and merrill lynch and ice, and the recent acquisition of the b of a merrill lynch business it's the bone marrow foundation celebrating a 25th anniversary we mentioned some of the big earnings tonight, already have darden out. >> i couldn't believe how strong the same store sales are that's a very good example what i'm talking about, that people are coming out of their homes and they are starting to go and go out at darden darden is middle america i have no pull at olive garden whatsoever it is disconcerting to me but that's all right, i don't need to get in front of other people.

it's a miraculous quarter. there's a lot good to like that stock can go higher from here. people are out of casual restaurant plays that they want to own and by the way, i'm shocked that quodoba off the books and jack in the box is up. that's because people felt it would get 300 million. it got a little more than that from private equity. there was a time when people felt when chipotle was on fire that it was going to be worth more some thought more than jack in the box, that didn't happen. pay close attention to bonds because i think the bonds are giving you -- people don't realize, suddenly going up in yield. we need that in order to continue the bank rally, which has been the leadership -- >> some people pointed to the bonds for the other reason, saying yields not moving up. >> you need a microscope. >> not the expectation. >> although we are seeing --

we're up a little bit -- >> 2.6 was the math gic line. >> we're seeing old style rally, people are excited about it. dividend boost and people want to buy it. i think that there's still this notion that fang is dead and you've got to rotate back at all times because fang isie yesterya and people say year over year is going to be phenomenal and fang will be just as good as ever or not enough. >> what do you make of the journal piece that says some of these tech giants may say their tax bill go up >> i saw that. that's going to cause some -- that's going to be disconcerting. i was in a discussion yesterday with scott wapner and we talked about the idea of what still

wor works. i think this what still works issue is rotating into things that haven't worked out yet. gill from jp morgan recommending scripps, that's the kind of thing, that's working. and what is not working is a reiteration that alphabet is going to have a big year but alphabet is going to have a big year i don't want to sell that. csx has come back nicely from the unfortunate -- >> mr. harrison's death. >> and railroad -- the transports which we always look to are just doing so well. that's a great sign. fedexreports soon. >> i want to see micron tonight. that's going to be important i see the market -- i see new areas go up and it makes me enthusiastic i'm not going to say excited because that makes people feel i've got to take down some blockchain. >> well, you would have been

done well to have thought laugh riot blockchain. >> you would be laughing. >> that's the problem. >> right now it's still ha ha. >> for bitcoin, i'm seeing so many people who made money and i always have to tell them the same thing, you haven't made anything until you sell bitcoin. but selling bitcoin is kind of like, it's like -- you're defacing the flag. right? >> it's unpatriotic. >> do you stand for the star spangled banner? obviously, there's like this patriotic urge to not sell bitcoin, even though you're up big. one of my friends is a late partner at goldman, he sold some -- >> you mentioned it in a national context because many would argue the greatest strength they have is incredible demand from all over the world and that is what differentiates thismania from the dotcom mania.

>> that's a good point bought by u.s. investors here. it's the chinese, it's the russians >> it's countries that are unstable with rich people. >> all over the place. >> rich people who are -- >> which may mean it goes a lot further for -- >> true. >> before it finally -- >> i think it will but i want to go back to what moves things david, in your world, crown holdings, employed a lot of people in philadelphia, buy a company called cignode from carlisle for $3.9 billion and people say, isn't that great crown holdings is in the game. they are in the game >> they are in the game. >> what did you think of that in your interview any reflections on that? >> i thought you're referring to rob kindler yesterday, one of key points he brought up which i

think is a salient one, all of the cash from overseas will not bring more m and a his point being capital has been available, anybody who could have done a deal -- it is opportunities. it is a lack of topline growth, all of the things that have been in place. >> everything -- >> when you hear pundits come on and say cash coming back -- >> it would be other things, perhaps more investment, certainly buybacks and certainly dividends, but not going to fuel m and a. >> okay, you're closer to it than i am. i spoke with denise yesterday about the campbell's deal for snyder's i felt great about it. i did not know snyder's was number one in pretzels there are no -- there is no pepsico. everybody wants to beat pepsico but they are not this was a step forward -- >> it takes campbell's to 46% in revenues. >> campbell's soup, the can,

down about 25% sfwl other than andy warhol. >> i don't know who the cover bid was. i believe it was far lower >> really? >> yeah. >> i didn't know that. that's interesting, but hillshir brands -- >> sometimes you have to do something, you have to pull the trigger and pay the price. >> campbell's needed to change what people think about campbell's if it is, pepperidge farm, very exciting, i remember it. now i'm thinking this could be an earnings story out 18 months because they are in different aisles and it makes so much sense. cape cod and kettle, these are good businesses and they can take them to the next level. so i like that i think that lance may be better than we realize. i'm not kidding. >> okay. >> i hear you. >> they are delicious. have you had them? >> i've had some of their

products. >> they are delicious. >> i've had some lance products. yeah >> carnival is having a nice morning. they see 2018 four dollars to 430. among with other discretionary names like harley. >> versus the millennial can we praise the management and remember where the cruises go? they go to areas that have been largely unable to come back from storms it doesn't matter. one of the people -- maybe like one of the best executives since the turn of the century, created a company that we remember as having terrible accidents and now we just think wow, what a great backdrop for pictures. >> twitter is giving back some

of the gains from yesterday, obviously after five upgrades, jpm, the most recent one. >> right. >> that was a lot of momentum yesterday. through the day. >> more than a one-year high. >> once again, i find that -- if you follow anthony, every time anthony just published -- has #peoplenow the guy is just -- he's a one man band to be able to move this thing. but i find that it's more exciting and i find it's less -- >> that's always good. here's a name we don't mention too ofteoften, lucadia, they own jeffries and we focus on them because it's been the first of the financial services companies to report earnings, which it did and it can be a tell on the trading front or perhaps not as much as in the past because jeffries did report strong numbers, 40% increase in investment banking net revenues, this company is the lead are m and a adviser selling companies

