good morning it's 11:00 a.m. at the white house, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ good wednesday morning welcome to "squawk alley."

we begin this morning with midterm momentum stocks rallying after democrats win back the house, republicans strengthen their presence in the senate full team coverage this hour on "squawk alley. dom chu has the market reaction covered. bertha coombs watching the impact of results on health care stocks steve liesman will tell us what last night means for the economy. and aditi roy will join us on the movement we're seeing today in pot stocks. but we'll kick things off with dom. >> some of the big movers we've been telling you about all the way up until the election last night the last couple of weeks have focused on things like health care, defense, consumer spending, that sort of thing let's take a look at what's happening with the ishares aerospace etf. this has been rallying the last week and a half or so off of some lows from the turmoil that we've seen over the course of the october month there. but all of a sudden we're seeing a little bit of a move to the downside here. the reason why, perhaps this idea that defense is still in

play but we are hitting an area of resistance in the marketplace. $201.44 is the trade there that's the 200-day moving average for that stock it came up there and backed off sense. but defense certainly a sector to watch also one to watch is consumer spending, especially when it comes to retail. this is the spider etf losing momentum through the course of the day so far it had rebounded a bit off of those october lows however, the idea that a devoivd congress might mean no more tax cut 2.0, other things of that fiscal stimulus nature, perhaps pressuring a little bit on the retail side of things. one place we want to focus on is positive action, especially in construction aggregates. we're talking about companies like vulcan material, also martin marietta, up 2.5% up around 6% here for these companies. infrastructure is something that senate majority leader mitch

mcconnell said maybe both parties could come together on as a result, some of these construction -- cement making, concrete, that sort of thing, on the idea infrastructure could be in play. watch those names for sure health care is certainly a focus, although it is to the upside today one of the big etfs that tracks that is the ticker ibb those shares up as well on the day. perhaps a bit of a rebound, as you can see here a nice move higher over the course of this past week but today a nice move, 1.5%, guys back over to you. >> all right, thank you very much let's bring in our reaction panel this morning jonathan golev, sara fagan and jerry. good morning, guys jonathan, begin with you i would imagine this falloff in the vix clears a path for your somewhat aggressive s&p target, right? >> i'm not sure whether the market -- listen, the market has been moving higher the last week

or so so if we didn't have an election last night i'm not sure we wouldn't have this anyway i think the vix will continue to fall back towards 12 and that will push the stock market, 5 s to 8% by the end of the year. >> i think if you would have had a republican sweep it would have been much more pro cyclical. you'd be more sure of an investment spending process. mitch mcconnell is saying that's a maybe. i'm kind of thinking that they don't come together on it. >> jared, i'm curious what you think this congressional makeup bodes for potential regulatory changes, particularly that affect tech. can't help but notice alphabet is up 2.5% this morning, amazon is up nearly 5%. it seems like a split between the house and senate might mean not much changes in that arena >> i totally agree i don't expect much changes in

that arena at all. but i didn't expect them anyway. the reason is, is if you look at the deregulatory agenda of the trump administration, it simply hasn't been legislative. there's a case or two where it's been a bill but for the most part it's been exclusively executive actions by the administration and that's going to continue. if i may, let me just hitchhike on jonathan's point. i think one of the key outcomes from this election is that the positive fiscal impulse from all this deficit spending is today even more likely to fade late next year than it was already and that was already the expectation. i strongly endorse his view that any more kind of piling on the deficit to juice an economy that's already closing in on full employment will not be seen out of this congress >> so, jared, where does that leave you in terms of betting on infrastructure >> well, i think that's a low probability. if i were going to have to say anything that was above a zero chance, it would probably be

infrastructure, but i've already been talking with people about that this morning and the question comes right away, what's your pay for. i have ideas that i'd like to share with you but for now let me just say a low probability event. not zero, but low. >> i'm just curious, sara, do you think that the president's priorities are going to change because of the outcome here? we heard him on the campaign trail talking about health care and pre-existing conditions. we heard him say he would support a $10 federal minimum wage we saw states last night, missouri and arkansas, constituinstitut big hikes there. >> i don't think they'll change a lot. i do think that there is a deal to be done if democrats want to do it on prescription drug pricing. donald trump sounds more like a democrat on that issue than a republican it's a popular issue with voters and so they could get a deal but i would expect the president to embrace a pelosi-led house of representatives.

