Street our house in the middle of th street welcome to power lunch. As melissa points out, another string of record highs for averages any gains by dow, as in dam and s p 500 means a record close check out some of the big movers right now. Sea world is taking a hit. Reports the company is a takeover target. So why is it higher . We will explain later. Constellation brands, company beating east mates and raising the outlook. Constellation ceo joining cramer on mad money. The xlk is at a new 17year high paypal, apple, microsoft, alphabet all leading the way there. We are looking at shares of regeneron. News that we reported earlier he that u. S. Court reversed a ban on sales of the cholesterollowering drug, can you see shares up 3. 5 tyler, back to you thank you very much welcome to power lunch. Lets look at the dow. Major move that republicans passed a 4 trillion federal budget resolution. It is the first concrete step to tax reform for procedural parliamentary reasons. But there is a lot of work ahead, obviously ylan is here with more hi, ylan hi, tyler passing 219206, no democrats voting in favor of it, watched House Committee chairwoman diane black get highfives from colleagues after the vote was over senate has been trying to get its version of the budget out of committee. Remember, the senates version that includes that 1. 5 trillion tax cut. The house version of the budget is actually deficit neutral. I asked chairwoman black today whether her members might support a budget that actually increases the deficit. I never like to say what my members will or will not do. I can tell you that they are are very concerned about the deficit spending that we continue to do. So i think they will want that to be in some way a part of this final product. The senate is in recess next week the house is going to be out after that so youre really looking at early november before you can get the two chambers together to decide on what final version of a budget might look like and that means the time line for getting tax reform done this year is getting really tight, guys back over to you it absolutely is. So lets discuss more of that today is the First Step Towards tax reform as i lan just pointed out or is this just washington process that they are getting too excited about. Jim joins us from washington hi, jim. Hi, how you doing how much of a signal is this today that we will get tax reform done . It is a procedural thing. But you have to get the budget resolution through the senate, ultimately approved by the house, that allows for tax cuts. The 1. 5 trillion. I think it is misleading to call it tax reform. At the end of the day i think you are looking at rate cuts for corporate rates. Individual rate cuts i get a but im asking you to handicap that something gets done i think something gets done all likelihood, done in q1 of next year. But every republican will want to vote for tax cuts i think there hand isful of Senate Democrats that will have a hard time not o voting for tax cuts, even if you dont offset the cost of them to some kind of reforms or accompanying spending cuts i think it is hard in politics to say no to a tax cut particularly in an Election Year for those Senate Democrats up in trump country, thats a tough vote im trying to handicap here is the markets rallying because of this. Is wall street right to do so . It seems like markets have been rallying allier on anticipation of tax cuts, especially on the corporate side if markets are factoring in that there will be tax cuts in q 4 q1, then it should be. It is unlikely it heaps this year i think it is unlikely it is actual tax reform. But what the markets want to see is reduction in Corporate Tax rate thats what republicans are committed to and it senends up around 25 i think you will see reduction in individual income tax brackets you wont see a lot of deductions on the table that people think they will get rid of like for high state taxes i dont think that goes through at end of the day. But you probably get tax cuts. I dont know if you see marcus, and now on to the puerto rican debt issue where President Trump is saying it should be wiped out, 70 billion worth of debt that they have, and the governor didnt embrace that suggesting that maybe there is a deal for bond holders out there, i assume, because at some point puerto rico has to go back to the mark and the borrow again. What do you think about puerto ricos debt . I dont know if they even agree with what trump says about the tax debt it was bag problem befoa big prn before the storm but you dont have a lot of republicans rushing to do what would be considering bailout for puerto rico. But they have to also understand this is humanitarian disaster that needs to be dealt with. The fact that they are out next week, i think we are weeks from figuring out exactly what they will do. They listen to trump on this and feel like trump is saying whatever is on his mind at any given day and they hear from the budget director o in the white house who says Something Different p so they will end up doing what they want to do with probably not a whole lot of guidance from President Trump. How big an obstacle for the gop is the idea this may not be deficit neutral . How many votes do they lose on that this is a, to me, one of the most fascinating political topics right now have you a party that says listen we are totally committed to reducing size of government that is in conflict with cutting taxes in a deficit enhancing way. You can say Dynamic Growth will somehow, you have this Economic Growth over time but history shows that is probably unlikely. At least at the level they are talking about. There are a small number of Senate Republicans and small number of House Republicans who i dont think would vote for a tax cut unless it is deficit neutral. At the end of the day they can put together a coalition i think ultimately in the house that allows them to