Points s p turned negative. Down by lows to 3 points the nasdaq down by 72 points this morning a mixed bag again dow futures indicated up by 43 points s p down by 3 points the nasdaq down by 27. Overnight in asia, the nikkei ended down by 0. 3 the hang seng down by 1 shanghai down by 0. 20 in european trading, ret arroir across the board, though the ftse is at the flat line lets check out currencies yesterday cruel oil prices were down 1. 5 . This morning the dollar is up against the euro at 1. 1862 dollar yen at 112. 45 Republican Leaders in the house and senate are racing to merge the tax plans and send the bill to President Trump before the end of the year. A Conference Committee plans to reconcile the two pieces of legislation starting this week among the differences the house has four individual rates, the senate seven the house cuts the corporate rate to 20 right away the senate waits until 2019. The senate repeals the individual mandate while the house doesnt. Another point of possible contention, the house bill would repeal the corporate amt, alternative minu alternative minimum tax. The senate bill retains the amt. This morning well talk to kevin brady. He will join us at 8 10 eastern. Dont go anywhere at 8 10. Or between now and then either if you do need to go somewhere when is andrew no. Hes coming up lots from him, too in other washington news, House Republicans introducing a stop gap spending bill the temporary measure would fund the government until december 22nd Mitch Mcconnell says it will be passed by the end of this week in the senate. Democratic leaders nancy pelosi and Chuck Schumer accepted an invitation to meet with President Trump later this week to begin talks on a longer term spending bill. We all thought the same thing with this. In corporate news, britains cineworld has agreed to buy u. S. Movie theater operator Regal Entertainment for 3 3. 6 billion the deal values regal at 23 a share or 12 premium to the Closing Price as of monday cineworld is the uks largest cinema operator. Last month cineworld approached regal for the potential deal we had cinnabon last week. They sent some stuff over. Still floating around. When you realize i told you, its like celery. No. Its not its the opposite of celery cinnamon is good for you. Cinnamon cuts fat but the bun does not. It destroys fat cells in my mind now, cinnabons, you are a net loser of calories. Theres cinnamon with the cinnabons. On earth, its one of the great things its the smell. They know that. Its almost like an aphrodisiac. At least for me. Okay. On that awkward note andrew is in shanghai. He has a big lineup of special guests here he is with a look at whats coming up. We are at the starbucks shanghai this is the largest starbucks roast ery in the world theyre opening today. We have a big show from here lots of different interviews, lets start with a tour that how wart shultz just took me on of this very starbucks. Welcome to a coffee wonderland thank you the likes of which you have never seen in your life. Twice the size of the original Seattle Roastery i would say everything weve done at starbucks for the last 46 years has led us to this moment took us 18 years to get to 10,000 stores in the u. S i think in half that time well have 10,000 stores in china we want to create intimacy and experiences for customers like they never had they are sitting at the bar. We have wonderful people not only experts in coffee but experts in theatrically democrat traiting what we tem stra demonstrating what were doing we have the tea bar. The values of what weve been able to do culturally in the u. S. Weve replicated. Every starbucks partner, three employee in china is an owner. Everyone has Incremental Healthcare beyond the above that we provide we provide healthcare to the parents, Housing Allowance all the things weve done as a pane to enhance the life of our people what we tried to do in addition to the design and everything were doing with coffee and food is most importantly be respectful and dignify the chinese culture. It is pretty incredible to see what is going on here. Through jo throughout the show well bring you a number of big interviews great, sounds great, andrew in todays wall street agenda, the october trade deficit is out at 8 30 a. M. Eastern followed by the ism auto zone and hg supply report before the opening bell. Dave busters is out after the close. Lets get back to the markets. Joining us is noah blackstein, Portfolio Manager at dynamic funds, and chris burtelson, and our guest host, ed keon. Gentlemen, welcome to all of you. Noah, lets talk about what happened yesterday looked like a big day for the markets. Ended up with a bit of a reversal the dow ended in positive territory, but not the s p or the nasdaq is that a concern . I think what you have seen from the second to last week of november, last week and the beginning of this week is a massive rotation out of the yeartodate winners and into companies that have been losers or heavily shorted or into stocks that people believe will benefit from tax reform. Theres also a shift towards value. Even though the yield curve is flattening, the banks are doing well youre saying its not a concern, just a shift in leadership it hurts for sure, especially if you own Technology Companies. Whats changed its not like youre getting a wave of negative announcements the opposite its not like gdp growth isnt strong the fed now is 3. 