Lets look at where we stand in the markets the dow hitting a new high up 117 points the s p and nasdaq all in record territory. Earnings are driving the market highs its getting rewarded. Bob is at the New York Stock Exchange with more were at new highs because the market has successfully rotated into former out of favor sectors. Im talking about cyclicals. Whatever happened to the Global Economic slowdown. Those are the two classic cyclicals on a global level. Communication services are Media Companies also doing well. Even bank stocks doing well as the yields curve has steepened in the last month. Its not just here in the u. S. I think a lot of people were surprised to find that europe is moving up. We had new highs in italy and germany and france theres your european etf. A lot of this is because the bank stocks have turned around italy, germany and france even japan at eight week highs. A little bit of this is about trade optimism a lot of people believe that will help the global earnings situation as well. Fed with us as well. We had a little bit better Economic Data europe and over in china recently on friday thats going leading to a lot of people saying perhaps we need to look at the 2020 earnings will be below expectations maybe they are not maybe we can do a lot better thats fueling a lot of the optimism november is a good month back to you. We have a quick news alert here steve is flagging some warning signs. Thank vrs mus very much. The Federal Reserve out with its quarter. Banks tightening credit standards for new credit cards and consumer loans and for commercial real estate loans these are small percentages tightening but its going in the same direction but coming amid lower Interest Rates they have tighten credit for industrial loans reaching a threeyear high and banks are becoming less likely versus the beginning of the year to prove credit cards for those with low credit scores. Banks are siting low risk tolerance. Concerns about repayment from borrowers for the tighter standards. Scott. Thank you despite recession fears swirling, billionaire investor leon cooperman said hes not worried about the market at all time highs the only place i saw euphoyea was the ipo market thats been corrected. Is it safe to buy at these record highs lets bring in jack and hugh johnson. What do you think about what he said are we fairly valuevalued . Yeah, i would say were pretty fairly valued were starting to see a little rotation into sort of the outer favor areas. Based on the earnings, valuations are i will absolutely agree with lee and say they are full. Would you be concerned as he might get a bit bothered about the market at that point i think were about 2 above the averages for the quarter i think he hit the nail on the head when he said its not widespread ill call it optimism. You dont have the levels of optimism that ordinarily characterize the end of a bull market believe me, if we had a significant move, the so called melt up in stock prices, we had a speculative surge and we got a big increase in optimism and became euphoria then i would say were probably signaling the end of this bull market. Too much euphoria is not a good thing. They can get tall 3,000 is the target for the s p that you have. You said it remains intact were above that today do you need to start raising where you think stocks can go over the last couple of months i dont know. Its a year in number. Were only a month and a half or so away. I feel pretty good about the 3,000. We put that there at the beginning of the year. I think the market had followed the path we expected my sense is it will be hard to get a melt up. I just dont see especially with the headlines, the valuation and the earnings for next year are great for 2019, 2020 if we look much farther out, one of the things that we require is a 90 success rate in making money over a 7year Holding Period and historically that was really easy to do with the s p now we cant do that anymore we had the take money off the mid year were going to stay with our dry powder and use it as an opportunity to get in with a pull back. Maybe you want to make the case that earnings have troughed and will only improve from here. Thats a positive environment, is it not, jack . It is i will say that what were seeing in the corporate profit activity over the last few quarters is beat of very low expectations and then very low number and tamp down expectations right now analysts havent tamped down the next four quarters they are still looking for high single digits. We will see that come down to mid single digits. I dont think thats a bearish sign theyre going to be good for a while. They are good now. We see financials especially going to the top of the leader board. You see Technology Still performing well. We have seen a rotation back to the bull market sectors away from the safer sectors youve seen it in the credit markets. Not only has the yield curve become uninverted but quality spreads have narrowed. I say near term. I emphasize that you have to be optimistic but keep in mind the longest bull market in history, sooner or later this bull market will end and have a bear market and a recession. I dont think it will be a bad bare market or recession this will not grow to the sky. Well leave it there. Let me address the credit for a second if you could, quickly sure. We have seen enormous supply of Corporate Credit and the spreads dont compensate it very similar to what we saw we have shifted away from Corporate Credit to household credit a lot of marortgages we think household is in great shape. Mortgage probably of supplies. Thank you mcdonalds shares lower after the Company Fired ceo Steve Easterbook for engaging in a consensual relationship with a subordina subordinate. Only