it is going to be a combative environment where all the new committee chairs will engage in investigations, in part because the democratic base wants it there's a possibility of impeachment hearings i think donald trump will embrace that it will be more of the same in washington where very little gets done. maybe infrastructure, maybe prescription drugs, and mostly investigations >> so then where are the headwinds now, jonathan? >> well, i think the one thing -- first of all, both democrats and republicans are declaring victory. >> yes. >> but if we thought that the president was fighting this china fight for show just to get through the midterms, i think that we're all in for a rude awakening. i don't think that it's a bad thing that he's taking on these issues, but i do think that he's going to push forward and i think that will be front and center adds an issue. >> jared, i wonder how the needle might be moving, again, when it comes to health care we had utah, nebraska and idaho all vote to expand medicaid. so this whole idea of rolling

back some of these provisions in obamacare, you know, those are red states, seems to be again in question what do you think happens there? what do you think those votes may have signalled. >> well, you're exactly right to focus on those by the way, that's where i think democrats won big last night minimum wages, medicaid expansion, ex-felons in florida, those are all very big deals obamacare in my view was already here to stay when you had a bunch of republicans out there pretending to want to protect pre-existing conditions in the campaign, that told you that obamacare is not going away now with the house flipping, obamacare is the law of the land and it's going to stay that way. what you're going see from house democrats are a lot of policies and bills to strengthen obamacare. now how far they get, sara is probably right, not very far but prescription drugs, as you suggested, is something trump has always really understood is a huge problem maybe there's some wiggle room there. >> guys, it's a tight show today

because we are expecting the president in about 20 minutes. we appreciate it come back soon jonathan, sara, jared, thanks. >> thank you as we head to break, check out shares of twitter. five years ago today the company celebrated its ipo here at the new york stock exchange. the stock up more than 30% since going public, but -- i'm not sure that's right, but it closed that day above $44 per share still below that price and later, the president set to hold a news conference from the white house. we will take you there live for the start. a lot more of "squawk alley" still to come. [ phone rings ] what?!

ready for christmas? no, it's way too early to be annoyed by christmas. you just need some holiday spirit! that's it! this feud just went mobile. with xfinity xfi you get the best wifi experience at home. and with xfinity mobile, you get the best wireless coverage for your phone. ...you're about to find out! you don't even know where i live... hello! see the grinch in theaters by saying "get grinch tickets"

into your xfinity x1 voice remote. a guy just dropped this off. he-he-he-he. welcome back to "squawk alley. take a look at oil prices taking a turn south right now, trading at $61.30, down 1.5% you had builds in both oil and gasoline and a huge jump in u.s. production, 11.6 million barrels a day. that was a 400,000 barrel increase on a daily basis. remember, look at the market globally right now uz opec and russia getting ready for those iran barrels to come off. the barrels have not come off. so are we going to head into a winter with a supply glut on our hands? that's what the market is mulling as we trade lower. i'll send it back to you. health care a huge catalyst in last night's midterm results. top of mind for voters, so it

should be top of mind for investors this morning bertha coombs with a look at which stocks have the most to gain following the election. >> hi, contessa. for insurance and hospitals, analysts say gridlock in congress is good news. it means status quo when it comes to insurance regulation and coverage, which is not what we've seen the last couple of years so we're seeing now highs for humana anthem, aetna and united also new highs as investors anticipate less volatility in health care. democrats push through medicare for all and republicans can't repeal obamacare without the help of the other chamber. that's double good news for people like centene and molina health not only will republicans be blocked from cutting medicaid funding, voters in three republican states, idaho, nebraska and utah, approved referendum on obamacare medicaid expansion which could lead to

coverage for more than 300,000 people combined across those three states and maine, where voters expanded medicaid last year that were blocked by the republican governor, they elected a democratic governor that will carry out that expansion but democratic gubernatorial losses in key battlegrounds, florida and georgia, more than offset the gains in those four states those states have nearly 2 million people combined that still are not covered. drug makers and biopharma are higher today as well drug pricing is one area, though, where we could see bipartisanship, but the first place that they are likely to start might not be with drug makers but with the drug supply middlemen, particularly pharmacy benefit rebates which the administration has already targeted that's one area where a lot of folks think we could see a move in congress to help bring about more transparency. >> some of this will just take time to unfold there on capitol hill to see what happens

bertha, thank you. talks at session highs following last night's midterm results. art cashman joins us now what are you watching in the wake of what was widely expected to be the result >> well, first of all, i think you get an extra boost this morning when mcconnell spoke calmly about infrastructure, hinting that maybe he could cut a deal with the democrats and that's going to be stimulative that has added on to us here i'm going to watch also the president. i think he's still in his victory lap round, but where do we go with trade talks with china. he went out of his way to make it sound bullish going into the election i want to see if he changes that after. and finally i'm going to look at the internals of the market. we have rallied back into a classic retracement area, one that my friend, dennis gartman, tends to call the box. it's a retracement of 50% to

