Christmas. You can see we are set up for a lower open generally speaking on the major averages, s p showing a little more signs of life. European markets, most have been closed for the Christmas Holiday or boxing day as well. So not much to speak of there. Lets get to our own 10year note yield though as we take a look where we stand right now. 2. 483. Crude oil, wti up a few cents and just out the latest shill erin dex shows home prices up 6. 2 in october. That of course year over year from last year lets get to our road map this morning. It does start with apple largest market cap out there, shrinking in the premarket on some reports about next years iphone sales, were going to fill you in. Will this years rally continue as we close out 2017. Finally a retail rebound, how the struggling sector is faring so far this Holiday Season as you may know not too bad. Lets start with apple shares, they are under pressure in the premarket. Reports of sales of the new iphone 10 are slowing according to taiwans daily economic news. Forecasting sales of 30 Million Units kpcompares to prior estimates of 45 million. There may have been perhaps some delays associated with their suppliers on certain parts of it but it is pressuring the market, looking at the couple of notes and they are very few as you might expect investors seem prepareded for shipment to be lower in q1 due to normal seasonality and fewer working days based on inbound checks done here, it appears to be increasingly concerned about chinese demand for apple in addition to chinese smartphone vendors. Well see. I think the key point here is we know the apple iphone x game is in the late innings and super cycle we keep talking about is in the late innings but we see a tremendously expanding user base worldwide. Apple talked about record revenues for the First Quarter in fiscal 2018 and remember the tax code and the advantages that youre getting from that. Ive seen numbers in the last week key bank had a great report out saying the tax rate could go from 25 to maybe half of that that could dramatically move up the numbers. Weve seen estimates now maybe 1160, could go into the mid 13 range. Theres certainly a lot of movement behind here to help the overall bottom lines earnings numbers out and thats still going to be a factor. This morning is a mini example of contrarian indicator cover. Apples golden moment, making the case that 2018 apple will near a trillion dollar market cap and showing that beautiful new headquarters china is an important market for apple, especially the iphone x it sounds like a big deal. Reuters is saying they analyzed chinese social media saying interest spiked around the launch but not kept pace with the highly popular 6 in 2014 which drove big sales for china. Which way this goes is a big deal. China is 25 shipment of iphones, almost a quarter of that. User base is growing and services are growing there the multiple is 15 times i think 2018 you can get a real expansion of the earnings and go down to 13 or 14. Thats not expensive. But we talked about the multiple being fairly low and consistently been that the question is of course about the cycle. They never introduced so many phones at once to their own, they made the point we dont necessarily know exactly what to expect the number of months ago when the 8 and 8 flu and the expectation of the 10 hitting market as well, they were uncertain as how it would be taken by consumer. You mentioned the supplier issue and we notice some were down this morning. Sky works was down too but theres two Different Things if they are only going to do 30 because they cant get suppliers on board, thats a great sign. Only doing 30 because demand is not there, totally different story, right totally good work on the chinese side of this and follows suppliers and she put out a report out december 22nd saying iphone x shipments will be less than 30 million judging on orders of chinese suppliers in the calendar q4 and iphone x production cuts as many as 10 sounds like demand side. It conceivably could be to your point it seems to have another leg to it regardless of the concerns and then we dont hear a lot from them on all of the other questions that we have in terms of automotive or the content business obviously we talk a great deal about the Services Part of the business, ever growing part of it with the regrowing revenue stream that so many investors like and willing to pay a higher multiple for most analysts have 11. 50 and 11. 75, they have not modeled in the tax effects, you can get to 13 and above with the tax effects here thats not modeled in and maybe the market is trying to dissipate that to my point, theres another leg up here, potentially helped apple out. I believe the user base expanding the service is expanding, thats going to be the key to future growth. Trillion dollars, only 100 billion away from it trillion dollars bob, i dont know, right . North of 800. Well north of 800 never seen that before i dont know who knows, maybe we never will. Markets reopening after the christmas break with the s p and 500 on track for the best monthly win streak since 1983. The dow would be the best monthly win streak since 1959. Lets bring in kevin, senior Portfolio Manager and jim paulson. Jim, how are you setting things up the last week of trading week of the year as you look ahead . I dont know, david i always think this week is pretty funky and theres been a lot of times in the past when you had positive alpha going into the week and they took it away from you, only to give it back in the first week of january. A lot of funky things happen im not sure what i expect for this week. Its going to be a lot of players gone it often times condition pretty volatile as a result of that. We spent the last few weeks of course talking about the possibility of the tax bill. Its reality now i would have to think a lot of what you were thinking about jim, would be impact from that, not just on Corporate America but throughout as we start to think about both the intended and unintended consequences of this major very revamp of the tax code. I believe a lot is in the market and already in the 1. 