tv Power Lunch CNBC November 20, 2017 1:00pm-3:00pm EST
much >> a good place to invest. >> it still is they failed to form a coalition government >> went from down to up. the whole market flipped over. >> the euro versus the dollar. >> every bank is off >> we're going to watch it now thank you for being here congrats to america's new america's team the philadelphia eagles, the new america's team welcome, everybody happy monday 2017 turning into a rocking year for your money all the major averages are up bigly. it's not all wine and roses. there are things that you and your money need to be watching for into next year we're going to lay them out. the race for driverless cars shifting into high gear. what it means for the entire auto industry. she may not be in most famous of the kardashians but she could well end up being the most
successful how kylie genre era jenner takir makeup to a new level. tors carving out some gains. cisco systems have the most positive the stock is on track for its fifth straight day of gains. now down more than 20% from it' all time high. another day, another record high for bitcoin. breaking 8,000 for the first time it's now up almost 750,000% in 2017 michelle >> hey, there. live in auburn hills, michigan the white house worries about
u.s. jobs being outsourced to india. today an indian company is moving jobs to the united states the new assembly plant where they will assemble new off road utility vehicles they plan to hire 250 americans in the next few months and 400 more by 2020 ahead this hour by interview with the chairman and what he told me about corporate taxes and nafta. if he has any kmconcerns about . what republican congress wants from d.c.'s big tax plan back do you. >> we look forward to all of that see you soon we begin with comments from the president. he spoke a short while ago at the white house. president trump labeling north korea a state sponsor of terrorism. alts speaking about his agenda saying that tax reform comes first. >> it was announced at cabinet meeting today. one of the last of the year in which the president was also looking ahead to next year's
agenda legislatively he said there would be certain consequences to this designation for north korea. here's what he said. >> this designation will impose further sanctions and penalties on north korea and related persons and supports our maximum pressure campaign to isolate the murderous regime >> i've been talking to officials here at the white house about the timing of all this obviously, the president was recently on a 12-day trip to asia in which a lot of his effort was spent on rallying opposition i'm told this takes place on a separate track from his negotiations with the chinese on how they would deal withthe north koreans. the president said he was thrilled that the chinese would be sending an envoy to north korea. he viewed that as a positive step in this case i'm told this was not necessarily worked out with the chinese in advance on that trip the president also laying out some of his agenda items he wants to get to after tax reform
early in the new year. here's what he said those were >> we're looking for strongly at welfare reform and that will all take place right after taxes very soon, very shortly after taxes. we'll be submitting plans on health care, plans on infrastructure and plans on welfare reform >> the president wants to go back to the health care fight early in the next year after tax reform he wants to do infrastructure which is something he's been talking about for a while. on welfare reform trying to get a sense of what it is the president wants to reform about the welt fair system they are not willing to give up any of the details just yet on where the president is headed on that you can foresee the political battle around welfare reform next year. remember 2018 will be a mid term election year as well. >> it's not going to slow down anywhere from here it's going to ramp up. good luck to you we're thinking about you let's get back to the markets. the dow is higher today but
coming off two consecutive losing streaks things remain solid. there's a few things happening under the market's hood that you need to be aware of. >> this market showed itself to be quite resilienresilient. last week did give a preview of some of the things if you need something to worry about, if you want to monitor a few things that show vulnerabilities of this market, i think last week did give you some of that. one is a narrowing leadership profile of this market you've had small cap stocks that were in a real down trend into last week. the average stock has been under performing if that gets to an extreme, if a small group of stocks is supporting the index that might set the stage for a meteor correction at some point along the line and then corporate debt we saw the high yield debt market get cranky last week. under reported or
underrecognized is corporate america is very leveraged right now. that's been fine rates are low and they can cover with cash flow but if any of that changes the markets will be the first to step that out when i say over heating risks, it's about whether sentiment gets over heated or this late maturity market cycle. it would be where i looked for. >> thank you mike mentioned that cranky area of the market high yield that's one area that's concerning some people how worried should we be welcome back >> it's good to be here. let's carry on some of the themes that mike talked about the corporate debt aends leverage side of things. if you look at the junk debt it's getting so much attention for a good reason. there are those out there that
this could be one of the bigger warning signs. if you look at one of the big etfs, this is the spider high yield bond etf some of the biggest holdings are companies that have been under pressure also from a stock perspective. state street global advisors, you have sprint, community health systems and altice. bonds tied to those companies are among the fund's biggest holdin holdings right now a lot of traders aren't looking at negative price action as a sign of overall market weakness. one of the reason s high yield bonds and stocks of the companies that track them and issue them aren't really diverge ing in a way that would cause real alarm he looked at bonds in the high yield bond index that we mentioned and also the stocks that track them. he found the bonds and stocks aren't trading that much out of whack where they do historically speaking
another interesting point comes by over at academy securities. he doesn't think that high yield debt tracks the s&p 500 that well and might be better suited to look at the russell 2000 trading relationship since many of the companies that issue high yield or junk debt are smaller, more domestically focussed we saw the big percentage draw down back in late february to mid-march. we didn't see the corresponding move lower in corporate investment grade that we saw that last time around this time. it could be the dress rehearsal for a bigger pull back but other parts of the debt market aren't as stressed th eed as they werea time we saw this stress in the junk markets >> some could argue this kind of stress in health care that those are the kind of stresses that aren't contagious to the markets versus an energy decline >> or maybe financial or maybe technology or something along that line. if you look at the high yields issue there it could be
something we look at in future it's giving traders pause. sdm two oth >> we talked about one last week, we talked about tend of the show on friday we taked about maybe selling is causing some of this weakness because they are trying to raise money to bring back to the saudi government that's something the other thing is this election problem in germany this is something people are talking about. there may not be a coalition government in germany and one wondse wonders with the rise, possible brexit and now this with germany, are we being too sane qui sanguine >> it's very hard to say that person specific parts of the market will be that indicative junk may not be focused on what's happening in germany or saudi arabia right now
we could have macro thoughts but to sit at one specific part of the market is really driving that action. it's probably a little bit tough at this point given the fact we have seen markets hold up pretty well over the course of the last three or four months without any real pull back >> well said >> thank you is the stock market here at a crucial turning point of some kind or not? earnings are good, valuations good not out of historical norms. we're not trying to find the negative and the positive but you have to pay attention to things that are happening under the hood is there anything that dom or
mike or melissa that we discussed that does concern you at all or maybe something else that we didn't >> i think the germany point is well taken one of the things we have been looking for is this move of populism from the front burner to the back burner we're not seeing the institutional sellers out in the high yield market. we're not seeing big blocks go out to the market from some of the more institutional managers. i'm taking the movement in the high yield etf space with a grain of salt and trying to consider where we're at from a fundamental perspective and if there's any rationale. i'm not seeing it and neither is our team >> where do you stand as we are at the gateway of seasonality at this point is the risk to the upside or the downside >> i think the risk is to the
upside we've seen a couple of weeks of weakness think about whatwas happening it's really highlighted that the risks are political, not economic that's not just in europe. that's here in the u.s i think that gives us some real upside if the tax reform process, if it resolves favorably. we have some real upside i think the expectations are pretty well. i think we have a lot more upside than down side this year. >> where do you stay invested? >> we're invested across the board. i really like energy at this point. there's a mismatch between oil prices and the risks there because with the potential for mideast turmoil we're talking about political risk saudi arabia is at the top of the list there's some real potential to the upside there and even if things don't get -- even if oil prices don't ricse, companies ca do much better >> you both like financials.