to sponsors and financing them so financial sponsors, lxts bo, what we would call the lbo guys, private equity and that has become a much larger part of their business which has brought fixed income and equity down to 45% of the overall business if you want to tell from the capital markets, strengthen equities underwriting or trading and fixed income trading, jeffries may not be the place to go any longer. lucadia owns jeffries and that is why it is up over 1% this morning on again very strong numbers, total net revenue, $3.2 billion. >> that's very good. >> yeah. >> kind of an outliar to some degree. >> very impressive. >> finally, jim, some discussion about how toys are the weak spot in a good retail season. toys "r" us going to shuder more

stores. >> i think that's a good call. when i spoke to ollie's bargain store last night, it's a regional going to national chain, toys are in excess in the system there's inventory in toys. >> there's split action on mattel hasbro today. >> you raise a great point the toy season is not coming together it's jst not coming together my father used to sell toys during this period and could never make enough. it's juxst the opposite. a lot has to do with video games which has been very strong really, just what people do. because when you have that nvidia chip, it's very lifelike, you can get lost in it nvidia really fighting to be the n, in fact, yesterday was up six, let's watch that stock.

it's been -- intel by the way is the best of this group these days have you noticed that? >> gaming chips? >> i mean they are doing a lot of different kinds of chips but i'm impressed what intel is doing. i think mobile eye will turn out to be a good acquisition some people felt they overpaid for that only 550 people there. but -- >> you don't believe they did. >> no. i think he's doing a good job. talking about brian krkrzanich >> it hasn't looked so good lately. >> well -- >> it's up -- it's turned again but you can see it -- i'm talking about the very end here, obviously year to date it's been incredible. >> qualcomm is not rallying. intel is a leader, texas instruments up a couple of bucks. lam research has been an underperformer micron could change the direction. micron, there's a lot of money micron betting on flash isn't

down as much as we think saying be careful western digital. you raise a good point the semis are not on fire. nice upgrade to cypress semi, a catch-all semiconductor company. hock tan stock hasn't moved. >> broadcom could be in sort of a holding pattern. we'll see, the pursuit of qualcomm will begin in earnest again next year. >> but you raise a great point it has not been a market leader and you love to see them the banks have been the leaders and the banks benefit from say little more inflection but really benefitting from dere fw g and tax. >> we're off the initial highs, bo bobis on the floor. >> we've had closing highs 70 trading days this year that's got to be some kind of record sectors almost all of them open to the upside. once again we see strength in

consumer staples and banks are up, semiconductors up. they haven't been that strong in the last couple of weeks but retail very rare day to the downside the good news is every day we hit new highs. the bad news is we're getting very, very overstretched here and even simple ways of looking at the market. i look at relative strength indicator and this is the classic way to look at gains versus losses for a stock or index over a very short time period the one i look at is the one most people use, which is the last two weeks when you're over 70, you're overbougt, when over 80, our really over bought i have seen it close to 90 but the s&p 100, the biggest 100 stocks in the s&p are over 80 right now. that is -- what that tells you, it's going to be very hard to sustain this kind of new records every single day like that it's unlikely that's going to continue dow is over 80 s&p 500 very, very close we've talked a lot about sectors in the last few weeks, for

example, we've been surprised that the retailers had been so strong in the last few weeks, normally they will sell off in the month of december. but given the rather poor performance this year, perhaps not surprising there's still life in them you see the same relative strength indicator applied here really overbought. that's very, very rare l brands, michael kors, costco, it's going to be tough to sustain the kind of rallies we've seen talking about bitcoin, cme launching their futures on sunday i would say just like the cbo, orderly volumes are not titanic, nobody expected them to be but the key thing about them, they are orderly here's what's very important to keep in mind the future's trading the notional dollar volume versus what it traded in bitcoin in the cash is still very, very small to give you an idea. the notion of value of bitcoin in the last 24 hours and i'm

just talking about dollar value, i'm not talking about what goes on overseas, just u.s. dollar, not japanese yen or anything else, little over $2 billion you put the cme in, it's a little over $100 million we're talking about magnitudes of more trading in the cash than in the futures contract. bear that in mind. i think that will eventually change because i think the most important thing that's going on here is eventually, you are seeing a move to a more order y orderly market it doesn't matter the volume has not been titanic the trading in the cme and cboe futures have been very orderly no weirdness or disruptions, there's been changes of mind thomas was on air yesterday, very worried about the whole introduce of futures in bitcoin. he's now changed mind on that and talked about listings will make bitcoin more popular. people are noticing that the trading is occurring

nothing disastrous is happening and a lot of people are opening up i think the next step, you'll see the big guys, jp morgans, for example, start allowing it for trading for their clients and that's going to be very important. now you're going to see futd you'res notjust with hedgers and people who might have bitcoin and want to hedge it, but you'll have people who want a directional opinion. i mean, sure, it's professional people who want to get in on this and express an opinion. overall i see it maturing and that's a good sign the dow turned negative, down ten points, back to you. >> bob pisani, thank you let's check in with rick santelli, good morning. >> good morning, carl. about a second ago we were trading at 2.43, now it's down to 2.42. stocks have rocked and rolled and the dollar that's just rolled, interest rates, specifically defined by a 10-year close, are unched on the year, that's a pretty good bet a lot of technical analysis in

