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tv   Squawk on the Street  CNBC  September 29, 2017 9:00am-11:00am EDT

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>> i'm going to -- if you double my pay next time it will be the same amount. >> you have quicken. you have the cavs. you like a renaissance man. >> keep us up to date with everything happening with detroit and the bid for amazon headquarters. >> we'll see you back here tomorrow, no we won't. we'll see here here on monday. have a good weekend. it's time for "squawk on the street." ♪ welcome to "squawk on the street." say good bye to september and q 3 on this final day of the quarter. best quarter of the year for the blue chips. look as the debate over tax cuts gets more specific. core pce is a miss up. begins with the end of the quarter. how much is left in the rally?
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>> inadequate on almost every level. senator mark warner blasts twitter for presentation as big tech faces mounting political pressure. >> more details as the battle lines on the details of the plan are drawn. the president will speak about taxes live later on this morning. markets continueto make history. the s&p posted record close on thursday heading into the final session. the dow and s&p on track for eighth consecutive positive quarter. nasdaq going for five straight. it is edging out with a gain in q 3. jim, we made it through almost september. >> what's extraordinary, i have been going through the charts because i love the charts. things were bouncing around fairly positively. then we got to the month of september. we have had moves on a lot of stocks. they came in in august. it's a truck parts company.
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there were so many doubles of industrial companies, smaller cap companies, tech companies, drug companies. when you see these moves you keep thinking this has got to be the greatest bull market of all time. the fact is that it does nothing. underneath there are stocks making people fortunaefortunes. it mocks the whole notion that you should just own the s&p. there are winners that could make you rich. so active management might have a shot >> thats 's my point. i'm not talking rich like $100,000 per family. that $1,000 renovation on your house. >> and we have all made mistakes. remember the president didn't know how much a gallon of milk was, previous president because
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he didn't go shopping. i know how much it is. >> i don't either. >> you buy it from prime. >> it's like five bucks now. in four weeks it is done. >> depends on where you live which was your point yesterday on taxes. and now they are calling it s.a.l.t. >> i looked at the state. i called my accountant. he said this is a soak the rich. did you hear anyone say soaking the rich if you add a top bracket and you keep this -- >> it depends where you live. you keep saying that. >> senators and -- people who represent me. >> i have been talking about state and local since day one in terms of what it would mean for the economies of new york and
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california. the blue states that don't have republican senators but do have roughly 33 overall republican congress people and 24 just between new york and california. so the battle in the house people are already talking about is whether or not they can maintain the lack of deductibility of state and local as only revenue razor thise tha have seen in the plan. >> we had speaker ryan on yesterday. he came to pennsylvania yesterday. he spoke in pennsylvania. >> they are very positive. >> he went to the district where the guy who lives in your building from house of cards, remember the actor, he represented that district in pennsylvania in house of cards. he went to that district, the most blue collar in the world.
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he went to the most blue collar district in pennsylvania. he basically said this is just going to be done. the people at the factory are so much more -- >> if you double the standard deduction does that mean mortgage interest takes a hit. look, to each his own. it is going to be hard. >> there are a number who also believe. >> i will take the other side of
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that trade. >> i'm engaged fully. >> i think you look at the home builders and regardless of what is happening this is the best bull market i can ever recall. kb homes which i recommended, the home builders are signaling a bull market. they are fooling around with stuff that could hurt the bull market. >>. >> only the big home builders are able to navigate the environmental loss. >> a lot of the stocks that benefitted from everybody getting excited about tax reform reversed yesterday including our
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own lethargic comcast stock that we love. >> russell's strength would indicate optimism. >> business is strong for so many companies. it's the 50th anniversary for that great american company. it can't handle the business they have. >> that's international, as well. >> there are -- the fact that every major economy is growing including japan. >> argentina is on fire. >> they discovered a whole new shale. >> we are starting to talk about it. >> we will talk about how strong q 4 usually is in the first year of presidency. we want to cover twitter because they are feeling the heat on the hill after giving closed door
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briefings to the senate intelligence committee about possible russian election interferen interference mark warner blasted the company accusing it of not taking the inquiry seriously. >> presentation that the twitter team made to the senate intel staff today was deeply disappointing. their response was frankly inadequate on almost every level. >> called it derivative. showed lack of understanding in how serious this all is. >> i don't like the stock. i like facebook. we still should care about the stocks. >> i know what you are doing. i saw him on the street a bunch.
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>> when i look at what twitter has to do, when i look at these places, you can't solve these problems overnight. i went to google and i said why can't you shut this stuff down the bad guys. it's like trying to stop the bad guys in hacks. they are bad. you can blame twitter all you want. the bad guys are very clever. we can blame -- >> what about sales force on twitter? >> dream force is coming up and going to be amazing. >> mark and i are like this. >> i asked mark how is it going to be all they did is look at the same facebook accounts and say yea. >> yesterday anthony came to me and said that the president --
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do i bother to get a comment on twitter? this is called reporting. >> amazing to watch you real time. >> you can't remember peter russo. >> he didn't live in my building. i used to see him on the street a lot. >> paul ryan is a ceo promising $5 a share and you are going to lose money this quarter. >> who >> he is making an analogue. >> i'm trying. >> my timing is so good on this. >> it is really good. >> george kaca rrrlin. >> does not appreciate your genius. >> do you see this tie
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this is the old spice. you see that stock up. >> ooirng it is friday. >> you are being disappointed. >> peter russo didn't live in my building. >> whole foods trying to shake the reputation for being an expensive grocer. looking at eight straight quarters up for the dow and the s&p as we put q 3 to bet. we are back after a short break. i count on my dell small business advisor
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after being called whole paycheck because of reputation for offering expensive products whole foods is looking to shake that reputation. one reason the merger came about is whole foods was in a trap and i couldn't figure out how to get out of that trap. amazon is a different narrative. i feel a little bit like houdini. >> it's funny. i know mr. mackey. . in the end houdini 36s store didn't end that well. i think the breach of data at whole foods is very interesting.
