Mixed week right now, youre looking at the dow on pace for its eighth consecutive weekly gain as kevin was talking about. Hard to find down days the s p 500 is hovering around break even if it does end in the positive territory, it would be its eighth consecutive weekly gain nasdaq on track for its sixth week of gains. Dow futures indicated up by 30 points nasdaq indicated to open up by 20 points. S p fight pictuutures indicate 0 1. 5 this morning the hang seng ended up by 0. 3 in korea, the kospi with you up by close to a half percentage point. In shanghai, down by a third of a percentage point in europe, you will see it looks like things are relatively flat. France, you couldnt get much flatter than it stands the dax is up by 0. 3 . The ftse up by 0. 25 we will get to the gop tax plan and jay powell in a moment, a couple other big stories President Trumps twitter account was temporarily dark last night the company says that a exiter employee accidentally deactivated the account on his last day of work i dont know if it was an accident i think he might have done it on purpose. Originally said the account was inadvertently deactivated as part of a human error by an employee but later clarified the situation. The account was returned to normal after become down for only 11 minutes. But 11 minutes im sure people missed we will see what tweet storm would have happened during that period netflixs Stranger Things 2 officially hit according to the first ever ratings report on netflix from neilsen the First Episode was watched by 15. 8 Million People within the first three days that tops the 15 Million People who watched the recent season of the walking dead last month a netflix spokesperson said neilsen is not accurate, not even close this is a big deal because neilsen has tried to start tracking Netflix Netflix has not given numbers. Netflix should know how many people were watching at any given point. Im sure they know i would not give neilsen the data what do they have to hide . They also have the long tale of people watching in perpetuity. I never understood that war. Its not like netflix is running commercials. Give them the data, be transparent. What are you hiding . My question is if youre trading at that pe, be transparent about everything as a network that struggled with neilsen ratings in the past and felt they are not been accurate, i can understand youre making these numbers up theres certain types of programs i think netflix wants to have on its platform that may not perform the way you would want them to in a traditional sense, but if youre running a subscription business youre fine to do it. If youre getting kicked around in the press every day because you have x show and its not performing as well as some other show it changes the dynamic and the culture. Ratings changes the culture of things you dont think . I love transparency as an investor you like it as an investor or theres an argument to be made theyre able to do more things that they wouldnt be able to do they can do whatever they want by providing transparency is giving more comfort to me as an investor to understand as a journalist i would prefer it. I love the idea you can go invest in an elek tick progrcle programming with the belief that people will watch it for ten years and you get a return they say whatever the production costs are, ill give you 40 more, but thats it. They must believe in the long tale like i want to be the owner if im an investor show me how this works i may give you a higher pe if that model is better do you look at the model and say theyre overproducing . No, what i want to determine is if the long run of production, if every movie ever made you look at the things since the beginning of time, the winners, losers, the titanics, its about a 7 return on investment, which is pretty crappy if were taking more and more dollars on a netflix model and producing more stuff at risk, do we skew towards a 7 irr theyre not trading near that. Everybody assumes everything they make makes money. Just pushing a fewbuttons. Asking a few questions you are better than everybody else who made a movie . I dont think so i think theres a lot of crap being produced there, too. At what point does the market look at that lets tell but a few stocks to watch this morning. We will talk about apple in a moment other Earnings Reports that have come out starbucks shares under pressure. The Quarterly Sales actually fell short of expectations the company is trimming it profit forecast. Starbucks announcing a deal to sell its tazo tea brand to unilever for 3 384 million the stock down by 3 they came in line with expe expectations but also lowered guidance for the current quarter. Thats different than what they used to do we have the ceo, Kevin Johnson, joining squawk on the street later this morning thats at 9 40 eastern time. Aig reporting a bigger than expected quarterly loss. They had huge catastrophic losses mostly from hurricanes harvey, irma and maria also announcing a pretax receive vef boost of 3 386 billion that came to a surprise as investors. That stock is down tmobile and sprint are said to be working to save their merger talking last week word was that negotiations were falling apart over which side would control the combined company sounds like tmobile has some sort of consideration for sprint shares for print up by 5. 