9 for the Fourth Quarter everything is strong secular trends are there youre witnessing a rebalancing between hedge funds now. If you missed these for a long period of time, theres good names down 10 , 12 15 off the highs. In that vain, chris, you think this is a great opportunity for infrastructure stocks in particular why is that . Absolutely. If you look at it, along with what noah had to say everything with a tax rate thats 30 plus was up yesterday just about industrials yes industri industrials. Retail tech, biotech, anything that is really 20 or less was down. And i think its a real great time for infrastructure. There are industrials. There tend to be a lot of them, mid cap type names thats what really is prejudiced in the new packs bill. I think it was a tax shift, if youll have. Quan quantitative, yes, but a tax shift. Were still wrapping our heads around what the combined tax bill will look like. But not too many differences between the house and Senate Looks Like it will be good for earnings which is the bottom line earnings in 2017 were remarkably good and stable. Usually you start the year out at 10 , 12 , growth expected, then it goes down about 5 by the end of the year. This year we started 10 , 12 , we will end up there thats unusual and a positive surprise for the markets as we go into next year, were looking at 10 , 12 Earnings Growth here, first of all, the economic fundamentals remain strong we could have the same effect as last year. Also we will get this tailwind of 5 , 10 from the tax cut. So, it looks like once again well have a double digit Earnings Growth year and though we might have rotation, we might have correction from time to time with the tailwind of double digit Earnings Growth, its likely to be another good year for the stock market mike santoli was here yesterday, he made the point that december has never been the worst month of the year. The worst month of the year so far has been a flat month. Is that a reason to look at this and think, okay, dont be waiting for the pullback if youre waiting to put money in you had the pullback in certain sectors. The yeartodate leaders pulled back dramatically over the last week and a half. Theres no evidence that this economy is slowing down or that earnings are terrible. Its not like were going into a recession. The Earnings Growth is there you have the tax cuts plus the Regulatory Framework which is Getting Better the tax cuts look like theyre on track i wouldnt bet against it. What happens if it doesnt get passed what would then play out i think we would see a correction 10 you know, maybe 5 , 10 we havent had a pullback in such a long time if you have a piece of genuinely disappointing news, which is a failure of the tax cut would qualify, that would be a good excuse for genuine correction. Just looking at noah because how is your guy how is trudeau doing up there . He lives in i do. He got emotional last week about something. He did. What was it we saw him cry im not here for healthcare thats what i asked you did he see a specialist . Im here for cinnabon you can come back in nine months or see your specialist up in you know, a lot of liberals would love trudeau. They look north. Ed, not for nothing. How much would you like trudeau to be why are you laughing . We can only have one president at a time. Unto nanortunfortunately for. Youre like a yankee in King Arthurs Court up there. A little bit. You have a great oil and gas industry i think with the opec cuts, its obviously i think this umbrella opec is putting up is bringing back the shale plays. Which should in turn bring Oil Prices Back down isnt there a ceiling where oil prices can do . You would think i think by taking oil prices higher, a lot of the shale plays which were producing to meet cash flow needs and pay bonds, now have more running room that sector pays high wages. Do either of you think that the you know, that the tax bill will not result in 3 or 4 growth and the market is this is like being fooled by all the happy talk about whats going to happen ed, i cant believe you believe that oil these private sector things are going to work its very hard to get 3 , 4 growth over a long period of time you believe that . Quite possibly it could happen in a short period of time i think we have 3 growth now. Already Corporate Taxes are close to 300 billion a year the regulatory costs in the United States are 1. 9 trillion dont underestimate the freeze the first thing that trump did through the executive order about checking the cost benefit analysis, thats a tax cut in and of itself. Thats spurred ceo growth. You have tax cuts and then regulatory reform. Theres 23,000 regulations in the previous eight years getting thrown on to businesses, as that rolls back, it embeaus ceo confidence we had the two healthcare ceos, one paid 42 , and the other 37e . The rest goes to hiring people and expanding businesses. People, i think, expect ceos to say, yeah, when i get money, i will hire people and thats not necessarily ceos will do it when demand picks up from the more disposable income in the private sector they expect it to happen in a vacuum but you hope its sort of like a circle that happens. I hope we do get a big surge. Chris, are you still there . Yes, i am i would say that though its down the road a bit, the real threat is the cross over if you get tenyear higher than 3 with Economic Growth, the fed starting to raise a bit. They start concentrating on the you think thats a bad thing if we see tenyear above 3 . Absolutely. I dont know why Central Banks are looking to these inflation numbers. Start looking at real growth and crisis level lows in Interest Rates, you will see it bump up that would be a good thing, wouldnt it . If the economy is firing on all cylinders, we see the tenyear above 3 , maybe we would be getting back towards normalization . That would be a good thing, right . Yes, but that would create a draw down in the market. As soon as you have the 5yearold the the 55yearold to 90yearold set saying i prefer bonds, will you see some withdrawal from stocks you think the stock market is being artificially inflated by abnormally low Interest Rates, and its not just the economy