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they talked about how don't worry about it because the point of sales system at the breach is different from the point of sales system at the register. my biggest complaint has been they never had the technology to win. how could your point of sale at one place be different from the other? >> apparently did not involve groceries as much as in store restaurants. >> they should be all the same system everyone has said i know has always said they were jerry built. they had different regions. when amazon comes in they are going to take out costs without taking out quality. i think that is fantastic. mackey may say that but i think amazon and whole foods will be a match made in heaven. they will take all the technology and figure out exactly what i want when i come in and they will know it and push it to me. and i will love them more than i
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do now. >> it is the earliest days right now in terms of what amazon is going to do at whole foods. when i look at transactions probably most significant deal was this one because of the m s message it was sending. the brick and mortar part of it being somewhat surprising. but you cannot imagine. we talked about it so often in part because so many companies are trying to understand what it is amazon will do with this deal and what it augerred for in terms of what their next transaction could be. >> i think walgreens is a great company. i do fear amazon will come in. if you go -- if you go to the park slopes they made it feel
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like venice. beautiful at the top which i know is a different point of sale system. it is an incredible store. it is very lucrative. if you were to put amazon on top of that i think that anybody within a two-mile area will have it so they bring that food. that is how powerful this could be. >> dan gilbert this morning making a pitch for detroit. >> that is something they recognized when they built the whole foods in detroit. you know what else was a great acquisition in terms of things that make it so families don't get divorced and have fights ikea. the only fight with my daughter was a cabinet.
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>> i have never used task rabbit. have you >> no. my father went to ikea almost every day. swedish people. >> we miss pop. >> we are back in a minute.
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♪ back for mad dash with mr. cramer who is loving this friday. where do you want to head? >> i am going to talk about a man. >> a man >> there is not a plaque, there is not a statue, a sign post. >> formerly of alcoa. >> you know what he said to me >> no, i don't. >> this man, he said the chinese will have to close the industry because it [ inaudible ] it has all come true. they are shutting down a lot and it is boosting the price to prerecession levels which is why city takes the target from 45 to
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53. he predicted all of this. he had a vision and the vision is right. >> he chose the wrong company to go with, then. then he ran into elliot and the weird stuff. >> itcould be for sale. can i just load the sequence >> i want a new scene. these are all so important to what i'm talking about. you have to understand that this combination, it was all about china and breathing air and people dying from respiratory illness and he was right. you know who else didn't have a plaque or sign post or statue?
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mo green, for heaven's sake. >> again with the god father. this weekend i will just watch them all over and over again. >> just be a little more like hastings >> i will try. >> just try. try spotify. it tells you what you want before you want it. >> we all have spotify in my family. we have opening bell coming up. >> i thought it was a rumor -- >>e' s. wllee
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you're watching "squawk on the street" live from the financial capital in the world. the opening bell in about four minutes as we put the third quarter in september to bed. the first positive september for stocks since 2013. although the nasdaq was up for september last year as the only one to do it. >> i feared september for a couple of reasons. one is because people think that october is the worst month so they want to cellcesell septembr ahead. if they had numbers like this in
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a lot of funds, years where i was up so much and say all i could do was give it back. i didn't learn that myself. i learned it from karen cramer who said this is the time honored way to do it. you had that and you had fear of october. and it will be the 30th anniversary of the crash. people remember the crash. >> i remember the 30 year ago one, as well. one of the last ticker tapes in new york that dow jones had in our news room. >> so if we get past this then i think we will have some quarters, the first will be the banks. if we are sure about that rate hike jamie dimon will tell a terrific story. i think wells will have a good
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story. >> i am a turn the other cheek guy. >> i wanted to get to honeywell. just worth mentioning the company has been undergoing this strategic review of its businesses. the new ceo who has been in that role not that long faced almost immediately an on slot saying you guys should really think long and hard. this is back in late april about spending or separating your aero space business from the rest of the conglomerate. they have been reviewing that. i can tell you we are probably going to hear perhaps not next week but does seem likely the next couple of weeks. the high likelihood is they are not going to spend aerospace. you are starting to see this
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reflect in some commentary. citi is out with a note saying unlikely. likely to be a stream lined version of the company reflecting new ceo for honeywell's future success, software focus, increasing cash convergi converging. let's keep an eye on honeywell. we will get the official review soon. they are not spinning aero space. >> i don't know if you realize how big a story you just wrote because plenty people recognize that darius is independent. people who thought this could unlock because aero space is so high. if you look at what boeing has done i would love a pure play aero space. that is a little bit negative.
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there are a lot of people thinking this is $170 unlock. so that is very important. thank you. >> boeing is going to be your best dow stock for the quarter followed by caterpillar and chevron. let's get to the s&p. >> a lot of people feel he got a great hand. a lot of people think if you look back at the skepticism there is not a lot of skepticism now. it's a home run. but he is believed director. i promise david every day i would mention proctor. >> as you should. >> you have been talking to people the bum barding of the blue and white card.
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i get almost no mail. there are people who are inundated with mail. seems to be something in the mail every day. >> definitely going after individual investors. >> that's a great point. that's the new thing. >> 40% of the shareholder base is retail. retail often times doesn't vote at all. it's an important constituency. and they all know the percentage th s they need to get. it is going to be close. we'll see what they have to say. the proxy advisory firms become important. and then the index funds. if they win one here they have a real shot. >> i got to tell you this group has come back down.
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because of the tremendous rotation out of the consumer products companies. i think ever since general mills. that quarter was so bad that people have said without consolidation there isn't that much hope in this business. and i'm not going to disagree. i can't find -- i happen to like clorox. i am struggling with the case for colgate. that's because of the face and importance of insta. >> i can't keep hope alive. >> they are very behind when it comes to artificial intelligence. they are. pr what about crakraft heinz?
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>> maybe he is using artificial intelligence. all these moves seem right. >> i am reading important e-mails. i am trying to prepare for something that i want to do. i listen to you, as well. >> we are talking about the need to be able to figure out what you want before you want it. and i think the consumer products companies are woeful about this. these consumer products companies they don't know what we want. if they knew what we want they would not be selling velveeta. >> velveeta is pretty good. >> by the way, speaking of food, tyson is your best gainer this morning.