3 . Apple blowing past wall street estimates in its latest quarter beating on every major metric the Company Offering an yupbeat forecast for the Holiday Shopping season, aleving concern about production delays. We are getting very close to the t world, a trillion dollars. The report coming as the new device hits shelves around the world this morning joining us is the Senior Analyst at William Blair and company good morning to you. You listened to that call last night. The thing i was listening for and timed cou ed coutim cook ad the supply concerns. Thanks for having me. Kevin, by the wear, imay, im a of your show i saw yesterday that apple is proving its to be a diversified sticky platform. You saw the diversity in product beat despite mute ed iphone sals to your point, tim cook did not talk about supply con strabts c the Bigger Picture is there is no competition when you look at this device, its no longer a phone its a personal Computing Platform and greater proportion of our lives are dependent on this. So its a good problem to have, which is demand is exceeding supply i believe the fact that they guided 84 billion, 87 billion for the december quarter proves theyre bullish on the whole iphone what do you think the stock is worth a year from now we talked if we could come within a trillion dollars. Right so the way i look at the stock is Something Like this if you look at the iphone sales, call it mid single digit unit growth asp bump high Single Digits. The top line is high Single Digits you do whatever you want to do on buyback, dividends, lets call it low teens eps growth i believe the multiple will expand over time, but even if you dont think the multiple expa expands, thats your return, a low teens. You said theres no competition . I think of samsung, pixel, and everybody and their brother. Clearly from a market share perspective around the world apple is relatively tiny relative to android, no . Well, lets dissect that. Pixel is what i consider google science project. Weve had multiple science projects from google i dont believe pixel succeeds samsung has a history of coming out with these phones. The problem with samsung, its not an integrated platform theyre going after the lowend, going after the highend the chinese are attacking them on the low end and apple attacking them on the high end they dont have integrated experience i would argue that there is no second to apple. Brfrnlgt before i let you go, what will happen to qualcomm and intel in this great debate of which chip is in which phone right now and whether frankly qualcomm chips will be in apple phones in the future at all given the fight theyve taken on, legal fight. I cover qualcomm. I have a market perform on it, im cautious the issue here is qualcomms licensing business now, qualcomm from a chip set point of view is the leader. There is no doubt. I would argue that the modem is more superior than intel but is it more superior that apple will say were going to switch i would be surprised if qualcomm gets thrown out. But apple definitely is moving more towards intel we have to leave it there appreciate your perspective this early in the morning thanks thank you our top story out of washington, reaction to the republican tax reform plan ylan mui has more on that story. Good morning we have a price tag for that tax plan, 1. 4 1. 487 trillion ovr the next ten years thats according to the joint committee on taxation. It means that this bill does comply, if only barely, with those special reconciliation rules that republicans want to use to fast track this legislation. The single biggest line item in this bill is cutting the Corporate Tax rate to 20 . Originally this was going to be temporary to save some money, but sources tell me that conservatives revolted when they found out and kevin brady changed course overnight we worked to make it permanent. Were convinced for our Small Businesses and our companies who have to compete around the world here at home that perm nanthat s that 20 rate is a red line for President Trump. He was against any changes to 401 k s. Republicans dropped that from the bill brady told me that he spoke with the president almost every day, sometimes multiple times a day as the committee was writing this legislation President Trumps all in. His tax cut and jobs plan, he and his team have been very engaged in both the drafting and framework and where we want to go these negotiations are not over five republicans from new york and new jersey are signaling early opposition to this bill because it doesnt do enough to spref the state and loc preserve the state and local tax deduction. Brady is staying on the table with this issue. He hopes they do, too. Ylan, this will be a dance because its so close to the 5 1. 5 trillion limit theyre allowed, if anything changes, there will have to be several changes to make up the money that would be missing, if they take anything off the table, right . All these parts are interconnected when i asked kevin brady how much he expected this bill to change, he said that the only number that he wants to see in there remaining the same is 20 . He wanted to see the fosters growth, middle class tax cut, the 20 corporate rate is the number he mentioned. Youre already hearing rumblings in the senate over the cost of this bill. Senator bob corker is worried about that well see as this continues to go through the sausage grinder of washington. You made it sound like everything is up for negotiation except the 20 then . I asked what does he expect to stay the same in the bill what are kevin bradys red lines, he said he wants growth, middle class tax cuts and a 20 corporate rate so the only number that he pointed out was that 20 corporate rate mr. Wonderful, is this wonderful . You know what i love about this the best . The opening dialogue that will occur about deductible of state taxes, take massachusetts and new york let the states compete if we do not allow state dedu deductib deductibldeduc deductibili deductibility, you