62%. and the s&p would be somewhere between 2,770 and 2,815 and we're right there now. so we've gotten through a couple of moving averages, but it will be key if we can get past 2,815. >> art, do you expect that any of the big things that people expected could change, will change there have been questions about facebook, amazon, google, these big techs that could be set up to be pressured or split up or have the rules around data change it seems that split government in congress, the house, the senate, makes that less likely to happen. >> well, to a degree but what you're seeing is maxine waters and others would not be unhappy to get certain investigations beginning so i think if i were running

facebook, i'd still be a little bit wary here to see where things are going but i do think, jon, that the key here is going to be the tone of the president on the trade talks. does he feel that this gives him a little bit more muscle power does he crack down a little pitt mo -- bit more on china or does he stay accommodative and see where we go from there >> why would this give him more muscle >> well, i think that he's still got control of the senate, puts him in great shape he can do a lot of stuff by executive edict and see where he goes so he lost the house, but he didn't lose it in an avalanche they have narrow control they're going to pester the heck out of him with investigations all over the lot, but it shouldn't be enough to really change his policy.

so i think he will feel reinforced, and quite frankly i think that president xi will see that, okay, he didn't get tumbled here so we'll see where we go. >> so they would respect the results? >> i think so. i think they might be a bit more accommodative. but i want to carefully listen to his tone. it will be more than just today, he'll be celebratory today, but by the end of the week i'd like to see how he sounds. >> there was some speculation that there might be an end to aggressive growth policies coming out of washington, d.c., if the democrats took the house or more and that that might lessen the pressure on the fed in terms of hiking rates do you see any of that coming through to fruition? >> well, i think you see that the yields have gone down a little bit here. i think that's primarily because they think it's lessened any shot for tax cut 2, so that's not going to be there.

but as i say, from the stimulus side, the tone of mcconnell helped the market here that gave you a bit of a booster shot we're assuming that they will pay for it, that it won't all be credit and that's why the yields didn't move. >> finally, people have been watching the internals since the low, right some of them have been patiently waiting for the percentage of names above a 20-day high, for example, to go up as they normally do after a correction are those being answered today >> we're getting closer to it. the market is, as i say, somewhat celebratory here. you know, we got a partial change in control but not a disaster on either side, so they're happy. but i'm going to stick more with what i spoke of before can we get up and through the box. we've gotten through several moving averages. and then the data you're talking about begins to kick in, meaning the market broadening here or

the rally broadening here. then i think we could be in very good shape but we've got a couple of days to go. >> art, good to see you. thank you. >> thank you. when we come back, which sectors are most impacted by last night's results and what that might mean for markets. take a look at the major averages the dow is up 268, as the president is set to speak in about ten minutes. when he goes live, of course we'll bring it to you. more "sqwkll" aomt.ua aeyin men we're voya. we stay with you to and through retirement. so you'll still be here to help me make smart choices? well, with your finances that is. we had nothing to do with that tie. voya. helping you to and through retirement. hi, my name is sam davis and i'm going to tell you about exciting plans available to anyone with medicare. many plans provide broad coverage and still may save you money on monthly premiums and prescription drugs. these are affordable, all-in-one plans that help pay for doctor visits, hospital stays and emergency care. but they also

include prescription drug coverage. in fact, last year humana medicare advantage prescription drug plan members saved an estimated $6,900 on average on their prescription costs. call a licensed humana sales agent or go online to find out if you could save on your prescription drugs. this plan delivers coverage for the three things you may care most about; prescription drug coverage, doctor visits, and hospital stays. plus, potential cost savings on your plan premium. humana has a large network of doctors and hospitals. so call us, or go online to find out if your doctor is part of the humana network. ready to learn more? call the number on your screen for this free, fact-filled decision guide. there's no obligation, just good information. call the toll free number on your screen, now. you'll learn all about a humana medicare advantage plan and how it compares with your plan. with most humana plans, you get

coverage for prescription drugs, doctor and hospital visits, and more. all for zero dollar monthly plan premium in most areas. most humana medicare advantage plans even include dental and vision coverage. and, most humana medicare advantage plans include the silver sneakers fitness program at a local fitness center. so call or go online to find out if your doctor is part of humana's large network of doctors and hospitals. and see if a humana medicare advantage plan is the right plan for you. pick up the phone, and call the number on your screen. the call is free. and licensed humana sales agents are standing by. so call now. today, we will steal christmas in style. ♪ if i'm gonna become santa,

then i need to get in to character. what's santa have that i don't? [ bark ] that's hurtful. go team. [ snow crunching ] [ louder snow crunching ] this is the loudest snow i've ever heard in my life. major indices rallying this morning including tech stocks rallying with the nasdaq up nearly 2%. key policy issues potentially on the line for big tech including privacy, net neutrality and antitrust weighing in on all of this as alan patrickoff, to add one more issue to all of that, alan, health we had some expansion in idaho,

nebraska, one more red state, i'm forgetting off the top of my head right now, for medicaid you've got a number of health companies in your portfolio. did you sense any kind of a shift or opening for efficiency in dealing with health care because of these results and because of how congress shaped up >> well, it's a little fast overnight to have any changes, but i think, listen, aca is safer now than it was even yesterday. >> is that good for you? >> yeah, i think it's good for everybody. i think it's good for business, good for the health companies. you know, obviously strong democrats like me would have loved to have seen a clean sweep on everything. we have naively optimistic and thought we'd wake up this morning like christmas morning and we would have sent the strongest message we ever could have sent. and we've sent a message certainly in the house and we've sent a message in