is that a concern? >> it is i think when we look at the spread if we're thinking about that from a historical context we're looking at it from an inversion perspective. management has done a nice job of trying to grow eps. what's going to happen is the fed will raise rates that's going to be a nice tail wind for financials. we like procyclical stocks these are the kind of stocks that we're really interested in. shying away from the staples remaining out of the consumer play i think that's how we're best positions going into the end of the year which we think will be higher >> the fed rates will have the impact on the longer end of the yield curve versus what we have seen so far. do you plooef the fbelieve the g
rate will override what's going on that keeps the yields lower >> i think right now the fed is going to hike rates based on domestic conditions. i think awhat's holding down rae s political conditions abroad. we have investor that really want to be in the u.s. because of the safety. >> is the yield curve going to steepen or not >> i do like financials. it's not about rates it's about deregulation. that's been one of the big head winds for the sector i think rates might help i think regulation is the key to financia financials >> thank you appreciate your time >> thank you let's get to michelle in auburn hills, michigan
>> we're here in a brand new spanking assembly plant. we spoke with the chairman about why he's opening this plant. he said the engineering powers is crucial he wants to be close to the end buyers of his products he's not worried about the policy around the north american free trade agreement he thinks lower corporate taxes would be great for u.s. industry >> i think your president is a consummate negotiator. i think he's best aware of how integrated nafta is. nafta may need some tweaks it's a 20-year-old agreement
i'm an optimist about nafta merely being updated i don't think it's going to be a situation where nafta will explode. >> you talked about u.s. companies being more competitive. they're debating tax reform in congress right now would a lower corporate u.s. tax rate make the u.s. more competitive and by how much s >> that's a rhetorical question. that's one of the reasons become an even greater magnet for investment the ease of doing business is already an attraction here the large market is already an attraction you're going to get a huge amount of investment traveling to the u.s
>> he expects they will employ more than 600 people here. we'll tell you about a lot more happening here back to you. >> you ride that bike? >> i'm planning on it. >> we'll see you later on. we'll talk to the governor of north carolina to bring amazon to a state that bathroom bill is a huge problem even though it's been repealed. kylie jenner is the face of a booming makeup brand it's coming offline and into stores
welcome back we're keeping a close eye on what's happening with aetna right now. this is on the heels of headlines coming out of dow jones and the wall street saying cvs health could reach an agreement to buy aetna by the end of november. that moves ahead some other headlines we saw this month with regards to reuters saying we could see one by the end of december the timeline shifting a bit.
it's one of the deals on wall street now >> the deal making or talk of deal making continues at an unbelievable pace. thank you very much. speaking of deals the race to lure amazon's second headquarters is on many believe the tar hill state, north carolina would be a front-runner even though the infamous bathroom bill is gone, the issue still does linger on >> north carolina has been attracting out of state innovators since the wright brothers came here from ohio it's no surprise this state is all in on the amazon race. there are four bids. charlotte and hickory.
and the governor is here with us how are you going to win amazon? >> when i talk to ceos about whether they will expand or bring their company to a state, the first thing they talk about is work force and talent north carolina checks all of those boxes for amazon we have 58 of the greatest universities 53 community colleges that fit exactly what amazon is looking for we know about our good business environment here. the quality of life, the low cost of living for employees we're growing by over 100,000 people a year. young people are moving to north carolina innovators are coming here north carolina can be called the state of minds because we have
that university link that amazon is looking for and that constant talent stream that they need a lot of companies have already found that out emphasis just created 2,000 jobs here it's pretty amazing what's happening here >> we did report cards we have done report cards on a couple dozen cities. you have the million plus that amazon wants stability of business friendliness that's something this state has a heritage of. good on location but talent. the ability to attract and retain strong technical talent you talked about the work force but the reason you get a c minus in our grade is because of the issue of inclusiveness
that's a lot of why you were elected. what do you say to them? >> i think north carolina citizens were sending a strong message with my election we have taken the step to repeal the house bill and companies have come back to our state, sporting events and entertainment have come back to north carolina we're a state that welcomes everyone our diversity is strong here we're very welcoming you look at the raleigh area, there's 82 languages or dialects spoken here in the rilye raw -- raleigh area north carolina has more historically black universities and colleges than any state in the country.
