"squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at u.s. equity futures. it looks like things are sharply positive dow futures almost in triple digit territory, up by 99 points s&p up by 9.5 points the nasdaq up by 25 points as the senate early this morning passed that tax bill still has to go back to the house on a technicality. yesterday we saw a down day for the markets. the dow down by 37 points. we'll see what happens but the senate passing early this morning that tax bill overnight in asia, look and you'll see the nikkei was up by a tenth of a percentage point.

decline by a less than a percent for the hang seng and shanghai down a quarter percentage point. in early trading in europe, there are red arrows across the board. the dax is down by a tenth of a percent. same thing with the ftse cac is down by slightly more than that. declines also in italy and spain. looking at crude oil prices, you will see that crude oil is up about 18 cents to 57.74 let's look at the ten-year yesterday the ten-year topping 2.4% we'll look at that in a bit. here it comes. >> yep >> 2.455%. slightly lower than yesterday, but still above 2.4% this is past the point that rick santelli told us to watch for a

breakout >> i read that all of the money not spent on -- it's not true, but all the money not spent on taxes is going to debt services as rates go up >> yeah. >> some of it will be. >> as rates go up, yeah. i was thinking about that this morning as they talk about the government funding needed for the projects i think it was the new york city subway i think what happens as interest rates go up? it's going to be so much harder to service >> did you bring my gift in? >> i did not >> i ordered mine from amazon. i don't have it for you yet. >> you did >> yeah. "art of the deal" by donald trump. you already have that? >> yes >> you got me "what happened" didn't you or -- what did you get me did bernie write a book? >> "unconservable truth. >> right >> i have something special for you. >> you do? >> you're going to like it

it's not a joke gift either. it's not a mindless joke -- >> i'm glad i talked about this then because i'll have to think about something then trying to think. you have the noise reducing ear plugs already. can't get you that for the flights. >> i'm good on that. what about a wheels-up card. >> oh. i'd take that. but just a card with my name on it >> just the card >> that's what i was thinking. maybe i could get you a couple of uber rides in europe. >> that's an idea. i don't have the account i don't have one >> that, i can work on >> i'm a five. >> that's a segue to this story, breaking news early this morning. the european union's top court ruled that uber is a transportation service and not a digital company.

the ruling could have a major implication for how uber is regulated throughout europe. uber issuing a statement saying this ruling will not change things in most eu countries where we already operate under transportation law. however millions of europeans are still prevented from using apps like ours, so we will continue the dialogue with cities across europe this could impact gig economies, and change a lot about what people talk about, the future of work and the workplace >> it's been a huge point of friction >> huge point, and then does things that go on in europe move here we had the same debate here about contractors and whatnot. the argument has been, there's been many, but uber has always argued it's the taxi unions that have been trying to effectively make this difficult for them

but there's also larger context of how we employ people and everyone is a contractor >> i'm sure the taxi people would like to say we would like to be free of this regulation. this puts us at a distinct disadvantage -- >> the taxi guys want them to be regulated. >> or they would like to be unregulated themselves, just make it a level playing field. >> for most taxi guys, they don't want to be unregulated they have the medallions >> what are the medallions worth now? >> a medallion, the high was 3 $1.3 million came down to about $33,000 maybe even lower they came down in the past 18 months >> it's like bitcoin now >> it seems like it's tough for taxis. >> i would rather get in an uber >> they seem nicer now >> it's pretty jammed in the

back of those taxis. i was looking at one yesterday they have the tv screens in your face your legs are jammed in the back i don't know >> the pass-through thing, andrew, people are talking about that now >> the tax reform? >> if you switch, you get no healthcare >> right >> you get no 4 01 k >> we talked about this. >> it's tough to switch then >> there's a lot of reasons -- going to pass-through -- >> for you, i mean >> for me or anyone who is a w2 player if you have these benefits it's tough. >> you don't need to worry about it so much >> but the people who will do it, if you're truly what might be considered a highly compensated player, then it makes sense. you have decided you will pay for your own >> buy your own. >> right >> you're talking less than 0.1% of people who would do that. highly compensated more than you. >> more than me. >> this is a prelude to the next

story, the senate passing a landmark tax reform bill early this morning that measure heads back to the house for a final vote president trump is expected to sign the bill into law later today. ylan mui has more. we know this is headed back to the house, but it's a technical reason >> yes they were staring at the finish line, but they're not quite yet. the senate passed this tax bill just over five hours ago the final vote was 51-48 no democrats voted for it. every republican did end up voting yes mitch mcconnell said the legislation will unlock america's full economic potentia potential. >> it's worth noticing we had the stock market up, optimism is high, coupled with this tax reform, america is ready to start performing as it should

have for a number of years >> president trump congratulated republicans in this tweet. the united states senate just passed the biggest in history tax cut and reform bill. he also highlighted that legislation repeals the individual mandate which president trump called terrible. but as you mentioned, there was some last-minute drama when the tax bill hit a technical snag in the senate lawmakers had to strike three minor provisions from the bill, it does not affect the bill, so it will have to go to the house again this morning even though they passed the bill yesterday. president trump checked in between meetings in the oval office and dining room, he spoke multiple times with vice president mike pence who was at the capitol forever the proce ts assuming all this goes smoothly with the second vote for the house, president trump will hold

a news conference later this afternoon. >> so he's not signing it until next year? >> we knows there a news conference at 1:00 p.m whether he will take the pen and sign the bill, unclear i've been reaching out to the white house for clarification on that the reason is signing the bill would trigger some cuts to social services programs that clearly democrats are very worried about. so, they're looking for a way to waive those cuts from happening, but unclear if they have a plan to do that >> we have -- our whining and gnashing of teeth is well documented i want to start paying more as soon as possible i know you do. you always talk about it the quicker we can get this thing signed where i can start paying a lot more, the better for me i feel better about it are you with me on that? do you want them to sign it

today? >> i'm prepared to prepay my state and local this year. because i desperacembesperately make sure -- >> i already set mine up to get paid >> you are ready >> you're paying them this year so you can deduct -- >> i know. i'm trying to get you to be honest to your principles. >> quick two points. the pass-through idea, you said you would lose things -- >> yeah. >> so, if you get yourself a step ira, as a company -- >> that's a 401(k) that replaces that what about the healthcare? >> you can create a better version of it. >> do i have to go -- do i have to go to obama care? >> no, but you can buy shares, let's say you're spending $1,000 a month in terms of matching -- >> i have obamacare, it's like 12,000 a month >> 12,000 a month. >> i'm kidding >> my only point is -- when i say you have to be highly paid, you can make the math work >> you have looked into this

>> ylan, one more question, the social services, what are the social services that will be cut and what's the fix that is expected to go in? >> medicare is among the programs that could face a significant double digit cut it is being debated whether or not they should include that waiver from these cuts happening inside that government spending bill that will be needed to be passed before the end of the year also, joe, just so you know, even if the president doesn't sign this until next year, the effective day will be january 1st. >> what happens to people on medicare if the cuts go through if this is signed and there is no fix in place? >> it could be devastating this is what democrats had been sort of hammering on for quite awhile now that because this bill adds to the deficit, it would trigger cuts to social services.

congress voted more than a dozen times in the past to waive that trigger from taking effect they still have not done it. so this is the concern, these programs will be cut >> i would imagine the republicans are concerned about that, too, if it looks like they're passing tax cuts for corporations at the same time this happens >> susan collins, one of the conditions for her support was an assurance from mitch mcconnell and paul ryan that these cuts would not take effect he has given that assurance, but the plans are up in the air. >> you want to look at a beautiful chart, we'll have to put one up fedex reported earnings better than expected due to increased volume i checked the historical trading in the stock we will talk more about earnings in a second with an analyst. we know what the transportation average has done the company addressed u.s. tax

reform on the earnings call. here's what the cfo had to say >> u.s. gdp would increase materially next year as a result of u.s. tax reform if this occurs we would likely increase capital expenditures and hiring to accommodate additional volume from this incremental gdp growth >> istill don't believe it wil mean anything good for anybody we have two guests coming up that will tell you it has nothing to do with what the market has done. there is fedex 2.4 248. there it is, 240, almost 250, a new all-time high. the company giving astounding guidance on the boost they expect from tax reform it will add another 4.40 to $5.50 to the per share result.

so a 40% boost to the current forecast doesn't really factor into the markets at all >> back to the markets joining us is jack cafferty and andreas garcia good morning to both you guys. same question we've been asking for the past week. >> i remember the last time these guys were on they walked off, i was like whatever go ahead global synchronous growth. global synchronous growth. that explains it all >> global synchronous growth translating into earnings, and higher markets we can support global synchronous growth what should we be complaining about. >> 35% on the dow, global synchronous growth >> first thing's first tacks will affect earnings here. that's not a question. how do you explain the fact that earnings are being revised upwards around the world

>> i don't know. we're a big part of the world. the united states leads the world. if we do well, the rest of the world does better. we're not a vacuum >> absolutely not. europe is in the midst of a strong recovery themselves the delta is pretty large. so, yeah, you're right to say tax matters. i don't think that this should be avoided >> all of this matters, optimism matters, deregulation matters, how corporations are feeling matters. the private sector matters if you're staring at this and unable to acknowledge something is happening, you're held back by political concerns or i'm not sure where it comes from exactly, right >> i think ultimately it comes back to earnings are going up.

europe is better, japan is better, energy prices have more or less increased from 28 to mid 50s levels telling you the world is in a much better place. interest rates remain low. we come back to your comments on the ten-year the ten-year telling you something is happening maybe the world is a little messier than what we were thinking >> how much of this do you attribute to taxes or some issues that joe is -- not so suddenly eluding to? >> i would flip it and we frequently want to talk about things like death by paper cuts, so the rules get tighter interest rates rise faster consumer confidence falls. here, what's the opposite of a paper cut? everything has gotten a bit better whether it's growth, whether it's the employment outlook, whether it's wages they're getting better but not so much faster that the federal

reserve or the global central banks have said, sorry, i'm taking the punch bowl away and you build the story which translates into earnings call that corporate or investor, it gets you higher earnings. >> 2018, what does the market look like? >> i have no idea. >> what do you get paid for? >> to tell people over the next 10, 20 years what they should be planning for that does not include giving you a price that is basically noise. i would say something that's interesting -- >> fair answer >> reality >> completely fair answer. >> if interest rates go up, credit card rates have started to spike you might get a tax cut and you may have to give it right back to credit card for a lot of americans -- >> credit card rates spike more quickly than savings rates >> yeah. there is a counterbalance to the tack cuts, it's underneath the

current as rates rise. >> but you have to have some kind of sense of where you think -- >> let's put it this wraay wall investigation matters a lot, valuation is at high levels here you could say it's going higher, but ten years from now it will not be much higher from today. if you have a plan ten years out, you have to start with requiring returns that are a bit lower than the last five, seven years. once that's out there, they ask millennials and gen-x what the expectations for returns were, 16% year over year is what they're expecting. you know why we've had that the last six years. i don't necessarily look at the end of 2018 as a bogey f your expectations are 15%, 16% -- >> and prior performance is not guarantee of the future. >> we have to leave it there

thank you. coming up, the retail supply chain is working overtime to get products packaged, shipped and delivered on time. courtney reagan will join us next from a fulfillment center i want to go to a fulfillment center >> why >> sometimes i don't feel fulfilled.