one firm downgrading the stock so far great to have you with us. Why is this so disruptive when the guy taking over is Steve Easterbrooks men tetee. Its the guy he brought in and trained. Hes been part of that push towards online ordering . It just changes the risk profile. Feeling okay with how this went down is one thing. On a go forward basis its totally different. This is a big scale global brand. No one can come in and flip the switch and change the strategy anything that chris is going to do, that will be inherited over the 12 to nec 18 months in terms of menu and delivery and marketing and digital, et cetera the flip side of that is hes not easterbrook. He had his own leadership style and he also had vast amount of Global Operating experience. Not to take anything away from kempczinski, hes been in the u. S. Operations and a lot of the ideas have come from outside the u. S. Do you see this as an opportunity for others, competitors to gain share . I dont think that mcdonalds has to lose for someone else to win. Youre in a franchise concept and they are doing well with the whopper and the chicken sandwich at popeyes its good news versus not good news in terms of mcdonalds, do you see this as any sort of cultural problem when you heard about the chief officer leaving did you connect the two dots at all . Are you getting any information from how you should read that . We are absolutely not saying that i think the easterbrook legacy when the book is final written will show he has laid the foundation of the digital footprint that will carry mcdonalds forward this is the way it had to be handled. I think in that regard, we are not saying anything about the dominant brand equity global footprint of the mcdonalds that will Carry Forward we also just cant say that that momentum will continue forward just because leadership changes. If someone was to say, im not sure about this, maybe this sounds like somebody looking to downgrades the stock the stock has been broken later and this was to make the move today and have the excuse of easterbrooks leaving to do it i think thats Fair Assessment we did get that push back today. The majority of times you have a leadership change of this magnitude, the stock will be flat to down the investor will not miss much by taking some off the table for the next 6 to 12 month period. I think it needs to be a much more proactive approach. While the stock did well, overall qsr is doing well and franchise concepts rerated from unloading all their stores during the last period, none of that changes in isolation this is about todays leadership change. Thank you coming up, tech stocks have out performed financials and just about Everything Else this year up 37 . Well hear from an analyst who says wall street banks deserve the same valuation as Silicon Valley tech giants well have all of those details of his emotional case against warr warrens wealth tax. Stay on power lunch. One of the products i helped develop at 3m was a more secure diaper closure. There were babies involved. And they werent saying much. Thats what we do at 3m, we listen to people, even those who dont have a voice. We are people helping people. vo thewith every attempt, strto free itself,piders web. It only becomes more entangled. Unaware that an exhilarating escape is just within reach. Defy the laws of human nature. At the season of audi sales event. Welcome back financials one of the best performing sectors out performing the Broader Market as rates rise mike mayo argues that banks should be valued more like Tech Companies. Mike mayo joins us now to explain. Nice to have you back. I mean, you have taken the get up a little too far now. First you slice the tie off on squawk now you got the hoodie we get it, youre partly a tech analyst. Now youre going over board. You want banks to be valued the same as Tech Companies im a still bank analyst. You cant be a bank analyst without being a parttime tech analyst. Maybe every third day i can wear this year to date for our favorite name citigroup, bank of america and jpmorgan the bank earning streams are less risky, more annuity like because Technology Helped to keep costs in check and if you go back to historical relationships between roe and stock riprices banks would be 3 higher whats new we looked at one third of Bank Businesses and compared them to 13 Tech Companies. We said you know what, that one third of the Bank Business should be valued like the tech kpoens closer to a pricetoearnings ratio of 20. Every Company Wants to be valued like a tech company. Dominos at the forefront of their technology and mobile ordering they should be valued like that too and not a food or restaurant stock. I guess what id say is do the math do the math. The Technology Firms grow three times faster the pretaxed Earnings Growth for the last three years for the largest banks versus those Tech Companies has been the same yet those Tech Companies trade 50 higher the same as the Tech Companies . Pretax Earnings Growth the same as the Tech Companies that trade 50 higher valuations revenues grow faster than expenses one reason is because of the motes around the Bank Businesses are under appreciated. You sure youre not trying too hard you got out performs on the big banks. You love the stocks go up. This is not back normal banks. I was negative for 15 years, 17 years. Look at the returns that banks are generating relative to their price to book ratios based on historical relationships they should be 30 higher just getting back to normal history including prior to the financial crisis absolutely. The last decade banks performance was lousy. Now its good. Youve crossed the line between destroying value and creating value. Once you create value, look at bank stock