Grasso not bad better looking so nice at this time of the day . No one is better looking at this time of the day. I saw you in makeup need some ice packs you dont need makeup you need a surgeon more powerful than a brush dont we all. We will need something more powerful than water. You guys are Drinking Water hot water with lemon. U. S. Equity futures, markets closed at record highs again dow futures up by 24 points, nasdaq down by a half. I think the zp s p closed up 14t of the last 15 sessions. And picking up steam. The s p 2534 right and were not that far from 23,000 at this point who knows whether we get there 14 , 15 on the dow for the year its supposed to be mid Single Digits thats all we deserve. How long have people been saying the market is overvalued . 2200 you can say more than that it keeps rolling you cant short it. Dont chase this rally. Lets tell but news just out. Pepsico out with earnings. The company is in with much stronger than expected numbers core eps 1. 48 compared to the 1. 43 the street was antiestici g anticipating organic revenue up 2. 3 year to date looking at some of the guidance that theyre giving for the fullyear, raising some of that guidance they say at this point they are on track to deliver their fifth Consecutive Year of 9 core Constant Currency growth theyre looking for fully organic Revenue Growth to be about their year to date growth of 2. 3 . They expect improvement for the north American BusinessBeverage Business in the fourth quarter. Expecting 10 million in cash flow from operations cash dividends of 4. 5 billion and Share Repurchases of 2 billion. If you look at that stock, at this point its looking like its going to open up a little bit. That chart is not what i have, i have 109. 50 to 109. 90. They innovate the reason i know this is remember i was going go off my diet i asked for chilli cheese doritos. They sent me a care package, because im a tv person. It wasnt over 50, i think. But in it are all these new things like they have a lot of carbonated drinks, like an orange mango soda. Its not zero calories, its like 60 or 80 calories in a long, thip bn bottles. A lot of different snacks. Things that are not greasy fried chips. Thats what theyre talking about. They have healthier options theyre rolling out around the globe. The carb count is not that high what were they they were i abilite them. One was called sun bites. Healthier snacks a lot of innovation tropicana fruit desserts in france they got to look at what General Mills tried to do. They tried to take out all of the colors from trix i love that theres a fine line they were using kale using everything i hate to make it to make trix give me back my dye, would you you know, you can really turn off an audience. We like that orange did you ever get back on your diet the diet, i have not put it back on. He told me i needed a cal pell a scalpe many makeup. Its a constant for all of us it gets harder as you get older. As youll see. Recovering from hangovers gets much harder, too. Really . Yes we do have a quick programming note pepsicos cfo will be on squawk on the street at 9 10 eastern time news breaking on amazon. The eu ordering the company to pay about 2 295 million in back taxes to luxembourg. The European Commissioner saying the online retailer was given unfair tax breaks. Meantime the European Commission announcing its taking ireland to court for failing to collect 15 billion in back taxes from apple. Uber reached a deal with softbank and will go public by 2019 they will move from a super voting structure to a one share one vote structure ubers board will move from a super voting structure to a one share one vote structure thats a big deal basically it dilutes Travis Kalanicks voting. This is a constant day by day battle. Its like a game of chess, ill see you two Board Members this is all perhaps a bid to regain access to the london market former equifax ceo Richard Smith heads back to capitol hill today for a second day of congressional testimony. He was grilled yesterday about the massive breach politico reporting that the irs has awarded a 7 7. 5 Million Contract to equifax to verify taxpayer identities and help prevent fraud. The nobid contract was issued last week. Equifax already provides Similar Services to the irs under a previous contract. That makes me feel better did you read this one the numbers are great. Yahoo s data breach was the worst in history, and the company said they didnt really know the total amount. And every single account was compromised. 3 billion . 3 billion people had a yahoo account . Did how many knew they had the account . Are they our partners in some things i dont know i have a yahoo account. I know mine was compromised. What do you do with it forward stuff from my other thing that i need to printout from my computer at home i have a yahoo account thats just to get coupons yeah. So if it got breached, it didnt make a difference i have a yahoo account, but this sounds private serveresque with you guys. Very Hillary Clinton pretty much you cant say hillary now or anyone in the trump family the thing is that yahoo breached 3 billion, its ensane. The idea that everybody was breached is insane the information they have about me is nothing compared to what equifax has on me and 145 million americans is essentially any adult who has a credit ratin rating how long does it take them to figure this out . Its terrible i am not happy about yahoo but the equifax information they have on me is much more concerning and you have no say if you get breached with yahoo you can say i dont want an account. If you get breached with equifax, you have to choice. At least its everybody you didnt get left out yeah. President trump will be traveling to las vegas today thats where he will be meeting with victims of the mass shooting jane wells has the latest on this good morning this is where