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>> just five days left until christmas. retailers are making some last-minute pitches to shoppers to get gifts in time for the holiday. we're all excited about the holiday. almost giddy >> yes we're getting right into the holidays >> it's the best time of the year >> the most wonderful time of the year >> that means it's crunch time for workers at fulfillment centers. so it wasn't like i thought. they have to pack and ship those gifts. courtney reagan joins us live from one of those centers. really you went to walton, kentucky for this, just south of cincinnati i think a trip home might have factored into it >> i'm coming all the way back to new york first. we have a lot of work to do

before we think about getting to christmas. we're close to cincinnati here and walton, kentucky when you think about it, your shipping times are getting close if you want to order online in time for christmas if you are, and you're not ordering from amazon.com, chances are you could be getting a gift fulfilled from one of these radial fulfillment centers. this is second behind amazon when it comes to the footprint 21 fulfillment centers in the country. yad r radialgistics for hundreds of brands this facility covers 1.3 million square feet. here they are covering air aeroposta aeropostale, world market, shoe carnival and others.

we know how big cybermonday was for retailers across the country, if you still need to order online, watch the shipping deadlines. in many cases, standard shipping options are in the rearview window, now you're looking at expedited options. tomorrow is a big cutoff to order in time for christmas. back to you. >> thanks. we'll move on and talk fedex we were just talking about it. i have to do the rule of 72, but it's up 500%, i think. shares of fedex getting a pop this morning the company posted a rise in profits due to increased shipping volume. joining us to break down the numbers, scott is here i hope he's been long since 2008 you had a buy on this thing? >> i have, thank goodness. >> so we were just talking about it 2008, the low was 40 it was scary to buy all stocks at the lows. now it's 250 that's six times your money,

right? it doubles again that's four times the money. doubled twice, gone up another 50%. you know the compound annual return in that stock since '0 8 >> it's been strong. >> i would think 20% a year. >> it has been the earnings growth has been there with it. it's deserved that we think there's more to come. >> oil prices, they do matter. they only matter in the context of the overall global economy. they do surcharges and things like that. >> right >> if there is -- if the entire economy has a tax break of lower oil, it's better for fedex what else have they done to outperform u.p.s., to outperform the post office and everything else how do they do it? >> solid execution going back a few years ago, they had a big major productivity enhancement. that went very well. they achieved 1.65 billion >> how do they do productivity enhancement? is it the computer system?

is it the technology that they buy and introduce into the company? what happens >> it was a bit of everything. that a lot of voluntary retirement program. they did fleet modernization of planes a bit of everything but it all added up very successful. they're still pursuing the best practices they have taken away from that. >> and an eight-year economic expansion did not hurt >> not at all. >> they make it look easy. it's not, trying to keep up with these things u.p.s. having struggles. what's the difference between these two? >> it's varying from peak season to peak season you know, there's different schools of thought u.p.s. had a surcharge this holiday season and fedex did not. fedex has been pursuing a mix of

smaller and mid size customers that may have something to do with it. u.p.s. had stumbles. both have done a lot of volume >> they've done amazing amounts of ramping up and getting things there. we were looking at on-time delivery statistics, i'm stunned by the difference between the two. what leads to that how do you execute like that >> it's interesting. fedex, a quote from the ceo in the call was we used it as the lead to our note boy, we had it right this year, so far, knock on wood. not much to worry about with a few days left in the weather forecast u.p.s. stumbled about 1,000 basis points lower on the service metrics. they're saying now it should be okay through the end of the season everything in the thanksgiving to christmas period should be okay they had the missteps certainly. >> not ta tao take anything away from u.p.s., both companies have been impossible to wrap your

head around getting fedex delivering on metrics like that. >> we'll do a look back once the season is over and compare the two, but it probably has something to do with customer outreach, how they manage customers at this time of year we don't know until it's all done yeah i think that's a big driver. >> you talked about uber earlier. what's the private market value of uber? >> we were at -- 70 was the high >> 70 billion. >> yes, except under the softbank deal, it was closer to -- >> i'm just using it as an ill plus trump administrati illustrati illustration uber was worth more than fedex for a while. does that make sense >> the softbank bid to buy uber was at a 30% discount to -- yes. it was a $48 billion valuation.

separately you talked about medallions earlier >> yes >> some medallions are going for as low as $350,000 >> right there -- >> at one -- in a bankruptcy it went for about $170,000. down from $1 million >> scott, you said fedex, you think there's more room to run u.p.s., too? what would you tell people to do looking at this guidance from fedex, you might think it's a great time to get into u.p.s >> we do we look at these two on where they trade, the pe differential. we have a buy on both. we do still prefer fedex, but interestingly, typically they're -- u.p.s. trades at a 2.5%, 3 multiple premium in pe to fedex right now that's only about one turn so fedex is catching up there. so, it's an interesting time to be looking at both clearly with this report last evening fedex is seemingly

hitting on all cylinders i think it's been touched upon on the show early this morning they have seen a surprise on what they'll get in the tax reform in this first fiscal year, which is very large. so i think that's going to help. it should get a lift on fundamentals that should help this morning as well >> unless they're not being honest with us, that's -- you can see it just -- it's hard to connect dots from tax reform to actual performance of a company. if you believe them, that's concrete evidence there that this is a positive for corporate america, right >> it absolutely is. they spoke about it. it will be widespread how they spend that cash benefit. >> the overall gdp does amazon threaten fedex down the road >> yeah. down the road perhaps. in the near-term, know fedex speaks of having no customer larger than 3%. right now i would say amazon is more dependent on fedex than a

threat but, yeah. certainly down the road they look to be a large player in the logistical supply chain in this country and perhaps internationally. that's more of a down the road discussion still even though it comes up frequently. >> great fshlgt tha . >> thank you >> all right thank you. some other stocks to watch today. shares of red hat are lower. the maker of lynex software issued guidance above analysts estimates. micron technology posting third quarter earnings that beat forecasts. revenue surged 71% the chipmaker is benefiting from strong demand from smartphones, pcs and servers. that stock is up by 6.8 pfrs

th 6.8% this morning. shares of stitch fix dropping the company reported higher sales but earnings missed forecast the online style service expects to make less money on clothes it sends to customers due to higher shipping costs and fewer available products for plus size and menswear as a result, that stock is down 12 % the ceos of red hat, micron and stitch fix will be on "squawk alley" today at 11:00 a.m. eastern time. when we return, the gop tax bill is expected to pass congress this afternoon. up next, we'll talk to the manager of an etf that contains the 34 stocks that are expected to benefit the most from tax reform later, house majority leader kevin mccarthy he'll be our newsmaker of the morning, he'll join us at 7:30 a.m. to talk tacks and many other issues let's look at yesterday's s&p 500 winners and losers

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning welcome back to "squawk box. see how the markets are setting themselves up. u.s. equity futures at this

hour, dow opening higher by 8 it points nasdaq up about 23 s&p 500 up by points policy-based investors could have something to celebrate when the tax reform bill is expected to pass congress txar will see 34 stocks that could see the most changes from the new tax code joining us is ben phillips thanks for being here today. >> thanks for having me. >> when did you put this together this must have been a recent event? >> recent event in terms of getting to market. we launched october 17th, the idea has been in the making sense two years ago. but, yeah, we launched the same day as tax reform. >> i ask because it seems like so many of the details have been almost late breaking trying to figure out which companies will benefit the most. have you been constantly shuffling the 34 companies in

there? >> not really. we kept the same portfolio we made some changes in early november with some changes going on the idea being we've always been focused on the tax cut being the biggest item 34% of the portfolio is tax cut. we have the eye towards interest deduction going away then the third bucket is u.s. exporters. u.s. manufacturers who have a strong domestic presence will have an improved global competitive position those key components have not really changed we are still talking about companies paying on average 35% plus tax rates >> can you tell us the companies? >> we have a number in there, southwest airlines has been one that people embrace given that it will benefit from the tax cut and they said they will use proceeds from the tax cut to buy new planes that's a second derivative play, looking at companies using the tax cut to improve cash flow and earnings >> did you hear about fedex? when you were listening, did you

think, wow, i may be on to something. he said the upside benefit is more than we expected. did you see that number? >> yeah. if you look at our portfolio, 20% eps on average is for our portfolio. that gets us excited 20% upside in the stocks in our portfolio. this is first order effects. we'll be looking to the second order effects. companies that invest are investing in growth. >> we had some people say some of this has been baked into the markets. overall market averages have risen substantially as we have seen it look more and more likely that this would be passed do you think that's the case or is there a lot of untapped growth potential still here? >> our fund is reflecting that there is some getting priced in. since we launched, it's up 7%. it's outperforming the market. >> what day was that.

>> october 17th. just over two months the second order effects are really important that's where people will get excited. also, wall street, they generally don't upgrade earnings estimates until they see the first good print we had some good prints. it's been decent economic growth next year we'll see in a lot of companies and in our portfolio we'll see this flow through, the eps benefit. then real earnings revisions will be upwards. >> joe mentioned about -- >> here is the daily news, this is typical of the daily news trump is a clown after the time. the art of the steal is it possible to go long the trump family because of the -- that's another big beneficiary of this, can you short the middle class since we know from the democrats and from this how badly they're going to fair under all these things is it possible in your fund? is there a proxy for -- >> we're focused on the corporate tax break and the

impact on the overall economy. >> when you see things like that, ben, do you think -- >> i think the personal stuff. that's been the biggest moving component. >> hyperbole people will die from this supposed supposedly it's apocalyptic and so,000 people will die a year from this >> paul ryan said yesterday, as people see this flow through the economy and see themselves paying less taxes in 2018, that's when there may be more public support for it. >> what will you do five years from now >> the idea is we'll continue to rotated and invest the portfolio in those second derivative plays. even two, three years from now, we'll look at improved consumer investments, increased m&a activity, u.s. companies being more attractive targets. >> u.s. companies will be more attractive targets in the coming years? >> potentially there may be big u.s. companies looking to consolidate

industries as well i think this will fuel banking activity we're excited about the multi-year impact. this fund will be outstanding for a long time. >> you could short the blue states, the legislatures in the blue states. >> not an etf to do that but -- >> exactly >> creative ways to do that. >> it's going to be tough. andrew is right about that there will be cutbacks >> thanks. >> i'll speechless coming up, we'll get -- >> what else is new. >> oil price predictions from michael cohen, head of energy commodities research at barclays and the house set for a do-over vote on the tax bill today. house majority leader kevin mccarthy will join us. at 8:00, shelly moo moore capit will join us

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. welcome back to "squawk box. saudi arabia announcing its largest ever budget. the kingdom will spend 261 $261

billion in 2018 as it looks to diversify its economy away from energy it intends to cut energy subsidies freeing up funds for spending and adding a value added tax on soft drinks to combat the slumping oil revenue. they are forecasting a growth rebound of 2.7 % next year. no word on when the prince is getting out of jail. there's no word on the 3$350 million -- 4$450 million painting nor did you see over the weekend the 3$300 million house that mb bought for himself in france in versailles >> way to make it look like you're stamping out corruption >> so a big disconnect between the corruption -- >> 3$300 million doesn't buy versailles it buys a house near versailles? >> i believe so.

