Kayla tausche. Goldman sachs internet analyst. Great to have you back. Thanks. Along with our own mike santoli as we watch the dow tick above 19,000 for the first time. Yesterday, of course, all four major indexes hit closing and intraday highs. What does this all mean . The path of least resistance is higher . This is how the market trades literally when the paft path of least resistance is higher. Its drifting higher. I think that happens around round numbers. I look at dow 19,000, all the caveats about how its only 30 stocks, 1,000 points on the dow is literally not what it used to be. The most impressive thing was it was at 15,5 in february. We ft. First hit 18,000 at the end of december 2014. So over two years, youre up about 5. 5 , point to point. Why is that . Corporate earnings flattened out for two years, going on three years. Now youre getting more of an energetic push on this reflation period. Fund futures hit 100. 2 for december. Now the market is coming to grips with the fact we will get a rate hike in december and market could keep going up when we do. Absolutely. I do think you know, theres this old saying i like to point to. The market never discounts the same news twice. This decembers rate hike is not the same as last decembers. The market can handle these small increments. The way its trading since the election and even a little before the election, everything youre hopeful about is right in front of us. We can pencil it in. We have progrowth policies, fiscal spending, a fred that gos slow. Rates maybe having to go higher than we expect or faster than we expect. Maybe its the fact that we dont necessarily get all those policies in place. Theres a lot of votes in europe to worry about. France, italy. The actual implementation of brexit. Thats already been voted on. And then the new congress, when that comes in, seeing what they can actually get done, whether they decide to go bipartisan or full republican, which you would expect since they control both houses. How far into the First Quarter do we need to get before perhaps people start to rethink these levels . Whats the record for the longest honeymoon . Thats what we might be pushing right now. You cant just extrapolate what weve been doing right here. If we keep barreling higher like this on not really very much news youre going to start to hear people saying were stealing from next years gains. Last two januarys were bad. You kind of peaked at the end of december and you fell. And youll have that muscle memory taking shape again. Certainly one sector to watch will be tech. Names like amazon, facebook, of course. Google. Heath terry covers the space for goldman sachs. We saw a huge period where large cap tech was not in favor. Why is that . Is it changing . Largely saw rotation. Large cap tech was widely owned across the market. At least in the first few days after the election, people wanted to own other things, fran structure, financials. So that was the easiest place to sell. And now . Now i think youre seeing it come back. We already see mean reversion around big names like this. People came to the realization there are opportunities in those names. Largely backed by strong consumers, which continue to work in their favor, particularly names like amazon, netflix. You look at the momentum that google and facebook have with advertisers as they come out of what had been this period of uncertainty. They can get return with those two. Talk about amazon going into black friday. There is always this halo around the Company Going into the holidays until investors see what margins look like in january and they realize how much the company had to spend to get all those packages to everybody. Reports of pilots going on strike to protest a Staffing Shortage there. Are we going to run into the same issues with amazon that we did last year . If anything they prepped this year better than they did last year. They got really surprised by the demand that there was from third Party Retailers to use their fulfillment system to get things to consumers during the holidays. They took steps at the beginning of september to start pulling a lot of that third Party Inventory and get ready ahead of the Holiday Season. Build out the infrastructure that they need. And that ultimately ends up to pretty meaningful share gains for them. When it comes to tight holiday days during the end of the season when youre trying to get those lastminute gifts, amazon is the only one you can rely on. How high are expectations for not just amazon but the rest of the sector . How rough is it going to be to meet that when we start seeing the numbers in jn for how the holiday sales actually went . Expectations are pretty high. Positive signals out of retail the last few weeks. Certainly the Third Party Companies that track online sales have generally been pretty upbeat. Its a high bar. Thats always what you have to worry about with these companies that execute as well as amazon does. We tend to get a little bit ahead of ourselves. Were not necessarily where amazon is valued right now. But the rally at the end of the year