auc often companies like amazon are looking to diversify and that pool will be here. is it inclusive or isn't it? >> absolutely is that's why these companies have come back upon my assurances that north carolina is moving in the right direction. the strong signals we're sending throughout the world that north carolina is indeed a welcoming state for decades. we've been a beacon in the south. place where people know that they can plan and get a great education. open a business. have the kind of environment, the low cost of living for their employees. we're sending this signal to everyone that north carolina is welcome. >> i want to ask you quickly about whoever wins this, it's
going to cost. there may well be a bidding war. you're not saying to the people of your state what you're offering amazon but how do you avoid overpaying and getting into that? >> that's an issue incentive for state s have gone pretty high in the last decade or so. north carolina, for years, had really not entered into those bidding wars we have believed for years that we're a state where people want to come to and you really don't needs to offer incentives. i think we found the last couple of years that you need to have a threshold of incentives in order to get to the table to convince people to come here. you do have to have some incentives that will help with taxes and other areas to lure these companies opinion our bid may not be the best for incentives but we're the best thing. >> roy cooper the governor of
north carolina thanks so much all of our reports at cnbc.com >> thank you very much tesla shares are down and now down about 20% from it's all time high two months ago up next elon musk's latest ambitions. courtney courtney >> hi. i'm live at a store in new york city i'm here for major retail launch of a cosmetic company by a certain reality star if you haven't heard of her, you ghbe the only one. i'll tell you all about it on power lunch. a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter.
morgan stanley they always refer to me as master sergeant. they really appreciate the military family, and it really shows. we've got auto insurance, homeowners insurance. had an accident with a vehicle, i actually called usaa before we called the police. usaa was there hands-on very quick very prompt. i feel like we're being handled as people that actually have a genuine need. we're the webber family and we are usaa members for life. usaa, get your insurance quote today. well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em.
kylie jenner at only 20 years of age is the face and name of a cosmetics that is worth half a billion dollars now it's hitting stores. >> i'm here in new york city's top shop store it's on fifth avenue available for the first time in a retail location. now lines at this store wrapped around the block as well as other stores around the country to shop the youngest kardashian-jenner with liquids lipstic lipsticks, eye shadow and more before today it was only available on kyliecosmetics.com. she does have a clothing line
with sister kendall. that's been around for about two years now. it's only goij to be available in seven city top shop stores this will december 20th or until they sell out. kris jenner confirmed last month that kylie jenner own the entire company, 100% of it. it's hit $420 million in revenue in its first 18 months of existence. it's on track to hit a billion dollars in sales by 2020 that's unprecedented speed when you're talking about cosmetics kris confirmed they have been in some talks with unnamed companies about what it might take or the possibility of looking at kylie cosmetics for a
global retail strategy whatever the future ends up, jenner was insistent that kylie wants to remain very involved. >> i think she would have to be the face even if she sold. >> yeah. >> that's the market that is the power of it is just her instagram feed and everything else. good for them. stepping aside from that, this could be a major step closer to fully sell driving cars volvo and uber signing a big deal we really won't know the fruits of this deal until 2019, 2021 this agreement is not a huge surprise it's for $1 billion. what will uber get for that? 24,000 suvs. they will ultimately have the technology to be self-driving models incorporated into those
vehicles we're in transition toward self-driving vehicles some of the vehicles when we had chance to test them in pittsburgh last year were volvo models everybody is sofrt sizing up what to do, striking some of these deals. speaking of self-driving vehicles, next week general motors will be briefing analysts on the 30th. thursday the 30th about its plan for the fump whture when it com autonomous drive vehicles a lot are looking to see if general motors gives us better pe r paramete parameters that's coming up next week a lot of news in this space in terms of automakers, ride hailing firms, tech firms. all working together or working on their own on this technology. >> we got that upgrades of gm
fell ahead of this event on optimism surrounding this event. we want to ask you about tesla every single tweet is mo v provocative. this one is interesting. >> any time you talk about a flying car people are going to pay attention. yesterday elon tweeted about the roadster the vehicle is gorgeous. we're working on some upgrades that could allow this to become a flying vehicle i don't think he meant literally it's going to have wings and take off there's technology especially rocket propulsion technology that would be interesting to implement into cars is what he was talking about. nonetheless, any time you talk about a flying car, you talk about elon musk, it will have people talking >> you've driven some fast cars. you're going to zero to 60 in
1.9 seconds. that is a flying car you better have -- you better have some training and i mean it that kind of torque, in a regular enengine, these are like the bikes from the music tron. you almost need a class to drive these things >> i have people complain there should be some greater regulation are you going to put a limit on how fast it goes from 0 to 60. >> i'm saying be careful thank you very much. >> you bet coming up, we're going to talk taxes with the people who make the decisions you'll hear from a key senator michelle in michigan with a member of congress there michel michelle
>> hey, there. thank you. we'll hear from representative david on tax reform, nafta and bringing high paying jobs back to michigan. don't move their love to you. with some friendly advice, a genuine smile and a warm welcome they make your town... well, your town. that's why american express is proud to be the founding partner of small business saturday. a day where you get to return that love, because shopping small makes a big difference. so, this saturday get up, get out, and shop small.
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hello, everybody here is your cnbc news update for this hour. at a cabinet meeting president trump declaring north korea a state sponsor of terror. that will impose additional sanctions. >> today the united states is designating north korea as a state sponsor of terrorists. should have happened a long time ago. should have happened years ago in addition to threatening the world by nuclear devastation, north korea has repeatedly supported acts of international terrorism including assassinations on foreign soil >> a traffic mess in manhattan be p a street collapse bringing traffic to a halt in new york city a water main break appears to be the cause of the water filled sink hole. it's on manhattan's upper west
side blocks from central park. no word on how long repairs may take santa claus may be coming to town but you'll need a reservation to see him macy's is requiring a reservation at its flagship store in new york city the new arrangement is intended to cut down on wait times for the little ones. that's the news update this hour back to michelle in auburn hills, michigan. >> there's an app for that >> there is. absolutely >> all right thanks there's a new university of michigan report which predicts that michigan will keep growing its worse force with an estimated 93,000 jobs being added over the next two years mainly from outside the manufacturing sector pft much of the state's economy is tied to tax reform and nafta let's bring in representative dave trout welcome to power lunch >> thanks for having me. >> we going to get tax cuts or
not? >> i think we will i think we'll reconcile the differences and this president will sign it >> what's up with this gang of six that seems to have so many issues are they going to do to tax reform what they did to health care >> they think they havethe latest and greatest best idea. we have to go through the process. i think they will work through the issues each have a different issue. i think we'll work through it and get something out of senate. >> you want to give us probabilities? wall street does that. >> i'm willing to say 80% probability we get something done by the end of the year. >> isn't it amazing it's not 100% >> we don't control the house and the senate >> you've got numbers. >> we don't have 60 votes. we have 240 in the house >> our colleague is very worried about nafta. he spend a lot of time at the white house. he thinks it's quite possible the president will withdraw the
company from nafta >> you're not running again. >> i'm not running again >> why not >> just not the right time for me to be in washington we're not that productive and that isn't a consequence of president trump. they weren't that productive of president trump. it's not the right time for me to be serving. >> how much is president trump is part of the issue >> it's factor we have different styles and i sometimes don't understand the things he does and says. i didn't have 63 million people vote for me ever maybe not for me to say. i think it's a very partisan environment and i think that problem has been exacerbated under president trump. >> like, for example >> charlottesville comes to mind the health care debate comes to mind the president blamed the senate. i'm not sure reagan would have had a problem with the senate.