and all these other things that are kind of pumping things up . I certainly think that thats still the case we have crisis level lows. Look at Interest Rates they need to get north of 3 guys . What do you think . I think that if rates rise because growth is strong, thats good for the stock market. Good for the economy if Interest Rates are higher, thats a normal natural thing. Yes, some people might reallocate, but i think in general theyll be enough buyers for thats what we were hoping for all along. You could hand off the baton if we can get double digit Earnings Growth, 3 , 4 gdp growth, theres another good chance for the stock market. Not at buying amazon at 238 times earnings they will draw down some great companies, yes, but at these levels not so the reflection is to those benefiting from the tax breaks chris, you want to talk about a couple picks you mentioned infrastructure stocks i know you have a couple in mind specifically what are they . I think if you look at flor corp, for a long time its ban poor performer, down for the year now all of a sudden you will see the fact that theyll start to get large contracts. Theyre only a 6 6. 5 billion company, but they can have a huge book. Looking at maztech, everything that is communication oriented, as soon as you see growth coming from infrastructure plans, you will see those companies go forward. They are what i consider political neutral. Doesnt matter which side of the aisle, as long as a rep is in the district and gets spending chris, thank you for joining us noah, good to see you. Whats your Corporate Tax rate in canada same as new york residents. No Corporate Tax 20 . And youre giving him grief why was i giving you grief . Because you enjoy that. I do. All right. Thank you. Ed will be with us for the rest of the hour. Coming up, well talk about Growth Opportunities in china. Joshua ramo will join us, andrew and us in shanghai at 7 00, andrew will talk to jack ma. Squawk box will be right back. It can detect a threat using ai, and respond 60 times faster. It lets you know where your data lives, down to the very server. It keeps your insights from prying eyes, so theyre used by no one else but you. It. Is. The cloud. The ibm cloud. The cloud thats designed for your data. Ai ready. Secure to the core. The ibm cloud is the cloud for business. Yours. We thats why at xfinityic. Weve been working hard to simplify your experiences with us. Now with instant text and email updates youll always be up to date. You can easily add premium channels so you dont miss your favorite show. And with just a single word, find all the answers youre looking for. Because getting what you need should be simple, fast, and easy. Download the xfinity my account app or go online today. Welcome back to squawk box. Lets head back out to andrew in shanghai with a special guest. Andrew joshua, thanks for being here. Pleasure. I always think of you as my china hand all right help us understand right now whats the most misunderstood thing about the country and the economy here when youre sitting in the United States, theres an admirable and justifiable focus on the Macro Economic conditions here, which are extremely troubling in some regards, certainly by western standards different than anything than any of us would feel comfortable waking up with having said that, the remarkable thing about life on the ground here is the dynamism of the consumer economy, which you cant miss the premise at the moment is if the great trick to chinese growth over the first 30 years of reform was connecting the Global Markets and low cost labor, whats happening next is the explosion in the domestic market you see that all around. You see that in places like this, the ability to open Something Like this in downtown shanghai expresses that. Youre on the board of starbucks, and this is working when i say this, starbucks for the first couple of years it was a tough run. Why is this working . Why is this working relative to the fact that so many other american countries have try dodd business in china and not had that same success . Its a great question how bad was it when i moved to beijing in 2002, i would at night take a taxicab back between the two starbucks it was undrinkable to go from that to this, its growing rapidly, you have to ask what went right. One thing that went right, starbucks figured out where the sweet spot in the market was they provided a unique experience that you couldnt get anywhere else. People thought this was a tea brinking nation. How do you get people to drink coffee, that was a huge advantage. And a desire to have this consumer experience. They didnt do it with a partner. Meaning, this was done relatively on their own. Thats right. They had a partner in east china, but made a decision what they would do is try to learn themselves this is a fundamental question for a lot of western companies will you go through the early years where things are uncomfortable, youre breaking stuff, its not working out, but youre learning how to use the new muscles in the market. If youre in the business of making steal, selling iron, probably there are different structures you need to go to market what do you thinkibili ibila u. S. china relationship . North korea continues its overhang in terms of the conversation yeah. The challenge in the relationship which has not changed in the 15 years since i moved to china is how can you find a way to get both sides on the same side of the table, whether thats north korea, which is a joint threat or Economic Issues which has the possibility for joint benefits, thats where youre trying to go xi jinping had this idea, new kind of great power relations, thats what the chinese wanted from this last visit, was to cement a new way that big powers coWork Together. T could Work Together th