>> you can't buy versailles for 300 million? >> not for 300 million >> did you miss this it was fascinating it was done through the shell companies. when you finally get through the shell companies, you go back and it's him interior design goes digital. we'll talk to a husband and wife design team about their unique liyle and what it means for hoday retail when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected.

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>> let's not go there. the interior design industry is undergoing a digital transformation partners are partnering with e-commerce players to create new products joining us now husband and wife design duo robert and courtney novogratz. they have an am zbron storefront they got pop-ups they have had a couple of tv shows, and a guide shop in new york during the holiday season because we just can't possibly talk about bitcoin enough, you are mike's brother >> yeah, i am. >> and mike is the big -- you know, he is fortress, and he was on, i think, whop ner's show talking about how high it could

go my first question to you would be what would you rather have, the bitcoin he has or the hair you have that he does not have >> i'll take the hair. would i take the bitcoin and buy some hair. >> real human hair >> can you apply hair with bitcoin? >> that's the question i immediately thought are both of you guys really have good taste? do you hire designers to help you, or do you guys know -- this is what you do, the two of you >> we've done for 25 years, you know we started buying and building townhouses, and then we started design i designing boutique hotels. >> we were the couple that if we came over to your apartment, we would redecorate it for you. >> come hang out at my place >> we found each other because,

a, we wanted the same things out of life, but we also had similar talents, and then we created a career out of it. >> architectural things? right down to fabrics and pillows -- >> yes >> a to z. >> we lean on -- now we have a team, but before, you know, when we were planning our wedding, we built our first condemned building in manhattan, and we learned everything on the job. zhoo that's amazing. what's new now it's all -- it wasn't always -- if it's 25 years, it wasn't always -- >> we started a brand about four or five years ago. aspirational designs at affordable prices. we really want mass. it's been four or five years, but we are starting to get a great look together. >> this is the perfect time to be in a business like this because it seems like everybody is watching these do it yourself shows or the renovation shows or anything that goes on. it's become almost a way of life for so many people >> and a lot of times couples

we've been hired, obviously, to decorate for people, and we let them know they chose each other for a reason they can pick a paint color, and it should be fun we get it. when you talk about home and money, it brings out so much anxiety in everyone. for us when we did one of our tv shows, we were going across the country, and we realized people need affordable pieces we started getting into product, and we use a lot of the stuff in our own homes, and, again, if our five boys can, like, jump on it, wrestle on it, the wear and tear and it holds up, we pretty much believe in it >> how do you find affordable pieces, though >> we design them, and we really have leaned on our vendors and our partners to say how can we get it delivered to someone's doorstep, how can we get it -- whether it's in a box and still have fabulous legs and still have fabulous fabric that's going to hold up >> also, when you have, like, amazon fulfilling things, you're not paying for 4,000 brick and mortar stores, right you are kind of cutting out the middle man >> this is a theme we've talked about yesterday just

we mentioned the same theme. all the success stories are people who are not having to deal with a lot of those costs >> all of those headaches and all of that. amazon has been amazing where, you know, we can partner with them, and we can bring our designs and our ideas and they can take the other piece to it and get it into customers' homes. that's what's most important >> what about the direct to consumer piece of it we were talking to the ceo of away, and they want this very direct relationship. they want all the data they want to be able to communicate. >> yes >> amazon is the -- >> well, how do you build a community? how do you -- that's one thing robert and i, when we first even started in this, is really trying to make that big digital world a community, a family. what's important for us is if you have our pieces in your house, i want to see how you use them i want to see how you decorate with them. maybe completely different than robert and i chose you may have all your fets on them instead of all your children we try to tap into saying, see, turn your photos back into the

novogratz family, and let's see and all learn from each other. >> fabulous is a word that's -- my wife uses it. if you guys didn't -- that's the word you need to describe the type of stuff that you want in your house the fabric has to be fabulous. the design has to be fabulous. the couch here -- what would you use if you didn't have it? is there another word? >> amazing comfortable. chic, casual >> fabulous is good, though. >> fabulous, friendly family something. >> we also think that everything doesn't have to be fabulous, right? kids rooms and -- >> right that accentuates the things that are fabulous you also said you were not a wrestler mike was and another brother, but you were not because you were a good athlete. >> i was -- according to me. according me you know >> they had to just brute force, but you actually had some talent >> i wasn't as tough as those guys >> all right >> actually, too, the great thing for our pop-up with amazon that's going on during the holidays is people can come in and touch and feel the product amazon delivers it to you.

that's what's been really important for us is people can say, hey, i'm looking at these -- >> all right

>> the senate passes a landmark tax reform bill sending it back to the house for a final vote. we're live in washington this morning with the details we're going to be hearing from house majority leader mccarthy crude prices on the rise will the build up -- professional sports opening their doors in las vegas, and the fed -- that story. plus, corporate headlines. the second hour of "squawk box" begins right now >> life from gt beating heart of

business, new york city, this is "squawk box. ♪ >> good morning, everybody welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin and joe kernan you are looking at a live picture of capitol hill where congress is at the finish line for passing a major overhaul of the nation's tax code. pending a second approval by the house today, which mostly is seen as a technicality at that point, that tax reform bill will head to the president's desk we'll have more on that in just a moment in the meantime, check out the futures this morning things are on a roll right here on wall street too you can see right now the dow futures are indicated up by about 93 points. earlier we're looking up 99. almost triple digit gain for the futures. s&p futures up by 8.5, and the nasdaq up by 23. here's what's making headlines this morning eight major banks have had their so-called living wills approved by regulators with no significant issues

that is the first time in three years that the fed and the fdic couldn't find issues that needed immediate attention. four banks, bank of america, goldman sachs, morgan stanley, and wells fargo, were told that their plans did have some shortcomings that need to be addressed at some point. the national association of realtors will be out with its november look of existing homes later this morning economists are looking for a 0.7% dough cline after a 2% jump back in october. a european union court has ruled that ride hailing service uber is a transportation service and can be regulated just like traditional taxi services. that follows complaints by taxi drivers in spain that uber was engaged in misleading practices and unfair competition however, uber says that the decision won't change the way it operates in most of the e.u. countries. senate republicans passing their big tax overhaul bill late yesterday now. the house will have their turn again before it goes to the president for signature.

it does matter to us we've had this huge move in the stock market, and i'm really interested to know about whether the actual -- when it actually happens whether it's one of those buy on the rumors, sell on the news or whether it continues, and i don't even -- i try to gauge what the consensus is for whether, you know, once you see the results, like fedex just boost the their numbers for the future based on this, i wonder whether you see more or whether we've already gotten everything it's just tough to say first, we got to get through today, i guess sfloog that's right, joe you can maybe somewhere some answers to your questions at about snoonoon president trump is planning a press conference for after that. despite the technical snafoo even though they had already passed it once yesterday now, republicans did pull together to get this legislation through the senate overnight with no gop defections 51 of 48 was the final tally

majority leader mitch mcconnell said that this is the key to unlocking america's economic potential. >> it's worth noticing we've had three two quarters in a row of 3% growth stock market is up optimism is high coupled with this tax reform, america is ready to start performing as it should have for a number of years. >> the reason the house has to vote against it at all is because several minor provisions in this bill violated the very complicated and arcaine rules of the senate bernie sanders says that's a prime example of how republicans are rushing to jam a massive rewrite of the tax code through congress with little debate. >> maybe, just maybe, before congress adjourns for the holidays we should start paying attention to the needs of the working families of this country, to the middle class of this country, and not just the billionaire class.

>> as republicans really want to get this done today and cleared off their plate because they've still got a government funding bill to deal with before the end of the week. no one, especially not me, wants to be here over christmas. back to you. >> we are going to talk to one of the players in all this coming up at 7:30 eastern time house majority leader kevin mccarthy will be our special guest right at 7:30. for some perspective on how the tax vote problems could play out in the markets, let's bring in a couple of more voices mark is chief investment strategist, scott, and right here on set with us is john hurdle, the executive chairman of hurdle, callahan and company. you know, we're still looking through these last minute details. a lot of things to try and figure out what's your overall take on it >> generally positive. there is a lot of details, and the fact is that not just the details, but how does the market react to those things are going to really determine where the earnings come. it's generally positive. fedex was increasing their

guidance today it's got to be more of the same. there's a lot of this in the market already, so we have to really see how it flows through. >> i mean, i think that's the huge issue trying to figure out how much of it is already in the markets, how much is not. joe just alluded that. i mean, we hear things like what you heard from fedex that was the first time i thought maybe there's a lot more we don't know about. >> there's -- you know, we were thinking that there's 10% to 12% earnings growth next year. if this is more than that, plus at 2% dividend on top of that, that's a much -- that's still another strong year, especially compared to the ten-year treasury on a relative basis the market looks like it has further to go. >> mark, would you agree with that >> well, i would, becky. it's hard to argue against that. when you look at facts that have consensus earnings estimates of $1 44 over 130 and change this year, expecting revenue growth of about 5% to o6% year-over-year, that's certainly a tail wind to expect equities to move higher just on that, let alone any kind of boost from the windfall from profits from corporate tax reform, which on top of that leads us to conclude

that it's going to be another good year. not one perhaps without the level of volatility that we had in the last 12 months going forward because i think there's a lot of crosscurrents that can help to create some instability in the markets over the next 12 months, but i think year-over-year you're looking at another year of stellar gains. >> what are the cross kushts that you are talking about >> well, it's shifting monetary policy being one we've gone from uber accommodative policies around the world to hardly called a tightening, but nonetheless, less accommodative collectively, particularly among some of the more important systemically central banks the bank of japan may be shifting off the price saving mechanism off the ten-year japanese bopd. japan undertaking serious structural reforms, and what are the consequences to china's economic growth, and the blow back to emerging market countries. there's a lot of things out there that can help to undermine the otherwise senguin view, but

that's the base case that things look pretty good >> the key is the relationship between the interest rates and the earnings even if earnings go up more and interest rates go up, if that relationship stays the same, we still have a positive conditions for the market one thing that's interesting is this normalization of the fed's balance sheet has been more telegraphed than anything in history, and, yet, the ten-year treasury hasn't moved much >> that's because you are also looking at around the globe interest rates near zero if you are an investor who has to buy bonds, where are you going to go? >> just there's more dough manned there seems like there's more demand for credit, for yield than there is for -- interest rates are the price of money supply-demand. there's a lot of supply of money looking for a home >> i know it's not ever this simple let's break this down to a simple terms as we can if you are saying it's what the interest rate increases are compared with what the earnings increases are, you just laid out your case for where you think earnings are going if we see interest rates of too hikes, three hikes, four hikes next year, how does that match up >> once again, those are still not -- historically we're coming