do tax cuts and probably some democratic votes. It is easier in the senate than it is in the house if you are rand paul or the freedom caucus, you will have a real gut check you have this opportunity to reduce rates and particularly on the corporate side that should have a big economic affect in a positive way but youre looking at longterm deficits that bob corker and others are saying, this isnt sustainable thats what republican parties are built on talking about cutting spending, amazing. Jim, thank you as we mentioned, another recordbreaking day on the street for major averages. S p on track to post longest winning streak since bill clinton was in the white house in 1997. There you see it up a half percent. President trump tweeting this morning that quote the stock market hits an alltime high, exclamation point. Unemployment, lowest in 16 years, exclamation point and manufacturing enthusiasm and highest level in decades, exclamation point. S p financials, materials, health care, all up more than 20 , exclamation point where do we go from here, exclamation point. Mike bell, exclamation point, jpmorgan asset management. Jason, let me start with you michelle just mentioned the market is going up one of the causes could be the prospect of tax reform or a tax cut. Do you see it that way why do you think the market is going higher just one day after another as it has been doing so like you mentioned, could be six record closes in a row and eightday win streak as well last six weeks since the bottom in august, i think the move has been somewhat predicated upon this resurgence in tax reform. We see that in small cap and mid cap. And seeing that in more economic sensitive sensors like financ l financials and energy. If you look at the Bigger Picture for the year, its been earnings in the economy that have driven stocks higher. And not so much the agenda out of washington or pro growth agenda we have seen fantastic growth in q1 and q2. We see a synchronized bounce and Economic Growth and these things have continued to draw stock Prices Higher. Mike, corrections can come out of nowhere for any number of reasons. But bull markets typically dont die until one of two things happens. There is a recession, number one. Or inflation rates that rise and tip the economy into recession do you see anything on the near term horizon that could lead to the end of the bull market the outlook remains very positive we look at risk of recession, and in the medium term, two to four years, then it may be gradually rising but in the near term, it is very little Consumer Confidence is strong. Everything looks good the at moment jason, going back to the idea of tax reform, in 2017, i think stocks are arising or seems like stocks are rising based on their own Earnings Growth, if you look at the consensus estimate about 145 and change for s p 500 companies, there is a certain amount imbedded in that according to most strategists in wall street because of tax reform you take that out and that could mean a down side to markets in current levels do you have the view that in 2018 it is crucial to have that reform tax cut, whatever you want it call it in place in order for markes to the at least maintain current levels at record highs snrs. I think were at the phase in the secular bull market where earnings are more important than anything else. First phase based on undervaluation based on early parts of economic expansion based on low Interest Rates. Second phase is going to be earnings driven. To your point i think is some tax cut elements baked into next years earnings. I dont think it is as much as some straf gisstrategists sugge. Im not sure we need to see the bull market continue there are other factors that play low Interest Rates low inflation and Earnings Growth as long as we continue it see the economy recovering and Global Economy in europe and japan and other places where its bouncing, there is still an upcycle. One of the odd things about this year is it seems like every market around the world with few exception says moving higher if i had incremental cash i wanted to put to work for say twoyear time horizon, would you recommend i put it more in the u. S. Or more in developed nonu. S. Markets or emerging markets . I think europeanequities across the board have a slight chance to do bet are than the u. S. You see flow into european equities now because margins are coming off of a lower base, if you have a growth in europe it might be slightly stronger than u. S. Next year and greater earnings coming through in europe because of the operating leverage which is higher we think european equities have good upside. But u. S. As well and also an overweight to emerging market. Stocks, stocks and more stocks thanks very much thank you one of the biggest in the s p 500, up about 4 streaming giant raising prices could it hurt subscriber growth . A lot of outreach last time netflix tried to raise prices. The nations largest student Loan Servicing company hit with major lawsuit. We will speak with the man leavg athae xtinth crgne anything worth pursuing hard work and a plan. At baird, we approach your Wealth Management strategy the same way to create a Financial Plan built to last from generation to generation. Well listen. Well talk. Well plan. Baird. So they called the fire, yodepartment for us. Clearly, my first truck was on the scene within five minutes. I am grateful we all made it out safely. To protect what you love, call 1800adtcares netflix is one of the top three gainers of the s p 500, company raising prices that is boosting the stock price. Julia boorstin with more julia . Investors and analysts believe that netflix has Pricing Power with 50 million plus u. S. Subscribers. Netflixs first major price hike in two years Standard Service going up 1 o to 11 and preemmium up 2 to . Basic plan remains at 7. 