>> here we are in auburn hills. this brand new facility. why do you think they're here and what more can be done to bring more overseas jobs back here >> i think they are here because southeast michigan has a long history of being the automotive capital of the world and we still are. we will continue to innovate and self-driving vehicles. talk about 600 jobs. i think you come back in five years, there will be thousands of jobs. great place to do business great climate and manufacturing base really has many advantages i'm proud they are here and it's an exciting day. >> what are you going to do after you're not in congress anymore? >> i'll go back to business. we have a family foundation and probably write editorials or something. >> we look forward to reading them thank you. >> thank you >> back to you >> see you in a few minutes. thank you.
the house and the senate are taking the week off for thanksgiving but when they come back next week, the pressure will be on especially the senate to get a tax bill done >> there's a lot of soul searching in the republican party as dave trot indicated in the era of donald trump. on the issue of taxes moderate republican lamar alexander says they found the sweet spot. >> on taxes i think we're right where we ought to be it's a middle income tax cut people in every kats goir get some lower taxes more importantly it will take the handcuffs off job creators and allow them to grow cutting the corporate rate from 35 to 20 lowing you expense things you buy immediately, that doesn't sound like front page news what it should do in tennessee
is raise family incomes. 90% of the people will use the standard deduction the child care tax credit will be doubled there should be more good paying jobs, more competition for employees which means wages go up >> what about the argument from marco rubio and mike lee that if you gave a little bit less money for people at the top, you could make a larger child credit and you could make it refundable against the payroll tax for people who do not have income tax? >> it's hard to take much more from people at the top when 10% of the people pay 70% of the taxes. you need a growing economy that produces more revenues that's more money if the government and more money in your wallet. >> more trooefcontroversial is s desire for a bipartisan fix for obamacare that's become a factor in the debate. moderate republicans want it
on the issue that michelle was just discussing, lamar alexander says nafta has been good for the economy. president trump is getting bad advice from people like steve ban nnon and should leave it alone. >> thank you rick is tracking the action at the cme. >> it seems like another day and another high for two-year note yields we traded 3% in mid '08. if we look at 30s minus five you can see how the curve continues to flatten the barometer for the weather
♪ what we do every night is like something out of a strange dream. except that the next morning it all makes sense. to power global e-commerce fedex networks are massive, far-reaching and, yes... a little magical. fedex.com slash dream a new start-up is winding up to take on the likes of disney and nickelodeon. they aim to create con tent for digital and media platforms. joining me is chris williams ceo of pocket watch. great to have you with us. >> thank you >> where can we find pocket watch these days and where do
you hope to expand >> yes, certainly we are recognizing that kids today are consuming content in a completely different fashion avoss a variety of platforms they are there, true omnivores of media one of the things we focused on with my background being largely digital, one of the things we noticed is that, we need these traditional media embedded in all of that. that embodies in our management team, our chief content officer, the president of entertainment of niklalodean and understanding how contents work on youtube and instagram and we find how to bring it here at pocket watch. today you can find us on youtube
and you search "pocket watch." in the future, you will see us across different platforms >> how do you keep it relevant, as a father of the 13 years old girl, i love her to death. and how do you keep these interested and keep these up and comers relevant on a platform that seems to change weekly and not daily. >> one of the things that we embedded in to our dna is working with some of these large existing youtube megabit brand creator partners we are not working with hundreds or tens of thousands we really decided to go deep with ones that we identify as having the attributes for creating longevity not only that, they were able to of these mass audiences and if you think of a portfolio franchise brand, and not of a
marvel, we look at some of these like one of the top three channels in the world, we look at them as these mega brands that'll scratch the service. we know that we can expand these brands because of other areas that the kids really embracing that includes merchandise and live events and books, kids still read books and today we have a new partnership with simon and schumer for a pocket watch booklet. >> we are out of time, is pocket watch back, are you working for disney and disney is launching a new services sometimes in 2018, it seems like your company is a nice fit for vai come com or di. are you going to be independent. >> we are just getting started here, we are doing a billion views a month on youtube and other platforms including tv
where we have a mproject of kee thompson and cast members. as a ceo, we just, we are focused on growing our business today. >> so we'll go along for now >> thanks, my pleasure >> thanks for having me. >> shares of square have more than tripled this year jim cramer last week are optimist, ou y be icshldouon the stock? here is one analyst thinks, coming up. i'm only in my 60's. i've got a nice long life ahead.