10s has been very good take the high and lows in the year, low 2.30s and good home base for a lot of home trades and 2.47 where we held 2016 that's held, big wood under the 2.32 area. the high yield, 2.63, i'll tell you something, 2.44 is a good bet. unchanged on the year. if the equity markets keep rocking and rolling as we go into year end, i sense there's a whole lot more eyeballs on the fixed income market watching equities and you never know, things could happen quickly. now, bunds, we're not going to go up unless bunds go up in yield and bunds have been too low. took at the two-day bund the housing data was pretty good this was 15 or 20 minutes before it was out at 8:30 eastern the markets are moving higher. there's definitely going to be a bias towards year end. even the shots, this starts on

september 1st, we have not had a shots yield smaller on a closing basis than minus 67. it's getting really close and that's one you want to pay attention to if we cross that toll bridge, think the whole curve moves higher there to june of '16 charts, the pound dollar certainly hasn't gotten it all back but it's higher on the year i think that's a victory for the pound. if you look at the pound euro, maybe a more sensitive currency relationship given brexit talks. that has not traded higher on year than 2016 and has a long way to go. carl, jim, david, back to you. >> rick, thank you very much still to come this morning, bob peck will join us. we'll talk tech and see what he sees ahead for the fang stocks, which are down this morning. it's a downgrade of apple not helping and dow quickly goes negative, down 39 points back in a moment let's begin.

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getting some breaking news

regarding the s.e.c. and the crypto company >> what we have right now is the s.e.c. saying they're going to temporarily suspend the trading of the crypto company, this ticker, crcw this is one of those companies that's engaged in the quote/unquote business of blockchain or crypto currencies. a lot of these companies have come to light because they have skyrocketing value on what seems like no news whatsoever. they're going to continue to suspend trading starting at 9:30 a.m. eastern time, december 19th, and it will go through 11:59 p.m. eastern time on january 3rd. they have suspended tradingin the company because of concerns regarding the accuracy and adequacy of information in the marketplace about among other things the compensation for the promotion of the company and other stuff involving it, so a very big deal, and it calls to memory the big interview from last night on fast money with regard to long fin and how their ceo said his company's valuation

wasn't exactly worth what it was. something to keep an eye on. back over to you >> stock's gone from $10 to $5.75 in a couple months >> you know crypto abistics? you should look it up. good company >> what's on "mad" tonight, jim? >> stunning. market access, which is a company that trades bonds, and i think brings a lot of transparency to bonds. i really like the company, and i can't wait to talk to the guy. and we'll ask him about the various companies that are maybe laughable. >> we'll see you tonight >> still doesn't know what it is have you figured it out? it's the one tony soprano was involved in. >> maybe next time, david. >> proving too fast for me >> when we come back, douglas holtz-eakin onhe t vote, and senator corker's switch to yes don't go away.

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welcome back to "squawk on the street." i'm carl quintanilla with

melissa lee and david faber at post 9 of the stock exchange sara is off today. dow started off with a nice bang, but quickly went negative a touch. down about 16 points s&p roughly flat that's where the road map begins a lot going on with the record run for the markets. all three indices in the red we'll discuss what could derail the rally next >> nearing the finish line voting is expected to begin on the big tax reform bill. we'll take you live to washington >> and financial technology firm longfin stock making news. why the ceo told me his company's market cap is, quote, insane >> markets down following yesterday's massive rally with the dow posting its 70th record close of the year. the house votes this afternoon on the final gop tax bill. for more on all this, let's bring in michael, chief u.s. economist at jp morgan, and larry mcdonald, from acg analytics. good to see you both so let's start putting together some final verdicts as the legislation as we know it,

impact, let's just say on 2018 what do you think? >> i think something between a quarter and a half percent on gdp growth with some of that coming through higher consumer spending so in the aggregate, household disposal incomes will be lifted by over $100 billion next year, and some coming through higher corporate spending the tax code will get sweetened up that should support next year and on into 2019 as well >> is it an inflationary bill? >> only a little bit we're not talking about a huge delta on growth. we're at full employment, so any push to growth we see here should tighten labor markets further, put upward prerth on inflation. it is supportive of inflation. we'reinate looking for run away inflation. >> bond markets are not seeing that either, right >> right >> one of the tell tales >> we think this is supportive of further fed rate hikes. we will be, as i said, we're operating at full employment any added push to aggregate demand is something the fed probably wants to lean against a

little bit in terms of the policy setting >> larry, the takeaway for equities after what michael just said >> well, really, you know, wall street loves to do these 2018 forward forecasts. but it's really most important, the first quarter. the year forecast is helpful, but let's focus on something that's really helpful. and this is really going to be a cash for clunkers january. you've got thousands if not millions of investors that are holding on to gains, they're holding on to gains. they want to sell their stocks in january and push that gain out to the next tax year. and so if you remember cash for clunkers 2019, it created really massive dislocations in the auto market and i think right now, you just have too many people that are waiting for that new tax here to take some gains. and i think that's why we're setting up for an ugly january >> so how ugly is that going to

be, larry, and how about the promise that companies will actually see better growth, the price targets will be coming up on the part of wall street because a lot of wall street has not factored in a 21% corporate tax rate for earnings. you take a look at the notes out there, and they're ratcheting these things higher as the tax bill looks like it's going to kraungs the finish line. >> you know, you look at a yield curve. you have two tens have flattened almost 100 basis points in the last five, six months. and wall street is very crowded. one of the things we do is look around the street at all the forward year records, and the entire street, the entire street is calling for more flattening and i think the big surprise for the first, second quarter of next year, is you're going to get probably steepening because the growth is there, as you pointed out. the global growth cycle is very impressive, the most impressive in seven years so the entire street is telling us the curve is going to flatten. and once again, they're going to

