12 months. Check things out this morning, if you want to see the knee jerk reaction to some of these things, youll see already the futures are indicated higher. We knew the republicans were likely to whip, but if you take a look, there were some this was what you would absolutely call a wave with some races that hadnt been expected to go their way going their way, as well. Dow futures are indicated higher. S p futures up by close to 7 points. Nasdaq up by 16 points. As for the bottom, weve been watching oil closely once again. It is down again this morning, down by about 31 cents. 76. 88. Thats about where we were yesterday at this time. This morning, the tenyear looks like it is yielding. I cant see it because theres a line over the one place where it says 2. 35 . The dollar this morning at this point looks like it is up against the yen, up against the euro, up against the pound. Euro is trading at 1. 2484. Dollar slrn yen, 1114 and change. Gold prices look like they are down, as well. 1,444. 80. A republican wave did sweep the Midterm Elections. Lets get you to some of the highlights. The gop netting seven senate races. The party only needed to win six or rather needed six to win control of the senate. Notably three of the contests were in the president ial palths ground states of colorado, north carolina. As for the house, republicans are on track to pick up double digit seats there. Scott walker. A little History Lesson there, too. Scott walker, rick scott, as well. And early on, you saw something with gillespie and but i didnt see the ads. Did you see the ads . You guys are both redskins fans. You saw the ad that he bought . Yeah. That almost did it. That helped him. It was in virginia, always. Lets get to oh, are you guys ready for this . Born ready, man. Speaking of experts, you will notice, joe, that republicans are at 52 seats, which is the number that i told you yesterday. Yeah. You were right. You were right. Now it will probably going to 54. John, ive been giving you just slight just little pushes about maybe its going to be a wave and you kept pushing back at me and i kept giving you the chance because it felt wavy as you were getting closer and closer. The thing that got me, and i try to watch a lot of different news outlets, there are two narratives. One was it was a lot of the Mainstream Media was antiincumbentsy. People are just mad at washington. They want to throw the bums out. And those outlets would not say anything about unhappy ps with the president s policies or just with progressive rule of growing government, never said a word. And then the other side, it was all antiobama all the time. I was surprised by some of the polls, though, that showed the economy was the number one issue and that they it should be. Isnt that what people feel . Yeah. I think thats what this was about. But look, you can see this was health care. In 78 sorry, i didnt mean to interrupt, but ben white and Megan John Harwood are you from cnbc . Im here. Okay. I thought becky makes a good point. 78 of voters in the last nights exit polls said they were very concerned about this economy, but they broke heavily to the republicans. Its the economy, stupid. Isnt that the saying . It always is the economy. Its almost like it is both things, both antiincumbentsy and they were reelected, though. The economy was clearly a repudiation of president obama. You cant have republicans winning in his home state of illinois, the governorship in maryland, a lot of blue states and sweeping to possibly nine seats. This is a repudiation of this president , no question. There is a reason that every time in the last 100 years, except two, with a second termer or in no. That president obamas have lost seats in the midterm reaction. The reason is the president of the United States is the most conspicuous in the country and people take out their unhappiness on that person. Theres a lot of things that were different this time. He was taking it to new levels with the number of seats that hes given up. Thats not the point. The point is we knew that was going to happen. It was a bad map for democrats and the president is low. Hes at 40 . That has consequences for members of the party. But we should not underscore what a big victory this was for republicans. Republicans within governship in maryland and massachusetts and here is where i disagree a little bit partnership thought and said often that this was going to be an antiincumbent year. Republican incumbents did much better and governors particularly. Thats the combination that ben was talking about. Double digits. He won by a wide margin. It was almost like the left knew a party and no one came. I watched again on the nightly news. I saw more still shots of her. Looks like she was already governing very effectively on the shots i saw on the Mainstream Media. They did it and they worked they spent so much time prop her up and it never happened. Wendy davis in texas early on was supposed to be there they lost by a million votes. One more thing that i remember talking about. One more thing . No, no, this is not bugging me. With the Huffington Post there was i talked about it here. It was they were air a huge win for obama, a huge endorsement. And i looked to see, who you, who said it . And it was mark pryor, a democrat that voted for obamacare, admitted that finally finally admitted that he had voted for obamacare, but he didnt call it obamacare. I got an email from the nation last night. Their hell was the democrats lost big, why obama should double down. And the neat is now republican, here is why that sucks. What i wonder about this, the left is not going to let up on the president. Does he respond by saying we have to compromise or does he thats a big choice for him to make. Hes going to dig in. You made the argument by this morning that he was digging in by going to asia approximately. Is he going to do that . Yes, he is. That