gerrymandering, we've sent a message in some governorships. we came very, very close in a couple of key governorships. you don't like losing, but losing by a fraction in states that were clearly on the other side is very -- it's an encouraging morning. >> utah is the last one that i couldn't remember. how does this bode for competition overall? we've talked about how you feel about big companies like amazon, like alphabet, the effect that they have on innovation. from a policy perspective, do you expect things to pretty much stay the same or get better over the next two to four years >> i think that we're going to see privacy is an issue that's going to stay with us. it's not going away no matter who won last night and i think that there are other issues that people are concerned. net neutrality, which you discussed, i don't think that's changing but, you know, we're in a new congress and we'll see what's

going to happen. hopefully we won't get just stuck in no man's land for the next two years, which is a real possibility. >> what does this mean for some of these pigger tech companies we heard president trump talking about looking into whether google and facebook might be violating antitrust laws, and now you've got democrats who will chair some of these committees in the house who seem to indicate that they'd like to look at some of the same issues? >> i think it's an issue that's front and center i hate to be a broken record, but i mean i think that we've got to look at some of these companies that have taken over so much of the businesses they're in and affected so many tech companies that there's got to be some attention paid to it and some definite investigation. >> given that gridlock has been like, oh, the markets are going to love gridlock, but on these issues, if you think it needs to happen, is the split between the house and the senate going to be a problem to getting anything done on net neutrality or privacy or antitrust of big

tech >> i think there are certain issues they'll come together, like infrastructure, for example. in terms of looking into the size of companies is going to be something that's going to be there. privacy is definitely something that's not going away. but i think that for the most part we're going to have a lot of investigations and we're going to have a lot of -- i don't think we're going to have too much change. i wish i could be more optimistic. >> it's money you mention investigations because mcconnell this morning spoke to reporters and warned democrats against what he called presidential harassment, saying it hurt the republicans under clinton and didn't really hurt clinton himself. he says if that's the way you want to play it, that's your choice. >> that's mcconnell speaking he comes from some singular position we're now going to perhaps get a chance to find out what the president's financial position is. >> that matters to you >> i think it's something that's been long in coming and has not

been appropriate that these -- there were a lot of things that weren't disclosed. i don't think there's going to be wholesale investigations, but there's certainly -- there are going to be certain issues that were verboten before and now they'll be available to be discussed and they will be. >> alan, always great to have you with us. >> thanks for inviting me. european markets set to close. let's get to seema mody. >> european markets rallying as the midterm elections here in the united states revealed few surprises for european investors. a few warning signs on the economic side of things. eurozone retail sales coming in flat in september. very surprising coming ahead of the holiday shopping season. despite that weak data, we're also looking at shares of mulberry jumping more than 4%. the british luxury goods retailer said business had been hit by declining revenues in the uk that market accounts for 70% of its total sales.

the european auto sector under renewed pressure after bmw reported a sharp drop in profits and saw its margins cut in half. analysts say that's due to increased spending on electric cars and costs from new emission rules weighing heavily on profits. that stock is down more than 3.5% this comes in the wake of several profit warnings from other eu automakers, including daimler and suppliers such as michelin and continental so clearly a story that we continue to watch. on the more positive side of things, for turkey, perhaps signs of rehabilitation in turkey launching a new euro denominated bond the question is whether there will be foreign investor interest we'll get that answer over the course of the last week. finally, a meeting between president trump and russian president vladimir putin has been confirmed later this month at the g20 summit. carl, back to you. >> thank you very much, seema. let's get a news update this morning ahead of the president

with sue herera back at hq. >> good morning, everyone, here's what's happening at this hour florida's secretary of state announcing there will be a mandatory recount in that state's senate race because the margin of votes separating incumbent senator bill nelson and gop governor rick scott is less than half a percent scott's leading nelson 50.2% to 49.8 w 49.8% with nearly all of the votes counted. china's premier and russia are holding talks in beijing the two say they oppose unjustified trade barriers or sanctions. five people were sent to the hospital after a cargo jet went off the runway while landing at the international airport in halifax, canada, this morning. the plane was heavily damaged in that incident. and the fda approving a pill for cows meant to alleviate the

offensive odors in cow pastures. it's to reduce the amount of ammonia reduced in cow manure. yes, there is now a pill to make cow dung less smelly that's the news at this hour you can't mang it up let's get back to you guys. >> we live in a golden age, sue. >> yes, we do, carl. >> it's a good time to be alive. thank you. the president is set to hold a news conference any moment following last night's midterm election results we have our election desk ready for reaction eamon javers, michelle caruso-cabrera and more. >> we were waiting for the president to begin speaking here in the east room of the white house, and he is clearly bracing for the onslaught of investigations and subpoenas that are expected to come as democrats take control of the house. he tweeted earlier today that this is all going to be the fault of 17 angry democrats calling it a witch hunt, talking about the unpopularity of the