40, 1. 45 earnings estimate consensus on the street which even at that around 1. 40 puts this market close to 20 times forward, one year earnings i think what is less vetted is whether this is going to promote supply side productivity generated growth next year or whether its just going to add to already sort of Inflationary Pressure picking up, overheat pressures starting to emerge i think were going to face the latter a little bit in general and then with the added tax stimulus, i think its going to add to that. I think well have to reset the treasury yield up towards 3 and were going to deal with Wage Inflation over 3 i think its going to be difficult for a 20 times forward multiple marketplace kevin, bob pisani here. The big question im the stocks guy, the big question were grappling with here, number one, 2018, is this peak earnings were going to see number one and number two, is there going to be some kind of multiple compression. Were pricing now and trading anywhere between 19 to 20 times forward earnings and some people are saying we can keep that kind of high multiple and get to 3,000 on the s p 500 whats your take on peak earnings and multiple . Right now the data has come together so beautifully towards the end of the year. If you look at inflation and look at stress in the capital markets, everything seems to be looking really good. Were going to go with a more bullish tone to start off the year and consequently, you could see more multiple expansion but we would point out that the returns from here we think are going to be lower because when you look at the multiples youre talking about, youre at 18 times earnings or Something Like that and margins are fairly high. So over time we would expect both of those multiples to come down and those margins to come down as wages pick up. So ultimately, not peak earnings eventually youll see higher earnings, but i think the level of profitability is high as its going to be. Jim, i want to go back to something you said about inflation because ive heard this from a lot of people, not only do you think we might get pressures there but the tax stimulus will add to that. What if we think about the tax reform as more of a increasing ago agree gat supply in the economy. Could it have the opposite effect by, could it actually mean inflation is lower and not the kind of 2009 aggregate demand status but supply stimulus i think thats the hope i agree thats got possibility i think its remote. I think its below 50 that that happens. But its not without zero probability, if we push productivity from the 1 pace weve been growing in this economy towards 2 to 2. 5 on a sustained basis, then youre kind of into a late 90s environment of Growth Without any bad consequences Growth Without the need to raise Interest Rates because youre promoting productivity which holds inflation in check that could be a second leg to this bull that no one is really talking about right now. I think id put the odds of that less than 25 i think were at a 4 Unemployment Rate. Were going to set a 50year low in 2018. I think wages are probably already above 3 and were going to find that out with real with the reported numbers next year and i do think thats going to take a 3 plus treasury ultimately by bond vigilanties and at the minimum, we probably have a pause in this bull in 2018 with some gut check here and then maybe to your point, maybe if its productivity generating, we have another leg yet in 2019 and beyond kevin, just before we let you go rotations on everybodys mind. Tech which has been the Market Leader all year, a little tougher this month and banks, some other groups like energy are coming to the floor, some of this may be on tax issues, whats your thought on rotation as we go into 2018 the rubber band is fairly stretched between lets say growth and value growth represented by tech has had a phenomenal run a lot of it has been supported by improving earnings and investment trends. But ultimately there has to be a squaring up. So the growth the growth trade is probably looking a little bit tired right now i think its time to look at maybe some of the value sectors like energy and financials guys, thank you both. Appreciate it this morning kevin and jim. Thanks. Ive got to talk about bitcoin. Futures may be pointing down but the crypto is looking okay bitcoins wild ride continues, prices are rebounding, bitcoin is trading over 15,000 right now after it had the biggest weekly decline since 2013 then this past friday dipped just above the 11,000 mark from a high of over 20 k on some exchanges. Bob, how do you follow this . Is there some cosmic tell in whats happening with crypto the thing to do is keep a perspective on the size of this. This is attracting tremendous outside interest because its a new technology i dont know if we can put up the market cap for bit coin. Its important to understand not just bit coin but the total value of the whole crypto currently is 400 billion. The u. S. Stock market by comparison is close to 30 trillion and bond market is 38 trillion and the gold market is 7 trillion i throw the money supply too, broader indication of the money supply, including cash and deposits at 13 trillion my point in bringing all of this up, were dealing with a very, very small business. And were dealing with something that is literally one one hundredth of the size of the bond market. This is the