that rick was talking about, we could eventually get there. Do facebook and twitter have a problem when you comingle fake news, bots and abuse material to usage . It doesnt seem to be material to use. It is a problem and certainly a kind of thing that advertisers worry about. Its easy to want to advertise on television. You know the environment youre in. You hear these things about facebook and twitter having these kind of issues you worry about where your brand will be run up against. They do have to address this. I dont think its a problem for engagement. It could be something that advertisers have to think about. You put out a note on ai, which gets mentioned increasingly, at least on this show. Whats the thesis and the takeaway . The thesis for us is pretty simple. This is the Apex Technology of the information age. This is as big as it gets. Artificial intelligence. My colleague and i spent a lot of time over the last year of digging in to intra capitalists to get a sense of sort of where this is going. What you hear is this cuts across everything. This is about making capital and labor significantly more efficient than it has been. You talk to economists like goldman, theyll tell you this productivity stall weve been in this past decade, theres potential to pull us out of that. You look at agriculture. Factories and farms have already become more productive. What theyve lost is jobs. How many more jobs do you think the u. S. Economy could lose when this actually comes to bear . I think if you look at the way weve been through these Technology Cycles before, we lose them in some places and pick them up in others. U. S. Economy is incredibly good at creating new jobs around these technologies. As factories and firms get more efficient indeed, ai is white collar that gets more efficient, doctors, lawyers, research analysts, that get more efficient through the use of ai. Well have to see where the new jobs around this get created. I was talking to a venture capitalist who said the Data Sciences class at stanford has gone from 40 students ten years ago to 500 students this semester. While thats important i worry about the expectations level on Artificial Intelligence for this reason. Its not a product like search, like smart phones, like a social network, even like infrastructure has a service or software has a service. Its an enabling technology. Is it clear yet whether this makes all those things i just mentioned a bit better and adds margin to those companies or does it create whole new companies, whole new industries . It doesnt seem clear to me yet. Youre absolutely right. This is an enabling technology. Somebody else made the comparison that this is electricity. It makes everything a little bit better. But in the same way that those enabling technologies create new companies, we think thats going to be the case for ai. Any time compute has to face a big, new workload im stealing this comparison from a private company weve spoken with recently. Any time it has to do with a big, new workload you see new companies created out of it. You see new big Hardware Companies created out of it. When vr and ar started getting talked about, it was about which sector or industry would lead it through the early innings, right . Gaming, pornography, whatever. Is there Something Like that for ai . It cuts through everything. One of the places we see it used the most is energy. Ten years ago a report called ai and the oil field and has been executing on that sense. Energy analyst has written on this extensively in the report we published. I dont know that necessarily theres one interest. Every industry, companies in those risk being left behind. Ges Mining Machines out in San Francisco getting your wind turbine to operate more efficient through ai is a real deal. It is. Thanks for coming in. Thanks for having me. Heath terry. Donald trumps soninlaw, Jared Kushner. A lot more from post nine in a moment. There are many things you dont want in industrial strength like cologne. Morning but theres one thing you do. gags its called predix from ge. The cloudbased Development Platform thats industrialstrength strength [and her new business i do, to jeanetgo. Jeanette was excellent at marrying people. But had trouble getting paid. Not a good time, jeanette. Even worse. Now im uncomfortable. 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He has been mentioned as a possible appointment for a whole range of different cabinet offices, also possibly the new director of national intelligence. Rudy giuliani was faced with a number of questions. He did come over and talk to the reporters. He didnt have much in the way of answers. Here is what he said. Im not going to discuss what im interested in or what the president elect is thinking and mulling over. Thats not fair. Thats not the right way to do it. This has to be done privately. I dont mean just with regard to me but with regard to everyone else. Reporter and, carl, i can tell you that former new york governor Eliot Spitzer is nearby. He just came over to our Camera Position and asked if the dow was going to stay over 