will be a stick in the eye for a Republican Congress and it will sour relations for the last two years. He will get nothing. Remember at the white house, i think hes mad, hes probably madder now than he was. Im sure he is. And do what he wants to do. Look, i agree with ben. Hes going the take the action on immigration. Although with his he takes his sir couple scribe by this reven majority. The opportunity and the potential for republicans to push back effectively is much bigger because of this win, not only on immigration, but also on the Environmental Protection agency and the rules on carbon. I like that. Yes. But remember, the core disagreement between the two parties is what happens to the size of government and do you close the gap between our obligations and the money coming in by producing more money . I dont think hes going to bend on that. So the question is, Social Security and medicare, for example, do they get smaller . How much smaller do they get . If you dont have any revenue, they have to get a lot smaller. Hell fight on that and theyre probably win. Immigration is right. Nobody is going to work dead here. Yeah. The question is not the question is what can the Republican Party do . Is there a waiver with no. But there should be consequences from elections. This is the public saying they would like to see some sort of compromise on issues. I dont think that right. But i think its the opposite of that. I think republicans are going to be in this wave election to say we dontny to compromise with you on anything. We just blew you away and but this is the but were not this is the danger of both parties. It is unfortunately probably the fact, but this is a huge opportunity for the Republican Party and if we dont seize it, we will have no chance of winning in 2016 elections. It is coming together and passing legislation. The president can tax reform, economic growth, Social Security reform. But that gets to the core question. Tax reform, republicans want to cut tax rates and cut revenue. Okay . I think corporate better Corporate Tax reform will grow the economy, which will give something for republicans to run on. Look at what yeah, but republicans havent been willing to move on Corporate Tax reform without personal tax reform. If they dont disconnect those two, not happening. Look at what gillespie did in virginia. It is still too close to call. He ran on his own health care plan, on his own economic plan. He ran on policy. And yes, he had a really great ad in the football game, but i think he did well last night because he is one of the few people who actually ran on something. And voters rewarded him on that. But there will not be a Republican Health care alternative to obamacare that is enacted into law. Thats not happening. I agree with that. But then we can have an intelligent debate in the president ial rate about what policies were moving forward as opposed to a race to the bottom and to which party is worse at governing. Dont we need to have a debate on some of these things before the president ial race and dont republicans have to demonstrate before the president ial rate race that they can govern with a majority . And i think theyll be able to demonstrate that for some of the reasons john said. Whats going to get done trade deals, maybe . Yeah. So two trade deals. Maybe a little bit on infrastructure because i think that republics are going to want to show an interest in delivering on that. Very, very little. This is i know you disagree with me, but there are big swings in the u. S. Politics, sort of the in the way the public views overall directions for the country. And there have been times in the past where youve seen the pendulum swing. My point was if both parties have a chance to screw this up over the next two years, but if the republicans dont screw it up, i would say it wasnt just antiobama rhetoric. It wasnt just antiincumbentsy. It was antiprogressive policy backlash that could swing the country even in 2016. What is the republicans dont because if the republicans zaupder this, were going to go back to smaller government. Lower taxes, less regulation. More i think it was. More disagreement between the drn. I think youre right both parties in the country. Except for social issues. I agree with you. We are center right. But the core disagreement between the parties is really about Social Security, medicare and medicaid. Size of government. Thats where the size is. And last night and do you want to address those at some point. Maybe even the republicans but thats did any republican run last night on cutting Social Security and medicare . No. But i think the country Social Security is different than cutting it. Yes. They can make an agreement on those issues if republicans put some revenue on the table. But you the party that the country wants to try to jump start the economy in the exit polls is now the republicans. And that wasnt the case for the past couple of years. They thought, hey, lets try some of these things. Lets try this 800 billion stimulus. Lets try infrastructure. With the counterfactual. I think this economy is much more tepid than it should be. Markets up, unemployment markets up. Look at the fed. Theres a lot of we can both argue about that. I agree. But i think at this point were back to trying some version not of trickle down, but of making business to allow job creation to come down from the private sector instead of a government sector solution to everything. Thats what this election is. And if they dont lessen up thats one thing you wont see the last two years is president obama making a deal with republicans on some version no. I dont expect him to get any friendlier with the private sector, i dont. Its obviously true that theres a republicans were given the keys to the economy saying you can do some things they had a key before. They ran it into a ditch. Remember that . What do they do with