mueller investigation or so he claimed. and all of this as the president really here trying to get on the offensive because he knows that his policy agenda is in peril now with divided government. you heard earlier today senate majority leader mitch mcconnell talking about the fact that the 10% tax cut for middle class households that president trump had been touting, that's essentially dead they would have to work with potential house speaker nancy pelosi in order to get it done unlikely to happen now the president has tried to extend perhaps an olive branch to pelosi, saying that she deserves what would be a great honor to serve as speaker. we'll see if that actually opens the door to any type of bipartisan discussions and negotiations in a new congress >> thank you we'll come back to you in a few moments. as we said earlier, let's get to the election desk. aimon, michelle, steve and john. i'll start with you. how much does the president give away this early in the game? >> evening the president is

going to try, carl, to claim credit for the expansion of the republican majority in the senate that was something that he did help by rallying voters in those red states republican turnout and enthusiasm and engagement all rose later in the campaign to match democratic intensity the issue that democrats told me before election night was not whether their voters would turn out, they knew that was going to happen, it's whether the r republican vote would turn out in places like indiana, missouri, north dakota, that sort of thing, and that vote did turn out that's why democrats lost a couple of their incumbents there are still races in limbo but the president also has to confront the fact that he now has a rival power center in washington the democratic majority in the house is a big deal. it's going to rock the trump white house in terms of oversight investigations and forcing the president, if he wants to get anything done legislatively to compromise.

>> carl, i would -- >> eamon javers -- >> i would just jump in on that and make one point john, ultimately, this is more and more the republican party more and more is donald trump's party. he's going to come out here in the east room in just a couple of minutes and put his stamp on it when he came into power as a rookie president with not a lot of political experience, there weren't republicans really who owed him political loyalty now there are. you saw the president making that point in a tweet earlier today saying that the people who followed my lead won their races. those people are now going to have some loyalty to president trump politically and personally that's a new dynamic for him so as challenging -- john is right, as challenging as it is to have democrats in charge up on capitol hill, there are going to be a lot of republicans throughout the republican party who owe the president a lot politically. he didn't have that dynamic when he first was elected so that's going to be a new thing going through the next two years of his term as well. >> but you know that's not a sure bit

if you look at south carolina, here was mark sanford who had taken on the president as a republican, lost in the primary to a woman who completely embraced trump and his policies, and then she was defeated in a district that hasn't seen a democrat in 40 years michelle, is the president likely to change at all to accommodate sort of a changing tide, a hit-or-miss sort of scenario >> i don't think president trump is ever going to change, contessa he's going to be the same person -- >> endorsed 100%. >> he's going come out fighting. he's going to come out fighting. he's going to frame this as a victory in every way, shape possible i think the question you're getting to is what is the message of the election when you see who won and who lost how much support does president trump have it depends on what part of the country you're in. we saw a really big rural/urban divide, very dramatic. you see a division when it comes

to ages. the age of people voting, the race of people voting. but none of that is going to change the president as all. >> steve liesman, it seems to me like we're in a position where we're not likely to get new tax cuts, that middle class tax cut that mitch mcconnell was likely off the table. also it seems like a tough road to any new taxes to pay for some of these things like infrastructure that people are talking about as potentially being on the agenda. what are the broader economic complications that you see of this congressional split and what new is likely to come out of it? >> well, i think we'll worry about the deficit when the bond market insists that the government worry about the deficit. that's when it will matter i think the republicans and the democrats on both sides will push that limit to the point i think you might expect some new spending if i was don quixote tilting at windmil windmills, i think there could be an infrastructure bill.

it is one thing both sides agree. potential for immigration reform because the daca issue may come to a head. pie the way, they're still going to have these budget deadlines so they'll have to fund the budget which means sides will come together. it's obviously somewhat politically naive to think there will be compromises, but i think there could be compromises where there have to be compromises in looking at the issues, for example, the views on tax cuts, the views on trade, i think the president and the democrats have fought these issues to stalemates you have pretty much equal numbers. they have helped, they have hurt and a big portion they have had no impact on so picking up on michelle's comments on those issues, tariffs and tax cuts, i expect no change at all from the president. >> jon, there is one tax cut that i think democrats could potentially support and i'm not betting on that butthat is a restoration of that state and local tax deduction that was taken away in the 2017 tax reform bill. >> how could that happen that's the thing that paid for