it happened this is the concert venue, the stage is straight back its an area still frozen in time everybodys belongings are still in there we now are told Stephen Paddock fired for between 9 and 11 minutes, killing 58 people his body was the 59th death. Look at this video outside his hotel room when police got there, they found 23 weapons, 12 converted to shoot hundreds of rounds a minute cameras over his door and in the hallways and on a food cart to monitor response but why . Thats on the mips of everyone in las vegas, including those at the massive Global Gaming expo thats a big insider event of the 26,000 registered attendees, were told so far only 15 people canceled. We dont have a thriving industry we dont have a thriving las vegas if people dont feel safe. Ensuring that safety is top priority were going to work as an industry and work as a community with Law Enforcement, with the customers to ensure people feel safe some compare the massacre to the horrific fire at the mgm grand hotel in 1980 which killed 85 people. A fire that changed everything about building and fire safety here to make sure such a tragedy never happened again it hasnt. Could we see another change based on this shooting in las vegas. We have video from the wynn which shows guests being wanded. As you said, President Trump will arrive today to visit victims and First Responders last night he tweeted its a miracle how fast the Las Vegas Metropolitan Police were able to find the demented shooter and stop him from more killing if you think about it, paddock shot from 9 to 11 minutes. It took 71 minutes to reach him. There was a onehour period where he was in mandalay bay in his hotel room waiting until a certain point when he eventually killed himself you bring up the changes this could eventually lead to, in terms of Hotel Security in vegas. You know, you think about it thats a situation you can just about export to any city in the country. You think those types of Security Standards will change around the country is it something people here in a free society are willing to put up with . Its interesting. The nypd has been training housekeeping personnel to recognize gun bags or guns in bags do you want to turn your Hotel Experience into going through tsa. In this case he wasnt running through the casino with guns shooting people, he was at a perch in a high building shooting down on an open area . What do you do about that in america . Theres so many questions. Even the Police Response the president complimented it, and they are saying because of all the cameras they have in las vegas it helped to get to him more quickly than they might have otherwise, but certainly that 71 minutes from the first 911 calls to finally breaking in the room, thats something that will be studied over and over to see if that could have been improved january, thank you very much. Janewells in las vegas we are continuing to follow a developing story out of puerto rico its been two weeks since Hurricane Maria made landfall. The governor said the death toll numbered to 34 this comes hours after President Trump visited puerto rico to survey the damage and he made big headlines when discussing their debt load. We have to look at their whole debt structure they owe a lot of money to your friends on wall street well have to wipe that out. That will have to be you can say goodbye to that i dont know if its goldman sachs, whoever it is, wave goodbye to that the white house did not immediately return requests for details. You asked the question, how does that work . Are they talking about wiping it out and not repaying it . Is this a taxpayer bailout it didnt sound like a taxpayer bailout sounded like he was wiping out the debt, which is extreme ramifications for municipals this is something weve been talking about since may when they filed for bankruptcy. This is a totally different thing. People argued its a violation of the fifth amendment of the constitution that a government cant take property and unilaterally take over its 20, 25 held by hedge funds, different types of funds. The rest is held by mom and pops bond mutual funds, 850 bond mutual funds open puerto ricos debt when he says your friends on wall street, its us they got compensated. Theres a reason the yields were so high. Taxfree yields. Its a risk its a risk theres been times in the past when it became clear something was never going to be paid back. You just eat t i guess that happened after 2008, after the financial crisis with gm and different places. Countries over the decades its happened to i dont know well see what he meant. I hurt myself yesterday. Im turning into hanes remember how he woul the back. I can only use one camera today. News out of washington, elan mui is reporting that House Republicans are leaning to a fourth bracket in their sweeping tax overhaul plan. I want to know, i heard it wont go above 39. 6. They might keep that high one. Whats the cut off who is wealthy who would what is the income level . We dont know, do we we dont. Details are still to be determined a senior republican said its highly likely we will see that fourth rate for wealthy households the tax framework from the big six only had three rates, 12 , 25 , 35 but it did give lawmakers the option of adding a fourth rate on the richest americans at least in the house now they appear ready to take that option theres no word exactly what that top rate would be yet as far as i can tell now, it would not be above that current rate of 39. 