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we kick it off with square it raised its price at $37 the rating remains neutral remember last week's square announced its piloting bit coin sale the biggest fiduciary made the krypto asset >> so your final stock is partially energy pe, the ticker, researchers upgrading it, quote "like the set up for years."
they do conservative guidance and strong funding the analyst says he's attempted to upgrade but worried of estimates. it is out of the way the stock is very attractive, pe, upgraded >> good thing you did not upgraded this year >> coming up we are diving into the tax world to find unknown items that'll mean big breaks for some and big checks for others. >> what would you get for $76,000, we'll show you the most expensive thanksgiving dinner ever when "power lunch" returns.
welcome back to the second hour of "power lunch," i am melissa lee. >> a shocking tax is buried in the plan we'll tell you what they are and who got hit by them. >> how much will amazon dominate the holiday season and what do traditional retailers do to compe compete? the former sach's ceo will join us and the most expensive thanksgiving dinner, pass the
gravy, "power lunch" starts right now. we begin with hour on breaking news. who's better to get to than steve lease miesman >> thank you very much jan janet yellen will continue to serve after the new person becomes chair. she will resign when her successor who's now fed chair nominee, jerome powell she holds a position that goes to 2024. it is really her choice. she believes powell will continue to work in a non partisan matter and she leaves with the economy near full employment and price stability, brian. >> big news, there >> something expected but unexpected, i think on this monday >> it was some questions because there were four open slots when she leaves and there is question
to whether or not she will stay on she will resign when powell takes office >> 2018 is going to look different in many different ways steve liesman, thank you very much >> right now, lets get a check on the market. stocks modestly higher right now. home depot and bm, you are down gm is both getting upgrades. speaking of auto, tesla is moving lower it is 21% off its all time highs hate ba back in september. we are getting more in your money, it is coming up lets go back to michelle in michigan for a look of what's going on there >> i am live in auburn hills, michigan this plant will assemble off
roads utility vehicles and they'll employ many. ahead, we'll speak to the ceo company of the hiring plans and look at why keeping nafta is considered crucial by the autoindustry and a look at the electric race car that i know brian is going to love house republicans have passed their version of the tax bill and the senate hopes to bring their version of the vote when they get back in town a clear picture of winners and losers is beginning to emerge. >> a lot of this is starting to come out of who will get tax heig hikes. >> here is a few of those. the senate bill is already drawing some fire on stock and investors of what's called first in and first out the bill would prevent investors from choosing the specific
shares of stocks they are being sold and instead, they'll have to share their oldest shares first and rather to selling their money losing stocks or the most expensive shares it would raise a projected $2.7 billion, it takes effect in january 1st if it happens. grad students could get hit by a tuition waivers. that's when a university waives the tuition for grad students as teaching assistants or research assistants about 145,000 grad students are awarded the waiver every year. a lot of people collecting art cars, the house bill does away of what's called 1031 in exchanges. that's when someone sells an asset and postpone the capital gain tax, if the proceeds are used to buy something similar or the same high value. so do buyers of airplanes and
tractors and cars, as a possible negative for the art market, get this, congress specifically c carved out one group that'll be allowed to keep using this tax loopholes and that's real estate developers and investors >> oh. i was going to ask you about that that's the most common usage of the 1031 >> real estate is the core, they preserve that because some individuals actually do use that >> i understand our president may have been involved in real estate that's why you may have had the side way glance, robert frank. >> several people in his administration would like that the art market, it could be a big deal >> severals. >> thank you >> one hot league contested issue in the gop tax plan is the impact on wages. republicans say wages will rise. democrats say no, the evidence simply is not there. steve liesman is back with us by
what we know of potential impact on wages >> this is a tricky one. the claim of the administrations, it is a subject of much controversy among economists that's a $200 million estimated by the white house of a minimum of $550 billion boost in american wages chl second very few ceos stepping up and the corporate tax cuts will leave them to boost investment corporate taxes are one factor behind the decision to invest in one country or another interest rates also play a big role capital is mobile and labor? mostly not mobile. standard economic stetheory say the factor that bears the
burden but, how much it helps, that's where the dispute is the government estimated of a quarter. this administration comes along and says the figure is much higher in our administration is the following graphic. so take a look, this shows wage gains in countries with low corporate taxes and against those with high corporate taxes. seems like a slam dunk until you look at what countries are in there. po poland and czech republic is in there. they do have lower corporate tax rates. you see the rate different different -- difference, it is not that is much they're simply not adopting the rosie scenarios.
>> were those two charts the same time frame. the trouble for the administration for the calculation, the time period where they looked at was there is no change to show the differentia differentials. if you include developed and smaller countries in there, you are going get much higher wage if there is some potentials, i think the idea is we are all getting 4,000 to $9,000 and wage increases. it is a far fetch for most economies. >> i run the first graphic over and over again, i will say this. just spending a couple days in ireland, it is a low tax nation. if brexit occurs, england and britain will cut their corporate tax rates because it is going to be their number one competitive force to keep businesses from leaving england because it p perceives negative effects
>> but this is a very important point andty think t the adminiss right. the increasing global nature of capital demands that the corporate tax rate be competitive in different places. the question is, i think the speed of which you get there, going to 20% is a huge changer and requires a lot of changes like mr. robert frank was just talking about the kind that get people blindsided along the way where a modest change does not require so much in the way >> it is incredible. you listen to half the story and it is the gop tax plan that's going to be great or amazing the democrats say it is going to be terrible. who do you believe >> if you take a general attitu attitude it is good but not nearly as great as supporters claim and not nearly as bad. i think it works pretty well steve, liesman >> the big selling point that it will cut the corporate tax rate