from such low levels if earnings come in as we expect and as the market expects, we'll be fine. >> even with four rate hikes >> even with four rate hikes, yes. >> you agree with that, mark >> i do. as long as the economic growth warrants the rate hikes. if, in fact, though, the fed is making a mistake by way of raising interest rates predicated upon strong labor conditions but expectations of inflation to follow through and it doesn't necessarily, that could continue to lead to an inversion of the yield curve, which i think would signal to the market a potential problem economically >> now you're making the case. we had neel kashkari on yesterday, the minneapolis fed president, and that's the case that he was making he is a little concerned in fact, he has voted against the last three rate hikes for that reason. do you think he is right, or do you think that, look, things are going really well? the economy is outperforming we've seen gdp growth of 3% plus the last two quarters. you are likely to see it again for the next quarter it is the right time for rates to be raising. rising >> i think that it remains the right time for rates to continue

to be hiked. that said, i think the fed is going to be cautious and make sure that the transitory effects of why they're whifing on the inflation call do start to emerge such that it does give them sort of an emboldened stance on achieving their rate hikes. that remains our base case it would not surprise us if we didn't see the follow-through on the inflation front to neel's point that the fed begins to slow down or gradually reduce the plot to reflect the expectation that inflation isn't mounting the charge it's expecting. >> jonathan, last word >> i just think it's that relationship you have to watch that relationship look for other things in the market that could derail us. bitcoin, for example one of the things about bitcoin that's just odd is how it's seeping into the public market we're starting to have companies that are calling themselves crypto currencies, things like that can there be a bleed-over effect fundamentally -- >> it's still such a small -- >> it's such a small portion, and that's what everybody thinks, and that's true.

we got to watch it because it's not really affecting the broad market right now, but even when we talk about it on a show like "squawk box", it almost gives it credibility that it doesn't deserve because it's not an investment at all. it's just about speculating. watch. funl fundamentals are strong. always watch >> jonathan, thanks for being here mark, it's good to see you too >> thanks, becky >> coming up when we return, the forecast for oil in 2018 prices have been moving higher on a draw down of inventories in the u.s. we're going to talk crude right after the break. then at 7:30 eastern time, house majority leader kevin mccarthy, he is going to be joining us ahead of today's very big vote in the house on tax reform lots to talk to him about. stay tuned you're watching "squawk box" right here on cnbc

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welcome back to "squawk box. do i have triple digits in the dow yet? we are close we do. i didn't know that it is. >> that's new. it was at 99 before. >> 101 i wondered whether it had moved from 90. might see things like what fedex said, and you just do the math it seems like. s&p up 9.5 nasdaq up 26 >> the question we asked every day is has this all been baked in how much of this has been baked in, the idea that the tax cuts were coming? >> what if it's more than what we baked in?

>> right that's what you are getting this morning. >> from fedex. >> fedex delivering a better than expected quarterly net profit because of increased volumes. the shipping company posting beat on the bottom and the top line fedex addressing u.s. tax reform on the earnings call here's what the cfo alan graf had to say >> u.s. gdp could increase materially as a result of u.s. tax reform if this occurs, we would likely increase capital expenditures and hiring to accommodate the additional volumes trigger from this incremental gdp growth. >> that's not all they had to say. fedex also giving some pretty astounding guidance on the boost that they expect from the reform saying that it would add another $4.40 to $5.50 a share on an adjusted basis to their outlook. that's about a 40% boost to their current forecast check that out the stock up 2%. this is the type of thing that people are already saying what other stocks do we have to find this with? noah blackstein writing in saying he thinks that this is just the beginning

that you are going to hear that this will be a theme from a lot of companies over the next three months >> right this could be another leg instead of a buy on the rumor, sell on the news event >> price of crude oil has surged 35% since june bringing about this new optimism in the market, but some analysts are remaining skeptical about the year joining us to discuss how u.s. oil companies pose a threat to prices in 2018, we want to bring in michael cohen, who is barclay's director of energy market research. you're a little skeptical. with what's going on here? >> look, the reason why we are where we are is because of some temporary issues, right? we've got unplanned outages in the north sea. we've heard venezuelan production that's tipping over 100, 150 barrels a day month on month. the market has got a lot to be worried about. inventories are down, and they've been down since september and october. >> you think this is all artificial >> i'm not saying it's all artificial i think some of it is rationale.

it was actually the title of one of our pieces that rationale, albeit temporary exuberance. i think the issue as we go forward in 2018 is a lot of those temporary issues go away on a balance level, you know, supply is going to exceed demand again. inventories are going to build >> wti, let's say, by this summer in your mind. >> so our view by the summer is that wti will go back into the mid 50s. you know, as we move into the end of the year, we think that prices in q4, for example, will be higher, but the issue is that u.s. production continues to move higher. 300,000 barrels a year higher. sure, we'll see a dip in october, but eia and our forecast expect 1 to 1.2 million barrels a day of more liquid supply out of the u.s. next year >> we were talking about saudi arabia announced their budget today. >> yes

>> part of the calculus of the future of that country has to do with the ipo of iramco, and that's supposed to happen in what they say is the second half of 2018, and they say that oil has to live somewhere between $50 and $60 for that to work what's your expectation? >> so our economists are continuing to be of the view that that will be delayed, that the ipo will be delayed. >> delayed as in not taking place in the year of 2018? >> correct >> not into 2018 not forever. but this will happen it's a key part of their national transformation plan, part of their vision to 2030 yes, clearly they want price stability. i would argue that they want price stability over a certain price level. you know, whether that's 40 or 70, i think they want prices to be level they want investors to have -- >> what ability do you think they have to influence the price of oil right now >> i mean, clearly, they're in the driver's seat of this opec

and non-opec policy. they have some control, but at the end of the day the markets don't, you know -- the market looks at the balance, and the market is seeing something that's going to be in surplus. >> it doesn't happen in 2018 because of what? >> well, look, there's a lot of different processes that have to occur as part of the ipo, as you well know. you know, it's -- the issue going forward is can they get their act together is the political back drop amenable to this investment? i can't say for certain. >> meaning, do investors want to take a minority position in a company in a country with questions about people in prison at the ritz? is that where you are going with this what are you trying to say here? >> there's a burj nch of issues there. listing the issues between saudi arabia and iran, the political back drop, all of this is something that could preclude them to wait in addition to the

budget issues. you know, mohammed bin saloman is a prince in a hurry clearly there's a lot on his plate. what we have to focus on in terms of the oil price for next year is that the saudis are continuing to pledge that they'll do whatever it will take >> here's the question do they have the sway that they once had it the problem is the higher oil prices get, the more likely you are going to see u.s. suppliers kind of turn the spigget back on >> for this coming year and the year afterwards, we calculate there will be something like half a million barrels a day of new supply from canada and brazil we talk a lot about the united states people forget that there's a lot of other oil out there, and they don't really have as much control over that. it's kind of all along the way >> that's the other side, and then the third leg of the stool is if we are talking about a very strong global economy, votes being lifted everywhere, additional demand that's going to be out there, can the u.s. suppliers even do anything about

that, or will oil prices automatically push higher because there's so much demand it doesn't matter? >> our expectations for next year are pretty robust in terms of oil demand. we expect that to continue we're in line with expectations, broadly speaking, for robust economic growth. the question that the saudis and other opec members are having to deal with is can they continue to supply incrementally more oil? can the u.s. industry supply more oil year after year after year if economic growth remains strong opec and other countries that are part of this group are betting that they can't and that, therefore, prices have to go up. >> great to see you. thank you very much. >> thank you you too. when we come back, house majority leader kevin mccarthy on today's house vote and beyond then turning sin city into sports city. las vegas hasn't hosted a major professional sports team ever. now they get three what it could mean for the strip?

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>> the e.u. top court dealing a big blow to uber the e.u. says that the ride hailing app is a transportation service and not a digital company. that ruling could have major implications for how uber has regulated throughout europe. this ruling will not change things and most e.u. countries where we already operate under transportation law however, millions of europeans are still prevented from using apps like ours we will continue the dialogue with cities across europe. while this court case can't be appealed, uber can pursue other legal challenges to courts to defend its business. >> in facebook rolling out new facial recognition features. it's using the technology to determine when pay photo view has been uploaded even if you weren't tagged that should help facebook crack down on fraud lent accounts like when someone else tries to create a profile using your name and photo. facebook will notify you if somebody uploads a picture of you even if they didn't tag the picture with your name the feature can be turned off if you don't want to get those notifications. i don't know how i feel about this i don't have tagging on right

now. i don't allow other people to tag me in their photo. >> i think i do. i just don't have it turned on >> what's that -- >> i just -- >> it was something like, you know, i bought something using the phone yesterday. >> did you >> no. i was trying to come up with something where i have moved into this world, and i -- >> flintstone. i don't have anything. i don't. >> i'm on twitter. >> do you follow james woods >> yes >> james woods >> i know james. >> he is awesome i know you do. he is awesome, but he is fearless he does things, and i'm going to retweet it and go, no, no, no.

i'm not. i don't -- i will not -- i'm -- he is fearless i'm just full of fear. coming up, house majority leader kevin mccarthy joins us after the break to talk taxes and government funding as we head to break, take a look at u.s. equity futures [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock. us. it's what this country is made of. but right now, our bond is fraying.

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>> i like it good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i can't do this. a number of corporate earnings reports are front and center this hour. general mills reporting quarterly profit of 82 cents a share. that matched expectations. revenue, though, was above forecast, and the food producer also raised its 2018 organic sales guidance that stock is up by 1.5% blackberry earning 3 cents a share for the latest quarter compared to an analyst forecast for break even performance revenue beating estimates and blackberry said it sees the revenue at the high end of its prior forecast that stock up 78 cents, which,

believe it or not, is a gain of more than 7% recreational vehicle maker winnebago reporting a quarterly profit of 52 cents a share that's better than the street was expecting. revenue above street forecast, and the company says that the broadening of its portfolio has helped it increase both its sales and its profit margins still, at this point it looks like that stock is down by a half a percent >> blackberry. >> we do that just for me because i actually have one here >> that's what i was going to say. we're going back >> no, i think there's three people in the company. >> we finished watching when it just came out. they haven't seen the previous ones, and now we're going back the last season was 2011, so worry going through that everybody -- >> still has a blackberry. >> as recently as 2011 i wasn't -- >> i was going to say, who is -- who still has a -- >> i still have an iphone too. you know who else has one? mary duffy >> i saw it last night, and jeff garland was on look at that ridiculous blackberry, and then i looked down >> because i can type so quickly on it. >> all right

to housing now that just shows you -- >> i know. i'm even more outdated than you are on this one. >> bingo more applications out. dooirna ohlick joins us now with more hi, diana. >> hi, joe what's a blackberry? >> i don't know. a food >> something spooked home buyers, and it wasn't interest rates because they fell. mortgage bankers saying it could have been the tax plan total mortgage application volume dropped 4.9% compared to the previous week. that according to the mortgage bankers association. now, applications are now 8% lower than the same week one year ago this is, of course, the slowest time of the year for the mortgage market, but the numbers are seasonally adjusted. you have to factor that in as well now, mortgage applications to buy a home had their weakest showing since last april volume fell 6 pefrz for the week and was barely 1% higher compared so the same week one year ago buyers might be concerned about the government tax plan.