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they are up there -- better earnings in beef. going to lay off about 400 people. >> amazing how a deal that a lot of people felt they paid way too much for was a home run here. it was one of the great home runs of all time. >> sometimes you do pay up and they do get a lot of criticism. >> that was a great deal. they are not going to comment on twitter. >> a deal, a lot of twists and turns. that is going to close october 3. >> they call that deal huge. >> the stock had been trading at a significant spread to the price as recently as yesterday. it did close up a lot of concern. they settled with the justice department, as well. they have concluded that. they are going to make a $35
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million payment. it will be within the $35 million loss contingency reserve. again, abbott says we will close october 3. >> everything i hear about alere is it is one of the more suboptimal acquisitions made in the pharmaceutical business. after a tough quarter utx and ge out with not a rebound both lagging the dow today. >> this will be the quarter when the new ceo knows anything he goes into 2018 with will be his. he has to make radical moves now. otherwise we will think about it as his company.
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look for big changes not just the corporate. >> what does that mean >> how big >> huge. >> i think that you are going to see -- >> the biggest one is splitting the company up. >> they can't do it. for i think the strategy where you just take out 2 billion in cost. >> they committed to that previously. >> faster. well ahead of what he wants. >> i think he can do it. i think he is much tougher than people realize. i think he has it. i thought it was brilliant. i would have felt. if ge had a better balance sheet ge should have had the comps but they didn't have the cash to do so. they didn't. and also the dividend. remember we will hear about the dividend.
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i don't know. charitable trust stupidly owns. >> it is well a hard gear to own. really quick home builders doing well. >> he missed by a little and people didn't care. >> you did tweet a picture and citi goes from 185 to 210. >> he is a genius. he sees my twitter file. let's hope he doesn't think i was hacked by russians. that artificial intelligence do you know what a huge customer they are. if it doesn't break out today it is literally someone locking it in. it is frisky and ready to run. >> with all that -- >> i know it is the picture i see that dog is not frisky.
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>> we need more action shots. >> that dog is always asleep. >> i know we have to go. i said please send me a new picture of nvidia. she said i can't. when i go home i'm going to spin with rachel w. i demand a picture. rachel w., the legendary trainer in new york. >> with help s&p 2511 is a new record. let's get to bob pisani. >> happy friday everybody. s&p up, dow down. utx on the dow a little bit. let's look at the market leaders. the market leaders all month. the other market leader not doing so much. energy, banks, this is that trade we keep talking about. they are the market leaders. even on advanced decline line. moving markets i had been talking about it all week.
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it is kind of obvious. we have firming global ratings. we had higher yields, somewhat more hawkish commentary and overlaying all of that is the u.s. tax cuts. you can see this trade just looking at the sector. the leadership groups. energy, banks, materials, industrials. there is a trade. the s&p is only up 1.5%. these are kind of noticeable moves to the upside. if you look at other asset classes it started at the middle of the month. we are starting turning around. oil started turning around. oil is up about 9%. ten year yield started moving up. there is a reflation trade. we had the companies that wouldn't do as well in the kind of economic expansion. utilities, reits and consumer staples to the down sides.
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this all kind of makes sense. 52-week highs in the asian markets. at one point in the month of september all 52 week highs. hong kong at two year hiez. why is this happening? because the global economy is continuing to expand. it is doing better. a week and a half ago the oecd revised their 2018 global growth expectations. for the most point they raised them. i think the u.s. was stable at 2.4. euro is up 1.9 up a little bit from prior projections. you get the point. it's not insane. we are continuing to see modest global growth going on here. you throw in speculation about tax cuts in the u.s. and you get markets continuing to move to the upside. let's talk about ipos. quite a week. we have a big one today.
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believe it or not this is the biggest of the quarter. it's a specialty chemical company standing right over here. we are waiting for that to open up. this thunderstorm story all throughout the quarter. the price talk was 21 to 23. they cut it down. the investors push back all the time unless it is a really big one. they push back. they want lower prices and generally they are getting it. by the way, speaking of well known ipos guess who just went public. angry birds rovio went public on the nasdaq. they price to the high end of the range. and it opened right at $12. so that looks fairly successful. and we are waiting for them to open on the nasdaq here in the united states next week. the dow down 39 points.
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>> thank you very much. >> a lot of people focussed on it because it will potentially come to a conclusion this weekend one way or the other y. am talking about disney. and altice. the cable systems one of the big presence here in the new york metropolitan area. as of the end of the month if they don't reach a deal it will go dark. that is the disney channels, espn, you know many of them. there is a great deal of focus within the larger media ecosystem on where this is going to end up. by most accounts disney is seeking increases in the fees it receives. this has been a point of contention for what it means for
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the bundle of programming and whether or not sports programming has made it too expensive therefore leading them to cut the cord and find this ever growing number of options that are out there in terms of what we call over the top programming choices, groups and bundles of programming. it is not just e srspn. regional sports networks. anybody look at what you pay for smy or yes here in new york. it's a lot. by the way, the yankees who are doing a wildcard playoff game in the new york area, that is an espn game and that conceivably will be shut out if they don't get to an agreement. >> espn, you telling me -- >> anything you get -- >> do you have cable
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we are always working hard to negotiate character agreements. we want to carry espn and sister networks. we offered an increase yet despite that fact optimum customers has been declining in the double digits for years. espn and the owner demanding double rates for the same content they offer today. disney coming back. let's include what they had to say. typical optimum customer pays $160 or more for service each month and the bulk of the money goes into their pocket. altice charges $34 which is more than 15 times we are seeking for the market's most watched station wabc. we have been through the disputes so many times in the past almost always content does
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win out. but you have a lot more options now if you are a customer out there. you can reach disney channels other ways given the bundles that are out there already that you can get via your broadband that is obviously provided by the likes of altice and others. we'll see. there are more out there whether directv now or hulu or youtube. this is a very important dispute. watch very closely. >> this is the weekend to try it. this is like a weekend where i have had the fight about how much time is watching in sports on sunday. >> i cannot afford to have it go down on sunday.