from 220% to 235%. plus, it could entice companies to bring billions or if not trillions of money back from the u.s. abroad. joining us now is mark wineburg, he's the assistant treasury under george h.w. bush and he was there for the first bush's tax cuts thank you for being here >> thank you for having me here. >> steve and brian said it very well and if you take away the inhibition to bring the money back, the money has to go back in creating jobs or wages or capital investment which would spur productivities. >> the only thing is the tracker's mark would say most
companies bought back shares and gave back dividends. how do we know this results in wages in creases and hiring and building first of all, i worry that we don't knows the exact magnitude. the company cannot go on a vacation by lunch its got to invest at the capitol. back in 2004 it was completely different than today. it was a one time tax holiday. this proposal would not only make it available to bring back cash but would lower the tax rate of 20% and provide for a complete spending and making it to track the capital in wages in the united states. that was not part of the deal in 2004 this was an inducement in creating jobs and wages and capital investment to in crease productivity >> why not trim the corporate tax proposal a bit and do a permanent cut on the payroll tax. nobody is talking about payroll
taxes but all your clients and people that we talk to, the small business are saying, that's your business cause payroll tax is part of the deal that you have with your social security benefits. those taxes going in >> you pay half and the company is paying half why not trim the company's side a little bit so theoretically there is a bump in wage >> if you take away the employees part, that takes money out of the trust funds you would not be able to do that as part of reconciliation and we'll change the amount of money going into the social security money trust funds. that takes a lot and determining how you redeuce payroll taxes and which is why we have not looked at those. >> robert was here setting outlining on some of them. another one is state and local tax reduction repeals. i am wondering if you are talking about that maybe to move or reconsider where they locate
new resources. >> so it is a great question i will be honest, everyone is figuring this out now and it is moving requeing quickly. it is a big issue for the high tax states and individual taxpayers. it is one part of the equation, there is reduction of the rate for many 70% of the people today don't itemize, when they double in the bill, it will be closer to 80 or 85% of people that don't get the deduction. you are talking about a relatively small piece of a pie that would lose the income tax there is a lot of politics and there is no, ma'some compromise, they're going to work so middle income people are not going to get hit by this. >> the state that contributes and of course, we are here so i want to be perfectly clear that we are biassed in the story. what are you - >> everybody is. em i am in one of the top states. >> you are in the top boat
you got to kidney of swallow a little harder okay >> i get it double because i am one of those big large pastors that's not getting a corporate tax cut or an individual tax cut. if the economy does grow and more people are spending money, we'll get more business, i am a believer in that everyone looks at it from their own point of view, that's fine we got to do something of middle income folks we got to get competitive. as you said moments ago, democrats and republicans agree on that. that's the core of the bill and you cannot lose focus on the main components. middle income tax cut and corporate tax cut. everything else is a lot of noise for sure and there is individual factors and people could find good or bad the cover the bill will survive. in the house and senate. >> it is dpoigoing to keep ongo up >> mark weinberger, thank you
very much. >> we'll show you what you get at melissa lee's $76,000 -- it is a restaurant. we'll be there >> the last couple of weeks because of selling by saudi arabia and family members are gaining steam, we'll dig into that first, back to michelle in michigan >> hey there, brian, we are at auburn hills, they're going to assemble after road utility vehicles and similar to this one. they already produced here in the united states and canada and mexico these red tractors. later we'll kick the tire with the ceo here, he's in charge of tractor sales and why they are so eager to be in the u.s. market don't move, "power lunch is right after this."e of tomorrow.
mahindra's ceo in charge of all the tractors it is good to have you here. >> we are standing in front of your big products. your number three in volume in the united states. >> yes >> where do you want to go from there? >> you wou >> eventually, you would like to take on the number two and climb up the ladder. more importantly, you will like to apply a ton of people across the country, we have six resolution poin points how much is one of these >> this is more expensive, i am sure you can afford it >> how much? >> it should be around $35,000 >> how is comparing -- >> more important of what the product can do
>> what does that mean >> you don't need to start the tractor to give it fuel. this is a highly efficient tractor. you have an awesome tractor for the price. >> you are a u.s. subsidiary, you are paying u.s. taxes, right? >> u.s. corporal taxes you are hopeful that the corporate tax cut goes into effect what will it do for you? >> it will be good for us. i think the taxes are quite complicated. it is time for us to keep it simple i was just going to ask. what would you do with the extra money? >> hire more or more plants? >> we are looking at locations
in the u.s the money wie would like to hire more people and creating more jobs into the community. so all this access giving back to the economy >> do you think wages will go up >> wages will go up. at the end of the day, they want to invest more people. are you shipping across the border into mexico and why i ask is what if the united states were to withdraw the north american free trade agreement, that would lead to duties across the border >> we do ship on parts but, i don't see a big difference at this time.
we don't import anything from mexico we rather export from the u.s. to mexico. >> mr. money owner, thank you so much forjoining us >> tell us about the hot red tractor. guys, back to you. caviar topped, sweet potatoes, a turkey that costs $105 a pound and cognac. an exclusive look inside the world's most expensive thanksgiving dinner. >> one retailers very well position taking on amazon this holiday asseon join us, it is all coming up when "power lunch" returns that knows the weather down to the square block. this is a diamond tracked on a blockchain - protected against fraud, theft and trafficking. this is a financial transaction secure from hacks and threats others can't see. this is a patient's medical history made secure - while still available to their doctor at their fingertips.