the plan was getting a lot of attention last week with reports of how it could cost home values in higher cost states to drop. now, applications to refinance a home loan which would not be impacted by the tax bill, they also fell. down 3% for the week despite lower interest rates refinance volume highly rate sensitive. this as the average contract interest rate for 30 year fixed mortgages decreased to 4.16% from 4.20% for loans with 20% down payments. all the numbers on-line cnbc.com back to you, guys. >> okay. thank you, diana today the house is going back to vote again on the republican tax bill leadership hoping it arrives at the white house ahead much the holida holidays joining us now house majority leader kechbl mccarthy we're hearing some conflicting -- i'm just -- i just want to know when the president actually signs it later because there's some question as to whether that -- is there -- that's going to be a big deal, big ceremony biggest piece of legislation you know, it's still the end of

the first year after all the machinations and hand-wringing and not getting anything done and all that, this would be a very big piece of legislation to tap off a first year that already has a stock market up 35% and a couple of back to back 3% gdp quarters already. i don't know what everybody feels so crappy about? >> you have some of the lowest unemployments. you have market and new high you have the regulatory -- we did things no one has done before from the congressional more than 15 times rolled back regulations. we want to vote on it twice we love it so much. >> god, it's crazy the divisive -- that is -- you know, taylor swift said, wow, i got everything i wanted in 2017. she is getting killed on twitter because people are, you know, charlotte -- >> people are -- it just seems such a divide. >> it is

>> if you sit back and look, this is going to help all americans. >> where is the president going to sign it later? >> we will vote on it. we have to enroll it and send it to him, and then he has ten days in that time frame i think the president will be very kpied excited to sign it after you'll see the house and senate go down to the white house. do a little ceremony i think the president will pick the time and place he has a short time frame, but i think he should celebrate the signature because for three decades people have been trying to do this and have not been able to accomplish this. this is not only changing this country, but look around the world. it's going to make america competitive again. they'll change the scope of where everybody else is as well. >> later, mccarthy we see the futures up this morning. optimism in the stock market about this we also spend time this morning talking about the potential cuts to medicare if the signature goes into play right away. is there a fix in place for that is there something that will make sure the cuts don't go

through? >> that is more of a fear of what the democrats are trying to spread out remember what pelosi said. this is armageddon this is the end of time, and if you look at what some of the senators said, they put a lot of different pinocchios out there they got the most that you can give for some of the talks about the bill this bill is simply going to double the standard deduction. an average family of four who makes $73,000 is going to save more than $2,000 in tax everybody starting in february is going to see an increase in their paycheck because of the deductions and where they are. just check your check. more importantly, look at where small businesses will be there will be more entrepreneurs. look where the corporate rate is going to go to 21. how many times do you talk every day on the air where you talk about a company leaving america because of our tax code. you're going to start reporting people coming back to america, and that's the difference we're going to find. we're not even talking about the trillions of dollars sitting overseas with repatriation

you're going to have the market up a lot of people in the 401ks not just the price going up, but the dividends. >> this is separate than the tax bill, though this is the cuts that would be kicked into place by the tax bill because of the issues to the budget, what that might mean -- or to the deficit. the cuts would then kick in, and it looks like a fix might not just placed until next year. they just want some clarity on that >> the clarity you will find here is the republicans have been want doing have this fixed for quite some time. when medicare -- when obama care went in, it cut medicare it is not sustainable of medicare of where they put it through. we have been trying to make our entitlements sustainable into the future you cannot ignore the problem. we can continue to ignore the problem. you won't have the solutions to solve it i think this is a place that you'll find republicans' ideas already put out there. we got to find a compromise where both people can come together so the next generation will be protected. >> but this fix will be voted on from the earliest of january 4th

or 5th >> when we come back in in january. we still have to do government funding before we depart this week unfortunately, you would think that would be an easy thing. if you just funded government the exact same way it is right now for another two weeks, but all the democrats voted no they sit back and say, well, it's just the republicans that are in charge. it takes 60 votes in the senate. that's the problem we have, people playing games >> majority leader, what do you think of the possibility -- and a couple of people have raised it, that given that there are no democrats on board with this, that we're actually creating a new sense of uncertainty this was similar to what happened with some of the bush tax cuts where they were in place and then people started trying to game some of them, and that uncertainty unto itself created its own problems >> i think we're finding too much of that in almost anything you do if a republican brings it up and democrats oppose it, a democrat has an idea or republicans oppose to it our whole system of government

it devised to find compliments, and i will tell you this personally, i had a number of democrats cool to me throughout this process and said they wanted to vote for it. i had one even the night before with me that said i'm getting whipped to vote no there's some that have never voted no on it before. >> i don't know if we have this. are you going -- are you done with tv today after this interview? are you going to do some more? >> why is there a problem >> no. i was going to give you -- are you up to speed on fedex and what fedex said today when they reported earnings today? did you hear the cfo >> no, i was in the gym. what did they say? >> give me a couple of seconds i'm going to play it for you, but just in terms of their earnings per share for next year, they're attributing -- there are volumes arising. they're talking about if gdp, if growth does increase, if they increase their earnings per

share estimate by 440 to 550, which is 40% more, you have the cfo now yet? here's what the cfo said if you lisk p to this because you can use this later >> all right >> u.s. gdp could -- it if this occurs we would likely increase capital expenditures and hiring to accommodate the additional volumes triggered from this incremental gdp growth this is all the stuff you talk about theoretically and hypothetically, and there are other people that think you're going to see other companies see the same type of stuff people will faint if it actually does increase hiring railroad wage gains or gdp or any of these things because you hear the stuff. we gofrom 10,000 people dying year and actual armageddon to where this company likes to say we're going to hire people

we're going to make a lot more money for shareholders >> look, this is a start of america's comeback this is an opportunity for so many others to start small business, but you are seeing real life examples just with that you saw broadcom announce they're come back to america because they left because of the taxes. we're going to see example of example throughout the rest of the year, but we have more to do you know, i wanted to make sure to come on this show on this day for all those times you doubted whether we could get -- >> what? oh, you're talking to him. >> i'm talking to him. >> i will say i am skeptical, and you have gotten to the finish line. i have two questions broadcom, one of the reasons they came may have been for the taxes or the expectation of taxes, but another major piece was their ambition to do more acquisitions in the u.s. and how difficult that would have otherwise been, including their hostile bid for qualcomm >> because it's going to be a better place to buy stuff. >> i listened to him say he came to this country because he got a

scholarship and became an american he left because of tax, and he brought it back because of tax >> i heard you at the press conference, and then they made a hostile bid for qualcomm, and we could debate what he would have done otherwise separate question for you, how do you think the public should think or feel over the next six or eight months if we hear a lot about either people moving from either blue states or salt states, if you will, to other states i imagine we're going to see headlines about that secondarily, about a new spate of what might be described as start-ups, and some of which may be pass throughs and others trying to game the system and what we should -- what is sort of as citizens we should think about that >> we want to make sure we protect that someone doesn't game the system, they don't have some professional athlete trying to just do a pass through to create and get a lower rate. we try to protect that we'll continue to look at this

tax code for any corrections we have to come back and look at. i happen to come from a blue state, california. you look at the latest statistics people have already started moving out we lost toyota we lost my neighbors down the street that had a small business with just 20 employees because you had a 13% state tax. that is already happening. what i hope happens in this because even if you are in a salt state, you are getting a tax cut, but i have talked to our governor in california you know what he did this year he now has california paying the highest gas tax in the nation. our gasoline costs $1 more a gallon than the state right next to us. they continue to raise the taxes instead of creating a new way of lowering the taxes like the federal government is doing and create an incentive. how many people do you know have moved out of new york? not for any other reason than the tax itself >> hey, leader, you know, president trump against all odds on a populous message got into

the white house, and poart of that populous message was not cutting entitlements, but we know that -- someday they got to be addressed, whether it's mean testing or however you want to do it, and we're playing around with this what we're doing now, and we're not even addressing the lion's share of government spending, which we can't even touch. you think that from once this is done, then you can tack to that. can you get him to look at that? it was pop lichl thulism that gm there, and medicare staying as it is, social security, but sooner or later we got to figure that out, don't we will he be on board with that? >> i believe so. if you do nothing, entitlements will not be there for the next generation is it easier to solve this entitlement problem for a future generation in a growing economy where our growth is over 3%? i think you have more options and more solutions to the problems i believe, yes, you'll find it this is a big problem, and it makes up 66% of the entire budget when ronald reagan was president, it was just 25%

you've got to do something about it if you want to make the next generation have an opportunity >> what did we decide about paul ryan is he really leaving >> he is not leaving i'm the closest to paul ryan as you can get. he is doing a tremendous job the only reason people start talking about it is because how hard he has worked to try to make tax happen. >> if i was hem or you, i wouldn't stay. i'm watching cantor, you know, doing all these big deals, raking it in best thing that happened to him. >> you know, there's more to life than money, and i think it is an unbelievable honor to walk in here every single day >> okay. >> and look at what we were able to do today. to be able to have a vote like this and be a part of this congress to be able to make it happen, it hasn't happened in three decades. so many people have tried before us how much opportunity we're going to give to other people. >> because you guys are young guns i saw that book. you and ryan are young guns. young guns don't retire. >> we didn't even -- >> you're a young gun.

>> we didn't even get any money from that book either. we gave it all away. >> a young gun you look good on the cover of that, you two. leader mccarthy, thank you you can use that soundbyte, but i prefer if you didn't go anywhere else. >> all right >> this show is most important you said to come on. >> that's right. >> okay. good thanks coming up -- thank you, leader coming up, the latest cnbc millionaires survey is out find out how the richest are feeling about the stock market, the state of the economy, and tax reform rht aerigft the break. squawk returns after this.

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cnbc millionaires survey is out, and guess who is here robert frank joins us. he has the results robert >> good morning, andrew. america's millionaires own about 85% of the nation's stocks, so their outlook can really shape markets. right now they're growing a little more skeptical about the stock market with the most downbeat forecast in about three years. more than one-third of million airs surveyed say the market will be flat to down next year that's according to the cnbc millionaires survey. 41% said it will be up between 5% and 10%, and 23% said it's going to be up double digits yeah, that's still positive, but it's below the levels of the past three years their favorite sector for putting new money into the market next year is tech and then financials.

it all falls along party lines the rich aren't that different republican millionaires say the economy will be stronger next year dems say it will be the same or worse. republican millionaires say the market will be up at least 5% next year. democrats are more likely to say it's going to be flat or down. now, one thing both agree on is that the biggest risk to financial markets and their wealth is government dysfunction. this is at the highest level since we started our survey. 44% said government dysfunction is the biggest risk. it ranked first among both dems and republicans. millionaires give trump a score of 32 out of 100 congress got 18. millionaires are dead even in who they voted for in 2016, but a quarter of millionaires who voted for trump say they would vote for someone else in 2020. of course, it depends on who that someone else is >> the economy will be the same next year or the --

>> depending on party. we asked them both democrats said the economy will be the same and the market is more likely to be the same kro thank you, guys. >> the new hotbed for professional sports, las vegas the gold en knights have shown that sin city isn't just for betters anymore. it's the most successful new franchise. i think they were in first place. i don't know whether they still are. contessa brewer will join us with a lock at how sin city is

turning into sports city that story is next in the meantime, check out the futures at this hour we were up a couple of digits on the dow. now we're just under 9up9. you can't predict the market. but through good times and bad... ...at t. rowe price... ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence.