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this is a day to try it. >> let's get to chicago pmi over to rick santelli. >> absolutely. what a big number. we are expecting close to 59. 65.2. 65.2 for our september read on chicago pmi. why is that so exciting? there is only a handful of reads with 16 handles. 65.7 the high water mark for june. now with this number the next number you have to go back to november 2014. so good number. let's look at what is going on in the market place. one week of tens. we are up on the week basically unchanged on the day with respect to interest rates. may 1 peak will tell you all you need to know. we settle at 244. we had a range that seemed to go
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on forever. see this is a pretty comfortable place for tens although you want topay close attention to the big pivot 2015 settlement which was 227. 48 to 50 is the zone. they can't lift their chin above the bar on that. that is meaningful. while we talk about higher rates or certain countries or trying to get bad loans consolidated that was some of the news out of portugal theirs is hovering just over 240 which happens to be the lowest since right before christmas. pay close attention on that chart to the area around 117. we tried to test it post election, didn't get below it. open the chart to july that is kind of the pivot traders are looking at. flip it around and think dollar index. august 1 chart shows you 94 seems to be the line with
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respect to where you might cause a bit of a panic. it has been a very successful short most of 2017. it is fighting to reverse that trend. >> there is the trio back to you. >> thank you very much. when we come back the new approach that uber is taking after being banned in london. will that pay off? record highs on the s&p, on the dow jones transports and russell this morning. we're back in a minute.
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>> a candidate that i think would make people feel good. there isn't anything that would worry me. i am one record saying the most important thing is disposal of incredible bond horde they have. >> you think they would be orchestrating? i am telling you that is the biggest worry i have about that moving interest rates. i would love a guy who understands the bond desk. they have too many bonds. >> the guys who bought the bonds have no idea. they own too many bonds. they have to sell the bond before they take rates up. so i'm not being fusheesh sacet.
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>> you get a two for one here. >> more parts to the job than just selling bonds. >> it's a good call. he would be great at the job. he also understands digitization and understands why inflation isn't going up. there isn't anyone i listen to more. >> you would rather have kohn? >> yes. >> we will find out by the end of the year. >> we have to go. >> don't go away.
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let's get to jim. >> i haven't talked enough about what is the stock to buy on failure of repeal and replace. they couldn't replace it. the company that most benefits is cnc. he was the guy who moved in new york and got obscured by the last attempt to save. it goes much higher. and i think that people should recognize this is the company that is successfully negotiated obamacare better than any other
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company in the world. my hats off to them, but that is the buy right here right now. >> what is on mad tonight? >> i have pennsylvania real estate. it's all the big malls in the philadelphia area. the mall is so challenged. let's find out from the biggest operator i know growing up on malls. i worry about the mall every day. that piece yesterday was devastating in the journal. >> have a good weekend. >> i'm fired up. i'm going to do my own show right from here. watch nvidia, he is frisky. >> we will talk tax reform with martin feldstein and alan blinder in a minute. hi, i'm the internet! you know what's difficult?
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welcome back to "squawk on the street." rick santelli here live on the cme floor. the last number of the week in the quarter university of michigan september final read 95.1. it's a little less than we were looking for.
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the 95.3 we followed gets tossed. 95.1 stands and equals what we saw in june but to find a lower number than that you have to go back to november when it was 93.8. do keep in mind january kicked off post election 2017 at 98.5 which was the best read since january of '04. that really strong chicago pmi i brought out pushed the dollar index in positive territory. pay close attention to the close. carl back to you. >> a lot of data in the last half hour. good friday morning. welcome back to "squawk on the street." markets got early record highs on the day the russell and transports settling back on a very heavy day. >> that is where our road map for the hour begins. record rally rolling on as we wrap up the third quarter. we will break down what is in
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store for q 4. >> twitter on the hill. top ranked senator calling it inadequate. >> president trump continues to sell the gop's tax reform plan and will address the national association of manufacturers. we have the details. >> it is the final trading day of the month and the third quarter. the s&p 500 hitting a record high this morning. all three major averages set to conclude their first positive september in four years. mike san thole with us. a lot of interesting moves especially for transports and the russell. >> it has been interesting. september in particular was this one big sort of reversal trade. the market has found a way to keep marching to the new highs whether it had to kind of draw on sectors it hadn't been participating for a while. you saw growth spots under perform value, large stocks under perform small.
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the question to me now going into the fourth quarter is whether this is a character change for the market. is it the market sniffing out the yields going high or is it a stutter step and we go back to the trend. i don't know the answer. i think that going into the fourth quarter a couple of forces working against one another. one is we haven't had a decent pullback. we are more than a year without a three percent dip. that makes this year look like some of the best years in history. but you still have that sense out there into mid october at least seasonal effects should be a little bit negative. maybe small caps are running hot. all of these things i think are in the mix. >> 23 minutes ago president trump tweeted out record high for the s&p 500 clearly watching the network. does he deserve credit >> there is no way to do counter factual and say where would the
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market be if he were not there. he gave a jolt to risk appetites. his election and him getting in there got people thinking in different terms about business investment and possibility of tax reform. the rest of the world outperformed the united states stock market this year. how exactly does that all fit into the equation of what has been driving i like to point out 2013 and 1995 those kinds of years where we had this very measured no pullbacks rally, grid lock years. government shutdown both years. this has acted like a dc grid lock type stock market. >> our friends point out since '80 first year of a new administration, fourth quarter down only once. it's almost always up. >> and it is one of those things if you lineup all the factors of what the almanac says. if you made a new high in
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september, tends to go further new highs down the road. six straight positive months as likely to do today -- over the coming few months doesn't say we are off to the races for years to come. it definitely puts the chips on probably more of the same continuing with a little more upside. >> if we are talking winners and losers technology is the standout. the nasdaq did the best of the big three. energy had a big quarter. crude climbed quietly. consumer staples were down two percent. despite the fact that you have activists in the sector. you have a proxy battle going on. especially the food company. >> it is really the traditional package food companies, to a lesser degree consumer staples. it's been hard to find a losing sector to be honest with you in the quarter. and they are not benefitting. utilities have had a decent run when yields have been lower.