those . Thats what i mean. They can make the economy get better and and in two years they can squander this in two years by being bad winners, by being sore winners, they could squander it. Theyve done it before. We saw ted cruz last night. He would not pledge his support to mitch mcconnell. Mitch mcconnell doesnt need ted cruz right now. Welch, all his friends are calling him, hes jumped the shark, theyre calling him, what are you, a wing nut now . The republican has to run ted cruz. Hes folding on things to go with go with you say that. I know that. And i think i would agree with you. It goes back to your social issues. Yeah, right. When he was here, he said if the states decide to do these social things, he has no problem with it. I think for the vast majority of voters who think about a president who gets to select people who are on the supreme court, for example, and those look, then all i know is changes in dynamics how does it into learning another youre lowering me into running another romney or mccain, youre making me think, yeah, youre right. But why should i listen to you . I dont want the other side to win. I want the there you go again with that. If you guys want to win, you should run a moderate. Run someone right in the middle. There you go again. There you go again. Thats how you we had the same coloring, too. Becky made a point earlier, which is a secular problem, okay . The problem is that the American Economy is not delivering rising Living Standards to average families. That has been true for a long time. Who do we believe can fix it . Thats the question. A couple of years ago when we were just moving into the 2010 cycle, i talked to bob leischauer, former director of the congressional budget office, a democrat. He said we were in for a long period of voter discontent and of turbulence with one Party Getting in, getting kicked out, another Party Getting in, getting kicked out. Why is that . Because we are now in competition with hence of millions of people around the world with lower Living Standards than we have and others are not rising. Right. That is a problem and the age old question. Do you solve that with redistributing a smaller pie or do you solve it with growing the pie and hoping that everybody you saw the growing the pie. The question is, how do you grow the pie . By getting out of the wait of the private sector. You dont incumbent the private sector and redistribute more and put more regulation. And thats why the bush economic record ended so successfully . Thats why the reagan economic record ended so successfully. Were going to continue this conversation. Were going to continue this conversation for the next two years, actually. Up next, why equity futures are indicating a bullish investor reaction to the election results. And then later, adam richman will join us to talk about why theyre hanging out with tech and foodies and how hes recovering from an inextra gram battle. Well tell you what that was all about in just a moment. For access to one of the top Wealth Management firms in the country. For a team of Financial Professionals who provide customized solutions. For all of your Wealth Management and retirement goals, discover how pnc Wealth Management can help you achieve. Visit pnc. Com wealthsolutions to find out more. Its in this spirit that ingu u. S. Is becoming a new kind of company. One that helps you think differently about whats ahead, and whats possible when you get things organized. Ing u. S. Is now voya. Changing the way you think of retirement. Welcome back, everybody. What impact the midterms could have on the markets . This from jm morgan may give you a bit of an idea. The stock market rarely embraces change, regardless of which party is in power. Stocks traditionally rally in the year after the midterms. Take a look at that. You see the average incumbents gain seats versus the average when incumbents lose seats. I thought the one thing that always holds true is you get a republican and democrats in both houses and its always good, right . Its like twitch, right . Yonl about that. This is a very small number of cases. Stocks go up these days. When we go through an appointment it does matter. Joining us now to talk more about it is drew mattes. James lew is the Global Market strategist at jpmorgan funds. James, why dont we start with you. We saw what happened with the election. This was bigger for the republicans than some had been anticipating heading into this. What does that mean for the market . I think it is good for the markets. Its more turned out the way we expected i. I would think the energy policy, it has increased. Which coincidently, we also pushed down Energy Prices to an extent. I think Immigration Reform is slightly more likely, although finally, i think Corporate Tax reform is slightly more likely. Also no terribly optimistic. It would be great if it does happen. There were some things this morning, ben white pointed this out in this mornings money notes, that House Majority leader Kevin Mccarthy has been saying things like were going to dry and govern differently. We dont want to be lurching from crisis to crisis. We dont want to be dealing with the fiscal cliff issues. Is that something that you think fits . If thats the case, what does that mean . Im optimistic about this. You look at last year. Those events hurt markets. From my perspective, the best situation for government is to kind of get out of the way of markets. Were still up. Thats the markets over the in fact couple of years. How does this change your forecast, if at all . It really doesnt. Our guys in washington called it. Everyone is worried about investment. But from our point of view investment in the Energy Sector . Investment in the Energy Sector going forward. But from my point of view, were in that sweet spot still where Energy Prices have come down enough. The consumer is going to have more money to spend