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slabs. >> an imported japanese black boar, those are topped with an orange marmalade spared with $1,800 special reserved bottles of cognac, $475 per pound imported of japanese, infused of $3,300 periwinkle bourbon, wagyu. >> you should get fed. you should be spooned. >> by turkey >> have a wing >> no, the servants >> thest cost is a five year lw >> the person who sold you the
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hello everybody, i am sue herrera, here is your cnbc news update zimbabwe's ruling party says it intends to impeach president mugabe the process will complete in three days he ignored his deadline to resign the argentine submarine had been lost for five days. t maybe of bad weather and making it challenging forest c rescuero
find the vessels >> the army has declared victory over isis earlier this month the jihadists then staged a counter attack using sleeper cell in the town one of two surviving movie posters for "dracula" set a world record of the most valuable sold poster, it was bought by 525, 800 >> brian, back to you. >> draw your own conclusions, world. >> sue, thank you. you got it no the oil market. lets go to jackie deangelis. >> crude pricing about a half of
a percent decline. today selling off being explained and continue of profit taking now, the news on keystone is a litt little more oil and gasoline can flow from canada and not necessarily needed at this particular moment the saudi king is ready to pass the torch to his son, the crown prince, that can have an impact, too. >> salman is in his 80s and believed to be ill he affected change in the kingdom. as the author of the saudi 2030 vision saudi arabia, business and politics, they go hand in hand dealings with some of the nations like the united states and israel and iran. he's also going to have to manage oil price fluctuations. consensus, key nbs will be
supportive the saudis and the biggest opec producer remember, all eyes are going to be on this next week of the final opec meeting of the year any plans to extend the production cut likely to drag the price closer to 60. >> well, we'll get the perfect guest to follow on that. >> lets bring in rbc's, helena >> there is some talk out there, some of the reasons where the markets are weak lately, the stock market saudis, some of the people that are in prison are being told you need to bring money home and you can buy our freedom. there may be some pressure to dump -- bribe b your way out of jail
>> what this is essentially saying is this is equivalent to a plea bargain arrangement >> they have to fork over some of these assets. the saudis are saying it is not as shake down, it is essentially setting up your account in order to move forward. it will channel into new investments over seas. this is at an unprecedented to have something like this to occur. >> and going in the opec meeting, i would say as oil minister, they don't deliver a positive statement, i think he was going to face trouble back at home. he wants that $60 plus environment because it is good for his ipo and his other policies so i don't think they want this meeting to go off in the other way. >> so this is the expectations they'll extend for four years
and one o f the things that's slightly concerned about it was vladimir putin who says we should go to whole way and 2018. a bunch of russian corporates all came out and said, we should not extend for the full year it is bad for us there is uncertainty of where russia will be going into vienna >> this is the next question for next year. everybody is talking about living in cash flows and that's what the ceo has said why are we giving this live line to shell producers if you are vladimir putin, you have an election in march and you are doing all the lending in the trust states, is he going to giver that back? answer your own question >> the bottom recruitment obviously staying -- >> how much markets, we talked
about markets being the swing producers, we are the boss is russia really the global swing producers? >> i think russia is the most important energy sleeper power out there. venezuela would have defaulted twice this year without russian lending. we see putin coming the rescue of so many distressed and he does all these extra deals of countries of saudi arabia. if there is one country seeing their influence rise, it is russia >> helima. thank you. >> now, lets get back to michelle in auburn hills, michigan >> thank you, so much, we are live from auburn hills, this metro region is holding the largest trading partner with canada and mexico. joining us now to talk about how important the autoindustry thinks the north american free trade agreement of their
profitability. >> it is good to have you hear we are hearing in larry kudlow that it is possible that the president will withdraw from the trade agreement. >> i am. if the relationship would come to an end, what will it mean >> it will be a big deal we'll revert to potentially the bilateral agreement that we have in place of canada prior to nafta. we have engines and transmissions and they'll send us vehicles back and forth multiple times we'll go back to what is call normal trading relationships that's 2.5% of most cars and parts. so if the u.s. company
manufactures a pick up truck in mexico >> or japanese company and brings it back into the united states, there is a 25% tariff if nafta goes away? >> absolutely. >> that's a huge taf rriff >> manufacturing pick up truck about half the production, tone toyota and nissan is manufacturing pickup trucks in mexico >> how nervous is the region >> pretty nervous. it is not just a comparative advantage like they make tequila and we don't so we want to trade that we build vehicles together across the whole region of north america. so we are building cars and trucks and engines and parts and they are crossing borders multiple times it is not just a you got what i want, lets trade, we are making things together in this region the free trade arrangement has
enable really in supply chains here in the u.s. and canada and mexico >> how big of the deal in the region of a new region plant that's opened by an indian company. >> it is a big deal. it is not on the road vehicle like car or truck that you can buy at the dealership. it is a big deal, companies are coming here and investing in the work force and in the footprint here and the metro detroit area. >> this is one of the issues that hindu face that is there is a perception that they could not match expectations for quality if they make a vehicle for the road do you this i they have that issue? >> you look back at the trans of the market and you go all the way back to honda, they started with motorcycles and small cars. hyundai kia, there are ways to
get the new confidence behind them >> kristin, thank you very much for skroin joining us and talkis about the importance of this trading. >> melissa, back to you. 34 days until christmas and four days until black friday we'll talk to the former sach's ceo about who's doing it right straight ahead i think it's terrific.
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the holiday season kicks off this week in nearly 70% of americans are expected to hit the storm this week with 115 millions people are expected to shop on black friday alone what can we expect this holiday season a former chairman of ceo of sach's the bust word is experience. retailers need do in order to stay alive how do you do that it sounds much easier than it is absolutely it is not an easy thing to do. some of the winners do do it very well. somebody like a costco is great on experience and tj max is doing a great job of define in terms of what you are doing. best buy is doing a much better
job of creating an experience and you can see the results. walmart have been transformational in terms of what they are doing. i feel good about that in the end, the consumers want three things, they want convenience and values and experience if you can deliver on all three of those, you can win. for some of those retails you mentioned their values are very unique >> kos costco, you are buying in both >> macy's and kohl's, what can you do to create that experience >> first of all, you got to make sure you have differentiated products so all of them are going after their own brands they got to find ways whether it is fabrication or fashion to have differentiated products. they still have to create the right experience and that means doing things in the stores so
macy's, if it brings in blue mercury or restaurants and try to create a buzz and it is the way that -- i remember sach's 50 years ago brought a ski slope into their stores. you have to figure out different ways to break the excitement >> did it break the ice for consumers? >> what? anyway, lets talk about black friday black friday used to be a day. you look on any website, i went to four or five during the break, it is black friday the day, does it still matters that much >> i think it matters. you are right, it is already black friday if you go to the stores or go into the web. but, it is the weekend and cyber monday cyber mondayer is bigger than black friday on programs like fast money which you are going to hear, they get reports that black