>> las vegas, which hasn't hosted a major league sports team is getting three, and it's turning sin city into sports city cnbc's contessa brewer joins us right now. she is life from las vegas with

more, and contessa, good early morning. always something happening out there. >> consider it tuesday night in las vegas in december this is the slow season. last night this crowd was filled to the brim in t mobile arena for the golden knights game. what a game it was the winning shot in the last two seconds of the game, the golden knights ended tampa's seven-game winning streak, and they've had just a phenomenal season now they are fourth in their division the merchandise sales -- second in their division. merchandise sales for their -- ticket prices are above the nhl's average. what you are seeing here is that it's an inaugural season that has drawn out so many fans in las vegas. in fact, a market study for the

knights showed them that they had 200,000 avid hockey fans living in las vegas. mostly from cold weather hot hockey places like canada and minnesota. mgm owns a stake in this team, and the ceo, jim burns, sat down with me to talk about why he is doubling down on an investment in sports.

>> go to rally behind after the tragic events of october 1st, guys >> i'm glad jim is in a better mood real setback during that election >> i wonder how much his stock is up too in the last year yeah he got very political. we'lbeig bk.l rhtac e. why do you put up with it? believe it or not you actually like what you do. even love it. and today, you can do things you never could before. you're working in millions of places at once with iot sensors. analyzing social data on the cloud to create new designs. and using blockchain to help prevent fraud. so get back to it and do the best work of your life.

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sflo the tax cuts, the jobs act is passed. >> our special guest this hour, shelly moore capito. "squawk box" news maker former barclay's ceo bob dimen on deal making, tax reform and the deregulation >> the crypto currency craze hits home. a look inside the breeding ground for overnight bitcoin millionaires the final hour of "squawk box" begins right now

>> if i had a million dollars? >> yeah. we'll play that later. >> bare naked ladies >> that work in this environment? >> does the name even -- i thought about that we need to be specific that we're talking about -- >> a band. >> yes >> band. band from the 19 t90s really >> they may be still cooking i don't know enough about the -- >> yeah. for millionaires maybe it is a good morning i don't know that's what we hear. welcome back to "squawk box. not for all of them. on cnbc live from the nasdaq market site in times square. i'm joe kernan along with becky quick and andrew ross sorkin futures right now indicated up about 90 to 100 all morning long now we're at 100 again the s&p indicated up nine, and

the nasdaq up 27 robert frank just talked about millionaires i said it's not what it used to be he said there are 12 million in the country. >> wow >> out of how many -- it's an actual number. >> still small but -- >> check out the ten-year that we're watching today it's 247 now he did finally get above that 244 resistance, but remember that well back in -- what were we thinking about back in march when we got up to 260? remember that? >> yeah. at that point we thought we were on track to head towards 3%. yeah >> didn't happen maybe this is the time maybe we're going to need a new chart. need a new vote. you said that was your favorite quote. >> we're going to need a bigger boat >> need a bigger boat. we need a bigger y axis. maybe. >> let's get you caught up to speed at what else is happening at this hour the e.u.'s highest court rulds that uber is not a technology company. it says it is a transportation service, and it should be regulated as such. as a technology company, uber

would have been protected by e.u. law from certain restrictions by individual countries. transportation companies are regulated more strictly, and this means uber could have to start paying licensing fees and employee benefits some some of the countries it operates in in response to that ruling the ride-sharing start-up said it will continue dialogue with cities across europe also, few earnings reports out this morning general mills matches estimates, but the adjust the quarterly profit of 82 cents a share revenue coming above forecast. the food company also saying it is raising its 2018 organic sales guidance, and that stock is up by more than 1%. also, check out shares of blackberry beating on both the top and the bottom line. the software maker says it sees fiscal 2018 are he have new you at the high end of its forecast, and that stock is up by 8% it's only 87 cents winnebago coming in 5 cents better than expectations with quarterly profit of 57 cents a share wrash. revenue also -- the recreational vehicle maker pointing to the

broadening of its product portfolio that says it helped increase both sales and profit margins. >>. >> late last night, early this morning. joining us now shelly moore capito senator, it's good to see you. what do you know about the timeline today coming on squawk is everybody else up and ready to go? do you know? >> everybody else is up and ready to go. we really got momentum here. i think the house -- this will breeze through the house we knew this was a possibility on some technicalities, and i heard from some house friends at about 1:30 or 2:00 last night, and they're ready to make that vote >> do you know how it's going to work after the -- the house put the checkmarks shouldn't be different than yesterday, right >> that's correct. >> when do you think there's going to be some -- a ceremony when it s that 1:00 at the white house? >> right i think the president is

probably anxious to get going. >> in terms of hiring and capital expansion, they change their guidance for what they're going to earn next year. it may be more than just flowing to the bottom line you might actually see the macro improve if all these companies start doing the things that if they all do what fedex did, you would see that, and some of the stuff that republicans have said might actually come true, which would be shocking for everybody, i think. >> it would certainly be welcome. we've always believed that what fedex announced this morning was going to be the result of making our tax code more competitive globally, and i'm excited to hear other companies doing that, but hiring more people to me is the critical thing because that will have some wage impacts as

well >> i ask leader mccarthy about what comes next. >> there are many that would like to see the issue settled along with border security we hope we could get that done towards the beginning of the year it's important to a lot of people certainly a lot of families across the country >> pretty amazing that the mandate goes too, which means you might -- you're going to have to address health care next year somehow again, and when do you expect that? do you have any ideas on how to make that work where people aren't paying just way too much in premiums and deductibles? >> we had two bills. the alexander bill and susan

collins bill that we were thinking may go on a continuing resolution that looks like that has fallen through, and i think we're going to have to address this at the beginning of the year in terms of the individual mandate, then you have to look at 80% of the people $50,000 and under who paid a penalty because they couldn't afford insurance that penalty is going to go away hopefully what we need to work on is the affordability along with other things, and i think we'll do that in the next several months because we're going to, again, start looking at insurance companies starting to reprice we've got to really get some stabilization there. >> right it's going to be -- >> going to be work. >> it's going to be destabilized, though already this enrollment season was the lowest in recent years, was it not >> well, you know, i saw mixed reports on that. you know, there was criticism that we -- that the president had narrowed the window that you could enroll, and then i saw reports that the sign-ups were

morrow bust. in my state they were fairly even maybe a little bit lower you know, so i think people want to buy insurance, but it has to be affordable. i think you'll see us working on that as soon as we come back in january. >> with the mandate gone, though, that is going to force rates up with fewer people in the pool, people who don't want to be in the pool. that certainly means price -- inflation is going to be there what do you think the best plan is for addressing that >> you know, i would vote for the alexander murray bill, which is a temporary stabilization with some flexibilities to the state, which would help the insurance companies keep their rates down this is the csr's, as they're called, and so imauto hoping that that does move forward. it did hit a hitch here last week, and so it's not going to be able to be addressed here in december, but hopefully in january. >> then the big overarching thing that we all, you know, at some point have to think about is entitlements and i can't

believe all this is about the discretionary part versus the non-discretionary spending i mean, we're doing all this, says and we've already spent 80% of the budget when we -- on january 1st it's already gone, right? when do you look at that >> you are frustrated. i chair a subcommittee we haven't even gotern the bill up on the floor. we've got to do -- we've got to start functioning better here, and it has to be bipartisan, and we haven't been able to get there. that will be predictability. one of the interesting things you might find interesting on my subcommitt subcommittee, i'm going to do the oversight on the irs we're going to be on them from the very beginning to maerks today is a good day for tax relief we want to make sure it moves forward for every tax and business taxpayer, and that's going to be a challenge.

remember kbh the house did something with -- yeah >> as a former house member, i can say that was the house >> you were the ones that screwed it up, though. in the senate. >> okay. okay >> senator, thank you. >> thank you all very much >> all right we'll be watching later today. >> sounds good thanks >> okay. coming up, a major player will be back in the hedge fund arena in just a few weeks. all the details about this man, steve cohen's comeback we're going to talk about it next later, a breeding ground for overnight bitcoin millionaires we're going to take you to the crypto castle. it's going to happen at 8:20 a.m. eastern te. quawk box" returns in a moment stay tuned you are watching squawk here on cnbc nobody's putting their money into equities.

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welcome back to "squawk box. futures right now indicated up

last i saw was exactly 100 now it is 106.25 s&p indicated up just under ten. nasdaq strong, up 27 a lot of these would be new highs. again, shares up -- that would be 71 new highs on the dow wendy's is higher. wedbush upgraded citing prospects for continued growth in free cash flow the stock broke out to new highs. >> 2018 could be a very big year for a guy we haven't talked about in a while steve coern, hedge fund legend leslie joins us with that story. lesl leslie >> that's right, andrew. less than two weeks steve cohen will be able to accept entry to outside capital.

snoot latest speculation is that cohen will seek fees that are higher than average. around 2.75% of assets as a management fee, and up to 30% of the profits. now, representative for cohen declined to comment on his plans, but the hedge fund industry has changed a lot in the four years since his prior hedge fund sac capital pleaded guilty to insider trading four years ago and paid a $1.8 billion yon dollar fine. each year hedge funds have lacked the s&p 500 and lp's are demanding lower fees with more favorable structures and a large part of the industry is actually ceding to those wishes cohen is known for generating alpha and maybe the anomaly in the market able to command those higher fees fees and other restrictions that other gp's have been unable to accomplish >> what do you think if you are a betting person? >> if i'm a betting person, oh,

that's why i do this job and not -- don't hang out at the tables in vegas. i think given that they've taken all of these efforts to go out and test the waters and speak with perspective investors, they've gotten a decent response they're looking to get sovereign wealth funds on board and some of these -- >> that's the question >> longer term investors to say -- >> would a -- let's call it a public pension fund get involved with mr. cohen >> a public pension fund >> meaning, you are -- you work for a state. do the past issues -- >> preclude you from getting involved >> preclude you from getting involved does the sovereign wealth fund that represents a country, there's a values piece to this is there a values piece that somehow -- i'm not making judgment i'm just -- >> i think it depends on the pension fund and what their exact bilaws show. steve cohen himself was not as much in hot water. the reason he was -- came under fire was more because he was supervising those who had wrong

doing and pled guilty to wrong doing. i think it depends on the pension fund i think pension funds these days are looking for that outperformance they see that they can get that with steve cohen they will be more inclined to invest with him. i think where pension funds are more skittish these days are things like crypto currency and the more risky speculative areas. in terms of, you know, their specific bilaws, i don't know if steve cohen himself precrudes them from investing in that. >> does this fall into that category where we can't invest in this because we're all about esg these days i don't know i haven't heard that from anyone that i have been speaking with, but i think it's a good question to raise