19,000. I told him i have no idea. We also asked him what he made of all this. He said, look, my office is right here. What do you think i make of it . But he didnt want to come on tv and did not go into trump tower. Carl . Thats a good one, eamon. Thank you very much. Eamon javers. We continue to await on news of Donald Trumps cabinet members. Jared kushner has the president elects ear. Steven bartoni joins us at post nine. Thanks for having me. This is great. I cant get over Eric Schmidts quote, Jared Kushner is the biggest surprise. Best i can tell, he ran the campaign and essentially with no resources. I talked to eric schmidt, that turned the story. Gop insiders, party insiders. When i talked to eric schmidt, such a democratic supporter, he built that machine for jared. Built that machine for hillary to say these guys came in, made up the rules as they went along. Its like a small startup disrupting a professional, richer, bigger company. Such a tech story. What in kushners background gave anybody a clue that he was capable of this . I think he has no background was his advantage. He said i dont know how im supposed to do this were going to build it from scratch. No one has seen a candidate like donald trump with a message like he does. They built a machine just for donald trump. They made the trump playbook as they went along. Jared kushner is sitting at the intersection of what some worry is the conflict of interest. Is he Trump Administration or is he trump business . Right now hes on the an adviser. No one knows whats going to happen. There are laws that might stop t doesnt matter if hes paid or not. Doesnt matter if hes a title. He will always have trumps ear. We howe that works, well see. He has a very successful business. So does trump. I dont think they want to muddy the waters intentionally to mess things up. Its going great. Why do anything that might screw it up . Kushner is positioned to be a power broker of the highest order for at least four years. What he will do with that power is anyones guess. Exactly. Take a guess. Do you think that he wants a cabinet position . Do you think he wants to be an official adviser to the president elect . Im not sure they can. They have those nepitism laws. They worked so hard to get elected, theyre still sorting this out right now. Im not sure he knows. It depends on his family, his business. Nobody knows, including him, i think. You make the point that he is so understated, compared to his fatherinlaw. Yes. Do you get the sense that he tries to walk trump back from the bombastic rhetoric that he has demonstrated on the campaign trail or on twitter today, obviously . Well, its interesting. I spoke to a lot of people, including Henry Kissinger and eric schmidt and peter thiel who said anyone who is worried about the Trump Administration, having Jared Kushner in that room should make them feel calmer because hes even keeled, centralist. In the middle of the campaign, he came to trumps aide. Since then he hasnt. Only time since this story that he commented on politics at all. His stance is, listen, i know donald. I trust him. And ignore what other people are saying i think hes going to do the right thing. You know donald, i know donald. Thats what he feels is right right now. What do you make of this flip in the model that traditionally had been the president deploys surrogates like a Vice President to be the attack dog, out there, bombastic, say things that a president or president elect wouldnt say . In this case, you have these advisers with a very sober carriage saying, i know who the president elect really is. Dont pay any attention to what hes actually tweeting on twitter. Here is how its going to be. Is this going to continue, do you think, based on the conversations with Jared Kushner or are there changes afoot . In terms of trump, twitter . In terms of having these people who are a little bit more buttoned down. Yes. Respectable in the way that they present themselves versus the president elect himself being very bombastic and whipping up his base. I love his strategy. Allegedly, they took his phone way during the campaign at some point because he was tweeting so much. As weve seen with hamilton and other stuff, he is still tweeting. I dont think they control him or want to control him. Theyre letting donald be donald. That was the old line, right . Right. When he takes office well see what happens. When youre the actual president versus the president elect. That yet remains to be seen. Fascinating to watch. And its really an important read. Thank you so much. Thanks for having me on. Steve bertoli joining us from forbes. Markets trading at record highs. The dow eight points below that 19,000 level. S p at 21. 99. A check on europe and the overseas close. Also in the fwregreen. More squawk alley straight ahead. Eligibility . You may think you can put off checking out your Medicare Options until youre sixtyfive, but now is a good time to get the ball rolling. Keep in mind, medicare only covers about eighty percent of part b medical costs. 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