be caught on the wrong side of the bed, and we're going to steepen in the first half. >> are you in the flattening - >> yeah, we are. part of it is because we think the fed hikes four times next year at the same time, the ecb will be continuing qe for the first nine months of the year, and we'll get into the ninth year of the expansion. it's pretty rare to have a steep curve nine years into expansion. rare to have nine years of an expansion, but you wouldn't expect a steep curve >> what you said earlier, you could see the tax bill adding between a quarter and a half a percent. half a percent off a 2% economy is a big percentage increase in growth >> right >> yet i'm looking at your research here, you see consumer spending actually coming down a bit next year. >> yeah, consumer spending this year did get a big support from the saving rate. we do expect maybe some of this windfall from the tax package will be used to replenish savings. that said, consumer spending was very good this year. for it to come down next year

isn't a bearish outlook. it's just -- >> right, expanding at 2.5% annual rate the last three quarters >> it has been a good year >> savings rate hasn't collapsed by any means, has it >> two years ago, it was at 6% now it's at 3% it's down a fair bit for a two-year span. >> right, and so households, you argue, will shelter some of that, keep it inhouse. >> historically, consumers when you have these type of tax windfalls tend to spend about two thirds of it and save about one third. that was the case with the '01, '03, and '08 tax cuts. maybe it's a little different this time around, but generally speaking, we think more will be spent than saved >> look beyond the first quarter. let's say people do take profits. what is the trajectory for the markets in the back half of the year, and if michael says that the consumers are going to spend, most of that tax cut, won't that have an impact on stocks >> i think you could have a

rough first quarter adjustment, and then - >> sure, okay. >> then a nice midyear bounce, i think would be very impressive here's the thing right now, the republicans are plus 47 in the house that's very important. in the blue states, as you guys have been pointing out the last week, there's a lot of damage here in the blue states. so those are states that republicans have some house seats. republicans lose the house, the mark's going to start to factor in disruption in say the third, fourth quarter, because that sets up the democrats will then hold the committee heads, and then they can really make things pretty miserable for the white house. so i think that's the big wild card, the midterms and the republicans losing the house and that's the key to really the end of the year performance. >> larry, bespoke hadidaty on what happens when all 11 s&p sectors trade above the 200 day, which happened earlier in the month. three months out, six months

out, a year out. they're up in the limited sample, 100% of the time any reason to think that might be different >> here's a better stat. in years where the s&p and say the nasdaq are up 20% plus, you want to look at the tax loss sellings we have a tax loss basket. chipotle, under armour, advanced devieshs, oil names. these sectors right now have been oversold toward the fourth quarter, because people are thirsting, reaching for losses to sell against their gains. so in the first half, i think the key is you're going to have dramatic outperformance from some of these beaten down sectors, and that's where i would overweigh. >> sounds like january could be interesting. we'll find out in just a couple weeks. michael, larry, thanks good to see you both >> the s.e.c. is suspending the crypto company we want to get back to dominic

chu for more on that >> obviously, no trading because the shares have been suspended from trading by regulators at the s.e.c. a little bit of context with regard to the headlines you are seeing, and by the way, it's one of the top stories on cnbc.com the crypto company is a company that went public in its current form in the end of september of this year. at the time, it was worth less than $100 million, with an "m" dollars. it is now at the time of suspension of trading estimated in the market of $11.3 billion with a "b. this has caught the eye of regulators a lot of these companies have come public in recent weeks, putting some description of bitcoin or cryptocurrency or blockchain in their descriptions, and they have given them free reign in terms of evaluation. in this company, crcw will be suspended from trading until just about midnight on january 3rd, 2008. the reason the s.e.c. is giving

this order to not give quotes or trade in this stock is they question the accuracy and adequacy of the information that the company has and the statements they're filing. also questions with regard to potentially what they call manipulative transactions in the company's stock in november of 2017 so a lot of interesting context with regard to these crypto companies, but remember, as you mentioned on fast money last night, it's very much a buyer beware scenario for many of these companies and i know we'll talk about a lot more of these in the coming weeks. >> a lot of companies out there hoping that adding blockchain to their name will give them market caps of millions and billions of dollars, which we have actually seen we'll get more into that later on on "squawk on the street. thank you for that crcw, again, halted here when we come back, voting on the gop tax overhaul set to begin today. we'll speak to the man who may have flipped senator bob corker on the tax bill, douglas holtz-eakin is with us later >> and later on, the holiday

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breaking news out of senate bapging. kayla joins us with more >> good morning. the senate banking committee has officially blocked president trump's nominee to lead the export/import bank the vote was 10-tlaesh with two republicans voting against that nomination a rare move considering that scott garrett, the nominee for

the president and chairman role, is a former congressional colleague, having representative new jersey in the house of representatives and as a founding member of the house freedom caucus until earlier this year. garrett's position on the bank had come under recent criticism because he called it an example of crony capitalism, and one of those republican senators, mike rounds, of south dakota, where 12 companies benefit from xm financing, described garrett as an abolitionist. two other senators, senator shelby of alabama and toomey of pennsylvania, now voting against the four members of the board and the inspector general nominees so effectively, you are having this stalemate at the committee level for all of the nominees at the export/import bank toomey and shelby said garrett is the guy and that if it were anyone other than garrett or if his nomination didn't proceed, they would vote against everyone