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staples are not getting the same defensive bid. they don't think the businesses are defensive anymore even though stocks have that kind of reputation as being defensive. people are so focussed on the big secular challenges. >> lack of growth. thank you. michael santoli. the president is set to tout his tax reform plans before the national association of manufacturers next hour. the proposal facing a policy hurdle. what to do with the state and local tax deductions. joining us to talk about that former council of economic adviser marty feldstein and former fed vice chair alan blinder. happy friday. marty, the treasury secretary yesterday argued that this would be a deficit reduction package and yet a bloomberg poll of economists 22 of 26 say this will widen the budget gap. where are you? >> no doubt that during the next
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ten years this is going to widen the budget gap. you know, they are going to have to pass it by reconciliation and that means after year ten it can't be adding to the size of the deficit that is currently projected. they are going to have to do things to limit what happens after the tenth year so that there is no increase in the deficit then. >> alan, your take on the impact on the deficit >> i think what marty says is correct in terms of senate procedures. there are so many ways to get around this. the bush tax cuts locked a 0 into the tenth year to get it under budget and zeroed out things. a lot of those things continued beyond that, not all, but a lot of them. that will be the republican plan. let's grab the first ten years and worry about the second. nobody should think the intent is to make it a ten year only
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tax cut. that wouldn't be very good tax policy. why would we want to cut the corporate tax rate and then go back to what it was? >> they are not aiming for that. i am a little surprised as the conservative economic voice in this conversation to hear you say that. are you saying when gary kohn told us yesterday the economic growth generated from a mix of these lower corporate taxes and deregulation is going to be enough to pay for the cuts, is that false >> i think it will help. i think we are going to get stronger growth. i think we are going to get more investment in the u.s. not only by american firms but by foreign firms. the important change and tax treatment of overseas profits. i don't think that that by itself is going to eliminate the increase in the fiscal deficit in the coming ten years. but we are heading into a very high debt to gdp ratio.
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that is very bad news. i wouldn't reject the tax plan in order to save a few percentage points on the debt to gdp ratio. >> one of the many debates is who the true beneficiaries are. the administration has made a point of saying labor is going to be the big beneficiary as opposed to capital. >> i think economists have been debating this. to the extent that there is a consensus everybody feels that way. it's that the burden falls on capital. the owners of capital not only corporate capital but capital. it's not a crazy idea that wages will get a boost from greater hiring. i don't dismiss that, but to think of this as anything else
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but very favorable to the upper income groups is just illusory. >> we want you to stay with us. we have gotten breaking news regarding the fed in the past few moments. for that we will go to eamon javers. >> white house official tells me yesterday the president and the treasury secretary met with kevin warsh. dow jones reporting that discussion included the chair job. who the president will pick to chair the fed. the report is that the president and the treasury secretary had the meeting yesterday. no indication that a job offer is on the table. there is a short list of candidates out there. one subplot is whether or not the president's economic adviser is a candidate for the job or not. he has seemed to be interested
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in the wake of his break with the president politically after charlottesville. that seemed less likely. based on this news yesterday it seems even less likely. we know the president and the secretary met with kevin warsh yesterday. >> thank you for that. . thoughts about warsh and how significant, how real would you say this is? >> i think it is real. you know, in most white houses you would say they deliberately let people know that kevin warsh was coming for an interview. this is so badly organized it might have been an accident. usually you try to keep these things secret but it is not a secret that kevin warsh is on the short list. everybody knows that. >> is he a good pick not a phd economist but has experience and has been a federal reserve -- >> he was at the fed.
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he was on wall street. he was a very smart guy. he watches fed policy so i think he certainly deserves to be on the short list that the president is looking at. >> how would you pick him out relative to yellen or kohn we had jim cramer arguing that the knowledge about the bond market will be key as you roll out the balance sheet. >> i don't agree with that at all. if you add janet yellen. even before he submitted his resignation over charlottesville was that exactly what cramer said. the bond market view of the federal reserve and monitory policy is very specific and narrow and financially focussed. that is not the view you want
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the chairman of the fed to have. you prefer what? >> a much broader macroeconomic view such as what you have with janet yellen and bernanke kpp. if i may say so exactly what you had with allen greenspan. >> is it too early for investors and market folks to speculate about kevin warsh and a hawkish fed policy versus a janet yellen president trump needs low interest rates. he said he liked a weaker dollar. he wants to borrow a lot to spend on infrastructure. >> there is no question that the fed is going to be raising interest rates both directly by raising the short rate and also by shrinking the portfolio bond, selling more long bonds into the market. so both of those are going to push up interest rates during the coming years. we are going to normalize as
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they say. we are going to get back to the kind of interest rates that we were accustomed to in the past. instead of the current situation where we have a negative real fed funds rate. >> i hope you can come back and do more wood chopping on taxes later on. appreciate it. quick updateon a story we have been following closely. senior u.s. officials say the u.s. is pulling roughly 60% of its staff out of cuba warning american travelers not to visit due to quote specific attacks that have harmed u.s. diplomats. the u.s. is ordering all nonessential staff in the embassy to leave. only emergency personnel will be remaining. when we come back puerto rico is struggling in the wake of hurricane maria. we will take you live to san juan next.
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and inadequate on every levelism one top lawmaker bstlaing twitter's response. we have the details. "squawk on the street" will be right back. well, it's earnings season once again. >>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.
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>>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.
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the cash only economy, puerto rico continuing to struggle to get back on track in the wake of hurricane maria. contessa brewer joins us from the island where cash has become king. how severe is the problem?