>> thank you appreciate it. >> when we come back, a live look inside san francisco's crypto currency castle deirdre, what do you have for us coming up? >> well, becky, we are here in the crypto castle, and all o the bitcoin or crypto entrepreneurs, they're still sleeping it's still very early here, but they let us in for a firsthand look at where they live, eat, sleep, party and plot the future of money we'll give you a look when we return

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>> let's take a look at the price of bitcoin at this hour yesterday it fell by more than $1,000 in less than an hour at one point the crypto currency slipping after coin base started supporting bitcoin cash. bitcoin cash is a spin-off of bitcoin that launched earlier this year. this morning you see it's up by $35 for bitcoin. $17,669. a three-story house in san francisco could be good luck for the next potential crypto currency millionaire deirdre bosa is standing by, and i will bite. what is the crypto castle? >> well, becky, this -- what is around me may look a little bit more like a frat house or a commune, but, yes, this is a crypto castle, and it's actually been home to half a dozen millionaires that have gone on to make their fortunes in bitcoin or crypto currency

start-ups. before bitcoin entered the mainstream, this house in san francisco was attracting early adopters and enthusiastenthusia. some came for the cheap rent others came for the like-minded community. now, though, this is where the next generation of bitcoin entrepreneurs eats, sleep, party, plot the future of money and block chain technology at any given time, guys, there are between four and ten people living here. sometimes in closets there's even a required reading like why bitcoin or disrupted. these are crypto industry magazines, by the way. now, this, guys, 2017, this year, becky was just outlining has obviously been a huge year for this crop of castle residents. a record amount of vc investment a billion dollars into crypto start-ups. i'm told that no one expects that kind of growth to be sustainable.

continued boom or overdue bust things will certainly stay interesting for this crop of residents and into next year for the crypto castle. back to you. >> deirdre, it looks shockingly like hbo's silicon valley place. >> it is, and there's been a lot of comparisons to erlickman from silicon valley we'll show you around later, but there's a liquor cabinet over here there's a frig covered in bitcoin stickers and other crypto currency stickers it really does feel that way >> is there an erlickman who actually owns the place? >> there is. there is it's a guy named jeremy garde r gardener, and he has his own crypto currency start-up called auger, and, you know, people come and it's a revolving door if they go on to make money, they don't need to live here where the rent is cheap. we're talking san francisco, of course he, you know, determines who comes in and who comes out and also there's a revolving cast of guests here as well. >> i can't wait to see this guy

later today. you have baited me thank you. all right. we'll watch deirdre throughout the day as she brings more of that to us in the meantime, when we come back, the trump economy and social tension in america. we will talk to national urban league ceo marcq morial about what he sees in the year ahead that comes right of after the break. first, though, let's take a look at the u.s. equity futures sharply higher this morning. dow futures now up by 114 points above fair value this comes as the tax bill is expected to be approved once again by the house today s&p futures up by close to ten the nasdaq up by 28. "squawk box" will be right back. ♪ 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. evaluating patients remotely, is where i think we have a potential to make a difference.

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>> good morning. welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square among the stories front and center, e.u. officials want the brexit transition period to end no later than december 31st,

2020 that view had been expected, but today marked the first formal declaration of the goal. that would be 21 months after britain officially leaves the e.u. slightly shorter than the two years sought by british prime minister theresa may elsewhere, mortgage applications fell 4.9% last week according to the latest figures from the mortgage bankers association both new purchase applications and refinancing activity fell despite a four basis point drop in the average 30-year mortgage rate that now stands at 4.16%. another housing number is due at 10:00 eastern. it's the national associations of realtors issuing november existing home sales consensus forecast calls for a .7% decline following a 2% jump in october tax reform at the finish line this morning. steve liesman is here with the potential impact on gdp. you're talking fedex this morning. >> that's the kind of thing

that's a big variable for how this tax cut will impact two corporations invest? do they give it back a lot of things in motion. general agreement, tax cuts will boost growth by how much and by -- for how long are really the variables out there? let's take a look at some of the forecasts i'm seeing for 2018. some of the them updated just la night and the day before in part, because they finally got the final bill there were some changes in it that were meaningful mike england just e-mailed me and said his number is actually 3% he is a tick higher because of some i things but half a point of that is from the tax cuts pantheon is at 2.7 high frequency at 2.5. morgan stanley, maybe less optimistic at 2.4% all of these numbers are believed to be current potential, and you see some guys in 2018. they're up 2019, though, they have a little bit of giveback in there i don't want to give you a lot

because -- ian shepherdson said the economy will be expanding by nearly 3% on the back of stronger business investment, a modest acceleration in consumption, and increased government spending along with perhaps better net exports as well there will be a big wealth effect in 2018 both from the higher stock market as well as the tax cuts he says negotiations led to a pulling forward of tax cut benefits into the first four years out of the last six. morgan stanley says we don't see this as a sea change for the current economic cycle the fiscal impulse should fade and grow slow across the second half of 2019, though they say corporate spending is a big variable in that josh fineman over at deutsche says all told, which we would welcome supply side. wee reluctant to expect a miracle. that's the dna of economists being reluctant to expect any miracles here are some of the unknowns. do consumers save or spend the tax cuts that they're given? do corporations envest or give it back? the key to all this, how much do rates rise in response to either higher growth or prance higher

inflation? let me show you the fed rate hike probabilities right now march for that next hike we're at 68% that will be jay powell's first meeting. september now, where now they got the second hike baked in -- we did just before it came on -- >> there's the fed rate hike probabilities. if we could go to the ten-year, we pass the psychologically insignificant 2.5% ten-year yield. >> 2.49. >> now it's -- >> it was 2.5 when you sat down on the -- >> you verify that thank you, becky you know, it's basically not responded all that much to the better growth figures, to the tax cut figures, to fed rate hike plans we'll see if yesterday and today is the day when the bond market woke up to the 2018 economic realities that seem to be coming our way. >> thank you, steve. >> sure. >> market rallies, trump's reforms and social activism

dominating the headlines in 2017 joining us right now with a year in review on how social tensions, particularly race relations, played out on wall street is mark he is the president and ceo of the national urkan league. he is also an entrepreneur, a former state senator, and former mayor of new orleans mark, thanks for -- >> good morning. happy holidays >> great to see you. let's run back this is a review of last year, but i'm sure we'll do looking forward to next year too what's happened? >> well, let's talk about the tax cut bill you know, if you are in the 1%, you are spiking the ball and popping the dom, but i think congress could have done better. what would have been better? instead of 83% of the benefits going --

>> marcq, let's just talk about that though. the idea that those in the 1ers approximate are popping champagne corks. there's a lot of people in the 1% that are paying higher taxes, particularly in some of the high state and local stacks >> like new york, new jersey, california >> like illinois you could run through those states there are people who are in the 1% who are going to be paying a lot more where a lot of the benefits will go to the middle class and they'll phase out by the year 2025. >> i mean, again, it's a long debate the way i always looked at this is the middle class may get something, but they're not going to get what they were promised they were promised a giant, a big, a huge, a historic tax cut. this is not the reagan tip o'neil deal, which was bipartisan and revenue neutral this is piling 1.5 trillion on the credit card of america >> you're right. we can go through this look we can sit here and argue for a

long time about what happens yes, the majority of the tax breaks are going to go to corporations the hope from the people who put this in place is that that will eventually spread through the rest of the economy. >> where the trickle down economics will work and whether that theory will take, and i think when you are talking about working people, you are talking about people of color, we could have done better now that the tax cuts have added, steve, 1.5 trillion to the deficit, now there's going to be an effort to try to pay for that with cuts to domestic spending i looked at the projections for growth, and many of the economists are suggesting, well, we're going to have strong government spending. paul ryan gave a big signal yesterday that cutbacks to entitlements and -- >> that's the second part -- that's the second leg of this plan >> second leg of this plan, and that plan would have a recessionary impact, and it's going to be vigorously opposed,

but there was not a lot -- since there were no hearings and really not a lot of public discussion, since this was done really in close smoke-filled rooms in washington, that part of the conversation was really not elevated it greatly concerns me that that is next. social activism this year, this was a year where hate crimes, racial engs tensions really flowed out into the open in american life. it was a difficult year. what was troubling to me most greatly was when charlottesville happened, frankly, to see the president, to see the president, in effect, give comfort to those that showed up with tiki torches to disrupt activities there. this has been a difficult year, and what we need -- i hope 18 can be a year of more healing, more tolerance, more togetherness, but it has to start with the leadership of the nation and setting a tone. >> let's talk about some of the

numbers and what this means for wall street. we're a business show, so we look at some of those things, and you do have some statistics on what the buying power is for black americans. also, the difference between wealth and salaries and how you figure out the middle class. >> so, you know, we know that african-american and latino buying power is increasing significantly. i think my figures show it's about 1.5 trillion to 1.7 trillion a year. if you take african-american and latino buying power together, it's over $3 trillion a year what et cetera significant is that it's growing faster than white spending power on a year-over-year basis, and that reflects changes in the demographics of the country. those consumers are going to have a big impact on the housing market, on consumer markets, on spending on an overall basis >> is their money -- is their spending power going upper capita too >> it's going upper capita >> it is a positive story. >> the unemployment rate was

positive too the lowest in 17 years >> it's positive, and as i've said and i'll have to say because i think it's true, the obama recovery continues you know, we are one year in >> respond to what fedex said this morning they said they're going to go out and spend more on capital spending that aus ensibly -- and hiring the capital spending part is for economic reasons among the most interesting in the sense that you put better tools in the hands of workers you make them more productive. you make them eligible essentially for better pay raises if the corporate tax cut does that, do you applaud that aspect of a corporate tax cut >> if the corporate tax cut increases wages to a greater extent than the rate at which they've been increasing over the last two and a half years, then it could be a positive for the american economy it remains to be seen. business leaders have not jumped on a stable and said now with the additional money we're going

to invest more in wanlges. whether those capital expenditures are going to flow down to workers remains to be seen there is a possibility of that sort of scenario, but i come back to what i said earlier. tip o'neil and ronald reagan did a deal in 1986 there were two components of that deal that were not present in this. number one, they agreed that they would come up with a plan that was revenue neutral they would not add to the deficit. they took that off the table number two, they agreed that they were going to work in a bipartisan basis this bill did not meet either of those tests. that's why notwithstanding where we are today, it's going to continue to raise friction it's going to continue to engender opposition becausei think even today even the best if you -- best -- those knowledgeable legislative experts don't know exactly every provision of the bill because it wasn't going to be done in a transpatient fashion if this does increase wages --