friday traffic is up 3% or down 3% and they'll make investment decisions. i wonder of those reports on specific days will matter to investors. >> big mistake to think that way. the mind set right now, it is going to be a healthy holiday season you got a forecast of plus 4%. don't gauge it on one individual day. start to see what the season looks like the month of november. people are saying it is gotten up to a good start the reports coming in from retailer and inventory are in light. if you look at numbers last week, retail stocks are been fairly reasonably well you will have winners and losers walmart was up nine points last week you will see winners coming out of this. >> you have been in this for a long time. >> is there one store or chain that you look assort of a barometer. sales can be great and we don't
know at what cost and what margins. >> you are right this is not just about sales it is about at what price and what margin you deliver. there is not one bell weather. i do look at companies that are in the values segment. tj max and ross and burlington are all performing well and their inventories are in line and i are seeing good growth i don't think there is one store and i look at walmart performing well and any numbers of these companies. >> it is potentially of the hell mary holidays and sears and jc penney and could this be it? >> black friday. >> exactly >> for any number of retailers, black friday, the term came from the fact that was when they turn the profitability and you are on a lot of these companies are on the verge of whether they are making money >> they have a lousy season. is that -- i don't know they're going to close or not. you have seen macy's closing a
lot of stores and jc penney closing a lot of stores. are you going to see consolidations >> absolutely. are you going to see some going under? >> you see a lot of bankruptcies this year and more stores are closing. >> steve, always great to get our analysis on this >> the foceo of sach's. is there any way to still make money in thigrp,s ou trading nation will dig inks next. s next . i think that she's a very nice girl... you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think
a new report from the council of economic advisers saying the cost of the opioid crisis may end up being far higher than previously anticipated. meg tirrell joins us with that story. >> that's right, guys. the existing numbers around the opioid epidemic are staggering according to a new analysis out today, they may underestimate the problem. half a trillion dollars in 2015. according to the white house's council of economic advisers which points out that's 2.8% of gdp that year ppt the figure is more than six times the most recent previous estimate of $80 billion from a study released by researchers at the cec last
year the cea says it looks at a few things differently, primarily deaths resulting from opioid overdose which it says were undervalued in previous reports. the cea uses a measure called value of a statistical life to reach its new skbimt whiestimatd or $432 billion in fatality costs and $72 billion in costs for health care, substance abuse treatment, criminal justice and reduced prun ed productivity ame living with opioid addiction final the report also points out the crisis, of course, has been getting worse over time and even with the numbers of deaths climbing as they have, opioids may still be underreported on death certificates so pretty bleak look here. at the situation. >> so when they count the deaths, right, they're only seeing the deaths that are officially ruled because of opioid overdose? >> yeah, they cite a study that came out this year saying they may have been underreport eded 24% in 2015. >> is staggering difference. >> really staggering. >> meg, thank you.
meg tirrell. all right. time now for trading nation. today, let's take a look at some of the semiconductor stocks because one of the biggest semiconductor etfs moving higher today, the chips on pace for their best year since 2009 are they still worth your money? gina sanchez, rich ross with evercore isi gina, you've also got a huge number of deals, proposed deal doed in the space. everybody's menching with everybod everybody's merging with everybody. can you make money in this group is. >> no question semiconductors are in a super cycle, if you look at the drivers behind the super cycle, you're seeing sales in 2017 that will likely surpass sales in the year 2000 that was the height of the technology bubble. and the drivers that are driving this, brian, they're not going away you have augmented reality, you have virtual reality, a.i., smart tech, smart manufacturing, smart automotive these are all massive, massive trends that aren't really going away now the problem is, this is the
fly in the ointment, sometimes you get buying into the -- into the end products that goes into the inventory and they overbuy one year and sets for a price drop the next year that's what you have to be careful of. >> okay, rich ross, why are you such a fan technically on the charts of micron >> brian, look, as we know, this has been the year of the trend follower there's been no stronger trend than semiconductors within technology and this is the strongest stock within the group. let's go to the short-term chart first, brian, and you can see just how strong this trend has been you're up over 400% over the last 18 months riding that 150 day higher you can put the trend channel on there. all that's telling you is how strong the stock has been. when you look longer term, this is going to tell you where the stock is going and where we think it's going is $66 by virtue of the multi-year base breakout this trend has not even come close to exhaustion, brian, given $60 is $15 higher than where we are today we're a buyer in and around current levels i like the stock, love the base
breakout i love the strength of the trend. wow, very bullish view on micron rich ross, gina sanchez. for more trading nation, go to tradingnation.cnbc.com check please is next. >> and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> in volatile markets unless you're an extremely slo lly sho trader, it's usually best to avoid buying or selling during the first and last hours of the trading session. that's when volatility tends to be the highest when volatility picks up, often the spread between the bid and the k icwi ireaspre llncase and that's never a good environment for buying or selling.
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nasdaq. rewrite tomorrow. check please >> time tnow for check please let's kick it off with michelle in michigan. >> hey there, melissa, as we've been talking about, we're here at this new mahmahindra assembly plant. behind me is their formula-e car, competing and doing quite well little known fact, you need two of them to race because the battery dies halfway through, go the to hop in the other one. the other product mahindra manufactures is this fun little thing. look at this this is a power assisted bike. watch. i just do a few pedals and then it turned off, guys. never mind that was supposed to work far better than that it must have gone into rest mode because it's actually supposed to assist me you didn't see it. anyhow, these are $1,899
not $18. talking thousands of dollars they're big in san francisco i think we're still on. >> does that run on battery, michelle. >> reporter: back to you guys. >> is that on battery? >> reporter: it runs on battery, yes. what did i do wrong here the power -- okay. yeah so -- >> oh, wow. >> you'd be happy to know, michelle, the formula-e car much more successful. ten podiums last year in formula-e. >> really. >> yes >> look at her, she's just going all around. >> there she goes. >> reporter: i'd bring back one of these for you but they're illegal in new york. got to talk to the regulators. >> why areally illegal thein new york that's weird michelle, safe travels see you tomorrow. this german election thing over the weekend, it's a little wonky, boring, merkel loses her coalition, could be no elections. a lot of stuff going on in europe this is not -- no offense to italy or anybody or greece, this is the biggest economy in europe, one of the biggest in the world, politically it's been kind of thrown -- just something to watch, pay attention. >> it's never happened before in german history, this loss of
coalition power. what's interesting, though, is the reaction overnight, reaction in the european session -- >> not bad. >> not bad totally shirked it off maybe this is something that you have to watch in the longer term all right. thanks for watching "power lunch. >> "closing bell" starts right now. oh, you're back. hi, everybody. welcome the "closing bell. i'm kelly evans at the new york stock exkachange. >> i'm bill griffeth one bank is asking to no longer be deemed what's called systemically important we got top analyst mike mayo to talk about whether this could start a wave of deregulation, other banks could do the same, whether this would benefit those banks to have that designation taken away we'll explain it coming up in a little bit. >> slook forward to hearing what he has to say. also merck shares under pressure today the stock is now down 15% over the past