99. Netflix noting that now subscribers can now download shows, robust content including new films. Despite growing competition from amazon, hulu and hbo, ted said earlier this week that the companys growing content is worth it and paying off. The idea that there is too much out there is silly. A very kind of analog idea of what of how to make programming choices. For me, next year our budget is closer to 7 billion for content. Michael packard, despite a sell on netflix shares, says he expects close to zero attrition from the price hikes a lot of bullishness today on the stock. Thanks, julia boorstin. Lets look at what the latest price hike will mean. Senior internet analyst joins us now, rob, great to have you with us is there any concern people will balk at increases . Very little i think what we saw last year, last two years, water fall of price increases. I think some poor messaging on the ungrandfathering two years in a row of raising prices little bit after scare of a sca of joining slow down but at the end of the day, the amount of attrition i think ended up being less than a percent, in my estimation. So very, very little what does this mean at end of the day is for netflix i assume you raised estimates on the revenue side for kpt yeah. Per user thats right. And yeah you know, back on to the comment that ted was just making about 7 billion in programming, you know, growing from 6 to 7, and were talking about a price increase that has been outlined, thats bullish for the margin story. I think they are doing what they set out to do. Mon advertising better great Value Proposition. A lot more back into investment and content and growing the business at a nice rate. Does that mean they are profitable per subscriber at this price level yeah. They are knocking on the door already before we even roll through the subscriber growth and the price increases. So the profitability story, i expect, has already been up a lot this year and were at the beginning of what i think is a good margin story over the next several years. Is netflix the new espn in other words, the musthave that people will absorb price increases. They dont want to be without it because of quality of programming. Variety of selections you can have picking up existing shows or movies . Yeah. I think that it is getting to be a mustbuy i think we still have room, you mentioned 50 million u. S. Subscribers. It is about half penetration of the total available homes. I think over time it will become a musthave. Because what they are doing with this big budget is they are able to address the different people in your household. Whether your kids, teens, wife, yourself, whom ever, and they are better able to service niche interests. I think it is becoming that and will grow into becoming the mustbuy how high could they go . In terms of Pricing Power yes if you look at the hours of consumption compared to the dollars per hour, it is a Pretty Simple calculation they are a fraction of what people pay for Cable Television service. So you know, less than 40 so theres quite a bit of upside, i think, in terms of filling out that Value Proposition and getting adequate m montization for it 20 bucks, 40 bucks . Depends on content. But their ability to deliver more, obviously grows along side that, and one of the beautiful things of the story sun like any programmer in history, they are able to scale that budget globally thats the thing that internet delivery gives you over pay tv systems. Can you put it across so many more homes thats the thing for am zone as well as hulu and other services in terms of Pricing Power for netflix, arent they sort of boxed in amazon, you get that free with amazon prime you might think of a whole other service with video content i dont know what i pay for hulu at this point, 10 bucks or so. Arent they boxed in in terms of what they can actually charge . I think the pricing umbrella in this country is set very, very high by pay tv. Thats expectations for Video Services is. Large umbrella to grow under so where that ultimately goes is hard it tell itll be a function of the programming budget and their ability to deliver things that you cant live without and you have relative elasticity and keep in mind we are talking about the price of about one movie ticket yeah. Movie tickets are pretty expensive. Thank you. Rob sanderson. Stay home and watch netflix exactly, right. All right, navient stock plummeting we will talk to the attorney general who is bringing that suit and with so much Student Loan Debt millennials have trouble affording a down payment for a house. So what do they do get help and not necessarily from mom and dad. We will explain that one next. Thank you so much. Thank you so were a go . Yes we got a yes what does that mean for purchasing . Purchase. Lets do this. Got it. Book the flights hai si si ya ya ya what does that mean for us . We can get stuff. Whats it mean for shipping . Ship the goods. Youre a go you got the green light. That means go oh, yeah. Start saying yes to your companys best ideas. Were gonna hit our launch date scream thank you goodbye let us help with money and knowhow, so you can get business done. American express open. So you can get business done. This s electricity. This is a power plant. This is tim barckholtz. Thats me this is something he is researching at exxonmobil using fuel cells to capture Carbon Emissions at power plants. This is the potential. Reducing co2 emissions by up to 90 . While also producing more power. This could be big. Energy lives here. Say you want to buy a house but dont have the money for a down payment, common problem dont worry, though. Millennials have a solution and theyve told diana about it. What have they told you, diane millennials today have high Student Loan Debt, pay high rent and when they started in the work force they were underemployed. Add it all up and it doesnt equal enough to save for a down payment for most millennials like so much else, why not crowd fund it . Thi