else the two leaders on the committee noted there are no senate confirmed positions filled at the export/import bank we'll see how long it takes the administration to come forward with a new nominee and new personnel for the rest of the board. a stunning move at the senate banking committee this morning >> it is thank you. kayla tausche in washington. >> also in washington, the final push for tax reform is happening at the house is expected to begin voting on the gop bill today. mitch mcconnell also expecting to hold a vote later this evening. joining us is douglas holtz-eakin. former director of the congressional budget office. great to have you with us. >> thank you >> so one of the key senators here, senator bob corker and apparently, according to politico, you were summoned to his office he grilled you with questions, you gave him answers, he flipped. what did you say a lot of other americans out there might need to be flipped too. >> well, i think it's flattering to think i somehow made the difference in senator corker's

vote he talked to dozens and dozens of people. i really respect the due diligence he did in thinking about the bill obviously, he's deeply concerned about the deficit. i applaud him for that the last administration left behind $10 trillion in deficits over the next ten years and you have to make a judgment as to whether the growth consequences of this bill are sufficiently large to make it worth incurring additional deficits, which we will he came to the judgment that the answer is yes. i think that's a considered judgment and i applaud him thinking hard about it >> you know, making that sort of decision whether or not it's worth it sort of the crux of that is deciding what that growth is going to be. and economists on the street are out with very varied opinions. so what was that threshold and what is the threshold for you, for that matter? >> i don't know what his threshold is i think we know the status quo is a dangerous position for the united states. every company when they look at the tax consequences of their operations puts their

intellectual property offshore some put their production offshore if they make any money around the world, they leave the earnings off shore, and in m&a activity, the headquarters end up elsewhere leaving our tax rules unchanged is not a particularly attractive proposition. everything in this bill changes the dynamics in business taxation to give better incentives to innovate and invest in the united states, to hire people here, and hopefully raise productivity and real wages. that is the crux of the important growth proposition real wages have not been rising because productivity growth has been so weak this bill changes the tax dynamics on that front and i think that's what makes it worthwhile >> doug, some of these are more recent assessments of the bill i know you have surely seen the tax policy center this week, 2018, middle-income cut, $900. top 1%, $51,000. are these still flawed they got knocked around the first time around, but knowing what they know now, is it still

wrong? >> so you can't do everything with a tax bill. you know that. there are always tradeoffs, whether it's distribution versus growth but in the end, i think those kinds of arguments are basically de facto arguments for the status quo as i just said, we have an underperforming economy. in 2016, households that worked full time for the full year saw zero increase in their real income that's just not acceptable and i don't think voting for that as the status quo is a good idea >> doug, specific to technology companies that have moved their ip overseas to low tax jurisdictions and therefore generate so much of their cash there, which is why it's offshore how is this bill going to change their behavior i mean, it would seem to me they'll continue to do more or less that. >> well, there are some specific provisions aimed at i.p. de facto patent box which would give you incentives to locate that i.p. in the united states if you generate global earnings. get a tax treatment that's more attractive than ordinary so that's a specific target that

allows us to compete on the i.p. front. more generally, we're going to a territorial system for the first time in u.s. history that puts us in line with other competitive companies. we're getting the tax rate down to something closer to the average of the oecd. there will be strong expensing insentives all of that makes the tax consequences shift from what they used to be. taxes don't drive every decision, we know that, but at the margins where they used to push things offshore, they're now not going to do that >> what if this doesn't change corporate behavior, doug, and some studies have found with the 2004 repatriation tax holiday, 79 cents for every dollar brought back is actually spent on share repurchases or buybacks or dividends does that matter does a dollar in share repurchases matter less to the economy than a duollar in wage increases? >> i think there are three things to think about. first, it's not just corporates.

we have comparable changes in the noncorporate business tax incentives these are economy wide improvements and incentives. second is the repatriation here is not like those holidays this is a patriation, as of a date certain, every dollar overseas will be deemed to have come back to the u.s., and at that point, firms have a genuine economic decision to make. do we bring the money back or not? i think a litmus test of whether we have gotten this right is whether the money comes back if after everything is said and done they leave the money in belgium, that would be a bad sign for the incentives in the bill when the money comes back and a corporation does a dividend or a stock buyback or reduces its debt, that's deemed as a failure, i don't think that's right. if that firm doesn't have good investment opportunities, i don't want them using that capital. i want it put back into capital markets so some other entity can pick it up and make a valuable incentive using the incentives in the tax code. >> finally, obviously, it's an

historic bill. very hard to get this kind of thing done and signed. if you had your druthers, would you have timed it differently in the business cycle than the way it finally came about? >> i wouldn't. and i think the reason is i don't think the case should be made that this is a stimulus bill that's the wrong way to think about it what we need are genuine changes in the long-term trend growth rate of the economy and in productivity that's not a business cycle thing. you want better incentives in slumps better incentives when you're on trend, better incentives in boons. that's how you should think about a permanent tax reform it shouldn't be tailored to the moment it should be something you want at any point in the cycle. >> all right, doug, great to hear from you. douglas holtz-eakin. when we come back, it's amazon and everyone else new data shows the staggering difference between the retailer and its competition. we have details on that after a short break. take a check on stocks at this hour wn8 ind,l moderately in the re do 1pots we'll be right back.