in the majority the tax cut on the corporate side would they just get rid of it and allow the deficit to go up in that regard >> i don't know. but republicans like tax cuts. that is a tax cut that democrats could get behind it's something that helps democratic-leaning states and a lot of democratic members would be for it. like i said, not betting on it, but that's one that they could support. >> but it's unfortunate, steve, that both parties once they have power, they love to spend money. they don't mind deficits republicans claim that they are bothered by deficits, but once they get into power, they seem to spend lots of money. >> they love to spend money, but does that override the need for democrats not to give donald trump a win? they don't want to see the president having a major ribbon-cutting ceremony at an infrastructure project so you might see deficit hawks saying maybe now is not the time to spend money. >> i think what he means is that the price for democratic cooperation goes up. that is to say they're not going

to make a small deal to give the president a victory, but they might make a large deal if he's willing to make a large deal with them. >> separate from all of this of course is hank paulson speaking in singapore about warning against an economic iron curtain with china. >> that happened today he's been saying that for some time hank paulson was at the university of chicago just last week at a u.s./china forum as well i heard him speak. and he reiterated or said that for the first time where he talked about how concerned he is that even if you get beyond tariffs, he thinks this cold war with china will go on for a long time >> i think we're in for a longer period of tension in the economic area. it's going to be more complicated, it's going to be more tense we could talk about it for a long time. >> when it comes to china, guys, i wouldn't be surprised if the president brings it up today it's one of his key talking points he'll probably also talk about federal judges, the judiciary,

anything he can paint as a win i think the way he's handling china right now, i think to his -- in his mind is a real win for him. >> john, i'm curious what you make of this because cashin for example, just a moment ago suggested that maybe she is, i don't want to say the word impressed, but respectful of the fact that it was not a complete shellacking in the house the way it was a few cycles ago. >> look, i think the biggest variable in the u.s./china relationship right now is donald trump himself. whether the president wants to continue down this road despite unnerving markets, despite potential damage to the economy, i think he's the variable more so than she. >> can i just ask you very quickly -- >> i just wanted to -- yeah, go ahead. >> when i look at the trade numbers here, 25% said the president's trade policies helped them. 29% say they hurt the u.s. economy. 37% say no impact. i look at those numbers and i just ask john this question.

i don't see any reason for the president to back off. there are some regional differences there. i would imagine that the tariff policies would change if those numbers were dramatically one way or the other. >> i think he would back off if he gets closer to his own re-election in 2020 and it looks like his policy is hurting the economy. >> or in a specific electoral place, like, for example, the farmers who have seem to come out in continued numbers to support the president despite the effects of the tariffs. >> okay. so here we are the morning after midterm elections where we have seen the democrats retake the house. in the senate the republicans firm up their hold of course president trump coming out and many anticipate that he's likely to give this a victory lap. we are there and waiting to hear from the president >> it will be interesting to see what sort of tone he strikes on trade. he did tweet earlier this morning that he received congratulations from foreign nations, friendly foreign nations on what he said was his

tremendous success last night. it will be interesting to see if we find out who those countries were, if china was perhaps among them, because there's been a lot of speculation that perhaps some of the president's rhetoric had been an effort to energize and motivate his base around those trade issues does the president change his tone on trade with china after yesterday's result and what does it mean for ongoing negotiations around the usmca, around a trade deal with japan or the eu. remember, congress will have to weigh in and approve any of these deals. so working with democrats, keeping them in the loop is going to be very important even republican lawmakers had complained that the white house was operating unilaterally i'm sure that democrats are going to ratchet up that type of offense as well. >> eamon, you spent a lot of time at the white house and on capitol hill as well how likely is it, do you think, that camaraderie, even in a

behind-the-scenes kind of way, comes into play here i get that the optics for the democrats are important to be seen opposing the president, but do you think behind the scenes that they will find some common ground i asked about minimum wage earlier. >> look, contessa, i don't want to be a painful cynic here, but camaraderie is a dead letter in washington these days, even behind the scenes. there's no realin sent i've here for democrats to want to give donald trump a win i go back to john's earlier point. at some point the president pivots and starts thinking about 2020 and what his future is. my fascinating question here, you look at the stock market we've had a nearly flat year in the stock market a large piece of that is the president's trade agenda, which has been weighing down the market over the course of the year the president has signalled that he is willing to take a certain amount of stock market pain in order to get to the longer term goal, which he thinks is important of revamping america's trade relationships around the world. the question that we don't have the answer to yet that we might yet in the next two years is how

much stock market pain is the president willing to take over the coming two years where's the breaking point for the president when he says, you know what, i'm going to back off these policies we haven't seen it yet we don't know where that is. >> contessa, i'm going to be less cynical than eamon and point to one area of potential camaraderie and that is in the appropriations area, in the spending provisions. they have to compromise on that to keep the president open steve liesman referred to this earlier. they're going to have to figure out a way to fund the government and keep the lights on and they will do that. >> steve, to eamon's point, where is the strike price on the trump put on the stock market? >> i don't -- i don't know the answer to that question. i think there's a place where -- look, if you read woodward's book, he kind of liked the idea -- he was chagrinned that he was leaking information on a sunday to a reporter because the market wouldn't have a chance to