valuations during the prior preereriods you look at Tech Companies one third of banks are like tech they should get higher valuation or it shows Intrinsic Value and if you want to throw in there the greatest Value Investor of all time, warren buffet has this greatest overweight in u. S. Banks. How about another warren . What about Elizabeth Warren or Bernie Sanders gets elected . Theres political risks just a little up side, 30 . Down side, its there. Were still buyers in the big banks. All right good stuff good to see you. Check out shares of boot barn Retail Success story its up 120 this year can the stock keep on kicking . Well ask the companys ceo jus ahead. Does your broker offer more than just free trades . Fidelity has zero commissions for online u. S. Equity trades and etfs, plus zero minimums to open a brokerage account. With value like this, there are zero reasons to invest anywhere else. Fidelity. There are zero reasons to invest anywhere else. Im part of a community of problem solvers. We make ideas grow. From an everyday solution. To one that can take on a bigger challenge. We are solving problems that improve lives. Welcome back uber gearing up for earnings after the bell its third release since going public the stock is a poster child for weaker appetite for ipos its fallen 7 in a week we got about half a years worth of history with this stock and its not ban pretty picture. How are you viewing it right now . Well you know as you mention its hard to look at most stocks when theyve only been public for six months or so this one is a little bit different. There are some definitive lines that we can keep an eye on you get above 35 as recent high and the earnings can be a catalyst, that will be positive. It will give a lot more confidence in the name and squeeze a few shorts on the negative side, if you roll back over and the earnings are catalyst for a dive in stock and it drops below, its 28. 5, its low since it went public of 28. 5 that will be a problem im glad you mentioned the ipo market this whole thing with uber and lift and the whole blow up of wework will be very important. If we see a major break down over these Earnings Report that will have implications of issuers and banks to make a lot of money and the like. 2020 will be very dependent on the ipo market on how these stocks are reported the next few weeks. Something approaching a little bit of make or break. Its about a 50 billion market value. Obviously theres not a lot of illusions this is a wonderfully powerful bid how do you view in terms of a forward going basis on this valuation. Its an unsustainable economic model as its run right now. The great hope of selfdriving cars is pretty much a pipe dream at this point. Technology and the compliance liability issues are still very far away i think its very difficult to imagine a strong fundamental case you have a lock up period coming up in two days lyft did better. All right well see after the close today. Thank you very much. Head to our website or follow us on twitter back over to you ahead, boot barn soaring more than 120 this year was this stock made for buying well sit down with the ceo next teaching convicts to code. Tyler is in san francisc sitting down with the founder o of a company that wants to get prisoners out of their cells and into Silicon Valley. Welcome back here is your cnbc news update. An advice columnist who has accused President Trump of raping her in a new York City Department store dressing room in the 1990s has sued him saying he defamed her calling her a liar whom he never met shes a long time advice columnist for elle magazine. The cdc is warn about a multistate sal moe nmonella out. Its a more severe strain than the typical ones eight people were hospitalized and one death has been reported. They have not identified the supplier of the tainted beef yet. A funeral was held today in detroit for long time michigan congressman john conyers who died last week at the age of 90. Hundreds of mourners attended the service including former president bill clinton i remember, i think john conyers the first person that ever quoted Frederick Douglass to me and saying power conceives nothing without a demand never did and never will he understood that thank you very much. Take a look at the markets right now. We give you a check on the day when a dow hit a new high. S p is higher. Its the russell that does about a 1 away or so. It cut revenue guidance for the rest of the year next strikyker is buyin inin iit medical. Twilio lowering its earnings outlook. It had already lowered that guidance once last week when it r reported results lets send it over to tyler. One place where its been written is unlikely. It will be a million unfilled tech jobs in this country and a lot of them are in coding. The gentleman youre about to meet, a venture capitalist founded a group called the last mile which teaches convicts in prison in san quinton how to code and then gets them jobs how did the last mile start . When did it start . We started in 2010 and i was invite into the prison to do a talk to a group of men about business and entrepreneurship. They wanted to learn. They wanted to learn. A friend of mine was doing some mentoring there. She said a lot of these guys have questions i cant answer. Would you come in. My first reaction was no why would i want to go into prison i had never been there before. I believed the current perception about no hope, no path in prison i went in one night and i planned to do about a 30minute talk that 30 minute talk turned into a three hour discussion. What i discovered is theres a lot of talent and desire of people inside who really wanted to build a better life after they served their time guys were handing me Business Plans th