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when it comes to online shopping, there's amazon and everyone else. if you think retail giants like

walmart have a chance to catch up, some numbers may prove you wrong. courtney reagan joins us with exclusive results from our cnbc all america survey >> cnbc all america economic survey has tracked dramatic shifts in consumer spending, both over the course of our survey and year over year. this year, it crowns one retailer king. when it comes to how americans are doing, most of all of their holiday shopping, online is the preferred method again far over here at 45%, far above the second favorite category, big box stores that's like walmart or best buy. and 2016, online was the top choice for the first time in our survey but it's grown by 5% this year, and look at the pattern since we first asked this or since we asked it rather a decade ago it's doubled since then. pretty remarkable. when it comes to which websites americans shop online, even when you let them give you two choices, there is one far and away winner. look at this

76% of americans say they do most or all of their shopping on amazon.com number two isn't even close with just 8% of americans choosing walmart.com for that option. and what's more, over the last three years, americans are both searching more and buying more from amazon. 65% of adults who shop online search amazon always or most of the time that's 16 percentage points higher than when we asked that question in 2015 42% of all shoppers buy from amazon always or most of the time that's up 14 percentage points from 2015. after holding steady last year so then when we asked what's most important when you're shopping online, free shipping wins by a landslide here then ability to compare prices comes in second. which is interesting when you consider that amazon's dominance keeps reappearing because it does cost $99 a year for a prime membership to get free shipping on many items, that's not free

it's $99 a year. unless you hit that threshold and then you get free shipping too. it's an interesting thing to consider carl >> courtney, you know, the breakdown between walmart and amazon in terms of online shopping, does that reflect the market share they have it's almost not surprising that amazon has such a huge share of the online shopping this season. >> that's a really good point. we talk a lot about walmart's online retail business right now because it's growing so strongly, because it started off a very, very small base. walmart doesn't tell us exactly but most analysts estimate it's only about 5% of their total business walmart is still the world's largest retailer all in, but amazon definitely dominates online with the vast majority of their revenues comes from that source, and walmart's just trying to grow that vertical of the business >> all right, courtney, thank you. good stuff when we come back, as the house get set to vote on the gop tax bill, worries for property owners are mounting as they

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good morning, everyone i'm sue herera here's your cnbc news update at this hour. the crews are working this morning to clear the washington highway blocked by that derailed train car. federal officials confirming the amtrak train was going 80 miles per hour in a 30-mile-per-hour zone when it careened off an overpass on monday, killing at least three people >> british police have arrested four men on suspicion of plotting terrorist attacks the men were arrested at their homes in sheffield and chesterfield in northern england. they ranged in age from 22 to 41 years old and have not been formally charged palestinian protesters continue to clash with israeli

troops in the west bank. part of the ongoing unrest in the wake of the u.s. recognizing jerusalem as the capital of israel palestinian officials say they don't trust the u.s. to broker any future peace deal with israel and a mystery donor dropped off this check for $200,000 in a salvation army red kettle in minnesota on saturday. the donor, who wants to remain anonymous, gave the organization a heads-up that the hefty check was coming and that it's legitimate renewed your faith, doesn't it that's the news update at this hour i'll send it back downtown to you. >> sue, thank you very much. black rock releasing a record that says etf industry assets soared beyond $4.5 trillion for the first time ever, with two weeks left of 2017, what is 2018 looking like? joining us, martin small, black rock head of u.s. shares good to have you back. good morning >> good morning. good to see you. >> we talk about this a lot, but maybe put in perspective what

the industry did in 2017 >> 2017 has been an absolutely phenomenal year for etf growth we have crossed $620 billion in new assets coming in to global etfs this year for some context, that's a lift of 75 plus percent over the three year average of $350 billion. this is really etfs as lubricating agents for fundamental business model change and how asset managers are trading, and how wealth managers are building portfolios >> is there any way to top those numbers next year? >> i'm pretty bullish on next year again, i think the changes are structural it's how people are doing business wealth managers are lowering the cost of their investments by using etfs as asset allocation tools and global institutions that previously trade in securities and derivatives are using them as more efficient way of changes they're not just market and cyclical change. it's going to benefit the etfs and our clients.

>> pivoting around what thematic narratives where do you see the growth coming if in fact we're going to see disruption in various areas of the global economy. >> absolutely, i think you continue to see an economic expansion that has real legs and i think that's really brought a lot of new money back to the marketplace we have seen strong growth pretty much across the board it was a perfect year for risk assets you had acwe up 20 plus percent. you had emerging markets up 30%. but even high yields, investment grade oil all up high single digits, double digits. i think people are getting back into the marketplace and using etfs as a very efficient way to do it. >> you stated perfectly why etfs should work in that environment, based on you could throw a dart on any class and it would go higher they're winning and looking terrific, in an environment in which stock picking might make more sense, what happens to etfs

>> there's this incredible transition that's happening in the world of index investing it's not like god handed down the s&p 500 on the tablets of sinai. indexing doesn't have to just mean the market cap outcome anymore. they can be more than the market we have value oriented etfs, quality oriented etfs, low volatility etfs. and that's where we're seeing the growth, not just in big broad market indexes but also really in more granular precise outcomes that allow people to control the risk return profiles they're taking i really don't think you're going to see a world where there's necessarily market go down etf bad i see a world where people are using etfs in more precise ways to get risk return allocations iptheir portfolios >> those who might argue that sector correlation coming down from 90% a few years ago to close to 50% now is not a bearish picture for the industry >> no, i really don't think it is i think if you look at average

correlations across all sorts of asset classes, even before the advent of etfss and indexing, a lot of the average correlations were higher. the reason you see a lot of that is because of central bank activity in market forces. it's not because of etfs >> in terms of cost for the consumer when it comes to active management, is there a call from black rock to say perhaps active managers will have to charge more next year, which may raise costs actually to just run the fund does that help etfs? >> i think overall the cost of investing period is coming down across the board if you look at even the categories in active management, traditional open end funds that are doing well, they're lower cost investments really, everybody wants graut quality at great value i think you'll see active management flourish, just not at 80 assets points it's particularly doing it in places that aren't indexed very well super down in credit, secure ties to assets, or more less