want to attract more you create a competition in a unique way weve never seen for 50, 60 years this is a very expensive state new york city is crazy expensive. It becomes crazier expensive and you say i live in boston why dont i move to tampa . Were about to have a guest on here talking about billions being invested there i love this. I love this. If its something that goes into effect immediately and doesnt come in in stages t will mean a harsh reality for states like new york, new jersey, connecticut they have to compete. What happens in competition . Productivity enhancement you dont see disruption in the years until they figure that out . Oh, cry me a river. Een suckio much cash from people i would look at this when you start setting limits, like a 500,000 limit, you can take the mortgage Interest Deduction up to 500,000, then you cant, some states its just a much higher cost of living 500,000 does not buy you a lot in San Francisco alternatively there are states that are more efficient in how they spend their taxes. Strip will you the mortgage deductions because they left some haves, havenots, i think theyll have a problem getting it passed. Many of these blue states are net payers to the government much more so than a lot of other states youre talking about. The services in these states as a result have obviously theres developed services because there are taxes that pay for the developed services, like we educate people in this state in ways that other states dont. I think you come with me on this it becomes more complicated when you start to think about what some other states are offering and not offering i understand the competition argument go to 30,000 feet, ask yourself, im one of the people in the continuedry that pay rco of taxes i believe onethird of every dollar that goes to the meat grinder of states and government misallocated. Completely wasted im talking about changing that dynamic. Let the states compete the more productive ones that provide Better Services at a lower cost are incentivized to do more of that to attract more capital. It could be a great thing. This is the one time in my life well get to do this i understand that, even coming from states where we are getting the state and local taxes back, i understand the argument for not subsidizing here is another issue when you come down with it. Where was i going with this. Theres nothing good about taxing more. Judd gregg was with us last week his point was he was there in 1986 when they did it the last time he said you have to kill all the sacred cows. What if you leave thsome in, its a problem. If we with simplify the tax code and create competition at the state level, this is a wonderful thing for america, period. I believe this, if we could do these tax reforms, this economy would hum at 3 , 4 . Right now its under 2 . But they have to keep it under 1. 5 in scoring when has scoring ever been right . But the problem is they cant make it permanent and fast track it because of the rules. But were trying to kick start this economy back up to 3. 5 in perpetuity, which would be a good thing for all of us. When we come back, the jobs countdown is on. Well get ready for todays employment report with some predictions after the break. Stick around, squawk box will be right back. Your muscles look good, but we should be seeing more range of motion. Im fine. 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Schwab, a modern approach to Wealth Management. Welcome back we are a couple hours away from the october jobs numbers economists are looking for a snap back after that last report which was influenced by the recent hurricanes. Joining us is Jim Osullivan from High Frequency economics, and Michelle Gerard from natwest markets. What mnumber are you looking for michelle were at 300,000. Youre not at the high end. With that decline of 33,000 in september, a 300 number would not put the twomonth average anywhere close to what we had seen yeartodate prior to the hurricanes if you had it, you would need a number around 380,000 to suggest that the twomonth average would be close to the 175,000 weve been running that gives you the idea about the potential for this to print strong jim, what about you i have 340, you get a zero and 340, you have 170 average, close enough to what the trend has been how would you gauge the economy . If youre looking at strong jobs numbers like that, what kind of reading are you seeing in the overall economy . Weve seen good prints for gdp, too. 170, 180 has been the trend already in employment. About 1. 5 per year. At best Labor Force Growth is 1 per year its this is strong employment growth relative to demographics if anything, recent numbers suggest a lift the broader growth numbers, the survey numbers in general are showing a lift jobless claims at their lowest since 73, if anything, things are looking better the tax bill, what do you think of it . What will it do to the economy i think it will help. It will be a tough sell. Im not sure we can assume it will go through in the form it has been presented i think its a positive. Its important to recognize even without the tax cuts the economy has had good momentum. As you said, jim, its on an upswing heading into 2018. What do you think the heaviest lift is . The mortgage Interest Deduction . The individual side thats the issue the combination of the two, sort of having to limit deductions and appears for many individuals theyll face higher taxes while at the same Time Companies are getting a big tax break. Its that combination good luck selling it. Its a tough sell. The other issue is a new fed chief. Jay powell, assumption is he will get approved. What does