react. he said if we put this out tomorrow it would go down by however many hundreds of points. he kind of likes that reaction >> he's very attuned to that. >> the 270 electoral votes you need. >> but we're making the assumption that he believes that the market would fall because of trade. >> he knows it. >> wait a minute he could turn around and blame jay powell and blame the fed. >> i want to challenge my cynical colleagues here from washington. >> you said i was less cynical. >> less cynical than eamon but you're not not cynical i want to take the same question carl asked, which is this. the democrats really want a win on health care is there a price they would pay such that trump gives x and dems get something on health care is there a way to make that happen health care is the number one issue. >> look, i think that the core thing that democrats want on

health care they already have. that's obamacare so i think democrats are going to be in a position where they are not going to be willing to compromise cheaply they're going to have to get something. otherwise they'll be content to fight as president trump and the white house may be con tent to fight with them. >> are you saying if you give president trump money for the wall he'll give you x for the health care? >> that would be -- >> zero chance. >> i think john would tell me zero chance. i didn't ask it that way never compromise on the wall but the idea that they might compromise on, i don't know, maybe there's a s.a.l.t. for health care agreement or pharmaceuticals for health care agreement thes out theat's out e these guys, maybe there's some places where both interests coincide. >> you're about to see the president declare victory in this election where we lost the house of representatives this president is big on

declaring victory. i think the most likely scenario particularly on trade is for the president to get something from china and say it's a big win, this is a victory and now we're finished with our trade revamp i think that will be a signal to the markets that that's the end of this pressure i think at that point you guys are the market experts up here, but at that point the market can say, hey, that's going away. >> we would like that. >> now we can go back to focusing on earnings. >> you heard hank paulson earlier? i am not convinced -- >> you don't think there's a victory? >> on china on a trade deal? i don't know they want so many things out of china. they already tried once. mnuchin had the deal, buy more soybeans. >> it's interesting because we already saw in the lead-up to the midterms that the democrats were able to change what topics the president wanted to talk about. when he starts coming out and saying the republicans are going to be the ones to defend pre-existing conditions in terms of insurance coverage, that's a big change from touting the economy. and even this issue of

immigration, there were democrats who were forced to say, look, we are ready for comprehensive reform on immigration and a lot of conservatives are saying we need to do it because we don't have enough labor to fill the jobs that wee with unemployment standing where it is right now when you're out and talking to members of congress, clearly there was some expectation that this might be the result today how have they prepared for what their policy priorities will be? >> reporter: i think one of the things we have to be careful of is assuming that democrats are operating as a monolith. you talk about democrats versus the white house. there are a lot of new freshmen members who are going to be joining this congress and that is going to change the dynamics on capitol hill. so, for example, on an issue like infrastructure, which is one that nancy pelosi has said is a top priority, the white house wants to work on it, republicans say they want to work on it, democrats haven't come to an agreement on exactly what kind of plan they want. nancy pelosi saying she wants a trillion dollars of federal

spending the head of the transportation commit he says he wants $500 billion funded by a new invest in america bonding other members want to see a carbon tax, an increase in the corporate tax rate to pay for infrastructure, so there's still a lot of policy ideas floating around here. it will be a test for democrats to see if they can come together, unify and push an agenda together. >> i want to bring in jane wells as well out west in the aftermath of this midterm election jane >> hey, john yeah, we're here in arizona where the senate race is too close to call between two women, but it has been a record-breaking night for women, democratic women, i should say 97 women have been elected to the house. that is a new record but 83 of them are democrats the numbers in the senate are holding steady we'll ending up with 23 women senators that's the same as now

maybe 24 if this runoff election in mississippi is won by the female candidate but it really was a move for democratic women many of them decided to run for office in 2016 after donald trump's election and in fact the center for american women in politics women actually lost ground in this election so we've had this huge surge but it's really a democratic wave on the female side. carl >> jane, thank you our jane wells, a live shot of the white house as we are awaiting the president in a couple of minutes. by the way, the president's week is far from over he is expected to meet with putin this weekend in paris over a working lunch. we did get some details about how he watched the returns last night joined by the likes of sheldon adelson, steve schwartzman, michael milken, harold hamm, as they were cheering some of the returns like the kinds we got in texas, for example, in ted cruz's

victory. >> we're waiting to hear from the president. we expect him momentarily. again, to see how much of this for him is about turning this into a big victory dance over the showing of republicans in the senate especially. but it may also be an opportunity to offer up calmly as he did -- or an olive branch -- and he did to nancy pelosi >> we'll find out. certainly he can take this a number of different directions, policy priorities. obviously he has arguably more freedom than ever before regarding his nominees giving the room to breathe now that he has in the senate. >> indeed. and can't help but wonder is there any force pulling the two sides to the center here, or is it more polarization with the new faces in congress in particular are they feeling their

