60 points after the dow closed at a record level yesterday. The s p closed lower yesterday all the major averages moved off the highs of the session this morning the s p is indicated up by 5 points the nasdaq up by 10. This came after the feds decision and after if looked clear that Republican Leaders reached an agreement, at least in principle, on where theyre headed with the tax bill well talk more about that green arrows across the board this morning in asia, the nikkei looked like it was down by a quarter percentage point similar declines for the hang seng and shanghai. This morning in europe, with some of the early trading, you will see that there are some declines across the board. The biggest loser is the dax down by a half percentage point. Cac in france is down by 0. 4 . We have the bank of england and the ecb going to be releasing some policy statements today check out crude oil prices which were lower yesterday crude oil at 56. 59 couple of big economic reports on the agenda. At 8 30, weekly jobless claims at 7 45, the ecb decision will be made. Well monitor Mario DraghisNews Conference at 8 30. On the earnings front, adobe systems, oracle and costco all report after the close today. The big news of the morning t happened in Washington Senate finance chairman orrin hatch saying yesterday negotiators have reached a deal on a tax plan. Ylan mui has the details good morning. Not only do republicans say they have a deal on the tax bill, they also think they have the votes to get this passed as weve been reporting, the corporate rate would land at 21 , but i also confirmed that it would take effect right away, not be delayed until 2019. Another change is the deduction for state and local taxes would be capped at 10,000 but you would be able to apply it to property or to income taxes. Republicans are still vetting this deal with rank and file members, and several swing state voters told us they are still undecided. The full text of the legislation will not be released until later this week, but kevin brady told us hes encouraged by how far theyve come the final agreement wont be done until Committee ConferenceCommittee Report it filed at the end of this week. Were making very Good Progress on all the key issues, driving the rates, tax cuts for middle class families, making sure businesses see tax cuts and become competitive worldwide right away for republicans passing this bill would be huge, so huge that it deserves its own holiday. Theyre not calling it christmas, theyre calling it taxmas it looks like they got rid of the more controversial issues, things like the waivers for graduate School Tuition that had been potentially going to be taxed. Also medical deductions, they look like theyre back in. Those are some items that were stirring people about what was going to happen to the middle class. Sort of where we are at the stage is a lunch of smaller provisions beyond the headline pieces that individual senators and individual lawmakers are now gunning to have put back in or to have taken out. So, that is why lawmakers are saying theres not a final, final deal because there are those negotiations taking place. The medical deductions is extremely important to senator Susan Collins. She told us yesterday, she feels her concerns are being addressed in the negotiations. I havent heard taxmas. I heard resistmas. I know you have heard that. Speaker ryan, his office put at a whole poem called twas the night before taxmas, and all the reindeer were renamed to Committee Tax members. Too much time on their hands all over hollywood there are resistmas trees. You have a christmas tree. I do. Is it resistmas tree . I resist things all right. Jpmorgans ceo, jamie dimon weighed in on the tax reform plan yesterday he talked about the Ways Companies would use their newfound tax savings. On the corporate side, the benefit is not going to be immediate. You do have the reduction of taxes, companies will retain more capital, theyll start to use it over time you will compete away the advantage. Some will raise wages, some will buy companies, some may do dif vends and buyback. Thats not a good thing. Thats their money it gets recircumstanr recirculated into the system you think that thats what we heard with the low Interest Rates, buybacks, corporate, you know, shenanigans not shenanigans, but Financial EngineeringFinancial Engineering if this continues, these guys will probably do some of that. A lot of that but they dont have to wore borrow it now. Good thing with these high Interest Rates no, but they used to borrow it now they have more money to work with in that sense youre not straining. Jamies right its like qe4, additional stimulus comes in its private sector money, not Balance Sheet fed money. I will say this about qe 4. We said qe is one of the great thats when its from the fed. You dont have to unwind this. In terms of where the money goes to help its for the inequality the whole argument about qe is that it is creating greater inequality which is why maybe jamie was talking about increasing the earned income tax credit if you do increase assets, one of the effects is people get wealthier, but it builds a bridge to the economy doing better i used to make that argument and you said we shouldnt have qe no. I am saying if you believe its a bridge to where you pass the ba doton off, but one complaint, Richard Fisher used to say, we have this huge Balance Sheet, we primed the pump, now we need the engine to run. No more priming the pump if you get lower rates and more business activity, you can use some of the money in a way other than for business have said well do it when theres demand right you cant really see heres wages go up, demand go up what is my most fervent desire because i didnt