6 . This is a move that could help republicans defuse some criticism from the left that the tax plan so far benefits the wealthy. Orrin hatch said those numbers are still being negotiated and he said without those and other key pieces of information theres no way for an outside party to produce a credible analysis of the framework let alone a detailed estimate of revenue and distribution of the tax burden some key conservatives are indicating this is a point they could concede as well. The head of the Republican Study Committee said this week he doesnt seed a need for the fourth rate, but right now its not off the table. Well see what happens as this heads through the process. We should get details the fourth rate will help modify the state and local deductions, which are now supposedly up for, i dont know, up for discussion, negotiation, because theres so many republicans in potentially talking about capping the deductions, changing it so you can have a limit take one or the other with the mortgage deduction or the real estate deduction. This would replace that im sorry, steve, if this happens. Youre the only one here that probably would be affected by it when you do well, you shouldnt really mind if you have to pay a little more. Sure. In theory, right yeah. This is supposed to be a pro growth, supposed to be putting money back into the system this drives me nuts. Thats why i singled you out as the affected. The whole thing that we have to help people on the lower pay scale. 50 of the people in the country dont pay taxes. When you have a tax cut, it has to go to people who pay taxes. But there are other provisions that would help wealthy that are still remaining. If i look at the repeal of the estate tax, the repeal of the alternative minimum tax or perhaps what could happen with the passthrough rate. There are still ways that the people quwho are up at the uppe end of the spectrum benefit even if the top rate does change. Repealing the state tax, its hard to see if that is a den t benefit. Not for you, for your kids. I have a big Life Insurance policy i cant wait for that wait a minute taxfree. That one. When people say that, whoa im not sure that theyre willing to trade . Yeah. I hear you. Give me Something Else thank you. Coming up, its jobs week in america. Before we get the adp private payroll data well tell you what to expect from the numbers and what it could mean for your money. The dow looking to add 23 at open can we at least analyze can we push the offer online . Legacy technology can handcuff any company. But yes is here. The new app will go live monday . Yeah. With hewlettpackard enterprise, were transforming the way we work. With the right mix of hybrid it, everything computes. Joining us is steve chron from global allocation fund, and michael gapen, and our guest host is steve grasso michael, a lot of talk yesterday about who would be the next fed chair. At some point in the session jay powell emerged as the leading candidate. We saw the dollar index back off. Im wondering from your standpoint, does that matter in terms of the feds course of action could we see a real change if its warsh over powell or vice versa . My view is no matter who gets put forward, i dont think the tightening cycle gets done differently. For me the key question is will the new chair, whether its powell, warsh, whomever, will they use the Balance Sheet in the next downturn. Warsh is not happy with Balance Sheet expansion. Not a lot left for the new chair to decide in the current course. For me, its would they be responsive and use unconventional policies. Theres also the knock f there is a knock, on jay powell, that he wasnt involved in a downturn that a lot of candidates for fed governor have not dealt with the markets or a fed Balance Sheet, whereas warsh was in bernankes inner circle and may have more experience he was a key contact for the fed to go to congress and the market he had the credibility to speak to that side of the aisle and the markets saying heres what were trying to do and why this conversation of hawkish over dovish in terms of who will be ned chair is interesting given the prospect of fiscal stimulus it seems like most of the feds actions will be to the hawkish side the risk is to the hawkish side. Because we will see, if we have those tax cuts implemented, we will see inflationary pressures enter the economy most likely. We would agree. We think growth is on the upswing. We think tax reform has the ability to add attorneto earnind Inflation Expectations could pick up. In the work that weve done, when the fed is hiking from a low base t makes multiples on the market move higher, not lower. So we think it throws fuel on the fire that because rates are so low . When you start from a zero rate and the fed moves higher, the black swan of deflation is no longer a risk, you have growth picking up. Two, banks can lend and earn three, weve all gone out and refinanced our debt at low rates. Rates go up, we feel smart and maybe go out to dinner more. Traditionally thats what has occurred moving off an extreme low level of rates at this point in the cycle, where are we in the bull market . What seblgters do you wanted to be in . Weve seen an upswing in the past month in the reflation trade in materials do you continue with that. We move financials into that group. You moved from an Interest Rate bull market to an earnings rate bull market. With this fiscal policy coming into play, the value cyclicals represent the best opportunities. In terms of friday, jobs report, anything that could change yourout look for what ou for what the fed does . No, they expect weakness. Were saying the average hurricane since the mid 80s takes 50,000 off employment growth this one feels stronger than average, but not quite rita katrina 2005 so the consensus is roughly 100,000 lower than the recent trend. It will be a onemonth story youll get it back next month. I dont think the fed takes a big signal from this the market may, but it will be a temporary story. If youre in the reflation trade does that mean youre not in technology for two weeks or so, maybe will step out of the Technology Trade and go into the reflation tra trade, but it returns before the end of the year. All right thank you very