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>> reporter: i am at the convention center. this is command central for the government and federal response to hurricane maria. we just got out of a news conference where the government official said they understand that cash is in desperate demand around the island. they are doing their best to ensure not only that the actual currency is in the bank so they can get it but that there are generators up and running. they said they have banks up and running and able to dispense cash. let me get back to the ports. today the cover of the local paper here says the priority is relieving the log jam at the ports. the governor says that is his priority and says i have a plan. if private companies can't get to the ports to pick up their containers full of essentiallies they can sell them to the government and we'll distribute them. i yelled at him does that mean you're commandeering the containers he said we are offering the
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opportunity to buy them. i said are companies going to have the choice whether to sell them to you? he said no. if they can't move containers they must sell them to the government. they are pushing back somewhat on the 10,000 containers that we reported yesterday. they said there is only 3,000 containers. i talked to the vp of operations who reiterated the 3,000 number is not including all the private containers containers that may contain nonessential supplies. they are seeing movement on other areas, as well. the government has cleared access to all municipalities on the island. they say in some cases that means very limited access. they are installing generators at the water authority. they say almost half the island has running water. that is up from 33% yesterday morning. and they are expecting 100 tankers tomorrow, monday to deliver fuel to the island.
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the big question then becomes do they have the law enforcement to support these fuel tankers deliveries. we have seen people waiting in line for 15 hours just for a tanker to deliver the fuel to a gas station and then they have to wait behind first responders and those involved withrecover efforts. there is progress. the three star general says it is going to be a response that takes time and that the recovery will take a very long time. >> some are wondering what happens after the immediate recovery once they get supplies and once they deal with the humanitarian crisis. the president tweeting this morning saying the fact that puerto rico has been struggling for a very long time, destroyed by two hurricanes, big decisions will have to be made as to the cost of rebuilding. there are bigger long term questions about the economy and debt problems and how to get the island back on track. >> and there are those on the ground in puerto rico who wonder
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whether their debt problems have factored into the slowness of the response. we saw the regional administrator for fema get up and push back on a comparison of how many federal troops have responded to this disaster and to what responded to haiti or earthquake in japan. puerto rico already has a national guard here. they already are set up with a well-established police force. so they were prepared to respond to this disaster. they didn't need this on slot of armed forces on the island the way other disasters did. >> it's an ongoing story. we will watch it all weekend long. thank you very much for being there. when we return $2.5 trillion, the value of global deal so far for the year. we will talk to the global chairman curt simon. dow is down 16. we're back after a break.
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m&a buying picking up. could negotiations over tax reform put a break on deals in the works? kurt simon is global head of mergers and acquisition of jp morgan. the recent theme i have been hearing and sharing on the air is companies waiting for tax reform perhaps early in the year had things on their to-do list and then said let's go ahead and do things if we need to do them. i wonder with talk now with tax reform does it put a break -- >> the blueprint we have an outline of what elements of tax reform might look like. we have a long way to go. i think while the next three or four months congress is doing legislation that might put pause on it. long term should be a huge stimulus for the business.
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think about cash not coming back. i think a it is referred as qe 4. and then overall u.s. companies going abroad with 20% tax rate would be much more competitive. >> give me your feel on things. it has been a decent year. we saw more or less flat with last year not like the year prior. >> we felt great. short pipeline has been building. if you are looking at 2018 probably up ten percent would be our best uess. it is much better now than six months ago. >> why do you think it is? >> you look around the world every single economy is growing. japan is growing, europe is growing, china is stable. the back drop feels good and people want to be acitive. >> are we going to see anything big that will turn heads >> you will have to stay tuned. >> i hope so.
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>> tmt, technology, media, t telecom. >> when you look at new disrupters like amazon, apple, google, netflix, at&t and your parent comcast scaled vertically integrated and everybody else is in the middle. you get more vertically integrat integrated. i think it is a fascinating time. viewing patterns are changing as you know. i have a 14 year old at home that doesn't watch linear tv. i think how you watch those consumers is a key question over time. >> at&t time warner which should close fairly soon is a huge deal. it feels as though it has been very slow the expected response. i feel like i could have had that conversation or response that you gave me two years ago,
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five years ago. bankers always talk about that. >> i am very confident it will happen. i think you have to be a scaled player or niche player. >> do we see that big deal that people somehow think from silicon valley doing something unexpected >> i do. i do. >> i do. >> i'm more of an optimist. >> activism continues pace. you guys are not involved in adp. i can ask you about it. is there more to be gleaned from png fight than simply the fight itself >> i think it is a good question to ask is how important is that board room chemistry. i think a well functioning board is critical to a company's performance. i think you have one board saying our company and board is functioning well. dupont had that argument.
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you had a large investor saying itted be helpful. not looking to replace anyone. i think it is a really good debate. i think it will be very close. and we'll see. i think it is very close. i think the shareholder perspective is a pretty good argument. >> there is some who thought it might fade. they have stayed relevant, current and active. >> they have a lot of money. you think about -- this is the new normal. >> and finally what would be a bad sign for you i would assume if the economy starts to tank. anything else unexpected that could dampen your forecast >> i think it is geopolitical. north korea would be a bad
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thing. anything in washington that gives people a step back and pause and maybe it's the right time. i think it is much more geopolitical. >> keep me busy in the next quarter. >> hope so. >> global head of m&a at jp morgan. let's get over to sue herera. >> good morning everyone. here is what is happening at this hour. the white house says president trump will make a five nation trip to the asia pacific region from november 3 to 14 to address north korea's growing nuclear threat. mr. trump will travel to japan, south korea, china, vietnam and the philippines. the trip will also include a stop in hawaii. the state department is pulling 60% of its staff out of cuba and warning american travelers not to visit due to specific attacks that have harmed u.s. diplomats and
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ordering all nonessential staff in the embassy to leave. at least five people were killed, 29 injured in a suicide bombing attack in kabul. a stampede at a train station killing at least 21 people during the morning rush hour in m mumbai. the stampede was triggered by a rumor that the pedestrian bridge had collapsed after concrete chunks started to fall. that's the news update this hour. i will send it back downtown to you, carl. >> thank you very much. when we return tech under fire as twitter executives make that rare appearance on capitol hill. why one top senator says the presentation was quote deeply disappointing. take a look where we are trading. down in a tight range. dow is down ten.