have anything in the market, remember the mid 90s, what did i say could it ever happen again three years of 30 gains we have one under our belt you cannot deny, the market is up a third theres good things happening. Merry christmas, happy holidays, hanukkah just started, didnt it two days in so you get 11 christmases or something, right then you do christmas eight eight, 11, i grew up in ohio. Youre thinking of the 12 days of christmas. With the sorkins you get eight days and christmas would take all the holidays, too. Festivus, like seinfeld including festivus. Cnbc confirmed that Delta Air Lines is planning to announce an order for 100 airbus planes. This is a big win for airbus and a loss for boeing which hoped to land the order the purchase comes amid a trade dispute. Boeing complained that Canadas Bombardier sold planes to delta at below market prices and received unfair government subsidi subsidies. Talking bh ing more about al stuff with john silvia from wells fargo, chief economist have you always been chief economist . Ive been chief economist at wachovia and when wells fargo took over, they kept me on as chief economist. Amazing like a reverse pacman. They bought wachovia, you ousted the guy who was already at wells fargo . Where is he . Flipping burgers i was lucky enough there was not a person who was chief economist at wells fargo at the time there was a chief new accounts guy at wells fargo. Also on set is brian levitt from oppenheimer funds. Both you guys have now pored over the comments from fed and co yesterday youre not chief economist, are you . Senior investment strategist. Well started with silvia then john what did you read into both the move and the forecast and the comments from the fed . They anticipate keeping on the path in terms of the dot plot our route look is we will get three fed increases next year, as the Inflation Numbers continue to rise and finally the interesting point that you were talking about just a few minutes ago, when companies do get a Corporate Tax cut, they do get the profits. Thats actually what you said earlier, joe, in economic terms, the cost of capital is lowered, now they have cash we also discussed how theyll use the cash thats the key when janet yellen was talking about, will we make a difference in terms of longer Economic Growth . Is this cash going to be used to buy equipment and improve productivity that was interesting to hear you discuss this earlier and apply it to Janet Yellens comments. Brian, you agree with that . I think the fed will be able to continue to raise Interest Rates in the early part of 2018. What we have now is a synchronized global expansion. Most countries around the world are growing above trend. You have easing Monetary Policy. Its a nice back troop for risk assets Federal Reserve will continue to normalize policy i would watch the tenyear what you saw yesterday was equity markets up, bond markets rallying, we are still flattening the yield curve some. If we dont get a significant pick up in inflation, Federal Reserve will have to back off in 2018 a lot of people, john, are saying stimulus now. What do you think . I guess the proxy they use for how strong an economy is is the 4 Unemployment Rate yet you still got these low bond yields around the world. And you have the notion, i think, that a lot of these jobs that were created in the last ten years, maybe people, some of them maybe are parttime other ones, maybe people would like better jobs the other know, is that maybe if you had a choice of two or three jobs, you might be able to hold out for more money if you had eight years of 2 growth, is it a bad thing to try and stimulate the economy where we are now theres never a bad time to try to make the economy better, is there . To make it better, to make it more efficient, never a bad time ill go back to Janet Yellens comments you do get a short run stimulus here we have only 2. 7 growth for 2018 thats not a big push in the economy overall. Longer term, back to the same issue. Unless youre improving productivity and Labor Force Participation rate, theres not a sustained stimulus Going Forward. Its almost like republicans figure theres never a bad time to try to stimulate the private sector honestly, im not being negative here, but democrats think theres never a bad time to redistribute you redistribute in bad times, redistribute in good times, redistribute in average times. Never a bad time its like the two ways of looking at the world you think its a bad time to stimulate the economy . Are we already at maximum output with inflation where it is i dont think its a bad time to try to stimulate the economy. But i think to expect a new higher sustainable level of growth is probably overstating why we had it through 45 years, through ten recessions, grew at 3. 5 some of it is demographics. To johns point, you need growth in the Labor Force Participation rate, and you need big productivity gains you have a boom to corporate earnings, so they can retain more of what they generate, will you see significant investment in the economy to create productivity lets say we get three or four years of 3 plus. How will you go back and explain that happened when you basically said its impossible i didnt say impossible what do we need, more kids . More immigration no, we need to invest if productivity why are you so skeptical that we do that you dont think you think were stuck at 2 , demographically we cant go above that the reason ive got skepticism, weve been in an environment where businesses are flush with cash for some time now this is what were talking about, waiting for demand. Businesses will do anything to satiate demand the question is when does demand spark, maybe wages have not gone up thats part of the reason why. The most important thing for investors is this backdrop has been fine for the equity markets. Thats likely to continue. To joes point about why we havent had those years, consecutive years of big gains, we had a fantastic environment from 1999 to where we were a couple years ago, we doubled in 17 years it was not a huge run. We only had a huge run up in the last year. When it went down to 666 on the s p in the middle of a financial crisis we had a secular bear market, that ended in 2009 weve been in a secular bull market with a significant advance in the equity markets. I heard earlier talking about 1987, 100,000 in 1987 investment today is 2 2. 