now, wages have been increasing. >> right >> it increases it at a greater rate over a long five to seven year period. then we'll be able to look back and say this has a positive effect it remains to be seen. >> yeah. we'll certainly be watching very closely to see where this all comes down mark, we want to thank you >> thank you coming up next, former barclay's ceo bomb diamond is here he just sealed a $2 billion deal he will join us on set to talk about it when "squawk box" returns right after this i've been thinking. think of all the things that think these days. businesses are thinking. factories are thinking. even your toaster is thinking. honey, clive owen's in our kitchen. i'm leaving. oh never mind, he's leaving. but what if a business could turn all that thinking... thinking... endless thinking into doing? to make better decisions. make a difference. make the future. not next week while you think about it a little more. but right now. is there a company that can help you do all that? ♪ i can think of one. ♪

i6r7b8g9s i6r7b8g9sd . >> 105 points higher ahead of the signing of the tax bill. the vote on the tax bill, i should say nasdaq up about 27 points in the s&p 500 up about nine points shares of fedex are higher in premarket trading and delivery service beating on the top and bottom line. daily average package volume rising 7% compared to a yoer ago. we mentioned this a few minutes ago. fedex addressed u.s. tax reform in that earnings call, and here's what the cfo had to say >> u.s. gdp could increase material this year as a result of u.s. tax reform if this occurs we will increase expenditure and hiring to accommodate the additional volumes triggered from this incremental gdp growth >> shares of fedex right now

let's show you what's going on they are up about 2% in the meantime, atlas merchant taking a $2 billion acquisition of the hartford life insurance annuity business talcott resolution here to talk about the deal and more bob diamond we saw him the other day, but we didn't really see him. he was over there in the background the founder, of course, and ceo of atlas merchant capital. former ceo, of course, of barclays david shamous is here. he is the chief investment officer the atlas merchant capital. >> i have to can my partner who did all the heavy lifting on this, and -- >> you are just the pretty face? that's what's happening. >> heavy lifting was david >> when you do heavy lifting at a company called atlas, i mean, think about -- >> you got it. you got it >> am i right? >> absolutely. >> the entire globe. >> oh, atlas shrub too got to love that >> yeah. you know, everyone always talks about what happened to the

banks. you don't hear as much talk about life insurance companies the one big area where they had a big affect on variable annuities. variable annuities are basically where an insurance company ranks a put to the customer on the equity markets the markets go up, then things work out great when the markets don't go up or the markets go down, you can have problems. that's a lot of what happened post-financial crisis, and we've seen this opportunity where you have a number of big life insurers, big insurance companies that aren't writing this business anymore and decided to get out, and now it's in run-off it's going to be in run-off for many years these things take 20 or 30 years to run-off to be in the business of running these things off makes good sense. >> so this is -- it's a run-off, and there's going to be no new clients necessarily. >> we're looking at lots of things the current plan is to be in the business of run-off. we might look to buy additional run-off blocks and run those off. sometimes run-off could be a higher return business than writing new policies >> you guys have made a

specialty of trying to buy financial services businesses post-financial crisis. >> yep >> when you look at what's going on in this new tax environment, when you look at what people say about what's going to happen to financial service companies, are you bullish? do you think prices are about to go on the move and that would help you too >> i think it's -- it depends on the sector if you look at any sector of the economy, since the beginning of the financial crisis, the one sector that has, you know, still infinite -- still in crisis is financial services if you look at banks in europe, saz an example you and i have talked about the bank we acquired in greece the valuation has not recovered at all times since the crisis. >> is there a reason for that, though >> sure. >> is it risky >> well, is there a reason you know, the u.s. banks with tarp, you know, step one was all the banks got equity step two is you can't give the equity back to the government until you clean up your balance

sheet and pass the fed stress test three, until you pay the money back to the government, you can't pay bonuses, and you can't pay dividends. what happened? the u.s. banks recovered quite nicely they fixed the problems. across most of continental europe, you still have very, very high non-performing loans and balance sheets that have real legacy issues as those legacy issues come off, the opportunity to put talent and technology and drive lending, which is exactly what we're doing in greece, we have the only bank with no non-performing loans we can begin making loans the small, medium enterprise companies. >> most of the businesses you have acquired thus far have been traditional financial services do you imagine yourself getting into fin tech, and do you think that these fin tech players are going to ultimately disrupt or upend these traditional players? >> i would generally say we're much more attracted to the capital intensive businesses banks, insurance companies >> regulated businesses. >> yeah. the reason is not that we don't like fin tech or we don't like asset management, but the number of competitors of ours out there

looking to buy those things, there's a long list. everyone i know is an asset management expert. the number of people who wanted to buy a complicated insurance company or a complicated bank or whatever, the list gets very small very quickly >> and where do you guys stand on bitcoin >> here's my opinion on bitcoin. i've been looking at it for years. i bought a little bit a couple of years ago i'm an owner >> you didn't sell >> i bought a little i didn't sell. >> why didn't you sell we were talking earlier during -- i think it was during a break. if i had been smart enough to buy, i also would have been dumb enough to have already sold. >> here's my opinion people talk about this all the time it's very binary discuss either you love it and you think it's going to a million or you hate it and you think it's a fraud and it's tulips and all that to me it might not be so binary, and it's not crazy to have 1% of your net worth in bitcoin. >> that's how much you bought? 1% of your net worth >> no, but it's getting there every day. it's getting closer. if you have 1% of your net worth

in bitcoin or half a percent in bitco bitcoin, if it goes to a million, you'll be happy. >> how much of your net worth did you put in at that time? >> much less >> like ten bucks. >> more than that, but -- >> what's the intrinsic value of bitcoin today recognizing, by the way, that you can mine a bitcoin, the actual cost of mining a bitcoin today can be done for somewhere between $1,200 and $1,600. >> there's a couple of points. one, you have to build that up you have to create that, and that could could change any day. you don't invest a bunch of money, and you have to pay for electricity, and you have to take some chances that you may not get your bitcoin, and the cost might change. that's problem number one. problem number two is in the end there's only going to be 21 million of these once there's 21 million, there won't be any left. i'm not like some big pro-bitcoin guy. i'm not saying it's not necessarily a fraud. >> you guys have also invetsed in africa. you want to bank the unbanked in africa you talked a lot about that, and people talked about bitcoin being a currency for a lot of

countries where people might have questions about a sovereign currency >> that's why i think the bitcoin conversation, as david said, gets a little narrower if the conversation were are we headed towards a cashless society? absolutely is it going to happen more quickly in areas like africa where they don't have a lot of -- most people don't have branch banking as we know it in developed economies? absolutely is the technology real, and can we have a cashless society yeah, i think that's where we're headed for us once we invest in financial services, i think that's when we get really focused on fin tech. just investing in it is difficult, and as david said, prices tend to get run up because it's kind of a hot sector right now there's no capital you can measure the ebida. you can put leverage on it applying that financial technology once we made it an investment in a more traditional broker-dealer, insurance company, or bank makes a lot of sense. >> hard question for you you guys both invest in private companies, and i know you are

spending a lot of time in europe for the most part and africa and other places this is a u.s. deal. in the public markets, what are the -- who is the -- who is managing the best bank in america right now? you're friends with all of them. that's why i said it's complicated. >> i think there's been a a ver recovery of the uk banks post the financial crisis and without picking out one, what i would say is relative to the banks in europe, you're seeing real leadership from the u.s. banks how is that for a political answer >> very political. >> i'll take the bait though it's very hard to argue that the two best managed banks in the united states right now aren't goldman sachs and jp morgan. you look at the history and ability to manage through cri s crises, doesn't mean we have the jp morgan whale or whatever problems goldman had in the past there's a real history and real tradition of quality management in these places. >> thank you for coming in happy holidays and congratulations on the deal. >> thank you.

>> jim cramer is live from the new york stock exchange. we'll get his take on the day's top stories. futures are up sharply again this morning ♪ when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected.

that's the power of and. i mwell, what are youe to take care odoing tomorrow -10am? staff meeting. noon? eating. 3:45? uh, compliance training. 6:30? sam's baseball practice. 8:30? tai chi. yeah, so sounds relaxing. alright, 9:53? i usually make their lunches then, and i have a little vegan so wow, you are busy. wouldn't it be great if you had investments that worked as hard as you do? yeah. introducing essential portfolios. the automated investing solution that lets you focus on your life.

let's get down to the new york stock exchange. jim cramer joins us now. cramer, i haven't asked anyone this question yet because i'm interested in your take. i heard the stuff from fedex and using this and been using it as sort of a, you know, actual possibly real info about what might happen from this where they said we're going to hire more people and spend more money. you know what, they said if the economy does improve and if gdp does go up, this is likely what we're going to do. are we back to not knowing whether -- are we back to assuming that the tax cut -- tax reform plan does stimulate growth or do we know they are going to do it and fedex is going to add jobs and spend money? >> i think they are pretty clear throughout the theme of the conference call and the q and a that there's absolutely going to be a lot more growth than we thought or else they wouldn't have raised their numbers so much i feel very confident after reading and listening to the conference call that this is not

the market yet, that the tax changes are not in the market. there will be people who say that's why the stocks ran up there's plenty of reasons why the stocks ran up but it's not because of the tax code. i think there's much more to run for stock like fedex which benefits from almost every single line, including the expensing, instant expensing is fabulous for capital equipment >> because it was how much flows to the bottom line based purely on the way you calculate the taxes but some of the stuff they said is also contingent upon gdp hitting some of these numbers that people are forecasting from the benefits of the tax plans. it's still sort of contingent -- skeptics will say it hasn't happened yet, you don't know, 2018 is going to be a 3% year. maybe it doesn't come through. >> the skeptics would do that but i think -- when you move your numbers 440 to 550 the top of that range is because they expect business to be better they give you the range, you

could assume 550 is going to be right. they've got more business -- they have more business than they can handle. >> it's like -- >> it's too cheap. the stock is too cheap too cheap. >> the multiple at that was 16.5 if you put the new numbers in the multiple for fedex drops to 12 you're not talking about multiple expansion on any of these things or big runs with multiple -- >> exactly right, becky. there's just literally no way this company isn't going to make far more money than people preel li realize just from the gdp growth i would love if he would say -- our share of the gdp is going to grow and by the way, amazon, less than -- not even 3% or maybe 3% most and we're worried about amazon this was a great conference call felt good about it. >> i think "mad money" will have a great year. >> thank you pionguys too and that ge

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>> let's get a final check on the markets. 26 seconds, not anymore. 22 seconds up 106 on the dow jones, the

nasdaq indicated up almost 28 and s&p up 9.5 or so the 10-year was over 2.50, it's 2.486 at this point. you can watch cnbc and see the billing celebration, taking a victory lap down there when the house repasses this bill make sure you join us tomorrow "squawk on the street" is next ♪ >> good wednesday morning, welcome to "squawk on the street." dow needs 121 points for a new record today and futures indicate we'll get awfully close. the tax bill on the verge of becoming law the house votes again today. gary cohn spoke about it moments ago. 10-year yield is at least a nine-month high getting above