efficient areas of the global markets, for example >> martin, some amazing numbers. we'll see what 2018 brings thanks for your time martin small is blackrock head of shares. >> the gop weekly press conference wrapping up ylan mui is there with more. >> this is a monumental day for republicans, and house speaker paul ryan just addressed this issue at his news conference he also addressed speculation that he might step down now that it appears tax reform is in the bag and not run for re-election in 2018. ryan pushed back saying, i'm not going anywhere anytime soon. he has literally been working on this issue for more than two decades. and with the house scheduled to take a vote on this in just a few hours, he said he is very much looking forward to the culmination of all of that work. he also doubled down on the question of economic growth,

saying tax reform can get us a 3% economy, and that will do a lot to sort of dilute the criticism that the republican tax bill primarily benefits the wealthy and corporations versus the middle class you also heard leadership talk about pulling together as a team in what republicans can achieve when they do that, with the failure of the health care bill, which was their first legislative initiative, he talked about growing pains in the republican party now, they're trying to show that they can not only govern but also score some major legislative wins guys >> all right, historic day ylan, thank you very much. watching the speaker and the leadership meeting today >> the trump white house pushing some policies aiming to benefit drillers and infrastructure projects like pipelines as the new facilities come online, though, question remains, is the worst behind the oil industry? our jackie deangelis is live at a new plant in bay city, texas, that's supplying pipelines for the booming shale industry hey, jackie. >> hey, good morning to you, carl that's exactly right

the two big themes that we're watching in the industry are trump administration policies that are supportive to the drillers and the pipeline makers the infrastructure projects. but also at the same time, we're watching oil prices. they have been ramping up a little bit over $50 a barrel, and drillers are drilling, tapping into that u.s. shale supply that we found just a few years ago. the constructor of this plant in bay city, texas, it thinks it's poised to take advantage of both look at the facility here behind me this is where they produce seamless steel pipes 1.25 million square feet and a nearly $2 billion investment the seamless technology makes the pipes stronger and safer they say all of this is going to serve the shale industry, part of it right here in texas. and that demand is certainly going to be strong enough. the project started in 2013, before the trump administration policies, to be fair

it employed 20,000 people during construction it's going to have 600 permanent employees. it's believed that more projects like this are going to pop up as well because of what's happening in the backdrop that i mentioned. that shale boom and the supportive administration. the only question now is what will oil prices do when they're over $50 a barrel, it certainly makes sense to pump and build those infrastructure projects but just two years ago, they were closer to $25 a barrel. the ceo told me this is a long-term project. he believes the demand is going to be there. that's why they took the time and made the investment to set up this facility, and they believe long term it's going to be profitable. guys >> jackie deangelis, big story for the complex. thank you very much. bay city, texas. >> when we come back, the house preparing to vote on the sweeping tax overhaul. we expect a vote to begin around 1:30 or 2:00 this afternoon. what it could mean specifically for your property taxes.

and some big swings for financial technology firm longfin, why the ceo told melissa its company's market cap is, quote, iannse. when "squawk on the street" comes back dow down 32. ing? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

what is one strategist calling the contra technology play for next year find out at tradingnation.cnbc.com more "squawk on the street" coming up.

a report from rudy's estimates the tax bill will reduce property values in manhattan by 10% and the suburbs will be hit harder robert sat down with the chairman of the largest brokerage firm in both new york and florida. and he joins us now with more on what is still a developing story, robert. >> developing, david, and a lot of eyes on what's going to happen to all real estate in the high tax staets baize it's the most valuable real estate in the country. saying the tax bill is going to hurt some segments of the real

estate market in new york and high-tax states, but he said predictions of a mass exodus of rich people to florida, they're overstated >> the city will not have a mass exodus it will not really hurt prices in the city. in fact, we effectively have the bill we know what it is already we know there was going to be happening. we knew s.a.l.t. was happening for a while. meanwhile, the stock market is still going up doing huge sales we have done some of the biggest sales in the city over the last month. >> just a word of caution. saying that the mid-market in new york city, hard to believe it's the mid-market, but that's between $4 million and $10 million, that could take a hit with prices down 10% or more but he said real estate prices in new york are already down about 10% since that peak in 2015 so this could actually get sellers to be more realistic he said that the tristate area suburbs, they will get hit harder since they're further removed from those big jobs in new york city. as for florida, he said this

could prove a lift to the upper end of the market, but florida has already been strengthening in recent months because of all the demand from retirees one big impact of the bill will be a construction boon he said the tax bill's generous rules for expensing the full fit out cost of construction, a little complicated , but basically, it's going to lead to a huge surge in hotel and office construction other brokers are not as optimistics. new yorkers deduct $54,000 in income, state and local every year $14,000 in property taxes. those are now capped at $10,000. broker donna olson said this bill is, quote, a dagger in the heart of the real estate industry in new york and she's already had buyers cancel. for now, though, the big sales in new york remain strong. three apartments just sold at 432 park, one of those big new towers, for a combined $120 million. that's one buyer buying 3 apartments he's going to put together for