2 million. We had to move through if you take 1999 when we were at 10,000, and go to 20,000 in 2016, how many years it took to double like 16 years it took to double, its like 4 a year. We had a prolonged period where we came out of high valuations, we started to rebuild, we were overlevered we need to go back to 82 one point that i just make not on his behalf, but in your camp for a second, given the wealth effect that you could argue is taking place over the last year, if not actually frankly the last five or six years, you would think if everybody was so wealthy in spending this money, that that would the whole policy approach, the trickle down approach is create a wealth effect, it will work what im saying is look around, you tell me whether you think its working we dont know what twould hae happened without we are in good shape, but rich people consume, but not they dont use 100 of their savings. You just made the point for me rich people dont consume all the money theyre getting. You have a choice of nobody thats the argument about trickle down you dont grow the pie because it stays at the high end or grow it on hopefully you see demand you have to find a way to reasonably grow the pie at the bottom and middle ends it wont be through legislation. We tried that for eight years. We tried forcing it down, that didnt work. I think no wage gains and 2 growth let the economy do it. I think jamie dimon had an eloquent one, lower the unleash the private sector, watch what happens were coming back in a minute guys, thank you for being with us. When we come back, the force is strong with disney. The company could announce a deal to buy key assets from fox. We will be back after this ronoh really . Gs going on at schwab. Thank you clients . Well jd power did just rank them highest in Investor Satisfaction with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to Wealth Management. Welcome back its a big day for disney with the opening of the latest star wars movie and a potential multibillion dollar deal in the works for the assets owned by 21st century fox joining us is dan primac from axios. What does this mean . We anticipate a deal will be announced, one where 21st cen 1 century fox would own a part of disney what does this mean for Rupert Murdoch, it means he will refocus on news, which is how he started his career people keep saying Rupert Murdoch has been an acquirer, now to the point where he is willing to sell. I started thinking of it as a reverse pacman getting in, taking owner shp of dship of di especially if he can put his son as the next ceo. I think theres some truth to that im stunned this is happening at all. I get why it makes sense for 21st century fox i understand wanting more content. I understand wanting more content, im not sure why they want more live sports content, given their spns sespn issues. I thought when doj sued to stop the acquisition of at t and time warner, that this would be put on ice so im fairly stunned this announce mtd ment is coming you think this will face issues with regulators we dont know randall stephenson, the ceo of at t said he thought there would be so much uncertainty off of that that these talks would be put on hold. I agree with that. The issue with doj is that we dont know what their playbook is so im kind of surprised that disney would take such a major move which can disrupt their own operations and foxs operations while theres so much uncertainty out there. I wasnt surprised to see that there wasnt more done with comcast, because theyve been kind of the foil in all of that. I guess im not surprised to see this happen if the timing works for Rupert Murdoch and if is something ig wore like er woulde accomplished that makes total sense to me. I look at what happened with at t and how surprised they seemed to be with what happened with the doj one argument doj was making is one about distribution, particularly over the top distribution i understand at ts distribution with the pipes and directv is more than what disney has and potentially hulu thats a big transaction it speaks to the arguments that the department of justice made against at t, which is controlling both content and distribution do we think the hulu piece will be allowed . Im not sure with the other shareholders, that they can take a majority stake the way they have my understanding is that they get again, youre right the devil is in the details. The question is whether the terms of their Ownership Structure allow for this it also raises a lot of questions about bamtech, because they just bought bamtech, if theyre going to continue to run hu hulu, did they just waste millions on bamtech . Disney said the reason they launched bamtech is because they wanted to launch their own streaming to complete with netflix, do they merge hulu and their streaming or kill their streaming . These are things we assume we will hear today from disney. The other thing interesting to look at in the details when we get them is what the termination graemt lo agreement looks like okay. Thank you for joining us today thanks a lot. Chec