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s&p set a record up two. back in a minute. not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan.
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executives on twitter testifying on the hill. mark warner had harsh words about the presentation. >> presentation that the twitter team made to the senate intel staff today was deeply disappointing. their response was frankly inadequate on almost every level. >> google, facebook and twitter all asked to testify on russia's alleged interference. we are joined by ceo at converge who published a report titled how russian election hackers won with facebook ads. good to have you with us. hard to know what warner is responding to because we weren't in that meeting. twitter did publish a blog.
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did it strike you that they are not taking this seriously? >> i can certainly understand the dissatisfaction. they told people they shut down 600 accounts linked to russia. what we see is that the real measure of social media is impact and twitter didn't speak to that. that is part of why there is this this dissatisfaction. >> what gives you more clarity >> i think wu yount to know how many people were reached by messages. was there a place where a particular topic trended because of coordinating efforts? >> reflections on what has been said about twitter versus facebook and the asymmetry and an minity and does twitter have
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more to worry about than, say, zuckerburg >> i think twitter has a lot bigger problem because the great thing about twitter is that it is very open and easy to engage with and it is very easy for people to set up accounts and say whatever they want. that account gets shut down they are right back tomorrow with a new account. as long as they can build amplification around it. >> it looks like political pressure is piling up for both companies internally and on capitol hill. what is the solution here? >> i think the solutions are complicated. one thing we published in our report was that in the case of facebook there are things that were stoppable. when you go to facebook you can sort of venue shop for whether or not your ad gets approved. you can submit it again and a different representative who doesn't understand our culture because they are not here may
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approve that ad. that's a problem they both have. i think they both will have some policies and consistency to work on in terms of what ads get approved. >> one of the things they said in the blog yesterday was striking. we welcome the opportunity to work with the leaders in congress to review and strengthen guidelines for political advertising on social media. what do you think that could look like? and in turn how might it effect user growth, time spent? >> i think that is going to be interesting. i think it will be easy to solve for the campaigns spreading disinformation and harder to regulate on the political action committees and even harder to measure these kind of random third parties, these groups that werefluencing on facebook were firing up groups to talk about the second amendment or immigration. so these didn't necessarily have to be campaigns. they were just people putting in their credit card money. i think that is the hardest part
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to get a handle on. >> you mean defining what is political. because you can stir up a base without mentioning a candidate at all. >> yes. that's right. >> we are going to at this point see what happens next. would you expect them to appear publicly >> would i expect twitter to appear publicly? >> or facebook or google. >> one of the things we see because we measure the impact of social media campaigns for lots of brands. one thing that has been under explored is how these ads are being targeted. so what we hear is that they targeted black lives matter issues around ferguson, missouri. but in practicality we see campaigns that are really successful are targeted in much more nuanced ways than that. i think we need to hear from them to have the trust in what they are doing with our private data and what they know about us especially in the era of equifax
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breaches. >> it is almost daily news in some way shape or form. we hope you will come back if and when they come to the hearing. thanks for your time. >> when we come back putting jobs at risk. british prime minister teresa may speaking out against uber ban in london. we will discuss that and more wi j sthimtewart. "squawk on the street" will be right back. gotten to know our s so well that is feels like he's a part of our team.s with one phone call, he sets me up with tailored products and services. and when my advisor is focused on my tech, i can focus on my small business. ♪ a dell advisor can help you choose the right products with powerful intel® core™ processors. ♪ thank you so much. thank you! so we're a go? yes!
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( ♪ ) whoo! ( ♪ ) woman: class, let's turn to page 136, recessive traits skip generations. ( ♪ ) molly: i reprogrammed the robots to do the inspection. it's running much faster now. see? it's amazing, molly. thank you. ( ♪ ) let's go out to the cme group in chicago. >> thank you. i was going to talk more about
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our ten year today. as i look at the euro currency we have to talk about that. less is more and maybe giving the euro a floor. what do i mean by that less is more with regard to balance sheet. october 26 next meeting some think and mario draghi hinting maybe a balance sheet reduction. i had some smart people on who almost chuckled at the notion that at the october meeting going to give us anything with regard to balance sheet reduction. i don't disagree. i think the key to trading euro is all about anatomy. head, shoulders and mouth. i will get to head and shoulders part in a minute. on the mouth mario draghi has a powerful tool. so do president's prime ministers called the microphone. don't under estimate the talk. don't under estimate what mario
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draghi did when he said he would use a bazooka. like the relationship between the dollar and the euro. want you to look at a chart starting in july. this is important. you see that pattern if i lengthen that chart i can make a really good case that we are getting a top on the euro. the problem is it is all about timing. let's go to the white board. euro versus the dollar. these are time intervals. they are basically one month. there is a pulse to every market and every market is different. the pulse to the euro versus dollar has been small one month cycles. the reason i bring it up is head and shoulders. we have maybe in my opinion what could be a developing head and shoulders. we have the left shoulder, the
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head and the right shoulder. if you consider it is september 29 and october 26 at the meeting it really lines up nice. it is all about time and price in my opinion. i guess what i'm saying is that even though i think the euro is at the top, it might not be the right trade to be short the euro because talk sometimes is cheap. in this case it may be expensive. i think there is good chance that mario draghi will be able to create an illusion that he is going to do it which means upside to the euro currency. i think ultimately keep your powder dry and think anatomy when trading euro versus the dollar. david faber back to you. >> thank you. let's send it to john fortt with a look at what is coming up on squawk alley. >> president trump is coming up. he is making a case for the
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republican tax plan in front of the national association of manufacturers. we are going to dig into the issues around that, what needs to be ne idof that is going to come together. that is coming up on squawk alley. not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan.