$120 million so at least at the very top of the top, it remains strong we'll have to see in the coming months what happens after the bill passes. >> my guess is that's not a new yorker buying those apartments, robert >> you're right. that $120 million was an overseas buyer >> i'm sure. but overall, the question is, the economy, you know, 37,000 people pay half the income tax in new york. how many people will move here, what kind of businesses will think twice about ever moving here or expanding given the disparity in taxes i would assume that plays out over time, and then if the budget comes in light and services are cut and quality of life gets hurt, it could go on for a long time with the ultimate effect being an impact on all sorts of asset values >> absolutely. and to your point on the tax roles, we probably will see an impact and i think there are those people that already have a house in florida, they're already semi-retired and this will maybe push them to do it a little faster, so i think that's the

group that's going to move the quickest it's going to take time before we see whether it leads to fewer jobs, high-paying jobs in new york, or whether highly paid, highly skilled workers say, look, i would prefer to lichb and work in a state that doesn't have such high taxes that i can't deduct it's going to be a long time before we figure out what the impact is. but for right now, new york real estate is very, very strong. and a lot of that could be tied to the stock market. >> okay. thanks, robert i'll be in austin, texas, starting next year, but i'll see you from there >> you'll be an s-corp, too. >> thank you let's get to the cme group in chicago rick santelli with the santelli exchange >> i would like to welcome my special guest, the tax man, grover norquist. thanks for taking the time >> good to be with you >> all right you know, i tried to discuss this with everybody. with regard to tax reform, what they see, how they feel about it and the one common thread i hear

is, yeah, i think it's going to be good, but it's all going to end up in buybacks real quickly, i understand the nervousness about buybacks eight years of easy money and more than that with regard to -- sorry, a little less than that with regard to the fed paying interest on reserves so people are conditioned to think only the rich benefitted the way they did for the last eight or nine years. because buybacks, with all that money put aside, companies may invest in themselves through buybacks, but they dont seem to be ceding anything else. are all buybacks created equal and is that a negative with the money ending up in that channel? >> no, there's one, maybe $2 trillion of money repatriated. i want to be invested in a company that gets $3 billion back and says the best way, the highest return we can possibly get is to invest in our own firm and buy our own firm the company that wants to invest in somebody else's firm is not a vote of confidence in their own

product and their own capacities and if a company buys back shares, that money goes to a new investor, and they reinvest. the money doesn't disappear. i never understood this argument against buybacks it's great idea that money goes to a new investor. >> many people see this and of experience, many middle class have experienced, they haven't done well in the last eight years. that's what they see as a channel that isn't affecting them so i understand it i guess the question i should ask you is, would it be better instead of buybacks, all these companies tried to invest in something different, something new, an additional business, maybe, build new factories what's your answer to that >> well, it's not a question of who does it. the company themselves can invest in themselves and then the money they buy stock with goes somewhere else. but the world is changing. we have full business expensing

for most business investment, and that's going to reduce the cost of new investment in any sort of opportunity. and we're taking the after-tax income that all companies get, including subchapter ss and passthroughs, and reducing the tax and therefore reducing the tax and increasing your after cash tax flow the value of every one of these firms is going to go up, and the interest people have in putting money in there because they could invest less expensively and the payback is greater, you're going to see a lot of new investment from overseas not just repatriated stuff guys in brazil who live in brazil will be investing in the united states. >> all right another issue. everybody's talking about pass through shenanigans. wall street journal had an op-ed, should have lowered the breakest 28% i get that, but there's a lot of issues reconciliation at 51 votes, but is it pass through shenanigans

or pass through and tax planning shenanigans, tax planning, tomato, tomato, finish us up is the aspect of this going to be gained? >> it will be, but their efforts to make sure it's gamed, the way to solve is to take the rate for 28% for individuals, that solves the pass throughs. half americans work for a pass through, little less than half of americans work for a c-corp the pass through needs to be lower. do it by taking the individual rate down or doing the more complicated effort congress is doing to exempt certain income that makes sure how much you invest in the pass through we are approximating taking that rate down and that will help with more investment and more jobs >> grover, thank you as always always interesting to hear your view on anything related to taxes. david faber, back to you >> thank you, rick rick santelli. let's go over now to john forth, get a look at what's coming up

on "squawk alley." john >> bob peck, head of internet investment banking at credit sweeps is going to join us to talk about the outlook for 2018 in tech. when you think about what's happening in media, what's happening with m & a, no better time to dig in that's coming up on "squawk alley" mary had a little lamb whose fleece was white as snow. but after an electrical fire from faulty wiring, mary's vintage clothing and designer shoe collection were ruined. luckily, the geico insurance agency had recently helped mary with renters insurance, and she got a totally fab replacement wardrobe at bloomingdale's. mary was inspired to start her own fashion line, exclusively for little lambs. visit geico.com and see how affordable renters insurance can be.

welcome back to "squawk on the street," i'm dominic chu markets are starting to lose momentum here after setting record highs across the major indexes yesterday. tech and telecoms among the sectors leading stocks to the downside, but check out utilities. that group has been down as much as a full percent in early trading, declining more than a percent in yesterday's session take a look at shares of ppl, aes, exelon. as we talk about the sector overall, interest rates play a part in this guys, melissa, the ten-year interest rate for government bonds, 2.45% we see a rise in yields and the utilities taking a hit thank you. >> thank you, dom chu. shares of longfin plunge after comments made by the chairman and ceo last night on "fast money. here's a story behind longfin. two days after going public last

week, longfin bought a company that offers a block chain solution to importers and exporters, sent his company stock surging over 1,000% in just a couple of days, even though zidu has yet to make money. here's what longfin's ceo told me about the boost to his company. >> i'm a profitable and good company. their people are dragging this, not justified. if you look at my revenues, i value my pricing look at it i value my pricing at $5 $300 million >> in a volatile 20 hours, shares down as much as a third, 33% last night on the back of the interview, now down about 5% containing the losses, but this morning we're hearing the s.e.c. is halting shares of crcw, the crypto company there is this notion you attach block chain to the company's name and, bam.

>> crcw may be a fraud, though, fair to say. but still up 1,000%, melissa, for the week >> from 5 to 142 in a matter of days >> volatile addition to your show, as well. my gosh. crazy. good to have you, melissa. when we come back, a look at tech in 2018 bob peck is going to join us "squawk alley" is up next, so don't go away.

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