constituents put them in for a kind of change that's going to make them more resistant to compromi compromise maybe we'll get a signal >> hard to say jim jordan who will make a run for minority speaker, has told cnn the reason we lost in some cases we should have run closer to the president so there's some clues, at least, the coming term is going to mean actually potentially less compromise >> that's where my bet would be. >> really? >> not only because of that and the president tending at least in his tweets thus far to emphasize, hey, the people who stuck with me, they're the ones who got elected. and then on the democratic side a lot of the new faces you see are arguably coming from the left not from the center >> it will also be interesting to see how the exit polling on issues that were most important to american voters informs what the policy priorities are going forward, how much attention will we see this white house spend on health care? how much -- and we heard it in the leadup, the president talking about the caravan and border security, immigration

outranked the economy as a straight issue when it came to exit polling >> he might be asked whether or not he beliefs the caravan is an acute risk as it was a few days ago. by the way, to contessa's point, top issues were health care, 41%, immigration 23%, guns, 10%, and, michelle, as said earlier today, a lot of that's just because people are used to having a good economy. we've had a pretty good one for a while. >> sure. people talk about their anxieties and to the degree the economy isn't an anxiety anymore, that's why it falls back to number three one of the interesting things to think about what message does the president take away from all of those issues you just mentioned, immigration, for example. i hear whisperings where people talk about, okay, who is going to be the vp on the next ticket? do you keep pence there, or with nikki haley available, does she end up being the vp? you start to defang the issues

around women, maybe make him secretary of state it's up to the president to decide who gets to be the vp nobody is saying that anybody wants pence to go away, but certainly you might grab more of the middle if you made a move like that. >> he's running -- there's another question, the other side of that question, which is what message do the democrats take? i think there are consequences here for policy and consequences for the markets in this regard if the democrats take an attitude of we won because we ran more from the left than the center, that creates one area of no compromise. if there's a grab for the center, things that might happen >> i don't think it was ideological. >> minority candidates as well particularly minority women, hispanic and african-american as well

i think democrats are gravita gravitating to fresh faces, talent the party is close together on most major issues, and -- >> the democratic party? >> yes issues are not that wide, so you have somebody like sherrod brown, a democrat. he won handily last night. he will be in the 2020 conversation i asked about medicare for all which is a key issue of the so-called left i don't really have anything against it i'm not backing that right now i'm for letting people buy into medicaid when they're at 55. it's a little soft it goes to individual talent of the candidate. >> the democrats have a problem in florida and ohio, and that

means they have a problem with the national electoral map, doesn't it >> well sure >> is there a path to victory? it's ridiculous but is unavoidable. does that mean the democrats need to work an electoral strategy more in the center that allows them to be -- obviously they're competitive but to win in florida and ohio. >> governorship was lost in wisconsin. the governorship was lost although a democrat already held that remember, they barely lost in those states and that's why with hillary clinton who was quite unpopular for a democratic nominee on the ticket. without hillary clinton's baggage they're likely to be more competitive

>> i think the dems would give up wisconsin for either ohio or florida in that regard >> high-profile dynamics >> as we're talking dow session highs are up 313 mike santoli joins us back at post 9 as the vix threatens to fall below 17 again. >> i think the market is playing as if it's free of worrying about the political and policy stuff. i think the one swing in that perception would be if there's any hint of aggressiveness to china post election. goldman sachs saying the president is likely to put new tariffs on china in 2019 doesn't change it here there is the president's press conference live to the white house.

it was a big day yesterday, an incredible day. and last night the republican party defied history to expand our senate majority while significantly beating expectations in the house for the midterm year we did this in spite of a very dramatic fund-raising disadvantage driven by democrats, wealthy donors and special interests and a very hostile media coverage, to put it mildly. the media coverage set a new record and a new standard. house retirements are tough. these are the seats that could have been held easily and we had newcomers going in and a lot worked hard. it's very difficult when you have that many retirements we held a large number of campaign rallies with large,

large numbers of people going to everyone i'm sure you would have reported it if you spotted one. we saw the candidates that i supported achieve tremendous success last night as an example of the 11 candidates we campaigned with during the last week nine won last night this blue wave they talked about, i don't know if there was such a thing, could have been if we didn't do the campaigning probably there could have been and the history really will see what a good job we did in the final couple weeks in terms of getting tremendous people over the finish line. they are tremendous people many of them were not known. but they will be known

thiselection marks the largest senate gains for a president's party in a first midterm election since at least president kennedy's in 1962. there have been only four midterm elections since 1934 in which a president's party has gained even a single senate seat as of now we picked up, it looks like, three, could be four, perhaps it could be two. we picked up a lot and most likely the number will be three, you people probably know that better than i do at this point because you've looked at the more recent numbers 55 is the largest number of republican senators in the last 100 years. the last 80 years a sitting president has only gained