argument for why bitcoin should be able to increase in value. In comparison to that, it seems small but this market the size of bitcoin is huge. Look what it did in 2017 alone its crazy. The important thing, this is why the Central Banks are not acting aggressively on it because its still relatively small. People say what can bitcoin do in 2018 . It could double for sure my point is youre not going to see this turn into a 10 trillion, 15, 20 trillion industry without the government stepping in some way and getting more aggressive in the regulation thats my point. Im surprised they havent already. When we return, well look at what the numbers are saying about the Holiday Shopping season as bargain hunters head to the malls this day after christmas and rbc analyst mark mahaney and what he seize ahead for amazon and apple is hurting the dow say little bit this morning. Thats implied to open lower, nasdaq 29 lower and s p fractionally lower for the bond market well, its earnings season once again. Yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. Im excited for the dog show with christmas in the books, consumers are making shopping runs for bargains and returns. I think my family is going to the mall kate rogers is at a mall north of new york city with the Holiday Season numbers and early crowds there hi, kate. Reporter hey, kelly, retailers have something to cheer about this Holiday Season. New data out from mastercard shows that retail sales from november 1st through Christmas Eve grew at a pace of 5 , thats the fastest clip since 2011. E commerce even faster grew at the rate of 18 . Overall the National Retail federation says this season was set to be a strong one with total sales around 682 billion. Ecommerce said to account for 100 billion of that total spend. We are at the pal sades mall and it did just open its not too crowded just yet but shopper track says today, december 26th is set to be the fourth busiest day in terms of foot traffic this entire season because people are taking advantage of deals at bloomingdales, 75 off, target, 70 off of thousands of items and best buys discounting computers by 150 depending on the brand and amazon online, anywhere from 10 to 70 off. Tons of Electronic Items we caught up with shoppers really eager to take advantage of those sales macys has like a 40 to 60 off. I got a great deal on calvin klein coat i lucked out today. Good prices, its like 50 to 75 off after christmasand sav it for next year now, christmas of course fell on a monday this year. So shoppers actually got an extra saturday this past saturday to get in and get some last minute shopping done. Thats called Super Saturday that was set to be the second busiest day of the shopping season according to shopper track, we dont know how it fared just yet, well find out later in the week even though the Holiday Season is over, the return season is just beginning and the nrf says on average people usually return about 4 of the gifts they receive back over to you kate, what time did that mall open its only 9 00 right now this mall opened at 8 00 a. M. The foot traffic has been slowly trickling in weve been here since before the doors opened nobody was in but you would be surprised. We spoke to one woman, she flew in overnight and came right to the mall to take advantage of the sales, the shoppers are committed to these deals. David is bummed he cant be there right now. Hes there early first thing when it opens you know me, me and a mall, were like this. All right the trends this year, i had a hard time discerning trends. It seemed like home auto mason was big and beauty was big my family, a lot got elf cosmetic kits that were out. It was hard to see big trends. Millennials walk around with stupid ear flaps on all over town. What do you mean . Ear flaps with the 70s, look like youre a hunter in the woods. That was all over the place, couldnt figure out that. I wore that when i covered the conrail annual meeting, it was minus 3 in philadelphia. Never heard the end of it. Art cashin will offer his take on the markets lets give you another look at futures as we set up for the open nine minutes from now im a small business, but i have. Big dreams. And big plans. So how do i make the efforts of 8 employees. Feel like 50 . How can i share new plans virtually . How can i download an efile . Virtual tours . Zipfile . Really big files . In seconds, not minutes. Just like that. Like everything. The answer is simple. Ill do what ive always done. Dream more, dream faster, and above all. Now, ill dream gig. Now more businesses, in more places, can afford to dream gig. Comcast, building americas largest gigspeed network. [vo] progress is an unstoppable force. The season of audi sales event is here. Audi will cover your first months lease payment on select models during the season of audi sales event. Your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Welcome back, just about six minutes to go before the opening bell lets bring in arthur cashin, director of floor operations with ubs. Very Merry Christmas to you and everyone out there. What do you think about the markets as we set up for the last week of the year here it could be a little puzzling this is when we would be due for the socalled santa claus rally which starts basically Christmas Eve or the last trading day before christmas and runs through the beginning of the next year now, theres a little bit of a problem here and i discussed this with bob pisani in my year end interview that the tax bill threw a lot of things off. People didnt necessarily do the kind of tax selling they are used to and didnt know what things what rules would apply. So they kind of postponed some of that. That may be what is going to distort the santa claus rally a little bit and the oth