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♪ can i kick it? ♪ yes you can ♪ can i kick it? ♪ yes you can ♪ can i kick it? ♪ yes you can ♪ well i'm gone
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uber in the spot light after losing its license to operate in london. british prime minister voicing criticism of the ban. >> those 3.5 users. there are safety concerns. what i want to see is a level playing field. >> uber ceo heading to london next week for a meeting with the city's transportation commissioner. our next guest says the first public leadership test. jim stewart. welcome back. >> it's interesting that she came in against the london mayor in favor of uber. >> i think this is very sn significant. huge show down. it is also a key turning point
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for london and cities globally who are watching what happens here. uber needs london. i think london needs uber, as well. this is to me a fascinating test. >> what have you observed so far about observed so fa about dara's approach? there have been comments and tweets around this issue, specifically as he builds up to his london trip. >> i was kind of astonished initially. we think of uber as this really combative, you know, take no prisoners. they've had to muscle their way in against all these entrenched interests and cities and all of a sudden there's this open letter and full-page ad in london and then there's the internal memo saying we have to be self reflective, all this, you know, touchy, feely, we're going to be humble and this to me is really a dramatic change at the top of uber from the we're going to take no prisoners to let's sit down and hold hands and let's discuss and we're going to change, we know we've made mistakes. very humble and apologetic and i
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think, frankly, uber need to make this. >> is it clear to you kalanick's influence is gone? >> well, no. the mayor of london specifically said, you know, i really welcome this new approach from the ceo he said, but, it has not gotten down to uber uk and the people in london. he said we're really very arrogant, so how long will it take to filter down, can a leopard change its spots it's going to take some time the image of uber is not going to change overnight, but certainly it had to start at the top. >> who needs whom more london or uber >> that's a great question my own hunch is london needs uber i mean, you cannot be a world class city today if you do not have access to uber. >> especially when you just voted to leave the eu, close up some business relationships, and try to convince big tech disrupt tors that london is still open
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for business >> i totally agree this is the last time that london -- this is the worst time for london to be trying to close off its transportation system. and the opposition has been led by the very iconic black taxi cab drivers, but the jury is really out on whether these ride sharing services hurt them all that much. i mean, there's still a demand for them i think studies have shown that the number of black cabs in london has not gone down uber has really vastly expanded the market of ride sharing there. it's the private, you know, limousine services, the small ones, that seem to be being hurt so, yes, there is some disruption, but i don't think it's hurting the cab drivers as much as they think meanwhile, i wasn't in london, but just got back from san francisco. that's a city utterly transformed by ride sharing. in the old days i was always afraid to leave the central business district because i never knew if i'd get back you'd be waiting there 40 minutes later for some cab driver to show up.
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you can go anywhere now with a touch of your phone a car comes wizzing up it is a huge advantage, i think, to most cities and certainly if london wants to preserve its status as a financial capital. >> there was a note on gm recently, analyst last week who said not too far from now, two-thirds of households in dense urban centers will find ride sharing more attractive than private car ownership two-thirds >> that's a pretty remarkable number, but i'm not all that surprised. i mean, you really want to hassle with a car and drive when you touch your phone, get in, get out, there's no credit card to be handed over? >> it would be good to have the background checks and safer rules. >> i totally agree there have been some problems with uber. there were specifically some problems in london, but they are eminently fixable. let's face it, there is always going to be occasionally a problem. there are problems with regular cab drivers, too >> jim, while we have you, given
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how much time you've devoted to the tax system, you knew where i was going, give me your thoughts on what you saw this week. >> well, okay, there are four things you measure tax reform by does it raise money, does it promote growth, is it fair, and is it simple of those four things, growth is its strong point i think it does. it's a pro growth thing. it's a big tax cut mostly a corporate tax cut does it raise money? not so much. it looks like we're going to have some big deficit problems, although it's still too early. >> treasury secretary says it will cover the deficit over ten years. you're not a believer. >> no. >> through growth. >> no, no. we've got to see what the number is if it's something like $5 trillion, $6 trillion, there's no way maybe the 1.5 they are going to build into the budget and live with that. right now it looks to me eyeballing it big, big deficit problems is it fair no it does not really close the
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loopholes that i've been talking about over and over again. it singles out state and local taxes, which by the way many economists agree i would have no trouble getting rid of the deduction, but why is it the only one they are getting rid of that looks like they are picking on people in new york and california and other democratic states finally, is it simpler no this pass through thing with a separate rate is going to -- all the problems with having a different capital gains rate, the tax shelters and maneuvers that are trying to pretend income is capital, now everyone is going to want to be an llc. that is really opening up a pandora's box. we haven't seen the details of how they are going to deal with that, but this is going to be a tax lawyer heaven figuring out all of that. so i would say three of the four categories it fails. one of them it succeeds. and i'm disappointed, because there could have been so much more they could do i didn't expect everything that i would like to see, but this is what we've got
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>> tax lawyer heaven one way to put it. jim stewart, thank you always good to see you of "the new york times." speaking of tax reform, you are going to look at a live shot of the national association of manufactures the president about to deliver remarks on that tax plan in washingt, c. enhahappens, we'll take you there live don't go away.
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welcome back to "squawk on the street," i'm morgan brennan. technology standing out as the top s&p 500 sector on this last trading day of september leaders include alliance data, akamai, ebay, and facebook, which are all up more than 1% today, but despite the gains, the sector is only up about a quarter percent for this month still, that makes it the third quarter's and the year's best performing sector. it's now up more than 25% year to date. and with that i will send it back downtown for the start of "squawk alley. guys >> morgan, thank you very much good morning, it is 8:00 a.m. at twitter headquarters in san francisco, 11:00 a.m. on wall street, and "squawk alley" is live
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♪ ♪ good friday morning, welcome to "squawk alley. i'm carl quintanilla with john fortt and sara eisen here at the new york stock exchange. the president is due to speak at the national association of manufacturers in just under 30 minutes about tax reform our kayla tausche is on the scene and about to set that up good morning, kayla. >> good morning, carl. this morning manufacturers here at the national manufacturers association board meeting describe tax reform as a sugar rush and a

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